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Presented: Martin Kubů, PREOL (a member of AGROFERT HOLDING) 6th April 2009
THE FUTURE ROLE OF RENEWABLE RAW-MATERIALS
CHANCE AND CHALLENGE FOR THE CHEMICAL REGIONS
DyStar – Aliachem meeting2
AGROFERT HOLDING, a.s. Leading company in CZ/SK agriculture with substantial stakes in chemistry and food industry with consolidated turnover more than 100 bln CZK in 2008.
Martin Kubů Worked in KAUČUK, a.s., ČESKÁ RAFINÉRSKÁ, a.s. , PARAMO,a.s. and ALIACHEM, a.s.. Recently responsible for group renewable business, motor fuel trading and biofuels. Chairman of the Board of PREOL, a.s., a competence centre of AGROFERT and AGROPOL for biofuels, motor fuels and renewable energy.
INTRODUCTION INTRODUCTION
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CHEMISTRY, KEY PLAYER ON ENERGY CHEMISTRY, KEY PLAYER ON ENERGY MARKETMARKET
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WORLD ENERGY DEMAND AND TRENDSWORLD ENERGY DEMAND AND TRENDS
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ENERGY CONSUMPTION TRENDS ENERGY CONSUMPTION TRENDS OECD/non-OECDOECD/non-OECD
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Regional leader in industrial (non energetic) NG consumption (as „feedstock“ )
AND
Important regional electricity buyer
AND
at the same time utility producer at chemical plants
AND
due to participation in regional agriculture important player in biomass sourcing/consumption
=
HIGH POTENCIAL FOR SYNERGIES BETWEEN RENEWABLES, REGIONAL RELATIONSHIP AND CHEMICAL PRODUCTION
GROUP SYNERGY GROUP SYNERGY CHEMISTRY/RENEWABLES CHEMISTRY/RENEWABLES
DyStar – Aliachem meeting7
BIOMASS usage as renewable energy/chemical feedstock in CZ is influenced:
DIRECTLY by:
(i) CZ local conditions for substitutes (WIND, CNG, SOLAR, etc.) and
(ii) subvention allocations (frequently non consistently applied – SOLAR/WIND
availability, Excise tax for BIOFUELS/CNG, Green bonuses , etc.)
INDIRECTLY by:
(i) differences in BIOMASS SUPPORT SCHEMES in neighbor areas
Decision to run business in renewable segment is FREQUENTLY INFLUENCED BY OTHER FACTORS than relating to BIOMASS PRODUCTION CYCLE
OUR BUSINESS FINDINGS OUR BUSINESS FINDINGS
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Example: CZECH WOOD Example: CZECH WOOD PELLETS BORDER CROSSING PELLETS BORDER CROSSING
8
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FEEDSTOCK POTENCIAL FOR 1G FEEDSTOCK POTENCIAL FOR 1G BIOFUELS PRODUCTION IN CZ BIOFUELS PRODUCTION IN CZ
FAME ETOH
FEEDSTOCK HARVEST (RAPE SEED 75%, GRAIN 25%)
kt Cca 1 250 Cca 6 000
BIOFUEL PRODUCTION POTENCIAL Kt 372 402
FOSSILE FUEL REPLACEMENT POTENTIAL
% (w.) 8,13% DIESEL 12,21%
MOGAS
FOSSILE FUEL REPLACEMENT POTENTIAL
% (v.) 8,89%
DIESEL
20,3%
MOGAS
FOSSILE FUEL REPLACEMENT POTENTIAL
% (e.o.)
5,35%
MOTOR FUELS
4,17%
MOTOR FUELS
TOTAL FOSSILE FUEL REPLACEMENT POTENTIAL
% (e.o.)
9,52 %
DyStar – Aliachem meeting10
FEEDSTOCK POTENCIAL FOR 1G FEEDSTOCK POTENCIAL FOR 1G BIOFUELS PRODUCTION IN CZ BIOFUELS PRODUCTION IN CZ
FAME ETOH
FEEDSTOCK HARVEST (RAPE SEED 75%, GRAIN 25%)
kt Cca 1 250 Cca 6 000
BIOFUEL PRODUCTION POTENCIAL Kt 372 402
FOSSILE FUEL REPLACEMENT POTENTIAL
% (w.) 8,13% DIESEL 12,21%
MOGAS
FOSSILE FUEL REPLACEMENT POTENTIAL
% (v.) 8,89%
DIESEL
20,3%
MOGAS
FOSSILE FUEL REPLACEMENT POTENTIAL
% (e.o.)
5,35%
MOTOR FUELS
4,17%
MOTOR FUELS
TOTAL FOSSILE FUEL REPLACEMENT POTENTIAL
% (e.o.)
9,52 %
Including feedstock for 2G biofuels (biomass, FGW, etc. ) in CZ exists higher potencial than EU recommended target 8% of motor fuel born on renewable used for transport in 2020.
DyStar – Aliachem meeting
MOTOR FUEL EXCISE TAX in EU MOTOR FUEL EXCISE TAX in EU AND IN CZ/GERMANYAND IN CZ/GERMANY
11
COUNTRYGASOLINE DIESEL LPG CNG
TAX (€/l) VAT(%) TAX(€/l) VAT (%) TAX (€/l) VAT (%) TAX (€/GJ)*VAT (%)
EU min. 0,359 0,302 0,125 2,600
CZ 0,400 19 0,336 19 0,133 19 0,000 19GERMANY 0,654 16 0,486 16 0,180 16 1,290 19FRANCE 0,589 19,6 0,417 19,6 0,108 19,6 0,370 19,6AUSTRIA 0,417 20 0,297 20 0,261 20 1,650 20POLAND 0,356 22 0,290 22 0,204 22 0,000 22SLOVAKIA 0,398 19 0,373 19 0,201 19 2,570 19SWEDEN 0,536 25 0,455 25 0,146 25 1,130 25GB 0,682 17,5 0,692 17,5 0,132 17,5 0,600 17,5
Source : European Union of Natural Gas Industry and VSCHT
DyStar – Aliachem meeting
MOTOR FUEL EXCISE TAX in EU MOTOR FUEL EXCISE TAX in EU AND IN CZ/GERMANYAND IN CZ/GERMANY
12
COUNTRYGASOLINE DIESEL LPG CNG
TAX (€/l) VAT(%) TAX(€/l) VAT (%) TAX (€/l) VAT (%) TAX (€/GJ)*VAT (%)
EU min. 0,359 0,302 0,125 2,600
CZ 0,400 19 0,336 19 0,133 19 0,000 19GERMANY 0,654 16 0,486 16 0,180 16 1,290 19FRANCE 0,589 19,6 0,417 19,6 0,108 19,6 0,370 19,6AUSTRIA 0,417 20 0,297 20 0,261 20 1,650 20POLAND 0,356 22 0,290 22 0,204 22 0,000 22SLOVAKIA 0,398 19 0,373 19 0,201 19 2,570 19SWEDEN 0,536 25 0,455 25 0,146 25 1,130 25GB 0,682 17,5 0,692 17,5 0,132 17,5 0,600 17,5
Source : European Union of Natural Gas Industry and VSCHT Fossile fues Excise tax worth
0,0856 €/l…… ……Energy tax on biofuel in Germany
worth 0,09 €/l…….and will grow
DyStar – Aliachem meeting
Biomass (biofuels) vs Fossil fuels in CZ
DyStar – Aliachem meeting
Biomass (biofuels) vs. Fossil fuels in CZ
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RENEWABLE VS. FOSSILE
0
2
4
6
8
10
12
14
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Mil
iard
y C
ZK
Goverment subvention of "alternative " fuels in CZ till 2020
BIOPALIVA (B/E) Fosilní paliva (CNG,LPG)
Till 2020 supports for „ fossil fuels“ might be 104 bln CZK
Till 2020 supports for renewable Biofuels might be 18,2 bln only = 14,5% of theoretical support for other fossil fuels
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Electricity Full Cost
17 14 14 146 6 6
7 7 7 7
4 4 4
4
23 23 23 49 49 492
3 3 3
3 3 316
477
22
2
3
0
10
20
30
40
50
60
70
80
90
100
Nuclear Coal 60€/t(CO2=4€/t)
Coal 60€/t(CO2=20€/t)
Coal 60€/t(CO2= 60€/t)
Gas25€/MWh(CO2 4€/t)
Gas25€/MWh
(CO2=20€/t)
Gas25€/MWh
(CO2=60€/t)
€/M
Wh
CO2
Taxes
Fuel
O & M
Capital (IRR 8%)
SOLID BIOMASS: Decision to run business in renewable segment is FREQUENTLY INFLUENCED BY OTHER FACTORS than relating to BIOMASS PRODUCTION CYCLE/MARKET PRICE
DyStar – Aliachem meeting
PREFFERED CONDITIONS PREFFERED CONDITIONS FOR FOSSIL ENERGY SOURCES (FES) COMPARING FOR FOSSIL ENERGY SOURCES (FES) COMPARING BIOMASS (I) INCREASE SUPPORT NEEDED FOR BIOMASS, (II) BIOMASS (I) INCREASE SUPPORT NEEDED FOR BIOMASS, (II) REDUCE FES ATTRACTIVNESS REDUCE FES ATTRACTIVNESS AS FEEDSTOCK FOR AS FEEDSTOCK FOR REGIONAL CHEMICAL INDUSTRY DUE TO STEADILY REGIONAL CHEMICAL INDUSTRY DUE TO STEADILY GROWING PRICES GROWING PRICES
IT INCREASES COMPETITION FOR REGIONAL CHEMICAL IT INCREASES COMPETITION FOR REGIONAL CHEMICAL INDUSTRY DUE TO (I) LOWER UTILISATION OF LOCAL INDUSTRY DUE TO (I) LOWER UTILISATION OF LOCAL SOURCES, (II) INCREASE PRODUCT FLOW INTO EU MARKET SOURCES, (II) INCREASE PRODUCT FLOW INTO EU MARKET
DyStar – Aliachem meeting
PREFFERED CONDITIONS PREFFERED CONDITIONS FOR FOSSIL ENERGY SOURCES (FES) COMPARING FOR FOSSIL ENERGY SOURCES (FES) COMPARING BIOMASS (I) INCREASE SUPPORT NEEDED FOR BIOMASS, (II) BIOMASS (I) INCREASE SUPPORT NEEDED FOR BIOMASS, (II) REDUCE FES ATTRACTIVNESS REDUCE FES ATTRACTIVNESS AS FEEDSTOCK FOR AS FEEDSTOCK FOR CHEMICAL INDUSTRY DUE TO STEADILY GROWING PRICES CHEMICAL INDUSTRY DUE TO STEADILY GROWING PRICES
USA: $7.20
Canada: $7.10UK: $8.65
Belgium: $8.50
Russia: $1.50
Qatar: $1.80
Trinidad: $1.65
Japan: $8.70
South Korea: $8.80
China: $6.30
India: $3.70
Bolivia: $1.85
Argentina: $4.85
Iran: $1.25
Saudi Arabia: $0.75
Oman: $1.00
Ukraine: $3.60
Belarus: $3.15
Mexico: $6.85
Brazil : $4.90
Germany: $7.60
Libya: $1.00
Source: ACC
Global Natural Gas Costs – 1st Quarter 2007
($US per million BTUs)
DyStar – Aliachem meeting
RES PRICING RES PRICING
19
PetrochemicalsProduction [mio t / a]
Price* [ € / t ]
C H OCarbon [ € / t C ]
Ethylene C2H4 110 890 86% 14% - 1035
Propylene C3H6 75 850 86% 14% - 988
Benzene C6H6 45 830 92% 8% - 902
BioRenewablesProduction [mio t / a]
Price* [ € / t ]
C H OCarbon [ € / t C ]
Glucose C6H12O6 143 300 40% 7% 53% 750
Bio-Ethanol C2H6O 36 365 52% 13% 35% 700
Source: Evonik Industries
* Prices as of May 24th , 2007, Bio-Ethanol price for Brazil
DyStar – Aliachem meeting
AVAILABLE POTENCIAL AND AVAILABLE POTENCIAL AND BIOMASS USE (ČR, BIOMASS USE (ČR, TJ.rTJ.r-1-1 ) )
20
BIOMASS (Biofuel)
POTENCIAL TJ.r-1
UTILISATION 2006, TJ.r-1 %
WOOD, WOOD REST 32 800 16 200 49.4
STRAW I (grain) 6 050 39 0.6
STRAW II (rape seed & others)9 800 170 1.7
ENERGETIC CROPS12 000 0 0
BIODIESEL9 200 2 300 25
BIOGAS7 000 1 000 14.2
TOTAL 76 850 19 709 25.6
DyStar – Aliachem meeting
CZECH „BIOGAS CZECH „BIOGAS COVERAGE“ COVERAGE“
21
DyStar – Aliachem meeting
TRENDS IN RENEWABLE IN TRENDS IN RENEWABLE IN CHEMISTRY CHEMISTRY
22
DyStar – Aliachem meeting
TRENDS IN RENEWABLE IN TRENDS IN RENEWABLE IN CHEMISTRY CHEMISTRY
23
AGROFERT forecasts future replacement cheapest bio compounds used as motor fuel by other more sophisticated applications
AGROFERT expects future coexistence of bio fuel IG and IIG due existing synergies (use of byproducts from IG as feedstock for IIG)
DyStar – Aliachem meeting
Taking off curve of the Ren. Energy Sources Taking off curve of the Ren. Energy Sources in the EU and reaction of AGROFERT Groupin the EU and reaction of AGROFERT Group
24
Decision about investing into the production of Ist gen. biofuels, 400. 000 mt source material, 100.000
biofuels, 230.000 energetic product
• Tender announcement regarding to the „BIOMASS TO
ENERGY“ project• 2-4 biogas production
units projects
R&D center for Biomas to Syngas
???
DyStar – Aliachem meeting
AGROFERT GROUP: AGROFERT GROUP: REACTION TO THE TRENDREACTION TO THE TREND
Biomass sources in the Group (as of 2008)
780 000 mt/y of Biomass
I. Gen. Biofuels Biogas plants Biomass to energy R&D Biomass to Syngas
DyStar – Aliachem meeting26
SHARED BIO/CHEMICAL HUB
Loading unloading
Rapeseed, meal storage
FAME
Glycerin production
Product storages
Oil mill, extraction
POWER GENERATION PLANT
FERTILISER PRODUCTION PLANT
DyStar – Aliachem meeting
Total emissions from the biodiesel production chain calculated according newly issued sustainable criteria by EU
GHG Emission Savings
• EF = 83.8 g CO2 / MJ (RED)
• EB = 47.49 g CO2 / MJ
GHG EMISSIONSGHG EMISSIONS, CZ CASE , CZ CASE
Module [g CO2 / MJ]
Cultivation (eec) 30.69
Direct land use change (el) 0
Processing (ep) 15.82
Transport and Distribution (etd) 0.98
Biofuel in use (eu) 0
TOTAL (EB) 47.49
GHG savings = (EF – EB) / EF
GHG savings = 43.33 %