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  • Global Biofuels Outlook: Policy, Market and Technology Trends

    Hart Energy Breakfast Series September 6, 2012

  • Presentation Overview

    Petroleum Product Overview • Regional

    Product Demand Growth & Share

    • Refined Product Market Share

    Global Biofuels Overview • Global Trends • Global

    Mandates • Next Gen

    Biofuels

    Ethanol • Supply and

    Demand • U.S. Ethanol &

    RFS2 • Brazilian

    Ethanol Supply & Demand

    Biodiesel • Supply &

    Demand • Biodiesel in the

    EU Countries • Biodiesel in the

    Major Producing Countries

    Conclusions

  • Petroleum Product Overview

  • Regional Petroleum Product Demand Growth Or…Why Do Biofuels Still Matter?

    North America

    Latin America

    Europe CIS Asia- Pacific

    Middle East

    Africa

    -0.3%

    2.0%

    0.3% 2.0%

    2.2%

    2.6%

    2.2%

    MILLION BARRELS PER DAY

    Annual percent growth shown above bars

    Asia-Pacific accounts for 54% of 2011-30 growth, China 33% of global growth

    Source: Hart Energy’s World Refining & Fuels Service, 2011

  • Source: Hart Energy’s World Refining & Fuels Service, 2011

    2011 2015 2020 2025 2030 Increment 2011-2030

    Other LPG Heavy Fuel Oil Distillate Jet Fuel/Kerosene Naphtha Gasoline

    Refined Product Market Share Distillate dominates refined product market,

    accounting for nearly half of refined product growth

  • Global Biofuels Overview

  • Global Biofuels Trends and Outlook

    • Biodiesel and renewable diesel prices are forecasted to be uncompetitive with petroleum products and depend on troubled mandates

    Biofuels Largely Rely on Food-Based

    Feedstocks

    • ILUC is a headache for EU policymakers

    Difficulties in Implementing Far- Reaching Biofuels

    Programs in the U.S., EU

    • Internal market demand and constraints make export volumes cyclical and uncertain

    Brazil Considered the “Linchpin” but

    Internal Market Uncertainties

    • Technologies still unproven and scale-up has been very slow Next

    generation/advanced biofuels largely not

    available

    • Ethanol: Strongest growth from Asia Pacific but the U.S. and Brazil remain largest consumers

    • Biodiesel: Strongest growth from Asia pacific but the EU remains the largest consumer

    Despite these constraints: Biofuels

    consumption will continue to grow!

  • Source: Hart Energy’s Global Biofuels Center, June 2012

    Latin America: More countries push for

    mid- and higher level ethanol blends Ethanol

    Biodiesel

    Ethanol & Biodiesel

    Partial or No known biofuels program

    Africa: Countries beginning

    to set mandates

    Middle East: Ethanol & jatropha

    R&D projects; algae

    Asia Pacific: High variance in blend levels

    Europe: RED implementation, sustainability

    and GHG savings North America:

    RFS2, LCFS, intermediate blends

    Global Biofuel Mandates in 2012

  • Next Generation Biofuels Outlook

    Hart Energy projects less than 800 million gallons commercial-scale production by 2020 in the U.S.

    25 operating next generation biofuels pilot/demo plants in the U.S.

    • 18 cellulosic ethanol plants with capacities ranging from 1,600 gallons to 1.5 million gallons per year

    • 5 FT or HVO renewable diesel plants: undisclosed to 0.07 gallons to 5 million gallons per year

    • 2 for biogasoline or biojet

    2 operating commercial plants in the U.S.

    • Gevo: 18 million gallons per year of butanol • Dynamic Fuels: 18 million gallons per year of HVO renewable diesel

  • Evolution of Next Gen Potential Capacity

    Pilot/demo Commercial Pilot/demo Commercial Pilot/demo Commercial

    2010 2011 2012

    M ill

    io n

    G al

    lo ns

    Biobutanol Cellulosic Ethanol FT Liquids / Hydrocarbons Methanol Hydrogenated vegetable oil / animal fat Synthetic gasoline DME Non FT Hydrocarbon clean diesel, jet fuel

    Source: Hart Energy’s Global Biofuels Center, June 2012

    Note: Includes all capacity (operating, under construction and proposed)

  • Ethanol

  • Global Supply & Demand for Ethanol

    Source: Hart Energy’s Global Biofuels Center, September 2012

    2015 2020 2025

    M ill

    io n

    G al

    lo ns

    Asia Pacific Ethanol Supply Asia Pacific Ethanol Demand EU27 Ethanol Supply EU27 Ethanol Demand Latin America Ethanol Supply Latin America Ethanol Demand North America Ethanol Supply North America Ethanol Demand

  • Ethanol in the Major Producing Countries

    0 2,000 4,000 6,000 8,000

    10,000 12,000 14,000 16,000 18,000

    Brazil U.S. China Thailand Canada Argentina

    M ill

    io n

    G al

    lo ns

    Ethanol Supply & Demand in 2025

    Supply Demand

    Source: Hart Energy’s Global Biofuels Center, September 2012

  • Iceberg Right Ahead! U.S. Ethanol Demand and RFS2

    2015 2020 2025

    Bi lli

    on G

    al lo

    ns

    RFS 2 - Wet Ethanol

    E10, E15, E85

    E10, E15, limited E85

    E10, Limited E15 & E85 - Hart Energy Scenario

    E10, limited E85

  • Biodiesel

  • Global Supply & Demand for Biodiesel

    Source: Hart Energy’s Global Biofuels Center, September 2012

    2015 2020 2025

    M ill

    io n

    G al

    lo ns

    Asia Pacific Biodiesel Supply Asia Pacific Biodiesel Demand EU27 Biodiesel Supply EU27 Biodiesel Demand Latin America Biodiesel Supply Latin America Biodiesel Demand North America Biodiesel Supply North America Biodiesel Demand

  • Biodiesel in the Major EU Countries

    Finland France Germany Italy Netherlands Poland Spain Sweden UK

    M ill

    io n

    G al

    lo ns

    Supply Total Demand

    Source: Hart Energy’s Global Biofuels Center, September 2012

  • Biodiesel in the Major Producing Countries

    0

    500

    1,000

    1,500

    2,000

    2,500

    Brazil Argentina U.S. Indonesia Germany France

    M ill

    io n

    G al

    lo ns

    Biodiesel Supply & Demand in 2025

    Supply Demand Source: Hart Energy’s Global Biofuels Center, September 2012

  • Conclusions

  • Conclusions

    • The main ethanol consumer, the U.S., has hit a blend wall and cannot consume more ethanol until E15 penetrates the market. Vehicle fuel economy improvements will drive gasoline consumption down thus reducing even more the ethanol blending potential.

    • The Brazilian ethanol market suffers from competition with the sugar industry • The EU ethanol market is also limited by blending levels and declining gasoline consumption • These factors have led to a reduced ethanol demand and potentially over supply until 2025

    Ethanol: No Shortage Until 2025

    • The use of biodiesel in off-road applications creates a very large demand in the EU27 • Great uncertainties with regard to the sustainability of available supplies • Argentina seen as major potential supplier to the global market, but hurdles seen in the domestic

    (price setting, taxes) and export markets (export taxes, sustainability)

    Biodiesel: Large Deficit Expected Until 2025

    • 60% of the demand is to be met by ethanol

    Biofuels: Global Demand Equivalent to 5.4% by Energy of Gasoline and Diesel Pool by 2025

  • Thank You!

    Tammy Klein Assistant Vice President +1.239.970.2231 [email protected]

    mailto:[email protected]

    Slide Number 1 Presentation Overview Petroleum Product Overview Regional Petroleum Product Demand Growth�Or…Why Do Biofuels Still Matter? Refined Product Market Share Global Biofuels Overview Global Biofuels Trends and Outlook Global Biofuel Mandates in 2012 Next Generation Biofuels Outlook Evolution of Next Gen Potential Capacity Ethanol Global Supply & Demand for Ethanol Ethanol in the Major Producing Countries Iceberg Right Ahead!�U.S. Ethanol Demand and RFS2 Biodiesel Global Supply & Demand for Biodiesel Biodiesel in the Major EU Countries Biodiesel in the Major Producing Countries Conclusions Conclusions Thank You!

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