Libertad Orden y GROWTH, CONFIDENCE AND OPPORTUNITIES TO INVEST INVESTMENT IN THE BIOFUELS SECTOR BIOFUELS IN COLOMBIA In 2005, the National Government initiated policies oriented towards establishing incentives for the production and use of biofuels in the country, with the goal of promoting a productive development alternative for the formal use of the soil, contributing to generating jobs, diversifying the offering of energy options in the country and converting Colombia into an exporter of biofuels.
RATE OF RETURN FOR ETHANOL PRODUCTION (LT/HA/YEAR) SUGAR CANE BEETS YUCCA SWEET SORGHUM CORN 3,200 4,400 5,000 4,500 ETHANOL PRODUCTION 2005-2012 (THOUSANDS OF LITERS) 327,705 337,398 271,773 291,286 265,684 255,584 369,722 9,000 0 5,000 10,000 RATE OF RETURN FOR BIODIESEL PRODUCTION (LT/HA/YEAR) PALM OIL COCONUT CASTOR AVOCADO JATROPHA COLZA PEANUT SUNFLOWER SOY 5,550 4,200 2,600 2,460 1,559 1,100 990 890 840 0 2,000 4,000 6,000 BIODIESEL PRODUCTION 2009-2012 (TONS) 337,713 443,037 489,991 169,411 27,034 2005 2006 2007 2008 2009 2010 2011 2012 Although the international trade in biofuels is not large and has exchange barriers due to the existence of production subsidies, it is expected that in the medium term it will grow, since many countries will not be able to meet internal demand with domestic production. Source: Fedebiocombustibles A continuous increase in the production of biofuels will create a market for surpluses; Colombia will be able to supply the needs of other countries where internal production is not sufficient and where the need for its use is growing. 2009 2010 2011 2012 The production of biodiesel and ethanol in Colombia has increased over recent years thanks to the obligatory mixing policy. In 2012, 368 million liters of ethanol and 489 thousand tons of biodiesel were produced.
BIOFUELS IN COLOMBIA MIXING POLICY: Diesel and gasoline sold in Colombia must be mixed with biodiesel and ethanol. The amount of biofuels in the mix would tend to increase over the years, depending on the levels of supply and other variables. (Current mix: E8, B8 - B10).- Fedecombustibles-2013). The mixing policy (map) could change as result of an inter-sectoral biofuels mandate. E0 - B0 E8 - B0 E8 - B8 E8 - B10 ESTABLISHMENT OF PRICES: The Ministry of Mines and Energy establishes the prices for biodiesel and ethanol every month. This price is one of the highest in the world. (Ministry of Mines and Energy). Based on the Life Cycle Analysis, 2012, the ethanol produced in Colombia reduces GHG emissions by 74%, and biodiesel reduces these levels by 83%. (EMPA and Universidad Pontificia Bolivariana). Palm oil and sugar cane used in Colombia for creating biofuels have been proven to have higher yield than other raw materials used around the world. Once the domestic demand for biofuels is covered, any surplus can be exported. Source: National Federation of Biofuels
INVESTMENT OPPORTUNITIES Exports of biofuels to the United States and the European Union under free trade agreements are seen both as a challenge and an enormous opportunity. The growing production of palm oil and sugar cane requires the construction of new bio-refineries, biomass plants and development of transesterification, which allow the transformation of sugar cane and oil palm into biodiesel. It is expected that the future demand for biofuels in Colombia will be greater in the next few years, to the extent that the mixing policies are increased. As a consequence, local demand will have to be covered by increasing the production of ethanol and biodiesel. BUSINESS NETWORK Colombian soil can be used for planting crops aimed at biofuel production (following a soil study). Five ethanol plants (in production): Incauca, Ingenio Providencia, Manuelita (Palmira), Manuelita (Candelaria), Ingenio Risaralda and GPC. 5 5 13 Five biodiesel plants (in production): Oleoflores, Biocombustibles Sostenibles del Caribe, BioD, Ecodiesel de Colombia and Aceites Manuelita. Thirteen sugar mills and more than 50 palm oil extraction plants.
BUSINESS NETWORK ETHANOL BIODIESEL PLANT ETHANOL PLANT ETHANOL/ BIODIESEL PLANTS REGION COMPANY CAPACITY (L/DAY) Miranda, Cauca Incauca 350.000 Palmira, Valle Ingenio Providencia 300.000 Palmira, Valle Manuelita 250.000 Candelaria, Valle Manuelita 250.000 La Virginia, Risaralda Ingenio Risaralda 100.000 Pto López, Meta GPC* 25.000 TOTAL 1.275.000 BIODIESEL REGION COMPANY CAPACITY (T/YEAR) Codazzi, Norte Oleoflores 70.000 Santa Marta, Norte Biocombustibles Sostenibles 100.000 Facatativá, Oeste Bio B 115.000 B/bermeja, Central Ecodiesel de Colombia 115.000 San Carlos de Guaroa, Meta Aceites Manuelita 120.000 TOTAL GPC* 520.000 Source: Fedebiocombustibles.
Libertad Orden y LARGE FOREIGN COMPANIES HAVE CHOSEN COLOMBIA AS A PLACE TO INVEST MERHAV (ISRAEL):has invested in the development of an ethanol production project in the northern part of the country. MITSUBISHI CORPORATION(JAPAN) formalized its entrance into fuel alcohol production in Colombia via the purchase of BioOriente s share in BioEnergy, a company that is building the largest fuel ethanol distillery in the country. PROGRAM FOR PRODUCTIVE TRANSFORMATION: public-private alliance that promotes productivity and competitiveness in sectors with high export potential, by means of more efficient coordination between the public and private sectors. PROCOLOMBIA: the entity in charge of promoting international tourism, foreign investment and non-traditional exports in Colombia. FEDEBIOCOMBUSTIBLES: the National Federation of Biofuels is a non-profit organization that gathers together leading entities willing to work in the service of the Nation for converting the biofuels sector into means of leveraging wealth in regions where industrial centers are established. INTER-SECTORAL COMMISSION FOR BIOFUELS: responsible for biofuel policy management. It is made up of the Ministry of Agriculture and Rural Development, the Ministry of Mines and Energy, the Ministry of the Environment and Sustainable Development, the Ministry of Transportation, the Ministry of Commerce, Industry and Tourism, and the National Department of Planning.