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JEC Biofuels Programme Overview of Results A joint study by JRC / EUCAR / CONCAWE.

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Presentation on theme: "JEC Biofuels Programme Overview of Results A joint study by JRC / EUCAR / CONCAWE."— Presentation transcript:

1 JEC Biofuels Programme Overview of Results A joint study by JRC / EUCAR / CONCAWE

2 06 July 2010 Slide 2 of 89 Reproduction permitted with due acknowledgement Presentation Outline Slides Note3 1. Executive Summary4 – 5 2. JEC Biofuels Programme 6 – 8 3. Background to the Study9 – Fleet & Fuels Model12 – Non-road Transport Sectors19 – Reference Case 21 – RED Implementation Scenarios26 – Sensitivity Analysis34 – Biofuel Supply Outlook39 – Summary 47 – JEC Biofuels Programme: Contributors Appendix50 – 89

3 06 July 2010 Slide 3 of 89 Reproduction permitted with due acknowledgement Note The JEC Biofuels Program is a technical exercise intended to assess possible biofuel implementation scenarios for achieving EU renewable energy targets in the transport sector by These scenarios have been assessed by modelling and other analyses. The JEC Fleet & Fuels (F&F) Model is a simulation tool for scenario assessment What the model does: The model is a scenario assessment tool that enables the user to simulate the possible development of the European vehicle fleet as well as the total fuel and biofuel demand to The model is based on a historically reasonable 2010 reference case and assumes trends in the fleet, fuel and market development over the coming decade. It further allows the evaluation of important RED and FQD targets as well as the sensitivity of the results to vehicle fleet, fuels, and biofuels assumptions. What the model does not do: Due to the assumptions and simplifications selected for this study, the model is not a quantitative tool for predicting the future. No model can truly do this. The model does not lead to a single globally optimized solution but does allow a side-by-side comparison of various scenarios of fleet and fuel development. The model does not assess the cost implications associated with the fleet & fuel scenarios. Disclaimer This exercise is not intended to commit the JEC partners to deliver any particular scenario or conclusion included in this study.

4 06 July 2010 Slide 4 of 89 Reproduction permitted with due acknowledgement 1. Executive Summary: Key Conclusions The JEC RED scenario analysis is characterized by its objectives: Focus is on the technical feasibility of the 10% energy RED *) target with an associated calculation of FQD **) Article 7a GHG savings Realistic assumptions made regarding vehicles, fuels and renewables Study does not assess viability, costs, or logistics of analyzed scenarios Study also does not assess commercial readiness of analyzed scenarios Integrated Approach, i.e. all transport modes and actors are considered although with a focus on road transport Overall the RED implementation scenarios should be viewed in light of: RED-% from each scenario depends on the underlying assumptions and should be considered as theoretically achievable Scenario results have been further studied by sensitivity analyses *) RED: EU Renewable Energy Directive (Dir 2009/28/EC) **) FQD: EU Fuel Quality Directive (Dir 2009/30/EC)

5 06 July 2010 Slide 5 of 89 Reproduction permitted with due acknowledgement 1. Executive Summary: Key Conclusions Scenarios exist that achieve the RED 10% energy target for renewable energy in the transport sector with the given assumptions None of these scenarios achieves the minimum 6% GHG target (FQD Art. 7a) with the given assumptions (ILUC* not considered) Realization of the scenarios depend on : Biofuel supply, especially the availability of sustainable biofuels to Europe CEN specifications, potential vehicle compatibility and pace of introduction Compatibility of the supply and distribution system for all fuel products Non-road contributions to RED-%, especially HVO/BTL use by the aviation sector Each scenario would need policy measures (including incentives) to enable a smooth transition from today to the theoretically achievable projections Much more technical work is needed to ensure feasibility of these scenarios and compatibility with upcoming Euro 6 emissions limits Compatibility of vehicles with higher biofuel blends still to be proven and will require time, testing and investment Multi-stakeholder coordination and timely decisions will be essential Seamless transition is important to ensure continued customer confidence ILUC*: Indirect Land Use Change

6 06 July 2010 Slide 6 of 89 Reproduction permitted with due acknowledgement The JEC research collaboration was initiated in 2000 by JRC: Joint Research Centre of the European Commission EUCAR: European Council for Automotive R&D CONCAWE: Research Association of the European Oil Refining Industry 2. JEC Biofuels Programme: A Short History Collaborative Projects : Projects Completed Well-to-Wheels (WTW) Study Versions 1, 2b, and 2c ( )http://ies.jrc.ec.europa.eu/WTW WTW Study Version 3: enhancing pathways and vehicles ( )http://ies.jrc.ec.europa.eu/WTW Impact of ethanol on vehicle evaporative emissions (SAE ) Impact of ethanol in petrol on fuel consumption and emissions (report in preparation) : Projects In-progress : Major revision of WTW Study (Version 4) : JEC Biofuels Programme for a 2020 time horizon

7 06 July 2010 Slide 7 of 89 Reproduction permitted with due acknowledgement 2. JEC Biofuels Programme: Objectives Objectives of the JEC Biofuels Programme: Clarify the opportunities and barriers to achieve 10% renewable energy (on an energy basis) in the transport sector by 2020 Focus on road transport with the development of an EU27+2 Fleet & Fuels Model as the main supporting tool Focus on conventional and alternative fuels and biofuel blends while accounting for growth in alternative powertrains over decade Develop biofuel implementation scenarios in which the introduction of biofuel blends to meet the 2020 target is seamless to consumers and results in no detrimental impact on vehicle performance and emissions Three-year JEC Program initiated in February, 2008 ( )

8 06 July 2010 Slide 8 of 89 Reproduction permitted with due acknowledgement Develop a consensus demand and supply picture of biofuel types and availability needed to meet the 2020 Renewable Energy Directive target Review and analyze projections and other data for Biodiesel, ethanol, and others, including conventional and advanced products Consider domestic production and imports Include most recent updates on WTW energy and GHG implications Analyze possible biofuel implementation scenarios within the regulatory framework, including pros and cons 2. JEC Biofuels Programme: Approach

9 06 July 2010 Slide 9 of 89 Reproduction permitted with due acknowledgement Vehicles: More advanced engines & aftertreatment, diversification in engines and fleet Fuel consumption of LD vehicles falling, HD diesel demand slightly increasing Increasing pressure on CO 2 emissions with associated higher cost Customer preferences potentially in conflict with mobility policies Refineries: Increasing diesel/gasoline demand ratio Higher CO 2 emissions due to diesel demand and product specifications Increasing pressure on CO 2 emissions with associated higher cost Biofuels and other Renewables: Renewables in transport fuels mandated to 10% (energy basis) by 2020 Conventional biofuels widely available but with sustainability concerns Slower than expected pace of development for advanced biofuels Pace/priorities differ across Member States, potentially leading to fuel diversity CEN specifications are struggling to keep pace with legislative mandates 3. Background: The Coming Decade for European Road Transport

10 06 July 2010 Slide 10 of 89 Reproduction permitted with due acknowledgement Renewable Energy Directive (RED) Requires Member States to meet 10% renewable energy share in the transport sector by 2020 Requires sustainable cultivation and production of Biofuels as well as minimum greenhouse gas (GHG) savings per energy unit Fuels Quality Directive (FQD) Requires fuel suppliers to achieve at least 6% GHG saving from fuels supplied in 2020 with indicative targets Specifies an E10 main grade with E5 protection grade for older vehicles Vehicle Regulated Emissions Light-duty (LD) passenger cars: Euro 5/5b to 2014, Euro 6 from 2015 onwards Heavy-duty (HD) vehicles: Euro V to 2013; Euro VI from 2014 onwards Vehicle CO 2 Emissions LD passenger cars: new vehicle fleet average 130g/km by 2015 and review of 2020 targets Light Commercial Vehicle (LCV) fleet: Commission proposal of new fleet average of 175g/km by January 1 st 2016, review of 2020 targets 3. Background: EU Regulatory Environment

11 06 July 2010 Slide 11 of 89 Reproduction permitted with due acknowledgement 3. Background: Current Projections of Transport Demand EU27+2 Transport Energy Demand: [Mtoe] 2008 EuroStat 2020 JEC F&F Reference Scenario 2020 DG TREN (1) On-Road Diesel Light Duty69 Heavy Duty incl. Vans117 Gasoline10066 Biofuels Other: CNG, LPG, electricity57.8 Rail (Diesel & Electricity)9.510 Aviation5473 Inland navigation6.56 Other off-road (Diesel)1420 *) Total **)419 Other studies have been used to base case JEC projections and provide input on non-road energy demand (see Appendix 12.7) DG TREN: data for non-road transport sectors are used (**) TREMOVE: historical data and methodology, used as basis for fleet development in Fleet & Fuels model iTREN2030: implementation of the economic recession Wood Mackenzie: biofuel supply projections and other off-road diesel demand (*) Apples to apples comparisons for the energy demand projections towards 2020 were not always straightforward amongst the studies 1)DG TREN: "European Energy and transport trends to 2030, Update 2007

12 06 July 2010 Slide 12 of 89 Reproduction permitted with due acknowledgement 4. Fleet & Fuels Model: Model Overview A spreadsheet-based model has been developed to simulate the EU27+2 vehicle fleet development and the demand for fossil fuels and biofuels The model can be used to simulate different combinations of vehicles, fuels, and biofuels to assess different biofuel implementation scenarios Total fuel demand and diesel/gasoline balance Total biofuels demand, including ethanol and biodiesel, HVO, etc Total renewable energy demand, including electricity, biogas, etc Renewable energy demand for road transport to be used for RED calculations GHG emissions reduction according to FQD Article 7a Parameters relevant to fuel demand included (for example): Passenger car, van, bus and coach and heavy-duty truck demand Vehicle efficiency and improvement in efficiency over time Percentage diesel in new car sales Introduction of alternative vehicles (FFV, LPGV, CNGV, electric vehicle, etc.) Vehicle model year (vintage) assumed compatible with fuel grade

13 06 July 2010 Slide 13 of 89 Reproduction permitted with due acknowledgement 4. Fleet & Fuels Model: Model Overview TREMOVE data and other sources used to provide historical input on vehicle fleet Fleet composition Fleet fuel economy Activity (km driven) Per vintage Separate diesel and gasoline vehicles Forward-looking input for the development of the fleet to 2020 New sales, total population, and total activity (km driven) % diesel of new car sales Vehicle scrappage rate assumed to follow a typical S-curve Alternative vehicle fleets (e.g. CNGV, FFV, EV) Fuel economy of new cars is based on NEDC Real world factor included to estimate total fuel demand Impact of the economic recession factored in: Model incorporates latest HD sales data (ACEA) and iTREN methodology

14 06 July 2010 Slide 14 of 89 Reproduction permitted with due acknowledgement 4. Fleet & Fuels Model: Vehicle and Fuel Options Seven LD passenger car types (and fuel type options) Gasoline, Diesel, Flex-Fuel Vehicle (FFV) Compressed Natural Gas (CNG), Liquefied Propane Gas (LPG) Plug-in Hybrid Electric Vehicle (PHEV), Battery Electric Vehicle (BEV) Three Van classes (and fuel type options) Gasoline (Gasoline, CNG, LPG, xEV) Small Diesel <2.5 tonnes (Diesel, CNG, LPG, xEV) Large Diesel >2.5 tonnes (Diesel, CNG, LPG, xEV) Five Heavy-duty vehicle classes (and fuel type options) 3.5 to 7.5 tonnes (Diesel, CNG) 7.5 to 16 tonnes (Diesel, CNG) 16 to 32 tonnes (Diesel, CNG, E95, DME) > 32 tonnes (Diesel) Buses and coaches (Diesel, CNG, E95) xEV: represents the various electrified vehicles as BEV, PHEV, FCEV

15 06 July 2010 Slide 15 of 89 Reproduction permitted with due acknowledgement 4. Fleet & Fuels Model: Vehicle and Fuel Options Adjustable parameters that can be changed individually for each vehicle type Sales and stock annual growth rate Vehicle activity: annual km driven (LD, LCV), annual t-km (HD) Vehicle fuel efficiency Alternative vehicle 2020 sales share Alternative vehicle sales start year % replacement of gasoline or diesel cars by alternative vehicle % use of alternative fuel in alternative fuel vehicles (e.g. E85 take-up rate for FFV) Fuels implementation Optimistic assumption for biofuel blending at max allowed specification (e.g., 10% v/v ethanol minus 0.1% v/v blending tolerance) Up to 3 different gasoline grades: protection grade, main grade, and E85 Up to 2 different diesel grades: protection grade and main grade For the main diesel grade, market uptake by HD, LCV, LD vehicle and vehicle vintage compatibility can be independently set Vehicle vintage compatible with each fuel grade HVO or BTL are included in diesel pool assuming full backward compatibility Advanced Ethanol (lignocellulose based) is replacing/added to gasoline Other Oxygenates (e.g. ETBE): not specifically modeled but would be allowed up to the maximum oxygen specification Renewable Energy Directive specifics are implemented including extra credits for advanced biofuels and renewable electricity

16 06 July 2010 Slide 16 of 89 Reproduction permitted with due acknowledgement 4. Fleet & Fuels Model: Example Model Outputs Vehicle fleet development for the Reference Scenario (1) LD new car sales showing the growth of alternative vehicles LD vehicle fleet showing the impact of new car sales on the overall fleet Note growth in the LD diesel fraction over the decade

17 06 July 2010 Slide 17 of 89 Reproduction permitted with due acknowledgement 4. Fleet & Fuels Model: Example Model Outputs Road transport fuel demands Reference Scenario (1) including the impact of the economic recession Reference Scenario excluding the impact of the economic recession

18 06 July 2010 Slide 18 of 89 Reproduction permitted with due acknowledgement Calculation of the overall RED-% of renewable energy in transport (Art. 3(4) of the RED): All types of energy from renewable sources consumed in all forms of transport 1) RED-% = Petrol, diesel, biofuels consumed in road and rail transport, and electricity (in transport) but excluding off-road 2) 4. Fleet & Fuels Model: Renewable Energy Calculations Focus of the JEC Biofuel Programme: Model renewable energy in road transport. Use RED methodology to calculate ROAD-% contributions. These ROAD-% must be combined with assumptions for other transport sectors to calculate the RED-%. 1) Renewable energy in Road, Rail, Aviation, Inland Navigation and Pipeline Transport 2a) Off-road means mobile machinery (forestry, agriculture, and construction) ~20Mtoe 2b) CNG & LPG in road transport are not included, BUT: Biogas ( = biofuel) is included Application of factors: Advanced Biofuels count 2 times in numerator (support) - Definition: biofuel from waste, residue and non-food cellulosic material, Article 21(2) Green Electricity for road transport counts 2.5 times in numerator & denominator (efficiency factor) - Definition: electricity from renewable sources, Article 3(4) All types of energy from renewable sources consumed in road transport ROAD-% = Petrol, diesel, biofuels consumed in road and rail transport and electricity (in transport) but excluding off-road 2) Calculation of the contribution of road transport to the RED 10% target:

19 06 July 2010 Slide 19 of 89 Reproduction permitted with due acknowledgement 5. Non-road Transport Sectors: Outlook Aviation Projections range from 56 2) ) Mtoe consumption by 2020 Jet fuel specification likely to allow only HVO or BTL in this decade HVO/BTL or ETS certificates are options to offset GHG emissions Aviation fuel consumption excluded from FQD but included in RED Rail ~10 Mtoe consumption by ) 2) Fuel by 2020: ~70% electricity, ~30% Diesel (DG TREN 1) ) Rail Diesel: likely shifts to road diesel quality fuel by 2020 Diesel will likely contain FAME, HVO, BTL, the same as road diesel (i.e. B7 = reference blend) Inland navigation ~6 Mtoe consumption by ) 2) Likely shifts to road diesel quality fuel by 2020 Diesel will likely contain FAME, HVO, BTL, the same as road diesel (i.e. B7 = reference blend) Other off-road diesel ~20 Mtoe consumption by 2020 (JEC estimate) Diesel will likely contain FAME, HVO, BTL, the same as road diesel (i.e. B7 = reference blend) Other off-road fuel consumption excluded from RED but included in FQD 1)DG TREN: "European Energy and transport trends to 2030, Update )iTREN 2030, 2009

20 06 July 2010 Slide 20 of 89 Reproduction permitted with due acknowledgement 5. Non-road Transport Sectors: 2020 Outlook RED denominator 2020: Road transport energy demand: 281 Mtoe, RED: 275 Mtoe Rail transport energy demand: 10 Mtoe, RED: 10 Mtoe Inland navigation energy demand: 6 Mtoe, RED: 6 Mtoe Sum denominator RED methodology: 291 Mtoe* Rail 2020: ~70% of rail fuel demand by electricity: 7 Mtoe Assuming 35% RES: 2.45 Mtoe: ~0.85% RED* ~30% of rail fuel demand by diesel: 3 Mtoe Assuming B7: 0.2 Mtoe: ~0.07% RED* Inland navigation 2020: 6 Mtoe diesel, B7 in total sector 0.4 Mtoe: ~0.1% RED* Aviation 2020: second largest energy share, ~73 Mtoe Assumption: no contribution Other off-road 2020: 20 Mtoe, assumption: B7 in total sector: 1.3 Mtoe No RED-contribution as other off-road fuel consumption excluded from RED *: applied in RED calculations for all scenarios

21 06 July 2010 Slide 21 of 89 Reproduction permitted with due acknowledgement 6. Reference Case: Scenario 1 - Fleet Parameters Passenger cars New car average CO2 target in 2020: 95g/km (used for calculation purpose, figure is proposal for 2020 but subject to review) Diesel / gasoline sales share 2020: 50% / 50% Sales in 2020: 20 mil/a; Fleet in 2020: 270 mil Alternative fuel vehicles enter the market Financial crisis impacts miles travelled, however fleet mileage increases to 2020 Vans New van average CO2 target in 2020: 175g/km (used for calculation purpose, legislation under negotiation) Sales in 2020: 1.5 mil/a; Fleet in 2020: 28 mil Alternative fuel vehicles enter the market Financial crisis impacts miles travelled, however fleet mileage increases to 2020 HD trucks New truck average YoY efficiency improvement: ~1.5% Sales in 2020: 0.8 mil/a; Fleet in 2010: 15 mil Financial crisis impacts tkm and sales, but dynamic growth to 2020 Alternative fuel vehicles enter the market in specific HD classes (and MS markets)

22 06 July 2010 Slide 22 of 89 Reproduction permitted with due acknowledgement 6. Reference Case: Scenario 1 - Alternative Fleet Parameters 1: Cars in 2020 from TREMOVE baseline: 270 million in vehicle fleet; 20 million in new car sales Alternative Fuel Passenger CarsIn 2020 New SalesIn 2020 Vehicle Fleet 1 Flex-Fuel Vehicles (FFV)1%0.5% Compressed Natural Gas Vehicles (CNGV) 4% 0.8 Million 2% ~5 Million Liquefied Propane Gas Vehicles (LPGV) 2% 0.4 Million 2% ~5 Million Electric Vehicles Battery Electric (BEV) & Plug-in Hybrid (PHEV) 3% 0.6 Million 1% 2.7 Million Alternative Fuel VansIn 2020 New SalesIn 2020 Vehicle Fleet 1 Compressed Natural Gas Vehicles (CNGV)4%1.7% Liquefied Propane Gas Vehicles (LPGV)1%0.4% Flex Fuel Vehicles (FFV)1%0.3% Electric Vehicles Battery Electric (BEV) & Plug-in Hybrid (PHEV) 2% 24 Thousand 0.4% 90 Thousand In 2020 New Sales Alternative Fuel Heavy Duty Vehicles3.5t to 7.5t7.5t to 16t16t to 32t Bus-Coach Compressed Natural Gas Vehicles (CNGV)2%1% 5% Di-Methyl Ether Vehicles (DMEV)== 0.5%== 95% Ethanol (E95) Vehicles== 1%2%

23 06 July 2010 Slide 23 of 89 Reproduction permitted with due acknowledgement 6. Reference Case: Scenario 1 – Fuel Parameters Biofuel grades Ramping up to E5 by 2011 No vehicle compatibility restriction (protection grade) New E10 (main) grade from 2011 Vehicle compatibility with E10 from model year Ramping up to B7 by 2010 No vehicle compatibility restriction Assumes 1 Mtoe FAME/HVO coming from waste oils RED-factor of two, source: DG ENER High quality of FAME required Additional biofuels Ramping up of HVO, BTL, Adv. Ethanol Biomass-to-Liquids (BTL) Hydrogenated Vegetable Oils (HVO) Advanced Ethanol Start year Production simulationLinear ramp to Mtoe step to Mtoe linear ramp from 2012 to 2020 Linear ramp to 2020 Availability in 2020 [Mtoe]

24 06 July 2010 Slide 24 of 89 Reproduction permitted with due acknowledgement 6. Reference Case: Scenario 1 - Results Results comparing 2010 and 2020: Fossil demand changes: Gasoline demand decreases by 24% Diesel demand increases by 6% Diesel demand increases 13% for LD and 3% for HD Diesel/gasoline ratio increases from 2.0 to 2.8 Large biofuel volumes will be needed, increasing demand for CNG & CBG RED: 9.7% with 1.0% contribution from non-road sectors FQD: -4.4% GHG emissions savings reached

25 06 July 2010 Slide 25 of 89 Reproduction permitted with due acknowledgement 6. Reference Case: Scenario 1 - Results Alternative fuel demand results: FAME dominates biofuel market FAME demand increasing to 2010 driven by B7 specification Ethanol demand increasing to 2010 driven by E5 specification Ethanol demand increasing beyond 2010 driven by E10 introduction HVO and BTL demand follow availability assumptions (backward compatible - not grade dependent) CNG/CBG demand driven by introduction of CNGV mainly in LD but also in HD FAME / Ethanol demand by 2020, RED development FAME demand in all transport sectors will be ~15 Mtoe/a, increasing from 1.5 Mtoe (2005), 7.9 Mtoe (2008) Ethanol demand will be ~5 Mtoe, increasing from 0.7 Mtoe (2005), 1.8 Mtoe (2008) RED renewable content: 9.7% with 1.0% contribution from non-road sectors

26 06 July 2010 Slide 26 of 89 Reproduction permitted with due acknowledgement 7. RED Implementation Scenarios: Biofuel Scenarios Scenario 1: Reference Case Scenarios 2 - 4: High Biofuel Grades all vehicles Scenarios 5 - 6: High Biodiesel Grades HD only

27 06 July 2010 Slide 27 of 89 Reproduction permitted with due acknowledgement 7. RED Implementation Scenarios: Biofuel Scenarios Scenarios 7 - 9: Additional Flex-Fuel Vehicles (FFV) The FFV scenarios feature a sales share of 4.5%, which results in a 2.5% FFV-stock (6.5 mil) in Scenario 7: The FFV fleet requires a comparable Ethanol supply as in scenario 2 (B7, E20) and leads to the same RED-% as in scenario 2. Scenario 8: E20 and FFVs increase the Ethanol demand and the RED-%. Scenario 9: The FFV fleet requires a comparable Ethanol supply as in scenario 2 & 7.

28 06 July 2010 Slide 28 of 89 Reproduction permitted with due acknowledgement 7. RED Implementation Scenarios: Grades & vintage years Grade E5E10E20B7B10B15 Year of grade introduction now now Cars & Vans compatible from All All2017None HD vehicles compatible from All2017 Grade E5E10E20B7B10B15 Year of introduction 2015 Cars & Vans compatible from 2015 None HD vehicles compatible from 2015 & All Grades in Scenarios: Sensitivity cases: All scenarios: actual biofuels content is 0.1%v/v less than the maximum specification limit

29 06 July 2010 Slide 29 of 89 Reproduction permitted with due acknowledgement FAME demand: 14.6 to 17.2 Mtoe (compared to 5.7 Mtoe in 2007 as per EurObservER Biofuels Barometer) Ethanol demand: 5.3 to 9.0 Mtoe(compared to 1.2 Mtoe in 2007 as per EurObservER Biofuels Barometer) ROAD-% contribution: 8.6% to 9.8% RED-% (all sectors according to Directive):9.7% to 10.9% 7. RED Implementation Scenarios: Scenario Summary For further details of these scenarios refer to section 12.3

30 06 July 2010 Slide 30 of 89 Reproduction permitted with due acknowledgement 7. RED Implementation Scenarios: Scenario Summary Scenario 1 ( Ref ) Blends in 2020 E5, E10, B7 E10, E20, B7 E5, E10, B7, B10 E10, E20, B7, B10 E5, E10, B7, B15 (HD) E10, E20, B7, B10 (HD) E5, E10, E85, B7 E10, E20, E85, B7 E5, E10, E85, B7, B10 (HD) RED Contri- bution by 1 st Gen Biofuels 6.4%7.0% 7.6%7.2%7.3%6.4%7.0%6.7% HVO, BTL, Adv. Ethanol 1.4% Alt. vehicles LD: CNGV, EV, FFV HD: CNGV, E95V, DMEV 0.8% 1.4% RED: Road contribution *) 8.6%9.2% 9.8%9.5% 9.2%9.8%9.6% RED-% calculations using energy consumptions in 2020 by rail and inland water transport as discussed in Section 5. Calculation methodology described on page 20. RED contributions Road8.6%9.2% 9.8%9.5% 9.2%9.8%9.6% Rail0.9% Water0.1% Aviation0.0% Other off-road0.0% RED-% *)9.7%10.3% 10.9%10.5%10.6%10.3%10.9%10.6% *) might show rounding effects

31 06 July 2010 Slide 31 of 89 Reproduction permitted with due acknowledgement Impact of Renewable Fuels on Fuel Quality Directive Article 7a (2009/30/EC): GHG savings includes fuels used in on-road vehicles, non-road mobile machinery (including rail and inland marine), agricultural and forestry tractors and recreational craft GHG savings assumptions for biofuels and alternative fuels (vs fossil fuel baseline): 2010 fossil fuel baseline emissions per unit energy = 86.7g CO 2 /MJ 1) GHG savings do not assume potential improvements in biofuel production higher than 60% GHG reduction 50% GHG reduction for existing biofuel plants up to 1/1/ % GHG reduction for new biofuel plants from 1/1/2017 Reductions apply uniformly to all ethanol, FAME, HVO, BTL, DME, road electricity, and biogas component in CNG CNG is assumed to contain 20% biogas in 2020 Road electricity receives a 2.5 times credit; Rail electricity is excluded 7. RED Implementation Scenarios: FQD Article 7a 1) Source: JEC WTW Version 2c fossil fuel default values and 2010 fossil fuel demand

32 06 July 2010 Slide 32 of 89 Reproduction permitted with due acknowledgement 7. RED Implementation Scenarios: RED vs. FQD Scenario Biofuel Blends In 2020 Gasoline 1E5E10E5E10E5E10E5E10E5 Gasoline 2E10E20E10E20E10E20E10E20E10 Gasoline 3E85 Diesel 1B7 Diesel 2 B10 (ALL) B15 (HD) B10 (HD) ROAD-%Road only8.6%9.2% 9.8%9.5% 9.2%9.8%9.6% RED-%All modes9.7%10.3% 10.9%10.5%10.6%10.3%10.9%10.6% GHG Savings FQD Art 7a -4.4%-4.7% -5.1%-4.9% -4.7%-5.0%-4.9% Contribution of renewable fuels is sufficient to achieve the RED target but not enough to meet the FQD Article 7a target for the scenarios evaluated in this study To achieve the 6% GHG saving target (FQD Art.7a), average GHG savings for all biofuels assumed in these scenarios would need to be in the range of %

33 06 July 2010 Slide 33 of 89 Reproduction permitted with due acknowledgement 7. RED Implementation Scenarios: Pros and Cons Scenario 1 (Reference) Blends in 2020 Petrol 1E5E10E5E10 E5E10E5E10E5 Petrol 2E10E20E10E20E10E20E10E20E10 E85 Diesel 1B7 Diesel 2B10 (ALL) B15 (HD)B10 (HD) Pros 10% RED TargetPossible Vehicle compatibility Compatible with existing fleet Optimisation to E20 possible B15 compatibility with current HD fleet B10 compatibility with current HD fleet Compatible with existing fleet Optimisation to E20 possible B10 compatibility with current HD fleet Fuel grades and infrastructure Existing logistics One diesel grade Others B10 standard in preparation FFV is known technology Cons 6% CO2 targetNo Petrol Vehicle Compatibility Dedicated E20 vehicle Customer acceptance of FFV? Customer acceptance of FFV ? Customer acceptance of FFV? Diesel Vehicle Compatibility B10 compatibility with LD fleet & new HD fleet B15 compatibility with new HD fleet B10 compatibility with new HD fleet Fuel grades and infrastructure E85 refuelling infrastructure Two diesel grades Others Sustainable supply? CEN standard for E20 CEN standard for B15 CEN standard for E20 Potential air quality and human health concerns associated with higher biofuel grades

34 06 July 2010 Slide 34 of 89 Reproduction permitted with due acknowledgement 8. Sensitivity Analysis: Reference Scenario 1 The Fleet & Fuel Model has many adjustable parameters that influence the 2020 projections. These parameters can be grouped into three types: Passenger Car Vans and Heavy Duty Fuels Some parameters are linked to an introduction year or can be modelled by a ramp- up function, resulting in additional sensitivity of the model projections. Current calculations assume an immediate uptake by compatible vehicles upon first introduction of a higher blend maximum The next pages display the sensitivity of Reference Scenario 1 to changes in these adjustable parameters. Sensitivities are displayed as %-changes in renewable energy demand in transport (using the RED methodology).

35 06 July 2010 Slide 35 of 89 Reproduction permitted with due acknowledgement 8. Sensitivity Analysis: Reference Case Scenario 1 – Pass Cars Sales assumptions for some alternative vehicles impact the RED-%

36 06 July 2010 Slide 36 of 89 Reproduction permitted with due acknowledgement 8. Sensitivity Analysis: Reference Case Scenario 1 – Vans & HD Sensitivity assumptions for vans and HD do not make a significant difference to the RED-%

37 06 July 2010 Slide 37 of 89 Reproduction permitted with due acknowledgement 8. Sensitivity Analysis: All Scenarios - Fuels Pace of development of advanced biofuels significantly impacts RED-%

38 06 July 2010 Slide 38 of 89 Reproduction permitted with due acknowledgement 8. Sensitivity Analysis: Selected Scenarios Timely implementation of higher biofuel levels significantly impacts RED-%; For example, a 50% reduction in uptake of the E10 grade in Reference Scenario 1 would decrease the RED-% from 9.7% to 9.3% Implementing higher biodiesel levels in non-road sectors significantly impacts RED-% Renewable electricity in rail can contribute significantly to RED-% Impacts of sensitivity: E20 MY2015+: requires add. 0.7 Mtoe Ethanol in 2020 B10 MY2015+: requires add. 0.8 Mtoe FAME in 2020 B10 MY2015+(cars)/all(HD): requires 2.3 Mtoe FAME in 2020 HD B15 all: requires add. 5.2 Mtoe FAME in 2020 B30 for Inl. Nav. requires add. 1.3 Mtoe FAME in 2020 Additional sensitivities Referenceminmax HVO availability in 2020[Mtoe/a]3,01,54,5 FFVsales% 20201,0%0%4,0% E20 MY 2015+first model year B10 MY2015+first model year B10 MY2015+ (cars) & all (HD)first model year /all B15 HD MY2015+first model year B15 HD allfirst model year2017all Biogas in CNGShare e/e [%]20%0%40% Renewable electricity in road trans.Share e/e [%]35%100% B30 for Inland NavigationFAME blendB7B30 Renewable electricity in rail trans.Share e/e [%]35%100%

39 06 July 2010 Slide 39 of 89 Reproduction permitted with due acknowledgement 9. Biofuel Supply Outlook: Demand from scenarios Will these quantities of bio-components be available for European use through 2020: From domestic production and from imports? From sustainable sources meeting GHG reduction targets? Primary focus on availability, not costs and investments Biofuel TypeDemand Outlook (Scenarios) Demand Outlook (Scenarios & parameter variation) Conventional Biofuels Bio-ethanol from fermentationUp to 8.5 MtoeUp to 12 Mtoe FAME (and FAEE)Up to 17.5 MtoeUp to 19 Mtoe Advanced BiofuelsBio-ethanol from lignocellulose0.6 Mtoe1.3 Mtoe Hydrogenated Natural Oils (HVO)3.0 Mtoe4.5 Mtoe Biomass to Liquids (BTL) 0.25 Mtoe0.5 Mtoe Other RenewablesBiogasUp to 0.7 MtoeUp to 1.0 Mtoe Electric from renewablesUp to 0.5 MtoeUp to 1.0 Mtoe

40 06 July 2010 Slide 40 of 89 Reproduction permitted with due acknowledgement 9. Biofuel Supply Outlook: Current situation in Europe European domestic biofuel production: Biodiesel (EU27) Production capacity installed (2009)20.9 Metric-tonnes (276 plants) 18.4 Mtoe Actual production (2008)7.8 Metric-tonnes6.9 Mtoe Installed capacity utilized (2008)37% Bioethanol (EU27) Production capacity installed6.8 M-liters (68 plants) 3.4 Mtoe Actual production2.9 M-liters1.5 Mtoe Installed capacity utilized43% Production capacity under construction 1.8 M-liters (13 plants) 0.9 Mtoe Source: European Biodiesel Board ( European Bioethanol Fuels Association (www.ebio.org)

41 06 July 2010 Slide 41 of 89 Reproduction permitted with due acknowledgement 9. Biofuel Supply Outlook : HVO HVO capacity (Mt/a)HVO capacity (Mtoe/a) Neste Oil Porvoo (running) Neste Oil Rotterdam (2010) ENI/UOP, Livorno, IT (2010) Neste Oil Singapore (2011) Galp Energia, Portugal (2015) PREEM Oil (co-processing)0.1 Others / co-processing?? Sum (EU sites only) Sum2.68 +? ? Assumptions used for 2020 Reference case: 3 Mtoe +/- 1.5 Mtoe 1.All announced commercial projects are realized 2.All plants at 100% capacity (usual assumption is 80%) 3.All global HVO production comes to Europe Neste Oil announced projects account for the largest commercial production of HVO Demand for HVO from other regions exists and may change in the future Source: JEC analysis Global Biofuels Center: Next Generation Biofuels Facilities (2010)

42 06 July 2010 Slide 42 of 89 Reproduction permitted with due acknowledgement 9. Biofuel Supply Outlook: FAME Supply Supply projection for FAME: domestically produced and imported Source: Wood Mackenzie Global Biofuels Outlook (2009)

43 06 July 2010 Slide 43 of 89 Reproduction permitted with due acknowledgement 9. Biofuel Supply Outlook: FAME and HVO Supply Projection: Wood Mackenzie Global Biofuels Outlook (2009) Supply of total HVO and FAME limited by total availability of natural & waste oils Imports are essential to fully utilize higher biodiesel blends

44 06 July 2010 Slide 44 of 89 Reproduction permitted with due acknowledgement 9. Biofuel Supply Outlook: Conventional Ethanol Supply projection for ethanol: domestically produced and imported Conventional ethanol supply projected to be less than half the volume of FAME supply through 2020 without a major increase in imported ethanol Source: Wood Mackenzie Global Biofuels Outlook (2009)

45 06 July 2010 Slide 45 of 89 Reproduction permitted with due acknowledgement 9. Biofuel Supply Outlook: Ethanol Ethanol demand (max) = highest ethanol demand in all scenarios Imports and development of advanced ethanol are key to meeting demand Supply Projection Wood Mackenzie Global Biofuels Outlook (2009)

46 06 July 2010 Slide 46 of 89 Reproduction permitted with due acknowledgement 9. Biofuel Supply Outlook: Conclusions Although there are many uncertainties: Ethanol: likely to be available in volumes needed to cover EU demand given lower gasoline volumes and availability of imported ethanol FAME: possibly available in needed volumes with questions regarding domestic development, global demand, and competition for natural and waste oils from HVO production Advanced Ethanol: growing global supply but uncertainties remain about European production through 2020 HVO: competition with demand from global aviation sector; competition for natural and waste oils from FAME production BTL: scale-up to world-class plant size difficult due to technical issues Other related issues that could affect supply: Sustainability and certification criteria not yet defined Impact of Indirect Land Use Change (ILUC) on GHG targets Impact of taxation and tariffs on imports/exports More information on biogas and renewable electricity can be found in App.12

47 06 July 2010 Slide 47 of 89 Reproduction permitted with due acknowledgement 10. Summary: Key Conclusions Scenarios exist that achieve the RED 10% energy target for renewable energy in the transport sector with the given assumptions None of these scenarios achieves the minimum 6% GHG target (FQD Art. 7a) with the given assumptions (ILUC * not considered) Realization of the scenarios depend on : Biofuel supply, especially the availability of sustainable biofuels to Europe CEN specifications, potential vehicle compatibility and pace of introduction Compatibility of the supply and distribution system for all fuel products Non-road contributions to RED-%, especially HVO/BTL use by the aviation sector Each scenario would need policy measures (including incentives) to enable a smooth transition from today to the theoretically achievable projections Much more technical work is needed to ensure feasibility of these scenarios and compatibility with upcoming Euro 6 emissions limits Multi-stakeholder coordination and timely decisions will be essential Seamless transition is important to ensure continued customer confidence ILUC*: Indirect Land Use Change

48 06 July 2010 Slide 48 of 89 Reproduction permitted with due acknowledgement 10. Summary: Key Conclusions Vehicles: Todays vehicles are E10 (from MY2005) and B7 compatible Compatibility of vehicles with higher biofuel blends still to be proven and will require time, testing and investment Fuels: Compatibility of existing logistics infrastructure with higher grades is uncertain FQD Article 7a GHG target was not achieved in the chosen scenarios Coordinated development of CEN specifications is needed for higher grades Higher blends must be fully utilized in order to approach RED/FQD targets Biofuels: Significant questions regarding sustainability, pace of development, and imports Given uncertainties, ethanol/FAME are in the range needed for the RED-% target Pace of non-conventional biofuel production and HVO/BTL uptake by aviation sector are especially important Other Issues: Attractiveness of different scenarios will vary by Member State Non-road contributions to RED-% are important Potential exists for higher biodiesel blends to be used in non-road transport to meet targets but will require time, testing and investment Higher biodiesel blends could also be used in non-road transport to meet targets Costs and investments could be significant and were not evaluated in study Maintaining consumer confidence in fuel and biofuel strategy is critical

49 06 July 2010 Slide 49 of 89 Reproduction permitted with due acknowledgement 11. JEC Biofuels Programme: Contributors CONCAWE José BARO Nigel ELLIOTT Benoit ENGELEN Gerd HAGENOW Alain HEILBRUNN Liesbeth JANSEN Baudouin KELECOM Michael LANE Jean-François LARIVÉ Seppo MIKKONEN Alan REID John ROGERSON Ken ROSE Pirjo SAIKKONEN Antonella SOPRANZETTI JRC Covadonga ASTORGA-LLORENS Robert EDWARDS Laura LONZA Vincent MAHIEU Giorgio MARTINI EUCAR Renato ANDORF Thomas BECKER Jean-Christophe BEZIAT Alessandro CODA Ingo DRESCHER Andrea GERINI Simon GODWIN Heinz HASS Eckart HEINL Eberhard HOLDER Günther KLEINSCHEK Heiko MAAS Hakan MALMSTAD Beatrice PERRIER Willibald PRESTL Anders RÖJ Ann SEGERBORG-FICK

50 06 July 2010 Slide 50 of 89 Reproduction permitted with due acknowledgement 12. Appendix 1.Web-site Information & Background 2.Fleet & Fuel Model 3.Road Transport Biofuel Scenarios 4.Biofuel Information 5.Biofuel Supply 6.Non-road Transport Sectors: Renewable Energy Outlook 7.Other Studies

51 06 July 2010 Slide 51 of 89 Reproduction permitted with due acknowledgement The study report will be available on the WEB: For questions / inquiries / requests / notes to the JEC Consortium, please use the centralised mail address: 12.1 Web site

52 06 July 2010 Slide 52 of 89 Reproduction permitted with due acknowledgement 12.1 Background: Industry Perspective on Biofuels Implementation Both industries strongly support the CEN process as the preferred mechanism to ensure consistent product quality throughout the EU marketplace as history has shown. There is considerable debate around what are achievable and sustainable biofuel levels and political pressure to move forward even without EU/CEN fuel specifications. Fuel manufacturers are required to blend biofuel components to levels needed to satisfy Member State ambitions. Timing and blending levels are fragmented and uncoordinated between Member States Near-term biofuel targets are higher than allowed by existing CEN standards Vehicle fleets must be compatible with biofuels standards All stakeholders have an interest in generating relevant and scientifically sound data on these issues and have a demonstrated track record of working together on important problems.

53 06 July 2010 Slide 53 of 89 Reproduction permitted with due acknowledgement 12.2 Fleet & Fuel Model: Current Projections of Transport Demand Large variability amongst the different studies Diesel / Gasoline ratio Total amount Aviation 2005 EuroStat F & F DG TREN iTREN EU Transport Energy Demand: [Mtoe] 2008 EuroStat 2020 iTREN JEC F&F Road Diesel Gasoline Other: Biofuels, CNG, LPG Rail10 Aviation5450 Inland navigation6.5 Other Off-road20 Total373.5 W M 1)DG TREN: "European Energy and transport trends to 2030, Update )iTREN 2030, 2009

54 06 July 2010 Slide 54 of 89 Reproduction permitted with due acknowledgement 12.2 Fleet & Fuel Model: Simplified Flow Chart Flow chart applies for all vehicle types in the model: V ij i = Passenger Cars, Vans, HD, Busses j = propulsion system (Diesel, Gasoline, CNG, LPG, FFV, xEV) Circles: Input information Rectangles: Model calculators FC: fuel consumption PT: powertrain GHG: greenhouse gas sales i PT share j Sales i,j Stock size j stock i,j New vehicle FC i stock FC i,j On-road factor i Fleet mileage j Fuel demand i,j Grades / blends Grade compatibility j,j Annual mileage per type j Alt. Fuel availability Renewable content scrappage i,j FQD methodology RED-% RED methodology GHG emission factor by fuel FQD GHG saving (%)

55 06 July 2010 Slide 55 of 89 Reproduction permitted with due acknowledgement 12.2 Fleet & Fuels Model: Scrappage function The scrappage function has been defined to ensure alignment with fleet turn-over in TREMOVE and ANFAC data It impacts the number of vehicles that are affected by a loss of a protection grade, e.g. E5 by E10/E20 Effect in F&F model: By 2020, all vehicles older than MY2005 have a fleet share of 10% ( ~ TREMOVE / ANFAC) By 2020, gasoline cars older than MY2005 have a gasoline car fleet share of 13% (~17 mil. cars) Effect in F&F model: By 2020, all vehicles older than MY2000 have a fleet share of 1.5% By 2020, gasoline cars older than MY2000 have a gasoline car fleet share of 2.5%

56 06 July 2010 Slide 56 of 89 Reproduction permitted with due acknowledgement 12.2 Fleet & Fuel Model: Recession impact on HD sales Considers -20% to -50% sales changes 2008 to 2009 Assumes that recovery back to 2008 sales levels takes until 2013 source: ACEA: New Commercial vehicle registrations, Dec 2009 Vehicle type YoY change LCV upto 3.5t2,039,5571,421, % HD 3.5t-16t121,41481, % HD 16t and over316,030164, % HD Bus+coach48,83539, % Sum2,525,8361,706, %

57 06 July 2010 Slide 57 of 89 Reproduction permitted with due acknowledgement 12.2 Fleet & Fuel Model: Actions contributing 1% to the RED-% Biofuels: ActionRED step Impact toRemark fuel techveh. tech Add 2.9 Mtoe HVO to diesel pool1%yesno2-3 Mtoe announced capacities (~3 Mtoe assumed by Concawe) in 2020 Add 1.5 Mtoe BTL to diesel pool1%yesno~0.25 Mtoe announced capacities in 2020 E10 to E161%yes Vehicle Capability impacted B7 to B8.41%LimitedyesVehicle Capability impacted Alternative Vehicles: Car CNGV by 2020: 11% sales, 6% stock (~15 mil.)1%yesLimited20% biogas in CNG (1/2 is advanced biogas) Car FFV by 2020: 5% sales, 2.7% stock (~7.5 mil.)1%yesLimited90% E85 take rate Car EV by 2020: 13% sales, 3% stock (~8 mil.)1%noyes100% renewable electricity / 1/3 BEV, 2/3 PHEV (90% el. drive) HD16t-32t E95 vehicles: ~20% sales1%yes 100% E95 take rate. Vehicle capability? 3Mtoe E95 available? Aviation: 4% to 5% bio-kerosene in kerosene1%yesNoFirst gen. kerosene by 2020 Rail: Approx. 45% renewable electricity1%noNo45% share is slightly above expected 2020 EU grid average renew. target For comparison: Other transport sectors

58 06 July 2010 Slide 58 of 89 Reproduction permitted with due acknowledgement 12.3 Fleet & Fuels Model: Scenario 2 (E20, B7) results Results: Fossil demand changes: Gasoline demand decreases Diesel demand increases Diesel/gasoline ratio increases from 2.0 to 2.9 Large biofuel volumes will be needed Additional 1.8 Mtoe Ethanol over scenario 1 in 2020 Increasing demand for CNG & CBG RED target reached (10.3%) with given assumptions

59 06 July 2010 Slide 59 of 89 Reproduction permitted with due acknowledgement 12.3 Fleet & Fuels Model: Scenario 3 (B10, E10) results Results: Fossil demand changes: Gasoline demand decreases Diesel demand increases Diesel/gasoline ratio increases from 2.0 to 2.8 Large biofuel volumes will be needed Additional 1.8 Mtoe FAME over scenario 1 in 2020 Increasing demand for CNG & CBG RED target reached (10.3%) with given assumptions

60 06 July 2010 Slide 60 of 89 Reproduction permitted with due acknowledgement 12.3 Fleet & Fuels Model: Scenario 4 (B10, E20) results Results: Fossil demand changes: Gasoline demand decreases, Diesel demand increases Diesel/gasoline ratio increases from 2.0 to 2.9 Large biofuel volumes will be needed Additional 1.8 Mtoe Ethanol over scenario 1 in 2020 Additional 1.8 Mtoe FAME over scenario 1 in 2020 Increasing demand for CNG & CBG RED target reached (10.9%) with given assumptions

61 06 July 2010 Slide 61 of 89 Reproduction permitted with due acknowledgement 12.3 Fleet & Fuels Model: Scenario 5 (E10, B7, B15H) results Results: Fossil demand changes: Gasoline demand decreases Diesel demand increases Diesel/gasoline ratio increases from 2.0 to 2.8 Large biofuel volumes will be needed Additional 2.6 Mtoe FAME over scenario 1 in 2020 Increasing demand for CNG & CBG RED target reached (10.5%) with given assumptions

62 06 July 2010 Slide 62 of 89 Reproduction permitted with due acknowledgement 12.3 Fleet & Fuels Model: Scenario 6 (E20, B7, B10H) results Results: Fossil demand changes: Gasoline demand decreases, Diesel demand increases Diesel/gasoline ratio increases from 2.0 to 2.9 Large biofuel volumes will be needed Additional 1.8 Mtoe Ethanol over scenario 1 in 2020 Additional 1.0 Mtoe FAME over scenario 1 in 2020 Increasing demand for CNG & CBG RED target reached (10.6%) with given assumptions

63 06 July 2010 Slide 63 of 89 Reproduction permitted with due acknowledgement 12.3 Fleet & Fuels Model: Scenario 7 (E10, E85, B7) results Results: Fossil demand changes: Gasoline demand decreases, Diesel demand increases Diesel/gasoline ratio increases from 2.0 to 2.8 Large biofuel volumes will be needed Additional 1.9 Mtoe Ethanol over scenario 1 in 2020 Less 0.1 Mtoe FAME over scenario 1 in 2020 Increasing demand for CNG & CBG RED target reached (10.3%) with given assumptions

64 06 July 2010 Slide 64 of 89 Reproduction permitted with due acknowledgement 12.3 Fleet & Fuels Model: Scenario 8 (E20, E85, B7) results Results: Fossil demand changes: Gasoline demand decreases, Diesel demand increases Diesel/gasoline ratio increases from 2.0 to 2.9 Large biofuel volumes will be needed Additional 3.7 Mtoe Ethanol over scenario 1 in 2020 Less 0.1 Mtoe FAME over scenario 1 in 2020 Increasing demand for CNG & CBG RED target reached (10.9%) with given assumptions

65 06 July 2010 Slide 65 of 89 Reproduction permitted with due acknowledgement 12.3 Fleet & Fuels Model: Scenario 9 (E10, E85, B7, B10H) results Results: Fossil demand changes: Gasoline demand decreases, Diesel demand increases Diesel/gasoline ratio increases from 2.0 to 2.8 Large biofuel volumes will be needed Additional 1.9 Mtoe Ethanol over scenario 1 in 2020 Additional 0.8 Mtoe FAME over scenario 1 in 2020 Increasing demand for CNG & CBG RED target reached (10.6%) with given assumptions

66 06 July 2010 Slide 66 of 89 Reproduction permitted with due acknowledgement 12.3 RED Implementation Scenarios: Scenario Summary Scenario 1 ( Ref ) Blends in 2020 E5, E10, B7 E10, E20, B7 E5, E10, B7, B10 E10, E20, B7, B10 E5, E10, B7, B15 (HD) E10, E20, B7, B10 (HD) E5, E10, E85, (FFV ~5% sales 20) B7 E10, E20, E85, (FFV ~5% sales 20) B7 E5, E10, E85, (FFV ~5% sales 20) B7, B10 (HD) Road 1 st Gen Biofuels 18.5 Mtoe20.3 Mtoe 22.1 Mtoe21.0 Mtoe21.2 Mtoe18.5 Mtoe20.2 Mtoe21.2 Mtoe Adv. Biofuels HVO, BTL, Adv. Ethanol 4.8 Mtoe Alt. vehicles LD: CNGV, EV, FFV HD: CNGV, E95V, DMEV 1.8 Mtoe 3.6 Mtoe Rail Renew. Electricity 2.5 Mtoe B7 in Diesel0.2 Mtoe WaterB7 in Diesel0.4 Mtoe Air-/- Sum renewable28.1 Mtoe29.8 Mtoe29.9 Mtoe31.7 Mtoe30.6 Mtoe30.8 Mtoe29.9 Mtoe31.6 Mtoe30.8 Mtoe Denominator (road & rail) according to RED Mtoe 290,9 Mtoe Mtoe RED-%9.7%10.3% 10.9%10.5%10.6%10.3%10.9%10.6% Note: rounding might lead to illogic sums

67 06 July 2010 Slide 67 of 89 Reproduction permitted with due acknowledgement 12.4 Biofuel Information: Conversion Factors Tonne of Oil Equivalent (toe): A unit of energy corresponding to the amount of energy released by burning 1 tonne of crude oil Because different crude oils have different calorific values, the exact value of one toe is defined by convention Different organizations have adopted slightly different values This study has adopted a value of PetaJoules (PJ) Barrel of Oil Equivalent (boe): Approximately toe (i.e. there are approximately boe in a toe) Source: Wikipedia and study model 1 Mt of:Equals how many PJs of energy? Equals how many Mtoe? Petrol (2010) Ethanol Diesel (2010) FAME HVO BTL Diesel CNG LPG Electricity (1 TW-h)

68 06 July 2010 Slide 68 of 89 Reproduction permitted with due acknowledgement Current European CEN Specifications: For pure bio-components: Ethanol: EN15376 (for blending up to 5% in gasoline) Fatty Acid Methyl Esters (FAME): EN14214 For gasoline: 5% v/v (E5) ethanol and 2.7% oxygen (EN228) For diesel: 7% v/v (B7) FAME in diesel fuel (EN590) Generally no limits on addition of 2 nd Generation renewable diesel Hydrogenated vegetable oils (HVO) and animal fats Biomass-to-Liquids (BTL) Member State Initiatives: France: E10 (2009); B7 (2008) and B30 for captive fleets Germany: B7 plus 3% renewable diesel (2008), B100 for specially adapted vehicles Other Countries: B20 (Poland) and B30 (Czech Republic) for captive fleets E85 in Austria, France, Germany, and Sweden Standardization of high quality fuels containing bio-components is essential to ensure trouble-free performance in the current/future fleet 12.4 Biofuel Information: Biofuel Blends in EU27

69 06 July 2010 Slide 69 of 89 Reproduction permitted with due acknowledgement 12.4 Biofuel Information: Pace of Bio-component Developments

70 06 July 2010 Slide 70 of 89 Reproduction permitted with due acknowledgement 12.5 Biofuel Supply: Primary References Wood Mackenzie: Conventional Biofuels Food and Fuel: The Outlook for Biofuels to 2020 Released July, 2009 Global Biofuels Center: Advanced Biofuels Special Report: Status of Next Generation Biofuels Facilities Released April, 2010 Plus publicly available reports and websites Focus has been on availability of different biofuel types through 2020, not on biofuel costs

71 06 July 2010 Slide 71 of 89 Reproduction permitted with due acknowledgement 12.5 Biofuel Supply: Outlook for Biofuels to 2020 Wood Mackenzie partnered with Céleres in to merge oil product demand data with agricultural supply and trade data Céleres is a Brazilian-based consulting company focused on global agribusiness The Wood Mackenzie-Céleres Outlook has been used as a primary source in this study to evaluate likely biofuel supply volumes through 2020 because: Recent update on a 2008 comprehensive study from a credible and independent source Publicly available (upon purchase) Source: Wood Mackenzie Global Biofuels Outlook (2009) Biofuel demand initially derived from Wood Mackenizes road transport fuel demand, incentives to promote biofuels, and constraints on biofuel demand Demand output provided as input to Céleres agricultural model Demand for crops for food, fuel, and other uses included Assumptions included for crop yields and available land area Céleres model evaluated supply and demand for major crop types

72 06 July 2010 Slide 72 of 89 Reproduction permitted with due acknowledgement Sources: Wood Mackenzie Global Biofuels Outlook (2009) Global Biofuels Center Next Generation Facilities (2010) 12.5 Biofuel Supply: Key Messages Significant growth in biofuels consumption over the coming decade driven by ambitious renewable fuels policies in spite of concerns regarding sustainability. Conventional Biofuels: Surplus of biodiesel conversion capacity will persist over the long-term, putting pressure on biodiesel producer margins. Additional ethanol capacity will be required to meet demand within a few years. Biofuels will remain overwhelmingly reliant on food crops as feedstocks which will continue to present risks in terms of public opinion and pricing. Biofuel demand will remain reliant on subsidies or mandates due to their high cost of production. An exception will be Brazilian sugarcane ethanol, which could become increasingly attractive as a relatively cheap liquid fuel in export markets. Latin America production will continue to grow with exports of biofuels and feedstock crops increasing rapidly. Advanced Biofuels: Most advanced technology is renewable diesel, particularly hydrogenation of vegetable oil, even though LC ethanol has more announced pilot/demo facilities. Although most announced projects indicate a 2010 or 2011 production timeline, commercial operations are being delayed. Asia is the region with the most next generation biofuels capacity while the U.S. has the most facilities. Next generation biofuels demand cannot be met in the near term.

73 06 July 2010 Slide 73 of 89 Reproduction permitted with due acknowledgement 12.5 Biofuel Supply: FAME Feedstocks Rapeseed and soybean dominate vegetable oils used for domestic FAME production Significant volumes of jatropha, algae, and BTL not expected through 2020 Source: Wood Mackenzie Global Biofuels Outlook (2009)

74 06 July 2010 Slide 74 of 89 Reproduction permitted with due acknowledgement 12.5 Biofuel Supply: EtOH Feedstocks Lignocellulose ethanol not expected to provide significant volumes of domestically produced ethanol by 2020 Source: Wood Mackenzie Global Biofuels Outlook (2009)

75 06 July 2010 Slide 75 of 89 Reproduction permitted with due acknowledgement 12.5 Biofuel Supply: Global biodiesel production Global Biodiesel production capacity and utilisation, 2008

76 06 July 2010 Slide 76 of 89 Reproduction permitted with due acknowledgement 12.5 Biofuel Supply: Global ethanol production Global Ethanol production capacity and utilisation, 2008

77 06 July 2010 Slide 77 of 89 Reproduction permitted with due acknowledgement 12.5 Biofuel Supply Major global Biodiesel trade flows

78 06 July 2010 Slide 78 of 89 Reproduction permitted with due acknowledgement 12.5 Biofuel Supply Major global Ethanol trade flows

79 06 July 2010 Slide 79 of 89 Reproduction permitted with due acknowledgement 12.5 Biofuel Supply: FAME and HVO from Waste Oils Used cooking oils and animal fats are the main resources It has been estimated that potentially available quantities are 0.95 Mtoe and 2.25 Mtoe respectively Total volume not expected to grow dramatically in the coming decade It is assumed that about 1/3 of the available resource, or 1 Mtoe is used in transport in 2020 Biofuels from this resource count double, i.e. 2 Mtoe, towards the 10% RED target Source: information received from European Commissions DG ENER

80 06 July 2010 Slide 80 of 89 Reproduction permitted with due acknowledgement 12.5 Biofuel Supply: Biogas Current supply picture for biogas supply in 2020: 2007 EU production of biogas: 5.9 Mtoe, sources: landfill gas (~50%), sewage sludge (~15% ), "gas, others" (incl. energy crops) (~35%); applications: electricity generation, injection in grid (then fuel; domestic, industrial application) 2020 AEBIOM "realistic outlook: ~40 Mtoe 2020 theoretical potential: 166 Mtoe (IE Leipzig 2007; see AEBIOM publ., page 16) Biogas availability does not limit the modelled demand in the F&F model (~4Mtoe). However, both CNG and biogas road fuel potential varies by EU member states (in terms of natural gas infrastructure, CNG filling stations, biogas availability, biogas sources, etc.) Sources:

81 06 July 2010 Slide 81 of 89 Reproduction permitted with due acknowledgement 12.5 Biofuel Supply: Renewable Electricity JRC Report (March 2009) 35 to 40% of the total electricity (3,200 – 3,500 TWh) has to come from Renewable Energy Sources in 2020 to meet the [ ] target. In % (460 TWh) of the Gross Electricity Generation (3,300 TWh) came from Renewable Energy sources. European Renewable Energy Council Roadmap to 2020 (2008) admap.pdf admap.pdf Depending on the development of the total electricity generation, renewable energies will be able to contribute between 33% and 40% to total electricity production. Assuming that the EU will fulfill its ambitious energy efficiency roadmap, a share of over 40% of renewables in electricity production by 2020 is realistic. Energy transport and environment indicators (2009 edition) Roadmap 2050 (April 2010) By 2020 EU reaches the production of electricity from RES roughly implied by the 2020 targets (34%). In the baseline, RES penetration in electricity by 2020 reaches the level forecasted in the baseline scenario of the IEA WEO 2009 of 29%. 100% renewable electricity (March 2010) (PWC) roadmap-to-2050-a-100-renewable-electricity-supply-for-europe-and-north-africa-is-possible/http://www.supersmartgrid.net/2010/03/policy- roadmap-to-2050-a-100-renewable-electricity-supply-for-europe-and-north-africa-is-possible/

82 06 July 2010 Slide 82 of 89 Reproduction permitted with due acknowledgement 12.6 Non-road Transport Sectors: Renewable Energy Outlook The following sources have been used to estimate the renewable energy demand in 2020 for the sector rail: Deutsche Bahn strives to increase renewable electricity from 16% to 30% by 2020 (Jan. 2010) SNCF tests B30, B100 UKs renewable energy strategy: Biofuels & renewable electricity for rail document

83 06 July 2010 Slide 83 of 89 Reproduction permitted with due acknowledgement 12.6 Non-road Transport Sectors: Renewable Energy Outlook The following sources have been used to estimate the renewable energy demand in 2020 for inland navigation: Inland Navigation Europe: Uptake road quality diesel fuel with 10ppm Sulfur: as of 2011 it will be for the entire fleet available – bunkering stations are obliged to make it available. This means a small % could be biofuel. Potential for hybridisation, fuel cells and full electric for small vessels GREENPEACE: Biodiesel in inland navigation could ease environmental burden kosten_der_umwelt/

84 06 July 2010 Slide 84 of 89 Reproduction permitted with due acknowledgement 12.6 Non-road Transport Sectors: Renewable Energy Outlook The following sources have been used to estimate the renewable energy demand in 2020 for aviation: IATA has set a target of using 10% alternative fuels by 2017 together with an average improvement in fuel efficiency of 1.5% per year from 2009 to 2020 building on the Technology Roadmap of May 2009 taking into account the Strategic Research Agenda produced by ACARE (air transport technology platform) British Airways has set out plans to build a biofuel production facility in London, where biogas will be produced from waste and then converted into synthetic kerosene via the Fischer Tropsch method. Announced capacity by 2014: 16 mil imperial gallons/a -> 73 mil. L/a -> 0.06Mtoe/a Several test flight with and activities around biofuels KLM, North Sea Petroleum, World Wide Fund for Nature (WWF): "join forces to ensure that we quickly gain access to a continuous supply of biofuel" Air New Zealand's Boeing powered by Rolls-Royce turbines: HVO based on Jatropha Continental Airlines, Boeing, GE Aviation/CFM International, Honeywell: Second gen biofuels derived from algae and Jatropha plants

85 06 July 2010 Slide 85 of 89 Reproduction permitted with due acknowledgement 12.7 Other Studies: DG TREN DG TREN: "European Energy and transport trends to 2030, Update )2005 EuroStat statistics 2)2020 baseline scenario Energy demand EU-27+2 Transport ) [Mtoe] ) [Mtoe] Road Rail9.510 Aviation Inland navigation6.76 Sum

86 06 July 2010 Slide 86 of 89 Reproduction permitted with due acknowledgement 12.7 Other Studies: iTREN2030 New Integrated Scenario: Lower energy demand for road transport No major changes in the other sectors iTREN-2030 Final Conference, Oct. 21st 2009

87 06 July 2010 Slide 87 of 89 Reproduction permitted with due acknowledgement 12.7 Other Studies: iTREN2030 Decrease of diesel and gasoline consumption Increase of kerosene, biofuels, gas and electricity iTREN-2030 Final Conference, Oct. 21st 2009

88 06 July 2010 Slide 88 of 89 Reproduction permitted with due acknowledgement 12.7 Other Studies: Wood Mackenzie (2009) Road fuel demand continuing steady shift from gasoline to diesel Jet/kero demand expected to increase Ratio of diesel to gasoline continuing to grow through decade

89 06 July 2010 Slide 89 of 89 Reproduction permitted with due acknowledgement 12.7 Other Studies: Wood Mackenzie (2009) Europe is short on diesel production and long on gasoline providing a market opportunity for biodiesel blendstocks


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