2. Biofuels: The New Fuel Economy Mexico Biofuels Conference Guadalajara, Mexico 7-8 May, 2008

3. The Race to Renewable Manila, Philippines skyline Lillehammer, Norway How we generate our energy will determine our quality of life

4. Biofuels: The New Fuel Economy Oil surpasses the $121 mark: Yesterday! We can replace most of the fossil fuels demand Oil resources are predicted to run out by 2055 Biofuels has shown to reduce GHG by 40-50% Energy independence/Energy Security: Good public policy Expand economic development in rural areas The carbohydrate economy replaces carbon economy An estimated $30 Billion (USD) investments in Renewable Fuels projects in 2006-2008 worldwide From 2006 through April of 2008 over $1 Billion (USD) has been invested in cellulosic ethanol for R&D and pilot plants. The source has been the US DOE and Canada’s Agriculture Ministry.

5. The Race to Renewable 200 year old Dairy barn on Gotland, Sweden Converted to Biodiesel Plant Changing our thinking will add to our energy balance and economic opportunities

6. Biofuels: The New Fuel Economy 21st Century: the beginning of a New Era Challenge: TO DIVERSIFY ENERGY SOURCES Source: Nakícenovic, Grübler e MaConald

7. Developing A World Market Issues Facing World Fuel Markets 1. Fuel Costs in the World Market: A. Sierra Leone: $18.02USD/gal B. Aruba: $12.03USD/gal C. Europe/Paris: $8USD/gal 2. Growing fuel/oil demand 2006: USA imported $325B in crude oil, non- crude and petroleum products (23% increase in one year) 3. Reduced Refining Capacity Thirty years with no new oil refineries built in USA 4. China and India Fuel Demand The combined growth of the two economies will require new fuel capacity of an additional 40m barrels/day in the next five years

8. Biofuels: The New Fuel Economy COUNTRY Millions of Gallons% of World USA710051.7 Brazil502036.5 EU5704.1 China4873.5 Canada2401.7 Thailand 890.6 Colombia750.5 India530.4 Central Am400.3 Australia260.2 Turkey160.1 Pakistan9.50.1 Peru80.1 Argentina5.30.05 Paraguay4.70.05 Total13,743.5100% Brazil and USA represent 84% of the World Production of Ethanol 2007 Ethanol Production

9. Biofuels: The New Fuel Economy Ethanol: US Demand-Supply Projections

10. Biofuels: The New Fuel Economy Chicken and the egg: Flex-fuel cars and trucks USA – Los productos de los grandes fabricantes americanos (G.M., Ford, Chrysler) son para E10. Tienen algunos para E85. Por ahora su mayor producción esta orientada a vehículos convencionales de gasolina. Europa: solo pocos fabricante tienen vehículos Flex-Fuel. (Saab, Ford, Volvo), especialmente para el mercado de Suecia, donde el uso del etanol esta nuy desarrollado.. Brazil: País mas avanzados en desarrollo de vehículos Flex-Fuel. GM tiene modelos Flex-Fuel. Otros fabricantes como Mitsubishi y Toyota los introducirán próximamente.

11. USA Ethanol Blends: E10 (most states) E20 (testing) E30 (testing) E85 (45 states) Retail Fueling Challenges New fueling pumps and tanks are needed Education for consumers at point of sale Incentives and promotions to entice customers

12. Biofuels: The New Fuel Economy Biofuels as % or world transportation fuels 2005 2020 1% 5-7% Required increase (%) in biofuels production > 400% Required increase ($) in capacity expansion $200 bill. Transportation and Biofuels

13. Challenges for Biofuels POLITICAL –A long-term commitment to biofuels –Hemispheric cooperation to satisfy demand and economies of scale ECONOMIC –Improve regulatory and investment climate –Establish strong finance partners: venture capital, FIRA, I-ADB TRADE –Open up trade to make biofuels truly global commodities –Stimulate price competition SOCIAL –Educate the public, the media, government officials, regulators –Establish technical programs at schools and train workforce

14. Global Ethanol Feedstocks South America BrazilSugar Cane PeruSugar Cane ColombiaSugar Cane, sugar beet Central AmericaSugar Cane, sugar Beet North America United StatesCorn CanadaCorn, Wheat, Barley Asia / Australia / Pacific Rim ChinaCorn, Wheat IndiaSugarcane PhilippinesSugar Cane ThailandCassava, Sugarcane, Rice AustraliaGrains, Sugarcane, Sweet Sorghum Europe EUGrains, Sugar Beet FranceSugar Beet, Wheat, Corn GermanyRye, Wheat SpainWheat, Barley SwedenWheat Africa South AfricaCorn, Sugarcane GhanaSugar, Maize ZimbabweSugarcane, Sorghum MozambiqueSugarcane, Sorghum, Corn

15. South America BrazilSunflower Seeds, Soybeans, Castor Bean PeruJatropha, Palm Oil, Canola ColombiaJatropha Central America Palm Oil North America United StatesSoybean CanadaCanola, Rapeseed Asia / Australia / Pacific Rim ChinaCotton Seed, Jatropha IndiaJatropha PhilippinesCoconut Oil ThailandPalm Oil, Jatropha, Soybean, Peanut, Coconut AustraliaCanola, Sunflower Europe EURapeseed FranceRapeseed and Sunflower GermanyRapeseed and Sunflower SpainPalm Oil, Wheat, Barley Africa South AfricaJatropha GhanaPalm Oil ZimbabweJatropha MozambiqueJatropha Global Biodiesel Feedstocks

16. Biofuels: The New Fuel Economy Brazil  Second largest producer in the world  Most efficient producer in the world  Accounts for about half of international ethanol trade  Brazilian success generated large interest in biofuels across LAC. Countries throughout LAC have biofuels industries in varying stages of development  Brazil engaging in cooperation agreementsArgentina  Second world corn exporter well positioned to develop ethanol and top producer to develop biodiesel (vegetable oil)

17. Biofuels: The New Fuel Economy Colombia  Currently E10  Fifth largest producer and exporter of palm oil; 4 th in yield by hectare  Pioneering the use of tropical sugar beets and cassava for ethanol production  Potential advantage in access to the US market using trade agreements Central America and Caribbean  Biofuels of interest in cutting oil imports and raising export revenue  Using trade agreements and CBI

18. Other Global Markets  Japan is moving from 3% ethanol blend to 10% by 2020  India and Philippines have initiated fuel ethanol programs  Indonesia and Malaysia are planting more palm and now investing in ethanol production with molasses, cassava and sugar  Thailand has twelve ethanol plants and 10 more in planning stages

19.  Liberalization leads to increasing growth  Poised to be strong exporter:  Lowest-cost producer  Supportive government policy  Net energy balance  Abundant land resources  Increased internal demand due to FFV sales will change the export market dynamics  Existing trade: USA through CBI (early summer arbitrage allowed heavy direct sales to the US), Japan and S. Korea  Development of export industry is challenged by other nations’ trade policies Brazil Sugar to Ethanol Competing with the global leader

20. Biofuels: The Next Generation Feedstocks for Cellulosic Ethanol Switchgrass Wood wasteAgaveCorn Stover Rice Patty …..basically any waste plant material can be converted to into ethanol either through chemical or thermo process.

21. China’s Vast Resources

22. Food vs. Fuel Debate Source:

23. European Market  Poised to become net importer from Brazil and USA  Biofuels Directive (10% in 2020) to boost production of fuel ethanol and synthetic fuels to reach target  Growth of new capacity in Eastern Europe  Reforms of EU agricultural markets needed  Different biofuel requirements inhibit growth  Automotive industry must develop more biofuels cars The Opportunities and Challenges

24. Americas Hemispheric Network Americas Bioenergy Network Member driven Setting technical Standards Building Partnerships Promoting Clean Energy Project Finance Influencing Policy Communications Center Promoting your company Accessing the global market Americas Bioenergy Network

25. Africa: Renewable Energy Partners for Euro-African Green Energy (PANGEA) encourages African biofuel production as a way to promote sustainable economic development using what Africa does best—agriculture. Goals:  To promote African biofuels production for the European market  To encourage European investment and policies for in African biofuel production and importation  To monitor food vs. fuel issues  To serve as a one-stop shop of African biofuel expertise Activities:  Provide policy expertise to EU institutions and member states  Provide EU and African market analysis & trade opportunities  Create strategic political & industrial partnerships through networking  Quarterly Board meetings (Brussels) tied with EC/EP networking and Annual AGM  Participate in biofuel conferences and trade development workshops www.pangealink.org

26. The Race to Renewable What the future holds is in your hands!

27. Contact Information Randy R. Stratton, President TSG Marketing 3220 W. 57 th Street, Suite 100 Sioux Falls, South Dakota 57108 USA Tele. +01 605.323.0119 Fax +01 605.323.0122 Email: randy.stratton@tsgmarketing.com Mexico Biofuels Conference