1. BIOFUELS Xavier Beulin President FOP BIOFUELS Xavier Beulin President FOP IOPD Berlin – June 16th -18th, 2008

2. A justified enthusiasm - Energy diversification -Greenhouse effect – reducing CO2 emissions -Outlets for farm products BIOFUELS Issues - Impact on markets - Availability of farm products - Effects on development

3. -Energy balance-sheet: Saving fossil-fuel energy 3/1 for biodiesel (*) 2/1 for ethanol -Greenhouse gas balance-sheet 70 to 76% reducing CO2 emissions (*) mass allocation method - PricewaterhouseCoopers 2007 Positive environmental balance-sheets BIOFUELS

4. Biofuels production growth BIOFUELS

5. First generation BIOFUELS20072010-2015 Consumption targets2010-2015ProductionEthanol World USA (corn) Brazil EU 48 24 19 2 100 – 110 55 22 17,5 100 - 110 Biodiesel World EU USA Brazil/Argentina Malaisia/Indonesia 8,5 5 1,7 0,8 20 – 25 12 – 15 3 – 3,5 2,3 1 20 – 25 10 - 15 3 - 6 4 - 7 2 – 4 Millions of TData from EISA (Energy independance and Security Act) for the USA and from EU directive on renewable energy for EU

6. 2nd generation: intensive research for ambitious goals BIOFUELS Millions of T2015-2020targetsEthanol USA UE 51,5 7,5 BiodieselUSA UE 3,5 6,4

7. Biofuels — prospects (millions of tons) BIOFUELS

8. Ressources availability feedstocks

9. 2007 -84 MnT of grains, 5% of world grain production or 10% of world corn production -8,5 MnT of vegetable oil, 5% of world oils and fats production 2015 – 2020 -200 MnT of grains 10% of world grain production at this date -20 to 25 MnT of vegetable oil 10% of world oils and fats production at this date BIOFUELS Availability of farm commodities

10. BIOFUELS Only 5 % of current production of oil and fats is processed into biodiesel. Will grow to 10 % by 2020

11. Land availability

12. Ethanol in the USA - 2007 : 8,4 Mnha, or 24 % of corn area - 2015 – 2020 : 12,6 Mnha, or 35 % of corn area After deduction of the coproducts, area really dedicated to the supply of energy : -4 Mnha in 2007, or 4% of arable land -6 Mnha in 2015, or 6% of arable land BIOFUELS Land dedicated to biofuel production

13. In the EU, from European Commission Impact Study BIOFUELS Land requirement for biofuel production 17,53Total 4,62Biodiesel 12,91Bioethanol 2015-20202006 Mn Ha 17,53Total 4,62Biodiesel 12,91Bio 2015-20202006

14. In the EU : After deduction of the coproducts, area really dedicated to the supply of energy will be less than 7% of arable land BIOFUELS Land dedicated to biofuel production Mn Ha 20062015 - 2020 Bioethanol0,455,9 Biodiesel0,841,9 Total % of arable land 1,29 1,1% 7,8 6,8%

15. High prices will affect supply -Return to production of set-aside lands (EU – USA) -Stimulation of technical advances – yield improvement -A certain degree of rationing on food demand -New dynamic for rural zones of developing countries BIOFUELS Availability of farm products

16. Impact on prices

17. The current situation A general price rise for commodity, of which petroleum A greater volatility of agricultural prices strengthened by financial speculation An Asian demand strongly growing Poor harvests (climatic problems) The s trongest tension is on wheat market 07/08 averave prices versus average prices of the last 20 years : Wheat+ 150 % Soybean + 80 % Corn+ 75 % BIOFUELS

18. 2007-2008 situation BIOFUELS The strongest tension is on wheat market, Feedstock which is only little used for the production of biofuels Average prices in index 87/88-06/07 average = 100 252 173 180 211 157 230 124 60 80 100 120 140 160 180 200 220 240 260 02/0303/0404/0505/0606/0707/08 Wheat CBOT Corn CBOT SoybeanCBOT Soybean oil CBOT Soybean meal CBOT Rapeseed CAF Hbrg Brown sugar NYBOT

19. Impacts des biocarburants sur les prix European Commission Study on Impact of a 10% obligation for biofuel use Price impact : Grains : + 6% ; rapeseed + 8 to + 10% ; rapemeal - 40% ; soymeal - 25% INRA Prospective ( 2015 targets for USA and EU) grains + 20% ; oils + 65% ; oilmeals - 20% OECD Aglink (Current programs + long-term objectives) wheat + 6% and corn + 11% ; oilseeds + 5% ; oils + 30% ; oilmeals -12% BIOFUELS

20. Effects on markets: Stabilizing agricultural markets BIOFUELS -Contrary to food demand, biofuels outlets adjust to prices (elasticity). Fluctuations characterizing agricultural markets will be stabilized through more elasticity in overall demand. -Should the energy prices remain high, they create a bottom limit for agricultural prices, w hich besides had very strongly decreased for 40 years in real term.

21. Effects on developing countries’ growth

22. Negative effects -Net importing countries pay more for their supplies. (Will affect the mostly urban undernourished population of 200 million.) Positive effects –Local farming becomes profitable again. –A reduction in poverty in rural areas (2.5 billion rural poor). –A deterrent to the rural exodus - city / country balance –Economic growth BIOFUELS Effects on developing countries’ growth

23. Environmental impact

24. BIOFUELS -Greenhouse effect, -Recultivating lands and intensification (not synonymous with environmental degradation.) -Making use of marginal lands. -Deforestation? Risks to biodiversity? The answer must be found in support and management policies.

25. Improvement of food safety in the EU

26. BIOFUELS -1,5 kg of meal is produced for every liter of biodiesel produced in the EU. -This feed rich in proteins replaces soybean meal imported from the American continent. - The development of biofuels improves the protein feed supply : the rate of self-sufficiency in proteins in the EU has improved from 24 % in 2002 to 27 % in 2006.

27. BIOFUELS Palmoil is only little used for the production of biodiesel: only 10% of the biodiesel is produced from palmoil. Nature of oil and fats used for the production of biodiesel (world level) 63% 22% 11% 4% Rapeseed oil Soybean oil Palm oil Other

28. The biodiesel sector and Diester in the UE

29. Biodiesel and oilseeds in the UE Biodiesel and oilseeds in the UE A balanced and durable development of food and not food outlets

30. Hyp : Diesel fuel cons : 175 MnT in 22015 and 2020 BIODIESEL : a strong development - EU 27 objectives not out of reach BIOFUELS

31. BIOFUELS EU 27 0ilseed area develops with biodiesel demand

32. BIOFUELS Rapeseed potential development (1000 ha) HU 225  400 UKR 790  2000 TUR ~0  200 RO 350  500 BG 45  100 RU 670  1500 FR 1600  2000 UE 27 6500  8400 RU+UKR+TUR 1500  3700 SE 90  150 UK 600  700 DK 180  250 PL 795  1200 LT 175  200 DE 1550  1800 CZ 340  400 FI 90  150 SK 155  200 2007 area  Potential 2015-20

33. BIOFUELS Sunflowerseed potential development (1000 ha) HU 505  500 UKR 3400  4000 TUR 475  700 RO 805  1200 BG 690  800 ES 600  1000 IT 130  200 RU 5250  6000 FR 525  700 UE 27 3400  4700 RU+UKR+TUR 9100  10700 2007 area  Potential 2015-20

34. BIOFUELS

35. Veg. oils : balances maintained food/non food and imports/domestic (1) Veg oils : rapeseed sunflower soya olive linseed, cotton …. BIOFUELS

36. What about rapeseed oil ? EU used to export 1MnT and will have to import 1 MnT BIOFUELS