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1 Jeff Skeer, Office of Policy and International Affa U.S. Department of Energy German Marshall Fund Washington, DC, 22 February 2008 Policies for Sustainable Biofuels Development in the United States

1 Jeff Skeer, Office of Policy and International Affairs U.S. Department of Energy German Marshall Fund Washington, DC, 22 February 2008 Policies for Sustainable

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Jeff Skeer, Office of Policy and International AffairsU.S. Department of Energy

German Marshall FundWashington, DC, 22 February 2008

Policies for Sustainable Biofuels Development in the United States

Renewable Fuels Standard Enacted: Focus on 2d Generation Feedstocks

Year Billions of Gallons of Fuel Per Year 20 in 10 Proposal Enacted 12/2007

(Alternative Fuels) (Biofuels Only) 2010 10 12 2011 11 12.6 2012 12 13.2 2013 14 13.8 2014 17 14.4 2015 22 15 2016 28 18 3 2017 35 21 6 2018 24 9 2019 27 12 2020 30 15 2021 33 18 2022 36 21

Of Which Non Starch Ethanol Biofuels:

Comparison of Biofuel Scenarios

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1980 1990 2000 2010 2020 2030

EIA No-Policy-Change Projections

History

Annual Energy Outlook 2007

Corn Ethanol

Cellulosic Ethanol

Enacted December

2007l

Biofuels

Twenty in Ten Proposal

Biofuels &Alternative

Fuels

Year Advanced Biofuel Details Total Renewable

FuelBiomass-

Based DieselCellulosic

BiofuelTotal

Advanced Biofuel

2008 9.0

2009 0.5 0.6 11.1

2010 0.65 0.1 0.95 12.95

2011 0.80 0.25 1.35 13.95

2012 1.0 0.5 2.0 15.2

2013 1.0 1.0 2.75 16.55

2014 1.0 1.75 3.75 18.15

2015 1.0 3.0 5.5 20.5

2016 1.0 4.25 7.25 22.25

2017 1.0 5.5 9.0 24.0

2018 1.0 7.0 11.0 26.0

2019 1.0 8.5 13.0 28.0

2020 1.0 10.5 15.0 30.0

2021 1.0 13.5 18.0 33.0

2022 1.0 16.0 21.0 36.0

The Standards are NestedShown with 2022 volumes

Renewable fuels - 36 bill gal

Mostly corn-ethanol

Also other fuels which meet GHG reduction

threshold of 20%

Advanced biofuels - 21 bill gal

Cellulosic biofuel - 16 bill gal

Mostly cellulosic ethanol

All fuels must meet GHGreduction threshold of 60%

Mostly imported ethanolSome renewable diesel

All fuels must meet GHG reduction threshold of 50%

Biomass-based diesel

1 bill gal

Biodiesel

All fuels must meet GHG reduction threshold of 50%

Our Commitment to Sustainability

DOE’s Biomass Program is committed to developing the resources, technologies, and systems needed for biofuels to grow in a way that enhances the health of our environment and protects our planet. To that end, we are working to…

• Develop diverse, non-food feedstocks thatrequire little water or fertilizer

• Foster sustainable forestry practices toenhance forest health

• Selectively harvest biomass componentswhile leaving adequate soil nutrients

• Assess life-cycle impacts of major scale-up in biofuels production, from feedstocksto vehicles, addressing:

− land use and soil health

− water use

− air quality issues

− impacts on greenhouse gas (GHG) emissions

Lifecycle Greenhouse Gas Emissions Associated with Different Fuels19%

Reduction 28%Reduction

52%Reduction

86%Reduction

78%Reduction

Gasoline

NaturalGas

BiomassCurrentAverage

CellulosicEthanolCorn Ethanol

BiomassPetroleum

Sources: Wang et al, Environ. Research Letters, May 2007; Wang et al, Life-Cycle Energy Use and GHG Implications of Brazilian Sugarcane Ethanol Simulated with GREET Model, Dec. 2007.

SugarcaneEthanol

Biomass

Overcoming Barriers to Commercial 2d Generation BIofuels

Barriers

• Enzymatic conversion costs

• C5 sugars conversion

• Low Syngas-to-Fuel Yields

• Commercial-scale integration of process components

• Inadequate feedstock and distribution infrastructure

Solutions

• R&D to improve effectiveness and reduce costs of enzymatic conversion

• R&D on advanced micro-organismsfor fermentation of sugars

• R&D to improve syngas clean-up and catalyst for alcohol/fuel synthesis

• Fund loan guarantees, commercial biorefinery demonstrations, and 10% scale validation projects

• Fundamental feedstock research, enhanced feedstock demonstrations at scale, collection & storage equipment research, development and testing

Future efforts address obstacles to biochemical and thermochemical routes to biofuels, support demonstrations, and resolve infrastructure issues.

Genetic Strategies to Boost Crop Yields

Increase feedstock per unit of land by increasing growth rate and photosynthetic efficiency.

Increase fuel yield per ton of feedstock through better composition and structure.

Enhance disease and pest resistance.Allow germination and growth in cold weather.Use perennial, multi-year crops with efficient

nutrient use and reduced fuel input.Permit dense planting and easy harvesting.Deep roots for increased carbon sequestration,

drought tolerance and nutrient uptake.

Cellulosic Ethanol Potential and Status

Cellulosic ethanol cost competitiveness

and sustainability attributes are key to

biofuels growth potential

Historical and Projected Cellulosic Ethanol CostsHistorical and Projected Cellulosic Ethanol Costs

Major reductions in the cost of cellulosic ethanolalready achieved – much remains to be done

Enzyme Feedstock Conversion

Future goal

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Min

imum

Eth

anol

Sel

ling

Pric

e (c

ents

/gal

)

Cost reductions

to date

NREL Modeled Cost

Modeled Ethanol Cost for “nth Plant”

DOE Leverages Partnerships to Achieve Cost Reduction Goals

Commercial-Scale Biorefineries (up to $385 million) Six cost-shared, integrated biorefinery demonstration projects to produce

130 million gallons of cellulosic ethanol in 5 years using variety of conversion technologies and cellulosic feedstocks

10%-Scale Biorefinery Validation (currently 4 projects up to $114 million) Cost-shared, integrated biorefinery demonstrations using cellulosic

feedstocks to produce renewable fuels; one-tenth of commercial scale Four selectees announced last month for total investment of $114 million;

more selectees expected by April 2008Ethanologen Solicitation (up to $23 million)

Five selected research teams working on microorganismsEnzyme Solicitation (up to $33.8 million)

Creating highly effective, inexpensive enzyme systems forcommercial biomass hydrolysis; second phase: cellulase development with cost-sharing industry partners

Thermochemical Conversion (up to $7.75 million) Integration of gasification and catalyst development

Joint DOE-USDA Solicitation ($18 million) Biomass R&D Initiative

Major DOE Biofuels Project Locations

Geographic, Feedstock, and Technology Diversity

GHG Methodologies Task Force of Global Bioenergy Partnership (GBEP)

GHG methodologies taskforce established by GBEP steering committee in May 2007.

Desired end result is flexible methodology for policy makers in all countries.

First taskforce meeting held October 2007.

Second meeting scheduled for March 6-7 2008 and will include solid biomass and liquid biofuels.

GHG Taskforce Work Plan

1. Review existing methodologies;

2. Develop a harmonised approach so GHG lifecycle assessments can be compared on an equivalent basis;

3 Encompass the full well-to-wheel lifecycle of transport biofuels;

4 Not indicate a preference for any particular existing methodology or feedstock, or to limit parameters; and

5 Define parameters and inputs to be considered when conducting a LCA and develop a good practice document.

Membership of GHG Taskforce

Attendance at first meeting included:

•Canada•France•Germany•Italy•Japan•United Kingdom•United States

• UNEP• UN Foundation• International Council on Clean Transportation• University of California Berkeley• Iowa State University• GBEP Secretariat

Results of First GBEP GHG Meeting

Accomplished review of existing efforts in defining methodologies

Reached broad agreement that it is possible to develop common methodology

Developed preliminary list of parameters needed for a common methodology in a “checklist”

Recognized issues needing further discussion

Development of Common Checklist

The GHGs to be covered;

The effects of direct land use change, both in terms of above and below ground carbon inventories;

The effects of the production cycle, including fertilizer production, agricultural inputs and processing energy;

Combustion of the finished biofuel and tailpipe emissions; and

Corresponding factors to facilitate comparison with the fuel replaced.

Issues Needing further Discussion

Accounting for co-product emissions;

Ensuring transparency in default values and parameters used, and assumptions made, in conducting a GHG lifecycle assessment;

Whether and how to take account of the effects of indirect land use change;

How to take account of future technologies (e.g. cellulosic) in the design of the methodology.