Irish Biofuels : A Laggard or a Leader

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2 Irish Biofuels : A Laggard or a Leader John Mullins Chief Executive Officer 18 October

3 Agenda Introduction to Bioverda; Global Drivers of Biofuel Industry; Biofuel Technologies; The Case for Irish Biofuels; Case Study: Neubrandenburg, Germany 4

4 5 Introduction to Bioverda

5 Total Revenue 468m Group Overview 2006 Market Capitalisation ~ 1.3bn Roads Waste Energy Telecoms % C. R. G. 33.3%

6 Growth Platform Going Forward Security of Energy Supply Climate Change Resource Depletion Renewable Energy and Sustainable Waste Management 7 IRL UK Other IRL UK US Continental Europe IRL UK US Other

7 Bioenergy Business Bioverda is focused in three key areas Methane (Landfill Gas and Coal Mine Methane) Biogas (Liquid Waste to Energy) Biofuels (Biodiesel and Bioethanol) Geographic asset focus in Europe and North America Global trading focus for biofuels and CO 2 credits 8

8 9 Global Drivers of Biofuels

9 The use of vegetable oils for engine fuels may seem insignificant today, but such oils may become in the course of time, as important as petroleum and the coal-tar products of the present time. Rudolf Diesel,

10 Global Drivers of Biofuels Climate Change Agricultural Diversity Security of Supply Oil Economics Diversification of Risk Resource Depletion Regulatory Supports Global Trade 11

11 Global Warming is a Hot Topic Global warming is the only problem that has the power to fundamentally end the march of civilization as we know it, and render all the other efforts we are making irrelevant and impossible 12 - Bill Clinton, World Economic Forum, Davos, February 2006

12 Resource Depletion Oil and Gas Production, Gboe/a Non-con Gas Gas NGLs Polar Oil Deep Water Heavy Regular Source: ASPO, 13 Price and Supply pressures expected

13 Are Oil and Gas Politically Stable? Source: OPEC 14 Political stability is not ideal

14 Energy Security EU Natural Gas 1999 Norway Great Britain Russia km Netherlands km Deutschland km Kazhakstan Ukraine Uzbekistanstan France Romania Azerbaijan Turkeyenistan Algeria Libya Egypt 15 Source: Gerhard Schroeder, Chancellor of Germany s presentation to Vladimir Putin, 2004

15 Energy Security EU Natural Gas 2025 Russia km km km Turkeynistan 16 Source: Gerhard Schroeder, Chancellor of Germany s presentation to Vladimir Putin, 2004

16 Oil Price Volatility 17 Average oil price between 55 and 75 per barrel expected

17 18 Oil Price Trend

18 19 EU Regulations

19 20 EU Biodiesel Projections

20 21 Biodiesel is key in Europe

21 Biodiesel Costs Source: Lurgi GmbH 22

22 Vegetable Oil Prices Rape Sun Soya Palm 23 Source: Oilworld

23 World Ethanomics 24 Ethanol in Europe requires mandate/subsidy

24 25 US Ethanol: Past and Future

25 Impact of World Trade Argentina: Crushings of Soybeans (Mn T) 26 Source: Oilworld

26 27 Biofuels Technologies

27 28 Feedstocks for Biodiesel

28 29 Biodiesel Process

29 30 Biodiesel Process

30 31 Ethanol Process

31 32 2 nd Generation Production

32 33 The Case for Irish Biofuels

33 Sources of GHG Emissions in Ireland 34 Source: EPA Ireland

34 Ireland s GHG Emissions Projections LUCF: Land Use Change & Forestry 35 Source: Byrne Ó Cléirigh (March 2006) Determining the Share of National Greenhouse Gas Emissions Trading in Ireland

35 Biofuels : Ireland versus EU25 36 Ireland

36 37 EU Disciplinary Action

37 SEI Perspective 2003 Ireland has a high dependence on imported energy (87%) Irish GHG emissions are significantly above Kyoto commitments Opportunities exist to convert wastes to liquid biofuels Current levels of biofuel production are negligible An important step could be remission of road excise duty on biofuels 38

38 SEI Biofuels Strategy 2004 Ireland unlikely to attain the 5.75% target in 2010 Biofuels are more costly than fossil based fuels Biofuels are more likely to be imported Obligation system should be considered (e.g. RTFO in UK) Government could organise tenders to procure appropriate quantities Importing ethanol from Brazil may be more attractive for the Irish Treasury 39 What about a New Indigenous Industry

39 Mineral Oil Tax Relief 2006 Does not distinguish between indigenous and imported Granting of relief does not guarantee delivery this was the case for wind projects under AER Agricultural objectives have been generally ignored Targets are insufficient to meet EU expectations Term of relief does not securitise investment RTFO approach would be more appropriate There is more to do in this space 40

40 41 Case Study: Neubrandenburg

41 Neubrandenburg Plant 40kT biodiesel crush and esterification EPC GmbH are the Turnkey Contractor Lurgi based technology Supplier of rape seed co-located with plant Project Financed with German Bank Planning achieved in three months Commissioning plant with handover in December All output obtains excise duty relief of 38c/ltr 42

42 43 Neubrandenburg Plant

43 44 Neubrandenburg 40kT

44 45 Ebeleben 100kT

45 Many Thanks July 2006