Key Issues for the World Biofuels Market

Transcription

1 Key Issues for the World Biofuels Market Alfred Szwarc Hart's World Refining & Fuels Conference: Americas Rio de Janeiro August 2, 2006

2 Content Specifications Harmonization Increase in Productivity Ethanol from Cellulose Tax Barriers

3 Ethanol Biobased Synthetic Fuel Ethanol Industrial Beverage Hydrous Anhydrous Proprietary Grades Denaturated Undenaturated

4 Anhydrous Fuel Ethanol Ethyl Alcohol with very low water content, generally derived from biomass (sugar cane, sugar beet, corn, wheat, barley, cellulose feedstocks etc.), denaturated or not. It is blended to gasoline. The product has many specifications!

5 Brazilian Anhydrous Ethanol Specifications CHARACTERISTICS UNIT SPECIFICATIONS Minimum Maximum Aspect Color Clear and bright Colorless before addition of orange dye (15 mg/l) 20 ºC kg/m Alcohol 20 ºC ºINPM* ( 20ºC) 99.3 (99.6) Hydrocarbon content %vol. 3 Total acidity, as acetic acid mg/l 30 Electrical Conductivity S/m 500 Copper mg/kg 0.07 Source: Portaria ANP Nº 36 de 06/Dec/2005 (*) Brazilian unit, by mass

6 Swedish Anhydrous Ethanol Specifications CHARACTERISTICS UNIT SPECIFICATIONS Minimum Maximum Aspect Color Hazen Clear and free of impurities Max. 5 20/4 ºC g/ml Alcohol content % volume % weight Water % weight 0.3 Total acidity, as acetic acid % weight Aldehydes (as acetaldehyde) weight Methanol content* mg/l 20 Explosion limits* % volume in air Distillation interval* ºC Refractive index* Flashpoint* nd20 ºC Source: Svensk Etanolkemi A.B. (Sekab) (*) guaranteed but not always tested

7 USA Anhydrous Ethanol Specifications (ASTM D480604a) CHARACTERISTICS Aspect UNIT SPECIFICATIONS Minimum Maximum Clear and free of impurities Methanol content %v/v 0.5 Ethanol content % v/v 92.1 Water %v/v 1.0 Total acidity, as acetic acid %mg/l Solventwashed gum mg/100 ml 5.0 Copper mg/kg 0.1 phe Sulfur mass ppm 30 (10)** Denaturant* %v/v (*) natural gasoline, gasoline components or unleaded gasoline (**) California + limits for benzene, olefins & aromatics Source: ASTM, 2006

8 Polish Anhydrous Ethanol Specifications CHARACTERISTICS Aspect UNIT SPECIFICATIONS Minimum Maximum Clear and free of impurities Aldehydes as acetaldehyde g/l 100% eth. 0.2 Ethanol 20ºC % v/v 99.6 Water %v/v 0.4 Total acidity, as acetic acid g/l 100% eth Esters as ethyl acetate g/l 100% eth. 5.0 Copper mg/kg 0.1 Fusel oils as amyl alcohol g/l 100% eth. 0.2 Dry extract g/l 100% eth Chlorine mg/kg 40 Source:

9 Canadian Anhydrous Ethanol Specifications Aspect CHARACTERISTICS UNIT SPECIFICATIONS Minimum Maximum Clear and free of impurities Color APHA o C kg/l Ethanol content % volume Water % mass 1.0 Total acidity, as acetic acid mg/l 30 Nonvolatile matter g/100ml Copper mg/l 0.1 Chlorine mg/kg 8.0 Denaturants % volume 5.0 Flashpoint (Tag closed tester) o C 5 Source:

10 Sample Comparison (incomplete) Specification Brazil USA Sweden Poland Canada Aspect / Appearance Color Ethanol content Water content Total acidity (as acetic acid) Density Hydrocarbon content or denaturant Electrical conductivity Methanol content * Aldehydes (as acetaldehyde) Copper Chlorine Sulfur Nonvolatile matter phe Solventwashed gum Fusel oils Esters

11 Worldwide Fuel Charter refers to oxygenates recommends ethers (???) Ethanol (up to 10%) shall comply to ASTM D4806 (only???) No mention of neat ethanol use or in FFVs No consideration for Brazilian extensive experience

12 New York Board of Trade NYBOT Biomassderived (does not specify feedstock), undenatured, anhydrous ethanol at 60 degrees Fahrenheit. Chicago Board of Trade CBOT* Chicago Mercantile Exchange CME Cornderived* in compliance with ASTM D California requirements

13 Hydrous Fuel Ethanol Used as a neat fuel and (as in Brazil) used in FFVs Also has many specifications and suffers from the same lack of harmonization

14 Harmonization Issues Grade type classification Main specifications should be common Production process may require additional specifications (starch X sugar feedstocks) Units Stakeholders ( ethanol producers, auto industry, fuel distributors, governments, traders, consumers, environmental groups) WTO, ISO etc

15 Harmonization Benefits Standard key specifications Easier quality assurance Product certification & traceability standardization Lower costs Wider product acceptance Key for international market growth Key for turning fuel ethanol into an energy commodity In line with globalisation trends

16 Increase in Productivity Existing production processes are being continuously improved increasing production yields and reducing energy consumption Post2010 Source: IEA, 2005

17 Productivity Gains Brazil: CenterSouth Region t cane/hectare 85,00 80,00 75,00 70,00 65,00 60,00 55,00 50,00 45,00 40,00 Substantial Investments in Technology! ,50 7,00 6,50 6,00 5,50 5,00 4,50 4,00 3,50 3,00 2,50 m3/hectare Source: UNICA t cane/hectare m 3 ethanol/hectare

18 US Corn Grain Yelds Tonnes per Hectare Source: WWI, 2006

19 Ethanol from Cellulose Still at research and demonstration level: many countries at advanced stage Foreseeable commercial production: 5 15 years Will represent a revolution in supply possibilities (agriculture, forestry & industrial residues, municipal garbage etc) Existing ethanol producers may boost significantly production lower costs

20 Tax Barriers I BioEthanol is being considered a strategic alternative in terms of: energy diversity and security sustainability (renewable fuel) mitigation of the Greenhouse Effect mitigation of urban air pollution reduction of foreign debt (oildependent countries that may become producers) jobs generation development of new technologies

21 Tax Barriers II BioEthanol is still being viewed as a byproduct Import taxes inhibit the development of a competitive international market: USA: 2.5% ad valorem + US$ 0.54/gallon EU: 192/m 3 (undenaturated) and 102/m 3 (denaturated) Japan: 27.2% ad valorem 10%

22 Concluding Remarks Harmonization of specifications is key for the development and growth of biofuels markets Discussion of harmonization needs and benefits is necessary and requires an international effort Productivity of conventional processes is increasing and additional production from cellulose will boost ethanol use Tax barriers are incompatible with today s need for biofuels market development and should be lifted or considerably reduced

23 Thank You