Sustainable solutions for our changing energy needs Antti Nummi Advanced Biofuels 2018, Gothenburg
REG in Brief Renewable Energy Group (Nasdaq: REGI) is a leading provider of sustainable, lower carbon energy products and services. We produce biomass-based diesel, advanced biofuels and renewable chemicals. Our 14 plants in Europe and US have a combined production capacity of 1.8 million tonnes. REG s revenues in 2017 were USD 2.2 billion. 2
World GDP, trillion USD 2017 2060
Energy to fuel the growth Million toe 20 000 15 000 Global primary energy consumpaon +26% 10 000 5 000 - SOURCE: BP Energy outlook 2018 2020 2040 Despite improving energy efficiency, the world s energy demand is growing
Emissions to the atmosphere GROWTH OF DEVELOPING COUNTRIES POST WW2 ECONOMIC GROWTH INDUSTRIAL REVOLUTION IN EUROPE INDUSTRIAL REVOLUTION IN AMERICA CO2 emission have gone tenfold in 100 years with increasing speed
The world s energy transition Shares of primary energy 2016 2040 Oil Gas Coal Nuclear Hydro Renewables SOURCE: BP Energy outlook 2018 Primary energy sources are shifting from fossil to renewables too slowly
The world s needs for renewable energy ENERGY DEMAND CLEAN AIR QUALITY FEEDSTOCK SUSTAINABILITY NEW SEGMENTS BEYOND ROAD Energy demand increases and the energy portfolio decarbonizes Quality of fuels is constantly improving to minimize exhaust emissions Use of waste feedstocks increases and supply availability becomes critical Use of renewables is expanding to shipping, aviation, rail and industrial segments
Emissions to the atmosphere Carbon emissions billion tonnes CO 2 40 35 30 25 20 15 10 5 0 1970 1980 1990 2000 2010 2020 2030 2040 SOURCE: BP Energy outlook 2018 Evolving transition (ET) Internal combustion engine ban (ICE ban) Less gas switching Renewables push (RE push) Faster transition (FT) Even faster transition (EFT) Future trend depends on our choices today
The challenge The challenge is too big for law makers, companies or consumers to overcome alone. All sectors need to contribute
Use of natural resources Developed countries have the responsibility to take action and change the course
Europe s security of energy supply MT 1 200 USD/bbl 140 1 000 800 600 400 200 120 100 80 60 40 20-0 SOURCE: BP Oil ProducAon, MT Oil ConsumpAon, Mtoe Oil Price Linjär (Oil Price) 1965-1983 Arabian Light posted at Ras Tanura 1984-2017 Brent dated Europe is heavily dependent on oil imports in addition to gas and is exposed to significant supply and price risks
Structural product imbalance SOURCE: Eurostat Biodiesel / renewable diesel can decrease the dependency on diesel imports
Meeting the EU targets some of them SELECTED OBJECTIVE TO BE MET BY 2020 INDICATIVE OUTLOOK OF MEETING THE OBJECTIVE BY 2020 Reach a 20 % share of renewable energy in gross final energy consumption Renewable Energy Directive Reduce greenhouse gas emissions by 20% compared with 1990 levels 2020 Climate and Energy Package Reduce the overall environmental impact of production and consumption in the mobility sector 7th EAP Meet Air Quality Directive standards for the protection of human health Air Quality Directive We need to have a holistic look at the energy field and acknowledge the benefits of different solutions
Outcome of the market drivers ENERGY DEMAND CLEAN AIR QUALITY FEEDSTOCK SUSTAINABILITY NEW SEGMENTS BEYOND ROAD!! Growth in transportation volumes in sea, land and air, as well as the structure of the European fuel consumption and the S/D imbalance continue to be major drivers for middle distillate demand in Europe. Security of energy supply, the targets to reduce GHG emissions and improve air quality, and growing interest to reuse wastes support long term biofuel demand in Europe.
A smarter way forward We need smarter ways to produce our energy, to allocate our energy products and to consume our energy Natural resources more waste feedstocks OpAmizing our energy pool right fuel for each segment No subopamizaaon or quick wins at the cost of the long term good The regulation has to take into account the long term impacts of energy allocation
Smarter use of resources IMAGE: Ellen MacArthur Foundation Natural resources we use need to be renewable, recycled and reused.
Smarter optimization of fuel pool Bn toe 4 TRANSPORT ENERGY CONSUMPTION BY MODE 3 2 1 0 2016 Cars** Trucks Non-road* 2040 As commercial transportation grows, it becomes more dependent on liquid fuels SOURCE: BP Energy Outlook 2018 *Aviation, Marine and Rail, **Includes 2- and 3- wheelers
Smarter buying of fuels FAME o The highest GHG reduction with the lowest cost to the consumer and tax payer o Maximum amount of renewable carbon as feedstock, no hydrogen used o Oxygenated fuel meaning reduced tailpipe emissions o Enhances lubricity of conventional fuel o Biodegradable o Comparable to vegetable oil in transport & handling requirements HVO o Exceptional cetane number, virtually free of sulfur, excellent cold properties, no blending restrictions o Stand-alone HVO is a solution for airlines who want renewable jet fuel and on-road users who want renewable content higher than B7/B20 We need to have a holistic look at the energy field and acknowledge the benefits of different solutions
REG s production assets CRUDE FEEDSTOCK CAPABLE Albert Lea, MN Danville, IL Emden, Germany Geismar, LA Madison, WI Mason City, IA New Boston, TX Newton, IA Oeding, Germany Seneca, IL REFINED FEEDSTOCK Grays Harbor, WA Houston, TX Ralston, IA FERMENTATION FACILITY Okeechobee, FL FEEDSTOCK PROCESSING FACILITY Burlo, Germany 13 BIOMASS BASED PLANTS NAMEPLATE 1.8MMT CAPACITY 19
REG s presence 20
REG is committed to deliver o With our biofuels, REG has displaced more than 3 million MT of CO2 emissions since 2010. o We have 14 active biorefineries in Europe and the US both HVO and FAME research and development capabilities and a diverse and growing intellectual property portfolio to produce bio-based fuels and chemicals. o REG utilizes an integrated procurement, distribution, and logistics network to convert natural fats, oils, greases, and sugars into lower carbon intensity products. o We are committed to be the leading provider of cleaner, lower carbon intensity products and services for the world s energy needs.
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