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Sustainable Development of Biofuels ProgramSustainable Development of Biofuels Program

Swaroop Sarangan, Vice President

Biofuels 2010 - For Sustainable Rural Livelihood & Energy security

November 19, 2010, New Delhi, India

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ContentsContents

1. Indian Biofuels context

2. Biofuels Development Challenges

3. Reliance Biofuels Initiative

4. Summary

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India Energy Context India Energy Context

India’s energy demand is estimated to grow eight times to the year 2030.

Energy demand 315 million MTOE 8 times growth envisaged to 2030 75% import dependent Fossil fuel based Crude oil consumption 111 million tonnes growing 5.6% per year Gasoline consumption 11 million tonnes, growing 5% per year Diesel consumption 55 million tonnes, growing 5.2% per year Administered price regime High taxes (30% of value chain) Limited alternate energy play (mainly wind)

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Global Biofuels Opportunity

Global biofuels opportunity is significant, but current market penetration of biofuels is very low.

Aspect Gasoline Diesel

Global consumption (million MT) 1600 900

% Blending with biofuels* 10% 5%

Biofuels opportunity (million MT) 160 45

Current biofuel consumption (million MT)

51 11

% Penetration of biofuel opportunity

32% 24%

% Penetration of total fuels 3.2% 1.2%

Source : BP, US Energy Information Ad ministration, PFC Energy, US Chamber of Commerce, Reliance Research

* Biofuels (especially biodiesel) blending limit can potentially go up to 100% which would provide upside to the above projections.

Jatropha with Corn as intercrop

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India Biofuels Opportunity

Aspect Gasoline Diesel

Consumption (million MT) 12 60

% Blending with biofuels* 10% 5%

Biofuels opportunity (million MT)

1.20 6

Current biofuel consumption (million MT)

0.16 negligible

% Penetration of biofuel opportunity

13% NA

% Penetration of total fuel opportunity

1.3% NA

Source : Frost & Sullivan, Govt. of India Planning Commission, Ethanol India

* Biofuels blending limit can go up to 100% which would provide upside to the above projections.

India biofuels opportunity is also large, but current market penetration is negligible. India has 40 million ha of wasted land

Jatropha with Groundnut as intercrop

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Social-Economic Opportunity Social-Economic Opportunity

Biofuels have significant social benefits, most important among them being higher farm incomes and better rural life.

Benefits Better energy security Higher farm incomes Better quality of rural life Use of marginal land Carbon Sequestering

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Biofuels – Product/Market Biofuels – Product/Market

Biofuels primarily comprise bioethanol, biobutanol and biodiesel for blending with gasoline, diesel and fuel oils.

Products Bioethanol Biobutanol Biodiesel Renewable diesel BTL Diesel DiMethyl Ether ETBE

Markets Gasoline Diesel Jet fuel Fuel oils

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Renewable Biomaterials Renewable Biomaterials

Sugar and grain crops are used to make bioethanol, while vegetable oils, animal fats are used to make biodiesel.

Bioethanol/Biobutanol Sugars

Sugarcane, Sugar beet

Starch Corn, Sweet Sorghum, Wheat

Biodiesel Vegetable Oils

Non-edible: Jatropha, Pongamia, Jojoba, Simaruba

Edible: Palm, Rape seed, Soybean, coconut, others

Animal Fats and oils Algae Yeast

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Technology Technology

While first generation technologies are commercially used, several second generation technologies are being developed.

First generation Sugars/Starch to bioethanol

Fermentation; Downstream separation and purification

Oils & Fats to biodiesel Pre processing and trans-esterification

Second generation Biomaterials

Hybrids; Transgenics; Algae; Yeast

Biomass to bioethanol/butanol Hydrolysis, fermentation, separation Gasification, fermentation, membrane

separation

Chemical Renewable diesel (refinery hydrotreater) Pyrolysis or gasification and FT to jet fuel

August, 2007 November, 2007

December, 2009 July, 2008

Jatropha yield cycle, Andhra Pradesh, India

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Govt. of India Biofuels Policy - Summary Govt. of India Biofuels Policy - Summary Development of biofuels will be to utilise

degraded forest and wastelands for cultivation of biofuel crops, using non-food feedstocks

20% blending of biofuels by 2017. Storage, distribution and marketing of

biofuels would rest with Oil Marketing Companies (OMC).

Policy proposes Minimum Purchase Price (MPP) for biodiesel by OMC’s.

The policy proposes Minimum Support Price (MSP) for non-edible oilseeds.

R & D grants would be provided for projects involving second generation biofuels, new feedstock development, utilization of byproducts etc.

Any import or export of biofuels would be permitted only to extent necessary (exports only after meeting domestic requirements).

GOI biofuels policy revolves around growing non-edible crops on cultivable waste lands.

Jatropha with Black gram as intercrop

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Biofuels – Competitiveness Challenge Biofuels – Competitiveness Challenge

Farm productivity, seed oil content and by-product value are critical drivers of biofuels productivity.

Competitiveness with prices of gasoline (51 Rs/L) and administered prices of diesel (41 Rs/L)

Competitiveness drivers Biodiesel (farm productivity,

seed oil content) Bioethanol/Biobutanol (biomass

cost, enzyme cost) Byproduct value

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ContentsContents

1. Indian Biofuels Context

2. Biofuels Development Challenges

3. Reliance Biofuels Initiative

4. Summary

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Biofuel Development Issues (1) Biofuel Development Issues (1)

Product Issues Selection, blend ratios, GHG

emission savings and oxygen content.

Industry Issues Feed stock availability, site,

technology and competitiveness

Supply chain Issues Plantation material, plantation

window, produce aggregation and transportation cost

Business Issues Operability, scale, economics

and sustainability.

There are significant development challenges for biofuels, primarily on the linkages, logistics and competitiveness.

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Biofuel Development Issues (2) Biofuel Development Issues (2)

Farm Issues Farm productivity, Yield and

intercrop income

Technology Issues Feed stock engineering, second

generation technology, by-product value addition and IP

Socio-Economic Issues Non-food crops, feed stock cost,

subsidies, sustainability and farmers long term commitment

Other significant development challenges for biofuels are on the development of sustainable feedstock and technology.

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Product Issues Product Issues

Biodiesel goes twice as far and is better on GHG, fossil energy savings and emissions, as compared to bioethanol.

Aspect Bioethanol Biodiesel Remarks

Energy content3.5 mm BTU/bbl

(67 % of gasoline)

5.3 mm BTU/bbl

(90 % of diesel)

30% additional efficiency

of diesel engines

GHG emissions

savings

30 % over gasoline

(Grain-based alcohol)

45 % over diesel

(Rapeseed-based BD)

Fossil energy

savings20 % over gasoline 60 % over diesel

Emissions Better on NOxBetter on CO and

unburnt hydrocarbons

NOx can be improved with

ignition improvements

Water use in

cropsHigh Low

OthersBetter cetane

Better lubricity

Lubricity useful for ultra

low sulphur fuels

Source: CERA

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Land ProductivityLand Productivity

Bioethanol crops score better from a land productivity point of view.

Source: CERA

Biofuels Crop Productivity (Litres/Ha)

5700

6000

4800

1500

500

1800

3700

3500

2000

0 1000 2000 3000 4000 5000 6000 7000

Soyabeans

Rapeseed

Wheat

Jatropha

Sorghum

Corn

Palm

Sugar Beet

Sugarcane

b

Jatropha bund plantation

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Water UsageWater Usage

Water usage varies based on nature of crop and irrigation, but Jatropha and algae (brackish) perform best.

Biofuels Water Usage (CuM/MT of biofuel)

1162

444

2499

1110

736

3077

1226

703

9853

15596

0 5000 10000 15000 20000

Sugarcane under drip

Jatropha under drip

Calophylum under drip

Soybean under flood

Mustard under flood

Jatropha rainfed with support irrigation

Pongamia under drip

Madhuka under drip

Algae brackish

Maize under flood

b

Source: Reliance Life Sciences Research

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Energy Ratios - Reliance StudyEnergy Ratios - Reliance Study

Biodiesel crops generally perform better from an energy ratio standpoint.

Biofuels Energy Efficiency Ratios

4.52

3.32

2.89

4.87

7.34

8.5

6.77

5.29

5.83

6.74

0 2 4 6 8 10

Sugarcane under drip

Jatropha under drip

Calophylum under drip

Soybean under flood

Mustard under flood

Jatropha rainfed with support irrigation

Pongamia under drip

Madhuka under drip

Algae brackish

Maize under flood

b

Source: Reliance Life Sciences Research

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GHG EmissionsGHG Emissions

Both bioethanol and biodiesel crops perform better from a GHG emissions standpoint.

Source: Union for Promoting Oilseeds and Protein Plants

Greenhouse Gas Emissions (gCO2eq/MJ)

1

14

12

18

23

29

19

14

13

9

2

1

2

1

13

5

1

26

22

19

22

26

49

83.8

0 10 20 30 40 50 60 70 80 90

Biodiesel from w aste

Ethanol from sugar cane

Ethanol from sugar beet

Biodiesel from sunflow er

Ethanol from w heat w ith cogen

Biodiesel from rapeseed

Biodiesel from soybean

Biodiesel from palm oil

Fossil fuel

b

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At current seed prices, biodiesel is not competitive. Bioethanol (sugarcane based) is competitive at US$ 50/bbl.

Cost Competitiveness

Biodiesel Bioethanol

Raw MaterialRM Cost, $/lit

High/low 2009

Biodiesel, $/lit

High/low 2009Raw Material RM cost, $/kg

Bioethanol, $/lit High/low 2009

Rape seed 0.848/0.665 0.917/0.756 Corn 0.1588 0.545/0.475

Soybean 0.764/0.628 0.837/0.725Sugar Cane (Brazil)

0.415/0.331

Palm 0.710/0.498 0.782/0.585 Sugar Beet 0.099 0.420

Jatropha ** 0.930 Molasses 0.540

Animal fat 0.583

BTL Biodiesel 1.10

Conventional

Crude, $/ bbl Diesel*, $/lit

Conventional

Crude, $/ bbl Gasoline*, $/lit

40 0.34 40 0.32

50 0.43 50 0.39

60 0.50 60 0.48

70 0.57 70 0.53

80 0.64 80 0.60

* Ex Factory gate price; ** Jatropha seeds - Rs.12/kg

Cost Competitiveness Cost Competitiveness

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Biofuels – Role of Bio Technology Biofuels – Role of Bio Technology

Biofuels can bring about rural transformation through higher farm incomes and better quality of life.

Agronomy Plantation in irrigated, rain fed

conditions Cultivation with intercrops Hybrid development

Plant Tissue Culture Leaf disc regeneration Immature embryo transformation

Plant Metabolic Engineering Transgenic Jatropha

Bio-Process Technology Fermentation Enzyme manufacturing By-product value addition Yeast to oil

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ContentsContents

1. Indian Biofuels Context

2. Biofuels Development Challenges

3. Reliance Biofuels Initiative

4. Summary

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Biofuels Architecture Biofuels Architecture

The biofuels initiative of Reliance group is unique in its architecture and content.

Biodiesel

Jatropha Oil

Jatropha Seeds

JatrophaFarming

Tissue CulturedPlants

Elite PlantsCharacterisation

And Sourcing

Hybrid PlantsDevelopment

Transgenic Plants Development

Extraction

Transesterification

JatrophaSeed Cake

Biobutanol

Glycerol

3GT BiopolymerVia

1,3 Propane Diol

Enzyme directed conversion

Protein

Bioethanol

CellulosicBiomass

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Reliance Business Design PrinciplesReliance Business Design Principles

Business design is based on biodiesel non-edible crops on cultivable wasteland owned by marginal farmers.

Philosophy Energy security Rural transformation opportunity

Focus area Biodiesel

Crops Non-edible seeds Non-compete with alcohol

Agronomy Work with marginal farmers Focus on rain-fed areas No RIL land ownership

Technology For higher farm yields For higher oil content Pursue competing technologies

Hybrid variety of Jatropha with intercrop

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Components (1) Components (1)

The agronomy and farm advocacy components focus on the farm to address productivity, incomes and scale.

Agronomy R&D (Kakinada, Nagothane, Gandhar) Plantation (Jatropha, Simarouba, Pongamia) Jatropha cultivation with intercrops (Pulses, Millets, beans, oil seeds, vegetables) Jatropha hybrid development

Farm Advocacy Scale-up of biofuel crops Five states in India (Andhra Pradesh, Maharashtra, Madhya Pradesh, Gujarat, Chhatisgarh) NGO partners Multiple points of engagement

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Components (2) Components (2)

Plant and industrial biotechnology components focus on technology to address yields, costs and value addition.

Plant Metabolic Engineering High expression of oils in Jatropha Algal cultures

Plant Tissue Culture Transesterification

Pilot plant at Kakinada for feed stock validation and engine performance.

Industrial Biotechnology Glycerol to 1,3 propanediol to

polymer Oil expression in yeast Biomass to bioethanol/biobutanol

Enzymology Enzymes for bioethanol/biobutanol

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ContentsContents

1. Indian Biofuels context

2. Biofuels Development Challenges

3. Reliance Biofuels Initiative

4. Summary

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Summary Summary

Biofuels is an imperative for India for energy security and an opportunity for rural transformation.

India Biofuels Imperative US$ 1 trillion + economy 1 billion + people Seriously energy deficient

India Biofuels Endowment Arable land (142 mill Ha) Cultivable waste land (40 mill Ha) Cost advantage Biotech talent

India Biofuels Opportunity Higher farm incomes Better quality of rural life Jatropha biodiesel and Sugar cane bioethanol are sustainable

Challenges Costs and Competitiveness

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Thank You