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VERBIO Vereinigte BioEnergie AG Presentation Potsdam 12.12.2007 Fabian Hahn von Burgsdorff, VERBIO AG.

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Presentation on theme: "VERBIO Vereinigte BioEnergie AG Presentation Potsdam 12.12.2007 Fabian Hahn von Burgsdorff, VERBIO AG."— Presentation transcript:

1 VERBIO Vereinigte BioEnergie AG Presentation Potsdam Fabian Hahn von Burgsdorff, VERBIO AG

2 Introduction Markets Biodiesel / Bioethanol 2 nd Generation Strategy Conclusion

3 3 Current Group Structure Verbio Vereinigte BioEnergie AG Energy [Picture] MUWNUW Biodiesel [Picture] MBENBE Bioethanol Transport and logistics Others Swiss BioEnergy AG (SBE) (1) (1)SBE procures feedstock and executes sales of finished products on behalf of group entities. SBE also provides engineering services to Verbio Wind Biogas

4 4 Leading Biofuels Producer in Europe European Biofuels Companies (Current Positioning) (Current Nominal Production Capacity in ‘000 tonnes) Positioning Only integrated biofuels producer operating in Europe Size confers advantages: –Relationships with “Blue Chip” customers –Improved economies of scale –Involvement in political / regulatory process Publicly Traded European PeersGerman Peers (>150k t/a) (Current Nominal Production Capacity in ‘000 tonnes) Verbio is a leading pure play in both the European and German biofuels markets (2) (1) BioethanolBiodiesel (2) (6) (4) (3) (7) (3) (4)Operational capacity of 32,000 t/a expected Autumn 2006 (5) Includes nominal capacity of 40,000 t/a (50,000m 3/ a) in France and 9,000 t/a (11, 500m 3/ a) in a 50:50 JV in Hungary (6)NEW Natural Energy West GmbH (owned by Bunge, Agravis, Diester, and C. Thywissen); does not include further capacity expansion in Neuss (Germany) of 20,000 t/a for 2006 (VdB) (7)Company to install further 150,000 t/a capacity (Neuss) in 2006 (VdB) Source:Verband der Biodieselhersteller (VdB) estimates as of 31 May 2006 and company data (1)Includes 290,000 tonnes non-EU production capacity (2)Majority owned by ADM; includes production capacity of Oelmühle Leer Connemann (Leer) with a capacity of 125,000 t/a (acquired 1987) (3)Biopetrol is currently expanding its production capacity by 200,000 t/a (Rostock) and should start production = 4Q 2006 (5)

5 5 Group History 2000 April Sale of oil mill stake (1) Begin MUW Biodiesel plant planning, including application for subsidies November Begin MUW construction (135,000 t/a transesterification) 2001 August Start of MUW trial operations October First Biodiesel production in accordance with regulatory norm March 2002 Founding of MBE (first German Bioethanol plant) May 2003 Founding of NBE (Bioethanol plant at Schwedt refinery) June 2003 Begin MBE plant construction (100,000 t/a) October 2003 Founding of NUW (Biodiesel plant) January 2004 Begin NBE plant construction (initially 100,000 t/a) (2) Mid-2004 Start-up of MUW esterification (3) (16,000 t/a) (2) Second Half 2004 Increase of MUW capacity to 200,000 t/a 2004-Present Sept-Dec 2004 Start of MBE and NBE trial operations February 2005 Begin NUW plant construction (200,000 t/a) Jun-Aug 2005 Start ramp-up of MBE capacity Start of first NBE production line Start of NUW trial operations November 2005 First NUW delivery to Schwedt refinery May 2006 Start of second NBE production line (100,000 t/a) Foundation of Verbio (700,000 t/a) (2) Start of Biodiesel trading (2,000 t/a) 1995 Start Biodiesel plant feasibility study First contact with Dr. Pollert 1996 Construct oil mill (1) Expand Biodiesel trading ~20,000 t/a (2) More than ten years successful project development and operations (1)50% Verpachtungsgesellschaft mbH (Santo family) participation; (2) Data is nominal (nameplate) capacity; (3) [Definition of esterification to come]

6 6 Trends in EU Fuel Consumption Observations Western European gasoline consumption is in decline, whereas diesel is increasing –Price differential (tax driven) –Quieter, cleaner –More fuel efficient Less-developed southern economies growing faster than those of the North –E.g. Spain, Portugal, Turkey European supply-demand imbalance –Surplus gasoline (export to USA) –Diesel and jet fuel deficit (expected supply shortage of diesel refinery capacity in Europe) EU Transport Fuel Consumption Selected EU Consumption (2005) (in billion tonnes) (in million tonnes) Source:Frost & Sullivan data and estimates

7 Introduction Markets Biodiesel / Bioethanol BtL Fuels Strategy Conclusion

8 8 Worldwide Transportation Fuel Demand (2005): 1,583 million tonnes oil equivalent Large Potential Biofuel Market Worldwide Alternative Fuels Demand for Transport Source:United Nations Framework Convention on Climate Change (UNFCCC) (Nov 2005) Greenhouse Gas (GHG) Emissions ( ) Source:Hart World Refining and Fuels Service The below chart summarises % change in CO 2 emissions in the EU-15 ( ):

9 9 Conclusion Grain Crude Oil Ethanol Price Time In this Situation it is impossible for European Biofuel-producers to compete against Ethanol made of sugarcane or B99 from USA prices for wheat and vegetable oil increased much faster than crude mineral oil Oilseed Biodiesel

10 Introduction Markets Biodiesel / Bioethanol 2 nd Generation Strategy Conclusion

11 11 Political milestones - EU Biofuel Directive - CO 2 reduction of transport sector - Security of supply - Solution for agricultural surplus

12 12 Biodiesel and bioethanol = first generation biofuel

13 13 Biofuels Value Chain FeedstockProductionFinished ProductCustomers Logistics Trading Road, river, rail, pipeline and storage Feedstock, oils and finished product Biodiesel Vegetable oil seeds: Rape seed Soya Sunflower Recycled vegetable oil Refining (oil mills) Esterification Glycerine refining Methanol recovery Oil majors Third party traders Gasoline stations Fleet (truck, bus) Food, healthcare and pharma Direct substitute to mineral diesel: B5 (5% diesel blend) Higher blend for fleets (B30, B100) Bioethanol Grain milling Fermentation and distillation Rectification Liquid/solid separation Oil majors Third party traders Gasoline stations Grains/other biomass: Rye Wheat Barley Maize Sugar Cane/Beet Octane enhancer and petrol substitute: E5 (5% gasoline blend) E85 (85% flex- fuel cars) E50

14 14 Current Situation for Biodiesel - 5 mio. production capacity of biodiesel in Germany - max. 1,5 mio. for blending in B05 - Further increment of tax at thereby till ,5 Mio. t excess production - subsidized import B99 from USA/ against WTO - less export opportunities EU Biofuels Consumption Target (1) :2.0%2.75%3.5%4.25%5.0%5.75% Biodiesel – Target vs. Forecast (in million tonnes) (1)(2) 26.7% CAGR '05-'10 (1) EU Biofuels Consumption

15 15 EU Biofuels Consumption Current Situation for Bioethanol t production capacity for Bioethanol ,2% obligatorily blending in petrol = max t % obligatorily blending in petrol = max Tons - import of Brazilian ethanol - sustainability? Source:Frost & Sullivan, F.O. Licht, EU Directive 2003/30/EC (1)Based on EU target biofuels market share (by energy content). Assumes equal penetration of transport diesel and gasoline by Biodiesel and Bioethanol, respectively. Underlying diesel and gasoline forecast is as per Frost & Sullivan (2)As per F.O. Licht Bioethanol consumption forecast EU Biofuels Consumption Target (1) :2.0%2.75%3.5%4.25%5.0%5.75% Bioethanol – Target vs. Forecast (in million tonnes) (1)(2) (1) (3) 21.1% CAGR '05-'10 (1)

16 16 Feedstock: Demand: Biggest European fuel market Completely open market Feedstock: Demand: Existing market for Bioethanol Mandate since 1 Jan 2006 for Bioethanol Feedstock: Demand: Internal system Quota system Feedstock: Demand: Good sea logistics for refineries Refinery capacity (#1 in Europe) Quota system No feedstock for Biodiesel and Bioethanol - buyers’ market only EU Biofuels Market Landscape France Germany Italy Sweden Source: Coceral (Brussels, Jun 2006), Frost & Sullivan (1)Biodiesel feedstock is rape seed, sunflower seed and soya beans (2)Bioethanol feedstock is soft wheat, drum wheat, corn, rye and triticale (in million tonnes, 2005 figures) Feedstock: Demand: Good sea logistics for refineries Narrow market (Repsol & Cepsa) Free biofuel system Full de-taxation Spain & Portugal

17 17 Feedstock: Demand: Large grain surplus for Bioethanol Small transport fuel market with limited demand Feedstock: Demand: Good logistics, incl. sea Possibility to supply Nordic region via Rostock Feedstock: Demand: Good logistics Large grain surplus for Bioethanol (maize and wheat) Limited fuel market Single refiner in market MOL Feedstock: Demand: No market regulation yet Rape and wheat for Bioethanol and Biodiesel Sub-optimal logistics Feedstock Demand: Good logistics and feedstock for Bioethanol Small transport fuel market EU Biofuels Market Landscape (Cont’d) (in million tonnes, 2005 figures) Poland HungaryOther CEE Countries (6) Balkan Countries (5) Nordic Region (4) (in million tonnes, 2005 figures) Source: Coceral (Brussels, Jun 2006), Frost & Sullivan (1)Biodiesel feedstock is rape, sunflower and soya beans (2)Bioethanol feedstock is soft wheat, drum wheat, corn, rye and triticale (3)Last available gasoline consumption figure as of 2004 (4)Includes Finland, Denmark, Latvia, Lithuania, Estonia (5)Includes Serbia, Croatia, Bosnia, Macedonia and Albania (6)Includes Czech Republic, Slovakia, Slovenia, Romania and Bulgaria (7)Includes only Czech Republic and Slovakia (3)

18 Introduction Markets Biodiesel/Bioethanol 2 nd Generation Strategy Conclusion

19 19 2 nd Generation - ethanol from lignocelluloses - BtL - NExBTL - Hydrotreating

20 20 BtL-Biomass to Liquid Carbonisation Gasification Liquefaction

21 21 BtL-Fuels Raw Materials for synthetically diesel-production Straw Wood Residual Wood from industry Residual Wood from forest 4 t Biomass = 1 t Syn. Diesel But remember 2,4 t Grain = 1 t Bioethanol 2,5 t Rape = 1 t Biodiesel

22 22 BtL-Fuels what is public known Raw - material Supply: Demand of Biomass for a sigma facility: t t/a biofuel capacity Annual increment of Biomass in Forest2 - 3 t/ha Straw5 - 6 t /ha energetic wood t/ha average5,5 t/ha This requires ca ha acreage or km 2 or twice the city of Berlin - Investment Euro (Tom Blades VDI ) (biodiesel 70 Mio; Ethanol 110 Mio) - Biofuel not competitive with 1 st generation - Earliest availability 2015

23 Introduction Markets Biodiesel/Bioethanol 2 nd Generation Problems & Strategy Conclusion

24 24 Inconsistent Discussion - EU biofuel targets in volume - CO 2 reduction is not evaluated - Security of supply Brazil vs. Europe - still 10% setaside - food vs. fool - deforestation for biofuel production

25 25 First Steps Production of Ethanol grain ►Actual Rey production for food f. ex. Rey Starch concentration 57 % requires fertilization = 150 kg N / ha Yield Bioethanol 380 l / t Rey Prospective Grain production non food grain f. ex. Rey increment of Starch concentration to 60 % - 15% less fertilization = 22,5 kg less N / ha Yield Bioethanol 400 l / t Rey ha contracted Production secures short logistics and high quality

26 26 Production of Bioethanol classical procedure Consumer Byproducts/ Animal Food Refineries Filling stations Bioethanol Production Raw materials

27 27 Energy Ethanol 5,92 Energy demand Ethanol- Production Netto Energy -2,14 3,78 100% 64% Only 64 % CO 2 – Efficiency High requirements of Primary Energy Ökobilanz ~ 30 % Getreideerzeugung + ~ 70 % Bioethanolproduktion DDGS: Bewertung Allokationsverfahren auf Basis Energiegehalt Production of Bioethanol Classical process Net.-Energy and Energy requirement in kWh / l Ethanol

28 28 Production of Bioethanol Optimized process with integrated Biogas production consumer Feed Refinery Filling Station Bioethanol production Raw materials VERBIO - Biogas Fertilizer Energy

29 29 Production of Bioethanol Optimized process with integrated Biogas production Energy content Ethanol Energy demand Ethanol- Production -1,00 1,41 Net.-Energy and Energy requirement in kWh / l Ethanol 5,92 Biogas- Production Net. Energy content + surplus +0,41 No external energy required! No further exhaust of CO 2 / l Ethanol Futtermittel: Bewertung Allokationsverfahren auf Basis Energiegehalt

30 30 In Comparison classical Bioethanol production integrated with VERBIO Biogas Energy Ethanol -1,00 5,92 +0,41 Energy Ethanol 5,92 Energy requirements Ethanol- Production Netto- Energy -2,14 3,78 2,14 1,41 Biogas- Production Netto- Energy Net.-Energy and Energy requirement in kWh / l Ethanol Energy requirements Ethanol- Production

31 31 Conclusion CO 2 - Reduction VERBIO-Biogas process reduced CO 2 in g / l Ethanol Ethanol production Biogas production fertilization 624 g CO 2 / l reduced 624 g CO 2/ /l – Reduction compared to classical Bioethanol production

32 32 Erroneous Trends Food and Fuel: Biofuels Could Benefit World’s Undernourished “Decades of declining agricultural prices have been reversed thanks to the growing use of biofuels,” says Christopher Flavin, president of the Institute. “Farmers in some of the poorest nations have been decimated by U.S. and European subsidies to crops such as corn, cotton, and sugar. Today’s higher prices may allow them to sell their crops at a decent price, but major agriculture reforms and infrastructure development will be needed to ensure that the increased benefits go to the world’s 800 million undernourished people, most of whom live in rural areas.” Biofuels for TransportBiofuels for Transport, undertaken with support from the German Ministry of Food, Agriculture, and Consumer Protection, assesses the range of “sustainability” issues the biofuels industry will present in the years ahead, ranging from implications for the global climate and water resources to biological diversity and the world’s poor. The book finds that rising food prices are a hardship for some urban poor, who will need increased assistance from the World Food Programme and other relief efforts. However, it notes that the central cause of food scarcity is poverty, and seeking food security by driving agricultural prices ever lower will hurt more people than it helps. World biofuels production rose 28 percent to 44 billion liters in 2006, according to the figures compiled since research on Biofuels for Transport was completed; fuel ethanol was up 22 percent and biodiesel rose 80 percent. Although biofuels comprise less than 1 percent of the global liquid fuel supply, the surge in production of biofuels in 2006 met 17 percent of the increase in supply of all liquid fuels worldwide last year. This rapid growth is having unintended impacts. Large-scale biofuels production can threaten biodiversity, as seen recently with palm oil plantations in Indonesia that are encroaching on forests and edging out the endangered orangutan population, worrying European consumers who have begun importing palm oil from Southeast Asia. In Brazil, the Cerrado, a vast landscape of biologically rich forests, brush, and pasture just south of the Amazon, is coming under pressure as sugar cane cultivation expands. “Current biofuels production methods place a heavy burden on land and water resources, due in part to the fossil fuel- and chemical-intensive corn that is used to produce over half the world’s ethanol,” says Hunt. “Farming practices need to be reexamined if agriculture is to provide energy as well as food for a rapidly growing global population that is hungry for both.” “Farming practices need to be reexamined if agriculture is to provide energy as well as food for a rapidly growing global population that is hungry for both.”

33 33 Food versus Biofuel 2006Forecast 2007 Grain demand Ethanol production 2007 EU t t t EU t t t USA t t t China t t World t t Quelle: USDA, COCERAL, ACTI, 2007

34 Introduction Markets Biodiesel Bioethanol 2 nd Generation Strategy Conclusion

35 35 Conclusion - not 1st vs. 2nd generation – 1st and 2nd generation - biodiesel and bioethanol are available, proven technologies - food vs. fuel? Not really! - land efficiency? FAO report! - high potential of CO 2 effects for 1 st biodiesel and ethanol - sustainability directive !!!! - security of supply / Evaluation of GHG – reduction

36 36 A Powerful Vision “The last tree will die for biofuels.” (Fidel Castro maximo leader 2005) Thank you for your attention


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