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Blue Print - Green Energy In The America
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Blue Print - Green Energy In The America


Blue Print - Green Energy In The America

Blue Print - Green Energy In The America

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  • 1. Garten Rothkopf 1
  • 2. Garten Rothkopf “12 Facts, Six Trends, Four Pillars and Three Conclusions”… David Rothkopf Garten Rothkopf April 2, 2007 2
  • 3. Garten Rothkopf Recent News Headlines All these headlines are from March 2007 • “France: Government Proposes increase in Biodiesel” • “US and EU to Partner on Commoditization and Standardization on Biofuels” • “Synergy Drive on Track for Main Board Listing by Year End” 3
  • 4. Garten Rothkopf Recent News Headlines cont. • “China Launches Rapeseed Biodiesel Industry” • “EU adopts binding energy targets: Merkel” • “Petrobras Plans to Use Waterways, Rail to Spur Ethanol Exports” • “Brazil's Lula Visits Bush for Ethanol and World Trade Talks” 4
  • 5. Garten Rothkopf 12 Key Facts 1. The transport sector today produces 20% of greenhouse gas emissions. 2. Blend mandates have been enacted in 27 of the 50 countries surveyed by this report and 40 have some form of biofuels promotion legislation. 5
  • 6. Garten Rothkopf 12 Key Facts 3. Biofuels are the most competitive alternative today: a) Clean and GREEN, unlike coal liquefaction b) A proven technology, unlike hydrogen 4. The Western Hemisphere today produces 80% of the world’s biofuels. Latin America alone produces 40 percent of the world’s biofuels. 5. Brazil accounted for over 50% of total trade in ethanol in 2005 6
  • 7. Garten Rothkopf 12 Key Facts 6. Investment in clean energy reached $38bn in 2005, up from just over $5bn a decade before. Major recent investment announcements include: – The Chinese government has announced it will invest $187bn in clean energy through 2020. – The UK government will invest $2bn in a clean energy research center. – British Petroleum has pledged $500m to create the Energy Biosciences Research institute, which will focus on biofuels. – Brazil’s Petrobras and Japan’s Mitsui announced plans for $8bn investment in ethanol capacity expansion 7
  • 8. Garten Rothkopf 12 Key Facts 7. Many countries in Latin America and the Caribbean have the land, climate, and labor to be well positioned to capture a significant percentage of this investment. – Recent Investments Include: • Pure Biofuels to expand its feedstock production by an additional 60 thousand hectares in Peru to supply its 200m liter a year biodiesel facility. • Mitsubishi Corp established a 30 year supply contract and 10% equity stake in Usina Boa Vista in Brazil. • Leading US private equity investors made a $200m investment in Brenco, a Bermuda-based company which will develop biofuels projects in Brazil. 8
  • 9. Garten Rothkopf Garten Rothkopf Colombia: 5th largest producer and exporter of palm oil, 4th in terms of yield per hectare Peru: Highest sugarcane yield per hectare in the world and significant production of multiple biodiesel feedstock Chile: potential for second generation technology using its wood chip industry – the country’s third largest export Argentina: The world’s largest exporter of soybeans and is already developing a cost-competitive biodiesel industry 9
  • 10. Garten Rothkopf Mexico: Sugarcane and sorghum Dominican Republic: 200k are abundant. The latter hectares of traditional sugarcane accounts for 13.5% of land available for ethanol agricultural production and 0.5% production without diverting food of GDP. Sorghum is Mexico’s crops. 40% of sugar production second largest crop, with 6m now exported. tons produced each year. Guatemala: The world’s fifth largest sugar exporter, with 72% of Jamaica: A hub for production destined for Brazilian ethanol export. exports to the US market. Honduras: 6th in the world in palm in terms of area cultivated, with between 500k and 1m hectares of additional land available for expansion. Costa Rica: A developed ethanol export industry producing approximately 40m liters annually, destined primarily for the US market under CAFTA. 10
  • 11. Garten Rothkopf 12 Key Facts 8. Most countries in the region are net oil importers. 9. Biofuels also have potential in some countries as an export industry. 10. Of the 22 countries surveyed in the region, only 7 have blend mandates in place and only 5 have a comprehensive national plan. 11. There are today no common global standards for ethanol or biodiesel, no international futures contracts, and tariff barriers to trade. 12. Costs of all alternative energy forms are plummeting and so concepts of what national energy policies should look like are changing. 11
  • 12. Garten Rothkopf 6 Key Trends 1. Developing countries are expected to increase energy consumption at a rate 3 times higher than industrialized countries. 2. $100bn is expected to be invested globally in clean energy in the year 2010 – up from $58bn in 2005 and $5bn in 1995. 3. The transport sector is projected to increase energy consumption by 55% by 2030. 12
  • 13. Garten Rothkopf 6 Key Trends 4. $200+ billion in new investment is necessary for biofuels to provide 5% of transport energy in 2020. 5. To meet its current target of tripling ethanol production, Brazil will require between $40bn and $60bn in new investment. 6. The growth of biofuels will give the advantage to countries with long growing seasons, tropical climates, high precipitation levels, low labor costs, low land costs… and the planning, human resources, and technological know how to take advantage of them. 13
  • 14. Garten Rothkopf 4 Pillars Pillar 1 - Innovation (R&D and Education) • Brazil the undisputed leader to date. • Global investment in research and development is booming. • New disruptive technologies will dramatically change the playing field. Investment in innovation, particularly through regional initiatives and knowledge sharing, is critical for the region to remain a center of high value added technology exports in biofuels, not simply commodity production. 14
  • 15. Garten Rothkopf 4 Pillars Pillar 2 – Capacity Expansion • Potential to expand capacity in Brazil, and a number of other countries in the region, is significant. • There is clear interest from investors in funding such an expansion. What are needed are clear regulatory frameworks, tailored financing lines, zoning of territory to identify the appropriate areas for expansion and mitigate environmental impact, and support for the improvement of private sector transparency to encourage foreign investment. 15
  • 16. Garten Rothkopf 4 Pillars Pillar 3 - Infrastructure: • Infrastructure, particularly transport infrastructure, was the leading concern of almost every expert consulted for this report. • It is estimated that Brazil needs as much as $1bn a year in infrastructure investment • In countries with new industries, investing in biofuels distribution infrastructure is necessary for the implementation of existing and planned blend mandates. Investment in infrastructure requires a dual focus - looking inward to facilitate the growth of the biofuels industry in underdeveloped regions and looking outward to how production reaches ports for exports. 16
  • 17. Garten Rothkopf 4 Pillars Pillar 4 – Building Global Markets • This expansion strategy rests on the promise of global biofuels markets. • While there has been some movement on this issue in recent weeks, with the establishment of the International Biofuels Forum at the UN, much remains to be done. Liquid global markets with a diversity of producers and consumers are the key to energy security, but require common standards and sophisticated risk management tools – neither of which exists today. 17
  • 18. Garten Rothkopf 3 Recommendations 1. Sustainability – In terms of competitiveness, financing, and environmental and social impact. 2. Scale – Visibility to attract private sector investment and make a meaningful impact 3. Vision – Innovation, capacity expansion, infrastructure and the development of global markets are four pillars of one strategy. 18
  • 19. Garten Rothkopf Thank you. 19