Benedikt Stefansson, Director of Business Development · abatement derived from EU bioethanol...

Benedikt Stefansson, Director of Business Development

Low carbon intensity and green methanol: Iceland and beyond

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Ample supply of renewable energy but location and availability doesn’t match demand

Problem #1

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Growing use of fossil fuels causing climate change, ocean acidification and urban pollution

Problem #2

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Transform electricity and CO2 into clean-burning liquid fuel – methanol - which is carbon neutral

Solution (since 2012)

CO2-to-methanol: A liquid energy carrier which scales sustainably

CRI Emissions-to-Liquids (ETL) platform

5

H2

CRI’s Emissions-to-Liquids technology platform

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Clean conversion

CO2 purification

Electrolysis

One step hydrogenation of CO2Flue gas emissions

Renewable energy

Transport

Chemicals

Methanol

H2 rich emissions

Modular Offtake

1.4 t

0.2 t

1 t

11.5 MWh*

*Total load based on alkaline water electrolysis

H2

Building on more than 12 years of full value-chain experience

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Pilot plant Plant commissioned Foreign projects Commercial scale0.001 t/d 4 t/d 150-300 t/d

2006 2007 2012 2014 2015 2016 2018 2019 2021

Capacity added12 t/d 2 t/d

Methanol FC cars M100 fleet test UK Gasoline blendingCompany launched NL gasoline blending

637016 727504

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Energy source: Icelandic gridCO2 source: Geothermal gasCO2 conversion: 5,600 t/yrCapacity: 4,000 t/yr methanolElectrolyzers: 6 MW (alkaline)

First CCU-to-fuel plantSvartsengi, Iceland 2012 –

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Site of second CCU-to-fuel plantRWE power-plant Bergheim-Niederaussem, Germany

Energy source: Wind powerCO2 source: Coal combustionCO2 conversion: 500 t/yrCapacity: 350 t/yr methanolElectrolyzers: 0.6 MW (PEM)

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Plant adapts dynamically providing flexible load and energy storage

Site of second CCU-to-fuel plantRWE power-plant Bergheim-Niederaussem, Germany

Energy source: Wind powerCO2 source: Coal combustionCO2 conversion: 500 t/yrCapacity: 350 t/yr methanolElectrolyzers: 0.6 MW (PEM)

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Site of third CCU-to-fuel plantSSAB steel-works Lulea, Sweden

Energy source: Blast furnace gasCO2 source: Blast furnace gasCO2 conversion: 500 t/yrCapacity: 350 t/yr methanol

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Site of third CCU-to-fuel plantSSAB steel-works Lulea, Sweden

Energy source: Blast furnace gasCO2 source: Blast furnace gasCO2 conversion: 500 t/yrCapacity: 350 t/yr methanol

Plant uses waste gas streams from steel-making process

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Surplus or stranded energy Industrial waste gas

= Transport fuels= Zero fossil chemicals

+

CRI developing pipeline of Carbon Capture and Utilization (CCU) projectsEurope – defossilizing mobility China: low carbon clean urban air

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First projects: 50,000 – 100,000 t/yr First projects: 100,000 – 250,000 t/yr

CRI ETL platform with electrolysis CRI ETL platform with coke-oven gas

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Initial objectives of fleet trial 2016-2017

Demonstrate performance of M100 cars

Implement a green methanol value chain

Document CO2 savings and sustainability

Develop and test best practices

Results 2016-2019

> 400,000 km accumulated

Over 73% reduction of WTW CO2 emissions

Ownership costs < than BEV

Positive driver experience

Geely Emgrand 7 M100 in Iceland

2022 2024 2026 2028 20300%

2%

4%

6%

8%

10%

12%

14%

2004 2006 2008 2010 2012 2014 2016 2018 2020

EU 2009- : Increasing obligation for renewable energy in road transport

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Source: Eurostat, directive 2009/28, 2018/2001 (RED II)

New mandate: focus on sustainability

Share of energy in road transport

Gap10%

14%

Sodium chloride electrolysis

Water electrolysis

Separation of H2Recycled carbon fuel

Low carbon intensity methanol processes and EU framework

Energy source Upstream CRI Output (EU directives)

Renewable transport fuel from

non-biological sources*

+

+

Carbon Recycling International

* Also known as e-fuel

H2

H2

CCU fuel

Automaker obligation disconnected from renewable energy mandate

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Not battery electric = penalty Alternative: WTW perspectiveTargets for tailpipe emissions

‚

2

4

6

8

2010 2020 2030 2040

EU China US

10 L/100 km

4.1 tCO2EV – Chinese grid

2.1 tCO2

2.3 tCO2

0.4 tCO2

CO2 footprint for light vehicle

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Gasoline

CRI methanol – byproduct H2

CRI methanol – 100% wind*

Annual net emissionsFuel 0 1 2 3 4 5

Sources: COREPER, OECD, Covenant of Mayors for Climate and Energy, CRI

Implied value of CO2 abatement derived from EU bioethanol market price

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EuroBOB market price methanol equivalent

“Green premium” based on bioethanol market price

0

20

40

60

80

100

120

140

0

100

200

300

400

500

600

700

800

Realized market prices 2018-2019*

800 €/t 140 €/MWh

Energy eq. price

€38

*Source: Energy Census; Ethanol = T2 Ethanol CIF Rotterdam; EuroBOB = European gasoline blendstock CIF Rotterdam

0

20

40

60

80

100

120

0

100

200

300

400

500

600

700

800

900

Feb-18 May-18 Aug-18 Nov-18 Feb-19

€900/t ethanol Per MWh LHV: €120

Realized priceAverage 2018-2019

€85

Price of energy eq. in gasoline (EuroBOB)

Premium for ethanol on energy eq. basis

Observable ethanol market price

€47

-170 kgCO2/MWh

= €38

-1 t CO2

= €223

Value of CO2 abatementImputed from premium for ethanol

Solar energy striking earth in one hour = global energy consumption per year

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122,100 TWh

Global primary energy consumption per year

Oil 6.02 TWh

Coal 4.91

Gas 4.15

Hydro 0.42

Nuclear 0.27

Non-hydro renewable 0.12

Total 15.9 TWh

Solar energy striking earth per year

52,900 TWh

Source : EIA

Does Europe have sufficient energy to switch to e-fuels?

Europe: Road transport energy demand

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Europe: Renewable energy potential

RooftopOnshore Offshore Thermal Utility

6000 TWh/yr

5000

4000

3000

2000

1000

0 0

1000

2000

3000

4000

5000

6000

2020 2030 2040 2050

Fossil fuels Electricity H2 Methane PtL

Source: LBST/German Energy Agency 2017 “E-fuels: The potential of electricity-based fuels for low-emission transport in the EU”

6000 TWh/yr

Cost of electricity generation falling sharply

US on-shore wind LCOE - unsubsidized US utility PV solar LCOE - unsubsidized

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135124

71 72 7059 55

47 45 42 38 34 31 28 25 23 21

0

50

100

150

2009 2011 2013 2015 2017 2019 2021 2023 2025

125

98

79

6455

5043

3631

26 22 19 16 14

0

50

100

150

2009 2011 2013 2015 2017 2019 2021 2023 2025

$150/MWh $150/MWh

Source: Data 2009 – 2018 from Lazard; Forecast 2019 - 2025: CRI

10% CAGR 2013-2018 16% CAGR 2013-2018

? ?

A new ecosystem of circular economy and energy

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Process industry

Power sector Mobility and freight

Government

Public & NGOs

Fossil fuels

Auto industry

Ag industry

Stakeholders

Direct ecosystem Indirect ecosystem

Take away points

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We have a problem Technology is ready New markets are openingCost falling and supply rising

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Benedikt StefanssonDirector of Business Development

E-mail: benedikts [at] cri.is