Sustainable Development of Biofuels Program Biofuels 2010 - For Sustainable Rural Livelihood & Energy security Swaroop Sarangan, Vice President November 19, 2010, New Delhi, India 1
Contents 1. Indian Biofuels context 2. Biofuels Development Challenges 3. Reliance Biofuels Initiative 4. Summary 2
India Energy Context Energy demand 315 million MTOE 8 times growth envisaged to 2030 75% import dependent Fossil fuel based Crude oil consumption 111 million tonnes growing 5.6% per year Gasoline consumption 11 million tonnes, growing 5% per year Diesel consumption 55 million tonnes, growing 5.2% per year Administered price regime High taxes (30% of value chain) Limited alternate energy play (mainly wind) India s energy demand is estimated to grow eight times to the year 2030. 3
Global Biofuels Opportunity Aspect Gasoline Diesel Global consumption (million MT) 1600 900 % Blending with biofuels* 10% 5% Biofuels opportunity (million MT) 160 45 Current biofuel consumption (million MT) 51 11 % Penetration of biofuel opportunity 32% 24% % Penetration of total fuels 3.2% 1.2% Jatropha with Corn as intercrop Source : BP, US Energy Information Ad ministration, PFC Energy, US Chamber of Commerce, Reliance Research * Biofuels (especially biodiesel) blending limit can potentially go up to 100% which would provide upside to the above projections. Global biofuels opportunity is significant, but current market penetration of biofuels is very low. 4
India Biofuels Opportunity Aspect Gasoline Diesel Consumption (million MT) 12 60 % Blending with biofuels* 10% 5% Biofuels opportunity (million MT) Current biofuel consumption (million MT) % Penetration of biofuel opportunity % Penetration of total fuel opportunity 1.20 6 0.16 negligible 13% NA 1.3% NA Jatropha with Groundnut as intercrop Source : Frost & Sullivan, Govt. of India Planning Commission, Ethanol India * Biofuels blending limit can go up to 100% which would provide upside to the above projections. India biofuels opportunity is also large, but current market penetration is negligible. India has 40 million ha of wasted land 5
Social-Economic Opportunity Benefits Better energy security Higher farm incomes Better quality of rural life Use of marginal land Carbon Sequestering Biofuels have significant social benefits, most important among them being higher farm incomes and better rural life. 6
Biofuels Product/Market Products Bioethanol Biobutanol Biodiesel Renewable diesel BTL Diesel DiMethyl Ether ETBE Markets Gasoline Diesel Jet fuel Fuel oils Biofuels primarily comprise bioethanol, biobutanol and biodiesel for blending with gasoline, diesel and fuel oils. 7
Renewable Biomaterials Bioethanol/Biobutanol Sugars Starch Biodiesel Sugarcane, Sugar beet Corn, Sweet Sorghum, Wheat Vegetable Oils Non-edible: Jatropha, Pongamia, Jojoba, Simaruba Edible: Palm, Rape seed, Soybean, coconut, others Animal Fats and oils Algae Yeast Sugar and grain crops are used to make bioethanol, while vegetable oils, animal fats are used to make biodiesel. 8
Technology First generation Sugars/Starch to bioethanol Fermentation; Downstream separation and purification Oils & Fats to biodiesel Pre processing and trans-esterification Second generation Biomaterials Hybrids; Transgenics; Algae; Yeast Biomass to bioethanol/butanol Hydrolysis, fermentation, separation Gasification, fermentation, membrane separation Chemical Renewable diesel (refinery hydrotreater) Pyrolysis or gasification and FT to jet fuel August, 2007 November, 2007 December, 2009 July, 2008 Jatropha yield cycle, Andhra Pradesh, India While first generation technologies are commercially used, several second generation technologies are being developed. 9
Govt. of India Biofuels Policy - Summary Development of biofuels will be to utilise degraded forest and wastelands for cultivation of biofuel crops, using non-food feedstocks 20% blending of biofuels by 2017. Storage, distribution and marketing of biofuels would rest with Oil Marketing Companies (OMC). Policy proposes Minimum Purchase Price (MPP) for biodiesel by OMC s. The policy proposes Minimum Support Price (MSP) for non-edible oilseeds. R & D grants would be provided for projects involving second generation biofuels, new feedstock development, utilization of byproducts etc. Any import or export of biofuels would be permitted only to extent necessary (exports only after meeting domestic requirements). Jatropha with Black gram as intercrop GOI biofuels policy revolves around growing non-edible crops on cultivable waste lands. 10
Biofuels Competitiveness Challenge Competitiveness with prices of gasoline (51 Rs/L) and administered prices of diesel (41 Rs/L) Competitiveness drivers Biodiesel (farm productivity, seed oil content) Bioethanol/Biobutanol (biomass cost, enzyme cost) Byproduct value Farm productivity, seed oil content and by-product value are critical drivers of biofuels productivity. 11
Contents 1. Indian Biofuels Context 2. Biofuels Development Challenges 3. Reliance Biofuels Initiative 4. Summary 12
Biofuel Development Issues (1) Product Issues Selection, blend ratios, GHG emission savings and oxygen content. Industry Issues Feed stock availability, site, technology and competitiveness Supply chain Issues Plantation material, plantation window, produce aggregation and transportation cost Business Issues Operability, scale, economics and sustainability. There are significant development challenges for biofuels, primarily on the linkages, logistics and competitiveness. 13
Biofuel Development Issues (2) Farm Issues Farm productivity, Yield and intercrop income Technology Issues Feed stock engineering, second generation technology, by-product value addition and IP Socio-Economic Issues Non-food crops, feed stock cost, subsidies, sustainability and farmers long term commitment Other significant development challenges for biofuels are on the development of sustainable feedstock and technology. 14
Product Issues Aspect Bioethanol Biodiesel Remarks Energy content 3.5 mm BTU/bbl (67 % of gasoline) 5.3 mm BTU/bbl (90 % of diesel) 30% additional efficiency of diesel engines GHG emissions 30 % over gasoline 45 % over diesel savings (Grain-based alcohol) (Rapeseed-based BD) Fossil energy savings 20 % over gasoline 60 % over diesel Emissions Better on NOx Better on CO and unburnt hydrocarbons NOx can be improved with ignition improvements Water use in crops High Low Others Better cetane Better lubricity Lubricity useful for ultra low sulphur fuels Source: CERA Biodiesel goes twice as far and is better on GHG, fossil energy savings and emissions, as compared to bioethanol. 15
Land Productivity Biofuels Crop Productivity (Litres/Ha) Sugarcane Sugar Beet 5700 6000 Palm 4800 Corn Sorghum 3500 3700 Jatropha Wheat 1800 2000 b Rapeseed Soyabeans 500 1500 Jatropha bund plantation 0 1000 2000 3000 4000 5000 6000 7000 Source: CERA Bioethanol crops score better from a land productivity point of view. 16
Water Usage Biofuels Water Usage (CuM/MT of biofuel) Maize under flood 2499 Algae brackish 444 Madhuka under drip 1162 Pongamia under drip 1110 Jatropha rainfed with support irrigation 703 Mustard under flood Soybean under flood b 9853 15596 Calophylum under drip 1226 Jatropha under drip 736 Sugarcane under drip 3077 0 5000 10000 15000 20000 Source: Reliance Life Sciences Research Water usage varies based on nature of crop and irrigation, but Jatropha and algae (brackish) perform best. 17
Energy Ratios - Reliance Study Biofuels Energy Efficiency Ratios Maize under flood Algae brackish 2.89 3.32 Madhuka under drip Pongamia under drip Jatropha rainfed with support irrigation Mustard under flood Soybean under flood Calophylum under drip Jatropha under drip b 4.52 4.87 5.29 5.83 6.74 6.77 7.34 Sugarcane under drip 8.5 0 2 4 6 8 10 Source: Reliance Life Sciences Research Biodiesel crops generally perform better from an energy ratio standpoint. 18
GHG Emissions Greenhouse Gas Emissions (gco 2eq /MJ) Fossil fuel 83.8 Biodiesel from palm oil 14 5 49 Biodiesel from soybean 19 13 26 Biodiesel from rapeseed 29 1 22 Ethanol from w heat w ith cogen 23 2 19 Biodiesel from sunflow er 18 1 b 22 Ethanol from sugar beet 12 2 26 Ethanol from sugar cane 14 9 1 Biodiesel from w aste 1 13 0 10 20 30 40 50 60 70 80 90 Source: Union for Promoting Oilseeds and Protein Plants Both bioethanol and biodiesel crops perform better from a GHG emissions standpoint. 19
Cost Competitiveness Cost Competitiveness Biodiesel Bioethanol Raw Material RM Cost, $/lit High/low 2009 Biodiesel, $/lit High/low 2009 Raw Material RM cost, $/kg Bioethanol, $/lit High/low 2009 Rape seed 0.848/0.665 0.917/0.756 Corn 0.1588 0.545/0.475 Soybean 0.764/0.628 0.837/0.725 Sugar Cane (Brazil) 0.415/0.331 Palm 0.710/0.498 0.782/0.585 Sugar Beet 0.099 0.420 Jatropha ** 0.930 Molasses 0.540 Animal fat 0.583 BTL Biodiesel 1.10 Crude, $/ bbl Diesel*, $/lit Crude, $/ bbl Gasoline*, $/lit 40 0.34 40 0.32 Conventional 50 60 0.43 0.50 Conventional 50 60 0.39 0.48 70 0.57 70 0.53 80 0.64 80 0.60 * Ex Factory gate price; ** Jatropha seeds - Rs.12/kg At current seed prices, biodiesel is not competitive. Bioethanol (sugarcane based) is competitive at US$ 50/bbl. 20
Biofuels Role of Bio Technology Agronomy Plantation in irrigated, rain fed conditions Cultivation with intercrops Hybrid development Plant Tissue Culture Leaf disc regeneration Immature embryo transformation Plant Metabolic Engineering Transgenic Jatropha Bio-Process Technology Fermentation Enzyme manufacturing By-product value addition Yeast to oil Biofuels can bring about rural transformation through higher farm incomes and better quality of life. 21
Contents 1. Indian Biofuels Context 2. Biofuels Development Challenges 3. Reliance Biofuels Initiative 4. Summary 22
Biofuels Architecture Elite Plants Characterisation And Sourcing Tissue Cultured Plants Hybrid Plants Development Jatropha Farming Cellulosic Biomass Transgenic Plants Development Jatropha Seeds Protein Extraction Jatropha Oil Jatropha Seed Cake Glycerol 3GT Biopolymer Via 1,3 Propane Diol Transesterification Biodiesel Bioethanol Enzyme directed conversion Biobutanol The biofuels initiative of Reliance group is unique in its architecture and content. 23
Reliance Business Design Principles Philosophy Energy security Rural transformation opportunity Focus area Biodiesel Crops Non-edible seeds Non-compete with alcohol Agronomy Work with marginal farmers Focus on rain-fed areas No RIL land ownership Technology For higher farm yields For higher oil content Pursue competing technologies Hybrid variety of Jatropha with intercrop Business design is based on biodiesel non-edible crops on cultivable wasteland owned by marginal farmers. 24
Components (1) Agronomy R&D (Kakinada, Nagothane, Gandhar) Plantation (Jatropha, Simarouba, Pongamia) Jatropha cultivation with intercrops (Pulses, Millets, beans, oil seeds, vegetables) Jatropha hybrid development Farm Advocacy Scale-up of biofuel crops Five states in India (Andhra Pradesh, Maharashtra, Madhya Pradesh, Gujarat, Chhatisgarh) NGO partners Multiple points of engagement The agronomy and farm advocacy components focus on the farm to address productivity, incomes and scale. 25
Components (2) Plant Metabolic Engineering High expression of oils in Jatropha Algal cultures Plant Tissue Culture Transesterification Pilot plant at Kakinada for feed stock validation and engine performance. Industrial Biotechnology Enzymology Glycerol to 1,3 propanediol to polymer Oil expression in yeast Biomass to bioethanol/biobutanol Enzymes for bioethanol/biobutanol Plant and industrial biotechnology components focus on technology to address yields, costs and value addition. 26
Contents 1. Indian Biofuels context 2. Biofuels Development Challenges 3. Reliance Biofuels Initiative 4. Summary 27
Summary India Biofuels Imperative US$ 1 trillion + economy 1 billion + people Seriously energy deficient India Biofuels Endowment Arable land (142 mill Ha) Cultivable waste land (40 mill Ha) Cost advantage Biotech talent India Biofuels Opportunity Challenges Higher farm incomes Better quality of rural life Jatropha biodiesel and Sugar cane bioethanol are sustainable Costs and Competitiveness Biofuels is an imperative for India for energy security and an opportunity for rural transformation. 28
Thank You 29