1η Ενότητα: «Το Παρόν και το Μέλλον των Βιοκαυσίμων στην Ελλάδα και την Ευρώπη» A global biofuels outlook: U.S. RIN markets and EU proposals Gerard Wynn Energy and climate columnist Thomson Reuters
Global biofuel consumption
Two recent developments U.S. and the EU The U.S. Renewable Fuel Standard Problem 1: an ethanol blend wall? Problem 2: rising RIN prices Problem 3: missed targets for cellulosic ethanol Solution: biodiesel? The EU: European Commission proposal for 2020 targets Problem 1: halve crop-based biofuel target Problem 2: publish ILUC factors
U.S. Renewable Fuel Standard Obliges fuel producers to blend a certain percentage of biofuel into gasoline and diesel Producers must accumulate Renewable Identification Numbers (RINs) to match the required blend percentage Each RIN defines a certain volume and type of biofuel Producers can either blend biofuel or buy RINs on secondary market Ethanol RIN demand and prices rise when there is a shortage of ethanol, or if the ethanol mandate exceeds safe levels for older cars (the 10% blend wall )
U.S. RFS: two main categories of biofuel Advanced biofuel Includes cellulosic ethanol; sugar cane ethanol; biodiesel Conventional renewable fuel Chiefly corn ethanol There are separate mandates for: Total renewable fuel Advanced biofuel Cellulosic biofuel Biodiesel
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 1η Ενότητα: «Το Παρόν και το Μέλλον των Βιοκαυσίμων στην Ελλάδα και την Ευρώπη» U.S. renewable fuel mandates, 2006-2022 Billion gallons 40 35 30 25 20 15 10 cellulosic biofuel minimum biodiesel minimum Other advanced biofuels (excluding biodiesel and cellulosic) Implicit non-advanced biofuel 5 0 Source: U.S. Energy Independence and Security Act, 2007
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1η Ενότητα: «Το Παρόν και το Μέλλον των Βιοκαυσίμων στην Ελλάδα και την Ευρώπη» Blend wall: decline in U.S. ethanol production Million gallons 16.000 14.000 12.000 10.000 8.000 6.000 4.000 2.000 0 Source: U.S. EIA
Blend wall: decline in ethanol RINs Million gallons 14.000 13.500 13.000 RIN supply Mandate 12.500 12.000 11.500 11.000 2010 2011 2012 Source: EPA
Μαρ-10 Μαϊ-10 Ιουλ-10 Σεπ-10 Νοε-10 Ιαν-11 Μαρ-11 Μαϊ-11 Ιουλ-11 Σεπ-11 Νοε-11 Ιαν-12 Μαρ-12 Μαϊ-12 Ιουλ-12 Σεπ-12 Νοε-12 1η Ενότητα: «Το Παρόν και το Μέλλον των Βιοκαυσίμων στην Ελλάδα και την Ευρώπη» Blend wall: US gasoline and ethanol consumption Thousand barrels 340.000 320.000 300.000 280.000 260.000 240.000 Adjusted ethanol consumption Total finished motor gasoline exported Total finished motor gasoline supplied in the United States 220.000 200.000 Source: EIA
Μαρ-10 Μαϊ-10 Ιουλ-10 Σεπ-10 Νοε-10 Ιαν-11 Μαρ-11 Μαϊ-11 Ιουλ-11 Σεπ-11 Νοε-11 Ιαν-12 Μαρ-12 Μαϊ-12 Ιουλ-12 Σεπ-12 Νοε-12 1η Ενότητα: «Το Παρόν και το Μέλλον των Βιοκαυσίμων στην Ελλάδα και την Ευρώπη» % 10,5 Blend wall: ethanol, % of finished gasoline 10 9,5 including exports excluding exports 9 8,5 8 Source: EIA
Blend wall: projected % of finished gasoline % ethanol/ gasoline 12 10 8 6 4 2 0 2010 2011 2012 2013 mandate 2014 mandate Thousand barrels 2015 mandate 370.000 360.000 350.000 340.000 330.000 320.000 310.000 300.000 290.000 280.000 total ethanol consumption Percent blend (assuming constant 2012 gasoline demand) Source: EIA, EPA
log mln gallons 1000 Cellulosic ethanol: shortage 100 10 Actual production Amended mandate Original mandate 1 0,1? 0,01 2010 2011 2012 2013 Source: EPA
Yes? U.S. biodiesel: the solution? No blend wall issues (1.1%, compared with 5% limit) Can substitute for cellulosic ethanol in advanced biofuel mandate Over-capacity (2.1 bln gallons vs mandate for 1.3 bln) But, depends on... Brazilian sugar cane market (sugar ethanol also counts as U.S. advanced biofuel ) Diesel prices Soybean oil/ biodiesel margin > 50% lifecycle GHG emissions saving
EU 2020 proposal: limit crop-based biofuels to 5% EU-27 renewable sources, percent of all transport fuel, 2010 0,9 0,3 3,4 Biodiesel Conventional ethanol Electric cars Source: European Environment Agency, 2011
EU 2020 proposal: publish ILUC factors gco2/ MJ 140 120 100 80 60 40 20 0 Suggested CO2 emissions of crop-based biofuels % CO2 saving vs 80 gasoline 60 40 Indirect 20 emissions (Proposed) 0-20 -40-60 Direct emissions (Renewable energy directive, 2009) Source: European Commission; Renewable Energy Directive 2009 Total % GHG saving
U.S. ethanol market Some conclusions Infrastructure problems exceeding E10 Technology problems meeting cellulosic ethanol targets Biodiesel can capitalise EU biofuel market Continuing concerns over environmental impacts Biodiesel appears vulnerable, at least for meeting targets