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Abengoa Bioenergy: The Global Ethanol Company
 

Abengoa Bioenergy: The Global Ethanol Company

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Abengoa Bioenergy: To contribute to the sustainable development of the vehicle fuels market and the bio-based chemicals products market by renewable energy (biofuels) and environmentally friendly ...

Abengoa Bioenergy: To contribute to the sustainable development of the vehicle fuels market and the bio-based chemicals products market by renewable energy (biofuels) and environmentally friendly technologies that reduce carbon emissions.

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    Abengoa Bioenergy: The Global Ethanol Company Abengoa Bioenergy: The Global Ethanol Company Presentation Transcript

    • ABENGOA BIOENERGY www.abengoabioenergy.com Abengoa Bioenergy : The Global Ethanol Company World Biofuels Seville, May 13 2008 Javier Salgado Leirado President & CEO Science. Solutions. Service. 1
    • ABENGOA BIOENERGY Facing the reality… Negative trends in climate change have accelerated with industrial development Arctic summers ice free by 2040 study predicts (National Geographic) Science. Solutions. Service. 2
    • ABENGOA BIOENERGY Facing the reality… The Planet is heating up - and fast Glaciers are melting, sea levels are rising, cloud forests are drying, and wildlife is scrambling to keep pace. It's becoming clear that humans have caused most of the past century's warming by releasing heat- trapping gases as we power our modern lives. Called greenhouse gases, their levels are higher now than in the last 650,000 years. Science. Solutions. Service. 3
    • ABENGOA BIOENERGY …Climate Change is a fact Stern Report Costs of climate change were calculated at between 5% and 20% of global domestic product. While costs of taking actions on emissions would be about 1% of GDP. International Energy Agency If governments stick with their current policies, the World´s energy needs will be more than 50% higher in 2030 than today and emissions of CO2 will jump by 57% per cent between 2005 and 2030. IPCC (Intergovernmental Panel on Climate Change) It predicted a temperature rise of 3ºC within the next 100 years with catastrophic consequences for the planet unless greenhouse gas emissions were stabilised and then cut within the next decade. Science. Solutions. Service. 4
    • ABENGOA BIOENERGY We need alternatives to oil… Oil from new sources is more expensive to produce, harder to get, requires specialized equipment to refine and increased use of natural resources at a higher C02 emissions cost Global warming scientific discussion is over: The Earth is in danger From a BTU based To a CO2 net emissions economy based economy Science. Solutions. Service. 5
    • ABENGOA BIOENERGY …and we have them Biofuels are critical for meeting current and future fuel demand International Energy Agency Biofuels account for about half of the extra fuel coming to the market from sources outside OPEC. The views of the IEA carry significant weight in Europe and the US and policy makers have warned that the debate over biofuels should take into account its implications for energy markets and climate change. The world has moved into a new era in which food and fuel prices are more closely tied than ever before, yet putting a brake on biofuel expansion with oil at US$120 per barrel . Abandoning biofuels would make the situation worse Biofuels contributed only 1.3% to world oil supplies last year, (more than OPEC member Indonesia),but the share is expected to become much greater, helping to mitigate rising oil prices amid tightening oil supply. Science. Solutions. Service. 6
    • ABENGOA BIOENERGY Biofuels: essential player in the energy matrix Biofuels are critical for meeting current and future fuel demand Jeroen Van Der Veer ( Shell President) • World demand is increasing and needs all kind of available fuels, including biofuels • The high prices of crude oil are not enough to reduce fuels demand Christophe de Margerie (Total CEO) It will be difficult for the World to reach an oil production of 100 barrels/day Rockefeller Family (Exxon shareholder) They warned that the company will lose out competitors if it doesn´t review its climate-change policy and invest more in alternative energy BP BP has just announced a 50% equity acquisition on a brazilian ethanol producer and plans to invest more than $1 Bn in two new ethanol plants in Brazil. Science. Solutions. Service. 7
    • ABENGOA BIOENERGY Strategic vision tion ugh innova ion thro Evolut Market evolution Commercial Commercial ethanol ethanol Massive production Ethanol production introduction from ETBE & E5 from hybrid Mandate in of higher lignocellulosic Co -existence lignocellulosic EU (E5) ethanol Biomass. in the EU blends: Biomass and E10, E20, E85 cerealhybrid New Products Ethanol mandate (RFS) and from Biomass MTBE Phase - out in US E-Diesel • Hybryd • Hybryd plants with Technology • Cereal based lignocellulosic optimum technology • Biological (HE) & production biomass and cereal • Commercial G&C thermochemical (GC) hybrid plants combined with cereal process combined • Pilot demostration - • Heat& electricity by and enzimatic hydrolysis phase for HE gasification biomass • 100% ethanol production • Obtain biofuel and • Pilot investment - From lignocellulosic • Demostration phase other products phase in GC biomass for G&C Energy crop development Short Term Medium Term Long term Science. Solutions. Service. 8
    • ABENGOA BIOENERGY The Global Ethanol Company Cartagena, Sp Coruña, Sp Salamanca, Sp Lacq, FR Rotterdam, NE 40 MMGY 53 MMGY 53 MMGY 66 MMGY 126 MMGY Since 1999 Since 2001 Since 2006 Since 2007 Construction York, NE Colwich, KS Portales, NM 25 MMGY 55 MMGY 30 MMGY Since 2001 Since 2001 Since 2001 San Luis, SP San Joao, SP Ravenna, NE Evansville, IN Trinity, IL 3,3 Mt/y 2,8 Mt/y 88 MMGY 88 MMGY 88 MMGY Since 2007 Since 2007 Construction Construction Science. Solutions. Service. 9
    • ABENGOA BIOENERGY …and leading the 2nd Generation Commercial Hybrid Biomass Plant Hugoton (KS, US) Capacity : 100 MGPY (13 MGPY biomass, 87 MGPY starch) Raw material : Corn starch and stover Technology : Enzymatic Hydrolysis (glucose & xylose) Objective : Production at a gasoline competitive cost Start u Operations : 2010 estimated - p Biomass Demonstration Plant in BCL (Salamanca, Spain) Capacity : 1.3 MGPY Raw material : Wheat and Barley Straw Technology : Enzymatic Hydrolysis (glucose) Objective : Demonstrate biomass- to e - thanol process technology at commercial scale Start u Operations : 2008 - p Biomass Pilot Plant in York (NE, US) Capacity : 0.02 MGPY Raw material : Corn stover Technology : Enzymatic Hydrolysis (glucose & xylose) Objective : Competitive process with grain ethanol Start u - pOper. : 2007 Science. Solutions. Service. 10
    • ABENGOA BIOENERGY Abengoa Bioenergy is leading the industry effort towards Sustainability… Environmental Economical Social Sustainability The World Gas price Land use reduction Local Communities Development Worldwide Natural Resources + Protein supplies + = Sustainability Uses Public Awareness Agricultural Opinion CO2 emissions Development Our To be recognized Answer Abengoa Bioenergy To contribute to the sustainable development as a world wide - Protection, of the vehicle fuels leader in research defense and market and the bio-based and development, improvement chemicals products known for of the market by renewable technological Abengoa energy (biofuels) and + innovation in the + environment. Respect for Bioenergy environmentally friendly technologies that reduce conversion of biomass to all people under all = Strategy carbon emissions bioethanol circumstances Mision Vision Values Sustainability as a driver of our Business Strategy Science. Solutions. Service. 11
    • ABENGOA BIOENERGY Global Ethanol Demand is sky--rocketing Other Ethanol Demand (2007 2020) in Bn liters - EU US C.A.G.R. 7,6% 185 185 Bn liters a Brazil year (1.2 Bn 13 14 16 barrels) assuming Other 49 52 EU 20 an oil price of 120 56 USD/Ba suggests US 1 an overall ethanol Brazil 78 business of more 4 than $140 Bn per 26 year 74 18 With oil price at 200 USD/Ba 2007 2020 equation goes to So urces: RFA , Unica, A nfavea, A NP , USDA , Rabo bank,B io agencia, M o rgan Stanley, B ear Stearns, FO Licht's, A bengo a estimates $230 Bn per year Science. Solutions. Service. 12
    • ABENGOA BIOENERGY Ethanol more and more significant in Global Gasoline Demand Gasoline + Ethanol Demand (2007-2020) in Bn liters 1.349 1.349 49 3,6% 13,7% 185 1.300 1.164 Gasoline 2007 2020e Sources: IEA, Worldwatch Institute and Abengoa Ethanol Ethanol will displace a significant fossil fuel demand by 2020 Science. Solutions. Service. 13
    • ABENGOA BIOENERGY Even so…biofuels are in the centre of controversy Science. Solutions. Service. 14
    • ABENGOA BIOENERGY Current controversies on biofuels Main Controversies Biofuels GHG associated emissions are similar GHG Savings or higher than fossil fuels they substitute The energy balance for biofuels is similar or Energy Efficiency worse than fossil fuel they substitute Biofuels will mean deforestation of Deforestation and Biodiversity rainforest and biodiversity Biofuels destroy the world´s aquifer Water Consumption reserves Biofuels are responsible for the increase in Food Prices world food prices Biofuels jeopardize food security in many Food Security countries Science. Solutions. Service. 15
    • ABENGOA BIOENERGY GHG emissions Biofuels GHG associated emissions are similar The Controversy or higher than fossil fuels they substitute • Life cycle analyses and more recent studies performed by US DOE, A. Farrel of University of Berkeley, Joint Research Centre (JRC) for the European Commission and CIEMAT, conclude that ethanol reduces significantly GHG emissions in comparison with gasoline. • The International Energy Agency (IEA) has stated that biofuels, no matter they are used individually or blended with other fuels, improve the air quality. • US Energy Bill defined “biofuels” only those that imply a 20% GHG reduction on fossil fuels. New legislation from the European Source:DOE Source: A. Farrel Commission coming up, consider “biofuels” g CO2 equivalent GHG Emissions per MJfuel only those that reach a minimum greenhouse Gasoline 94 gas emission saving of at least 35%. Ethanol today 77 Cellulosic Ethanol 11 The Facts Biofuels contribute significantly to reduce the GHG in respect of fossil fuels Science. Solutions. Service. 16
    • ABENGOA BIOENERGY Energy Balance The energy balance for biofuels is similar or The Controversy worse than fossil fuel they substitute • US DOE, A. Farrel of University of Berkeley and CIEMAT studies show that biofuel have in all cases a better energy balance than fossil fuels, which means that in comparison to gasoline, ethanol saves primary and fossil energy. • The U.S. Department of Energy study shows that ethanol provides an average net energy gain of at least 67% in respect of the energy used in its production. Net Fossil Inputs Net Fossil Ratio Petroleum Input Energy Balance MJfuel produced MJpetroleum MJfossil needed for each MJfossil needed for each for each MJfuel input MJfuel Gasoline 1,19 0,84 1,10 Ethanol today 0,77 1,30 0,04 Cellulosic Ethanol 0,10 10,0 0,08 Source: A. Farrel Source:DOE The Facts Biofuels save more energy than fossil fuels Science. Solutions. Service. 17
    • ABENGOA BIOENERGY Deforestation and Biodiversity Biofuels will mean destructing rainforest and The Controversy biodiversity 2020 Estimated World Cereal Production will be reached by a significant yield increase which lays on conservative historical yields projections, while biotechnology improvements might boost yields doubling current seen figures The World has the capability of generating an extra corn production of 178 Mt/year just if yields in Eastern Europe, Argentina and Brazil reached only 75% of current US yield figures The Facts Bioethanol targets will be reached without destroying rainforest and biodiversity Science. Solutions. Service. 18
    • ABENGOA BIOENERGY Deforestation and Biodiversity (2) Brazil has managed to substitute 50% of gasoline consumption just with 1% of total land used for ethanol sugar cane. IPCC already warned in 2004 of deforestation issues in Brazil, showing that this in a old problem that can not be blamed on bioethanol (nor even indirectly because of crops displacements). Raw material demand for bioethanol production has barely direct influence in rainforest deforestation in Brazil. Moreover, Amazon Rainforest don´t comply with agronomics conditions to produce bioethanol New legislations have proposed that no bioethanol would count towards a members state´s usage target if it does not meet strict sustainability criteria. This would exclude bioethanol coming from land with a high biodiverstity value or land with high carbon stocks. The Facts Bioethanol targets will be reached without destroying rainforest and biodiversity Science. Solutions. Service. 19
    • ABENGOA BIOENERGY Water Consumption The Controversy Biofuels destroy the world´s aquifer reserves Virtual Water Content of Farm Products (M liters / tonne) 20 Yield response and water requirements in irrigated and non irrigated agriculture : 15 Source: UNESCO 10 5 0 on ce ze at ee y rk f r se e he rle Ri he ai Po Be ee tt ff at M Ba Co Co W Ch Le Source: UNESCO It takes 94 liters of water to proccess crude oil into 1 liter of gasoline It takes 560 liters to produce a Sunday newspaper It takes 8000 liters for a leather shoes… EU, US and Brazil have a negative evolution in their irrigation balance in the last 10 years. Thanks The Facts to the biotechnology we will reach the same yield with less water requirements. Science. Solutions. Service. 20
    • ABENGOA BIOENERGY Food Prices Biofuels are responsible for the increase in The Controversy world food prices World coarse grains consumption 2004 2 - 007 (Mtn) There are other factors behind : growing demand in developing countries, dietary changes, commodity 2004 2005 25,8 31,3 funds, energy prices, exchange rates… 2% 2% World cereals consumption for biofuels account for only 2- 3 on World cereal 2004 2007 (taking out % - 1.642 1.599 DGS recovery) 2006 2007 36,8 50,7 Biofuels cereals consumtion account for less than 20% of increase in 2007 vs 2006. 2% 3% Need to take into account that aprox. 33% of 1.583 1.674 bioethanol cereal consumption is reintegrated in the Sources: USDA, FO LIchts, RFA, eBIO. (Million Metric tons) food chain for animal consumption through DGS Coarse grains production in 2008 could increase by 2.9% to a record 1.722 million tonnes, with the bulk of the increase in wheat. "Should the expected growth in 2008 production materialize, the current tight global cereal supply situation could ease in the new 2008 09 - season,“ FAO Bioethanol, in the worst case scenario, has a much more The Facts limited impact in terms of significance and time than argued Science. Solutions. Service. 21
    • ABENGOA BIOENERGY Food Prices (2) Tra Lab De Far Ad nsp pre ou Pac mV ver Int ort r co cia Rep sts 3 Ene Pro kag Oth ere t 4% alu tisi Tax 2% ati Ren tio sts fits rgy air % ing ng e1 ers on es n3 s 38% 9% 4% 4% 4% 4% 8% 4% 3% % Farm Inputs = 19% of Food Dollar Energy Inputs = over 60% of Food Dollar Sources: USDA- E Urbanchuk, RS; “The Relative Impact of Corn and Energy Prices in the Grocery Aisle. 2007 A $1 per gallon increase in the price of gasoline has three times the impact on retail food prices as a $1 per bushel increase in corn prices. J.M. Urbachunk, LECG The Facts Energy prices having the heavier impact…. Science. Solutions. Service. 22
    • ABENGOA BIOENERGY Food Prices (3) Biofuels are responsible for the increase in world The Controversy food prices A rough calculation suggests that there are currently $181bn invested in commodities via index products, compared to $125bn in Feb'07 and $99bn in Feb'06.” Source: FC Stone Source: JP Morgan U.S. Sub-prime crisis has lead many funds and The Facts speculators to invest in raw materials, which has contributed to the rally in commodity prices Science. Solutions. Service. 23
    • ABENGOA BIOENERGY Food Prices (4) Biofuels are responsible for the increase in world The Controversy food prices $/ton $/bbl 400 120 High crude prices are causing high natural gas prices, 350 Cost of fertilizer ($/ton) which has at the end caused a severe price increase in 300 Oil price ($/bbl) 100 fertilizers. This is limiting and will limit the World 250 80 response for achieving higher crop outputs, mainly in 200 60 developing countries. 150 40 100 20 50 0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Financial Times, Bloomberg, EIA Source: New York Times 30/04/008 Bullish fertilizers prices having big impact in food prices The Facts and jeopardizing yield increases in developing countries Science. Solutions. Service. 24
    • ABENGOA BIOENERGY Food Prices (5) Biofuels are responsible for the increase in world The Controversy food prices Change in World Wheat and Corn World Population is expected Consumption (2005- 2007) to increase in more than 10% 3.000 million people by 2050 16% from current seen figures. This increase will take place mainly in China and India, which for instance, have the 74% Rest World Source: USDA greater impact on cereal China world consumption trends. India Source: World Resources Institute Emerging economies are not only eating more but more meat. This exacerbates grain consumption as it can take up to 9 Kg of grain to produce 1 Kg of meat. World Population growth and dietary changes make the The Facts real challenge Science. Solutions. Service. 25
    • ABENGOA BIOENERGY Food Prices (6) Biofuels are responsible for the increase in world The Controversy food prices 1. US corn production has left plenty for people, livestock Grain for US ethanol, China Meat, vs. US corn and for ethanol. Production (1995-2007) (mn t grain) 400 Source: World Resources Institute 2. Chinese meat consumption 350 is still 45% less than average 300 1995 consumption in US. 2007 250 3. If the Chinese people had 200 consumed the same amount of 150 meat, per person, in 2007 as in 100 1995, there would have been 50 enough grain left over to support 927 million hungry 0 people with enough grain for US Ethanol China Meat US corn Production an entire year. World Population growth and dietary changes make the The Facts real challenge Science. Solutions. Service. 26
    • ABENGOA BIOENERGY Food Security The Controversy Biofuels jeopardize food security in many countries 1. Price increases can mean good news for the world´s - poorest as it is more cost effective to import food aid than to - produce it locally. 2. As FAO admits, there are risks but biofuels can contribute - to increase energy and food security in developing countries. 3. There is a substantial potential for yield improvements in - many countries. High grain prices will represent a great opportunity for The Facts rural economies in developing countries Science. Solutions. Service. 27
    • ABENGOA BIOENERGY Food Security (2) The Controversy Biofuels jeopardize Food Security in many countries Historically, in the cereal clasic supply / demand situation, when production falls below demand, prices are forced up incentiving future production increases Source: US Departament of Agriculture Despite high increase in domestic uses of corn for Source: National Corn Growers Association ethanol use, production in US has managed to supply both domestic market and exports, thus not affecting food needs in developing countries Science. Solutions. Service. 28
    • ABENGOA BIOENERGY Food Security (3) The Controversy Biofuels jeopardize Food Security in many countries From the early 90´s both the US and EU have been discouraging crop production by: - Restricting the area used for food crops - Lowering support prices - Imposing stricter standards We are now suffering the outcome of more than two decades of agricultural policies which are totally devoid of economic logic. Some clear erroneous measures, i.e.: - Tariffs and subsidies have distorted Source: FAO international markets - EU has changed from The Facts having strategic reserves to a cero stock policy World Trade Policies are responsible - Spending on farming of current food shortages; they have as a share of total been distorting international markets public spending in and preventing development of poor developing countries fell by half between countries for decades. Now we are 1980 and 2004 paying the price Science. Solutions. Service. 29
    • ABENGOA BIOENERGY Food Security (4) 2nd Biofuels Generation At $70 to $80 a barrel, the Source: Mckinsey & Company replacement of up to 50% of all transportation fuel will be economically viable 2nd generation will be possible only through 1st generation cash flows Science. Solutions. Service. 30
    • ABENGOA BIOENERGY Food Security (5) World Meat Consumption in Mtn World Oil Consumption in Mb/d 244 beef 97 228 91 chicken 62 84 202 pig 58 53 70 67 55 94 103 112 2005 2010 2015 2005 2010 2015 Source: International Food Policy Research Institute Source: IEA, Abengoa The World needs solutions for both Food & Energy Abengoa Bioenergy is both a renewable ethanol producer and a protein producer, thus Abengoa Bioenergy is providing sustainable solutions to both the Food problem and the Energy problem Science. Solutions. Service. 31
    • ABENGOA BIOENERGY Conclusion More expensive oil and a less sustainable World Dilemma New economy based on CO2 net emissions reductions Bioethanol is part of the solution Science. Solutions. Service. 32