4th Aviation and Environment Conference

KHOO HOCK AUNMANAGING DIRECTOR/CEO,

COSMO BIOFUELS GROUP, MALAYSIAVICE CHAIR, ROUNDTABLE ON SUSTAINABLE BIOFUELS

Greener SkiesSeptember 27, 2011, Island Shangri-La Hotel, Hong Kong

BIOFUELS HAVE ARRIVED: THE LOGISTICS OF GETTING THEM ON

BOARDSession 2 Panel 2

OUTLINE OF PRESENTATION

Cost and supply are the greatest barriers to a sustainable supply of aviation biofuels.

What needs to be done to by governments and industry to create this chain of sustainable production at affordable cost?

Marketing to Airlines

- Source/Production

- Analysis of Competitive Environment

- Supply Chain Issues - Size of the Problem

- Elegance of the Solution

Bio Synthetic Paraffinic Kerosene

AVIATION SECTOR Aviation

industry seeks early adoption biofuel

10% replacement by 2030 requires 20.4 Mtoe biofuels.

Aviation industry requires truly sustainable biofuels; Regulations are fierce; Prefer 2nd generation sources such as jatropha, algae, camelina. USA has focus on domestically grown camelina.

Research and development intosuperior planting material,seed production,

nurseries, and establishingstrategic plantations

Development of viable contract-farminghybridised with plantation methodology

Establishment of sufficient logistical and expellation infrastructure for the farmers

and plantations to process their harvested seeds into crude jatropha oil

Development of a practical safe Refinery Network to create BIO-SPK product in demand

Establishment of a trading platform to create a market for the jatropha based aviation biofuel

Research & Development Initiatives

Advanced Plantation Approaches

AgribusinessSupporting Infrastructure

Bio-SPK Refinery System

Trading Platform

Jatropha curcas is cultivated in almost all tropical and subtropical countries

JATROPHA CURCAS

JATROPHA CURCAS

OIL PALM BELT

BELT

BELT

Indicative Prioritisation Factors of Jatropha Plantations/Farms Establishment by Country

Country LabourCost

Availabilityof Labour

Availability of Land

Rainfall Fuel Security

China Low High High Mixed High

Indonesia Low High High High Low

Cambodia Very Low

High Very High

Mixed High

Malaysia VeryHigh

Low Low High Low

Philippines Low High High High High

Thailand High High Low Low High

Myanmar Low High High Mixed High

India Low High High Low High

Laos Low High High Mixed High

Vietnam Low High High Mixed Low

The Jatropha Bio-jetfuel value chain for sustainable feedstock

Criteria of partners

Potential stakeholders

Research &Development

– Three continents to be covered

– Professional fields and management

– Land availability

– Technological ability to produce biojet fuel

– Optimal Logistic to fueling hubs

– FFP – Fit for Purpose logistic integration

– Off take contracts

– Embrapa Agroenergia

– Other research institutions

– …

– Curcas – Americas

– Inocas -Africa– Cosmo -Asia

– Petrochemical Partners

– “Green field”– …

– Aviation Logistic Operators

– End users: airlines, airports

SUSTAINABILITY:

PROJECT MANAGEMENT:

To cross-check the RSB criteria on the Brazilian Bio-jetfuel Platform: Inocas, Yale University, Fundacao Espaco Eco

– Curcas, Inocas, Cosmo, Santiago

Example Jatropha value chain… - steps toward professional scaling up of operations

SustainableFeedstock

BioJetFuel production

BioJetFuel use

– Track record in plant sciences

– Experience in Jatropha research

The Roundtable on Sustainable Biofuels (RSB)

The RSB is an international multi-stakeholder voluntary initiative developing a sustainability certification program for biofuels production. The RSB standard is …

• generic to all crops,

• adaptable to new information,

• truly multi-stakeholder;

… and includes …

• environmental criteria

• social criteria

RSB Principles Principle 1: Biofuel operations shall follow all applicable

laws and regulations. Principle 2: Sustainable biofuel operations shall be

planned, implemented, and continuously improved through an open, transparent, and consultative Environmental and Social Impact Assessment (ESIA) and an economic viability analysis.

Principle 3. Biofuels shall contribute to climate change mitigation by significantly reducing lifecycle GHG emissions as compared to fossil fuels.

Principle 4. Biofuel operations shall not violate human rights or labor rights, and shall promote decent work and the well-being of workers.

Principle 5. In regions of poverty, biofuel operations shall contribute to the social and economic development of local, rural and indigenous people and communities.

Principle 6. Biofuel operations shall ensure the human right to adequate food and improve food security in food insecure regions.

RSB Principles (contd) Principle 7. Biofuel operations shall avoid negative

impacts on biodiversity, ecosystems, and other conservation values

Principle 8: Biofuel operations shall implement practices that seek to reverse soil degradation and/or maintain soil health.

Principle 9. Biofuel operations shall maintain or enhance the quality and quantity of surface and ground water resources, and respect prior formal or customary water rights.

Principle 10. Air pollution from biofuel operations shall be minimized along the supply chain.

Principle 11: Use of Technology, Inputs, and Management of Waste.

Principle 12. Biofuel operations shall respect land rights and land use rights.

reporting of :certificates

risk assessmentsrisk management reports

self evaluationsindependent audits

application Self Risk

Assessment

decision by the RSB

SOE

Compliance with RSB Standard for

Participating OperatorOperator

YES

application to Certification BodySelf Risk AssessmentFull Self Evaluation

audit planning

Participating Operator

independent audit

NO

compliantCertificate

Re-auditing

not compliant

Overview of the RSB Certification System

Properties of the Ideal Biofuel

No Feedstock Limitations Easy to Ship and Store Fits into Existing Infrastructure Produced Using Proven Chemistry/Biology Despite Years of Effort, No Second

Generation Biofuels Have Been Fully Commercialized – Why Not?

14

Timeline for Commercialization of Algal Biofuels and ProductsPhase 1: 2010 For High Value Markets - Phase 2: Fuel Markets Begin in 2011-2012

2009 – Algae R&D Projects Mature, Start of Sales Into Higher-Value Non-Fuel Markets

2010 – Algae Pilot Projects & Demonstration Projects Increase in Scale & Production

2011 – Early Algae Fuel Production Projects Arrive For Defense, Government, CO2

2011– Early-Stage C02 Capture Projects Arrive (Expensive at first, then cheaper)

2012-2015: Scale Up: Commercial Projects, Production, Markets (Costs decrease)

2010-2015: Phase 1: Smaller Markets: Higher-Value Commodity Products: Pharma/Nutraceuticals, Animal Feed Supplements, High Value Oils, Green Polymers: Bio-Degradable Chemicals, Materials, Additives

2012-2020: Increased Production, Competition Lowers Costs, Market Share Increases To Commercialization

2012-2020: Phase 2: Big Markets: Algae Grows as a Commodity for Fuels: Biodiesel, Biocrude, Drop in Fuels, Ethanol, Aviation Fuels, Animal Feed, Large-Scale Green Chemical Markets, Plastics, Polymers Emerge

* Note - will be expensive at first, then cheaper as production increases

Source ALGAE 2020 STUDY, Emerging Markets Online

THANK YOU !!Contact Details:Khoo Hock Aun

Mobile : +6016-301 4079 Email :

khoohockaun@cosmobiofuels.comkhoohockaun@gmail.com

COSMO BIOFUELS GROUP