S pe ci al A dv er ti si ng S ecti on                 Biofuels’                  Bright                  Future        By ...
Adv er tisement 2   Since 2000, ethanol markets in the                           this project could tap 1.3U.S. have seen ...
Adv er tisement 4billion gallons of the 36 billion gal-                                                          “BP’s str...
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Forbes: Biofuels' Bright Future by Will Thurmond, Emerging Markets Online www.emerging-markets.com


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Published in Forbes magazine. Written by Will Thurmond, CEO, Emerging Markets Online. Author, Algae 2020 and Biodiesel 2020 studies of biofuels markets, feedstocks and technologies, For more information, visit www.emerging-markets.com

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Forbes: Biofuels' Bright Future by Will Thurmond, Emerging Markets Online www.emerging-markets.com

  1. 1. S pe ci al A dv er ti si ng S ecti on Biofuels’ Bright Future By Will Thurmond, Emerging Markets Online 2001: The Biofuels Revolution on foreign oil and producing renew- S even years ago, a biofu- able sources of transport fuels. Each els revolution was born of these emerging market nations has in Europe from ambitious targets to replace from 5% to 20% environmental, energy secu- of total transport consumption with rity and national security ethanol or biodiesel. policies. Starting with the EU’s Bio- Around the world, these biofuels fuels for Transport initiative in 2002, initiatives have received government these revolutionary biofuels policies support in the form of mandates, sub- took root in the U.S. in 2005 with the sidies, tax incentives and large R&D birth of the Renewable Fuel Standard initiatives. In the U.S. these initiatives (RFS) under the Energy Policy Act. and tax benefits have helped to accel- Not long thereafter, several countries, erate the growth of the biofuels indus- including India and China, followed try, with over 150 new ethanol plants suit and enacted policies aimed at and more than 185 biodiesel enter- reducing pollution and dependence prises through 2007 (see figure 1). 7 Figure 1: U.S. Ethanol Production 1997 – 2007 Billions of Gallons per Year 6 5 4 3 6.5 4.8 2 3.4 3.9 2.8 1 1.5 1.6 1.8 2.1 1.3 1.4 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: Biodiesel 2020: A Global Market Survey, 2nd edition, RFA, EIAForbes Magazine November 17, 2008
  2. 2. Adv er tisement 2 Since 2000, ethanol markets in the this project could tap 1.3U.S. have seen impressive growth fig- billion sources of renew-ures, from 2.1 billion gallons of pro- able energy every day.duction in 2002 to 6.5 billion gallons To handle China’s fastin 2007. Similarly, growth in the U.S. energy growth, MIT notesbiodiesel markets has been impressive, the country is currentlystarting with 25 million gallons of pro- constructing the equivalent of twoduction in 2004, reaching 250 million 500-megawatt, coal-fired power plantsgallons by 2006 and 500 million gal- per week and adding capacity compa-lons of production by 2007 — a 20-fold rable to the entire U.K. power grid eachincrease. Clearly, market growth and the year. According to biofuels consult-stimulus of the 2005 RFS have helped ing firm Emerging Markets Online, ifto accelerate the impressive growth of China could sequester the carbon fromthese markets (see figure 2). these coal-fired power plants to produce algae for biodiesel and ethanol, it couldEmerging Markets for Biofuels deliver a quadruple-benefit of carbonIn Brazil, India and China, major national reduction, clean fuels production, jobbiofuels programs are now under way. creation and economic growth.In 2006, India initiated a biodiesel devel- In Brazil, more than 50% of the trans-opment program to replace 20% of die- portation fuel consumed today comessel fuels with Jatropha-based biodiesel from ethanol, compared with U.S. ethanolfuel by 2012. In January 2008, Brazil consumption at only 5% of total trans-officially delivered the first orders for its port fuels, as cited in the landmark studynational biodiesel program to replace Biodiesel 2020: A Global Market Survey.2% of diesel fuels by 2008 and 5%by 2013, complementing its impressive 2007: Welcome toethanol program of 20-plus years. The Biofuels Evolution The International Energy Agency Brazil’s successful efforts toward achiev-notes that China will consume energy ing energy independence have oftenat an increased rate of 6% to 8% per been applauded by President Bush andyear for the next ten years. To deal with the U.S. Congress. In December 2007,these growing demands, China’s Minis- with the imminent arrival of $100-per-try of Science and Technology (MOST) barrel oil, the U.S. Congress swiftlyhas set aside an area the size of Eng- acted to upgrade the 2005 biofuels ini-land (approximately 32 million acres) tiative and RFS from its original targetto grow Jatropha for biodiesel. In a few of 7 billion gallons by 2012 to a revisedyears, this project could produce up to RFS target (passed in December 2007)6 billion gallons of biodiesel. China is of 36 billion gallons of biofuels produc-also fast at work testing next-genera- tion by 2022.tion technologies to turn municipal The 2007 RFS and Energy and Inde-waste into biofuels. If implemented, pendence Security Act designates 22 Figure 2: U.S. Biodiesel Production 2004 – 2007600 Millions of Gallons per Year 500500400300 250200100 75 25 2004 2005 2006 2007 Source: Biodiesel 2020: A Global Market Survey, 2nd edition, RFA, EIA Forbes Magazine November 17, 2008
  3. 3. Adv er tisement 4billion gallons of the 36 billion gal- “BP’s strategy is to focus on better,lons in the RFS mandate to come from more sustainable biofuels only,” saysadvanced, non-food-based feedstocks Susan Ellerbusch, president of BP Biofu-such as algae, switch grass, sorghum, els N.A., “as they can make significantcamelina, woody biomass, miscanthus contributions to reducing greenhouseand municipal waste. Most of these gas emissions and can be produced innew non-food feedstocks offer greater an environmentally and economicallyproduction yields per acre compared to sustainable manner.”corn and soy, and do not compete with By October 2008, more good newsthe food supply to provide biofuels. arrived, as the U.S. Congress and Presi- BP, a global leader in the biofuels dent Bush extended the biofuels produc-industry, has embarked on a con- tion and blender’s tax credits for biodieseltinuum of biofuels development in and ethanol for another year — a hard-keeping with this mandate, beginning fought victory for the biofuels industry.with a growing investment in ethanol In support of these R&D efforts, sev-from Brazilian sugarcane, and moving eral new private industry groups andto investments in more efficient fuel a next-generation premium biofuel associations have emerged to acceleratemolecules like butanol and advanced molecule. investment, innovation and commer-biofuels like cellulosic ethanol, which Several other companies, too, have cialization of next-generation biofuels,is produced from non-food energy made groundbreaking contributions including the U.S. National Algae Asso-grasses and “for-purpose” feedstocks, to the effort: ciation, the American Biofuels Council,such as miscanthus and energy cane. Conoco-Philips partnered with the National Sorghum Producers Asso- According to the U.S. Department Tyson® foods to create renewable ciation for cellulosic ethanol productionof Energy (DOE), the U.S. has invested diesel from chicken fat; and the Brazilian Jatropha Grower’s$7 trillion dollars in its petroleum refin- Shell has partnered with HR Bio- Association, to name a few. Each of theseing, pipeline and distribution infra- petroleum to produce biofuels groups’ endeavors creates new marketsstructure. For these reasons, the DOE is from algae in Hawaii; and accelerates the commercializationsponsoring R&D projects at more than and, Chevron invested in several of next-generation biodiesel, biocrude,a dozen universities and research centers biofuels R&D projects at universi- aviation and ethanol biofuels.to develop biofuels and “renewable die- ties and research labs, including ansel” from wood waste, waste vegetable algae-to-biodiesel initiative at the Biofuels’ Bright Futureoil, municipal waste and algae. This will U.S. National Renewable Energy For thousands of years, biofuels were nocreate a liquid biofuels feedstock called Laboratory and a sorghum-based different than the “hooch” Henry Ford“biocrude” or “bio-oil” that can be cellulosic ethanol initiative at used in his first alcohol-combustion en-directly integrated into the existing petro- Texas A&M University. gines, or the fuel Rudolf Diesel used toleum production infrastructure today to By 2008, investment in the biofuels run an engine on peanut oil in the latecreate clean fuels for tomorrow. industry had moved from Woodstock 1800s. A hundred years later, the bio- to Wall Street, demonstrating greater fuels industry continues to accelerate,Next-Generation Biofuels direct investment in private compa- evolve and grow rapidly, creating newInvestments nies and increased confidence in the markets, renewable-energy jobs, entre-In 2006 and 2007, most investments viability of next-generation projects. preneurial wealth, and a cleaner, morein next-generation biofuels went to For example, earlier this year, Chev- prosperous and brighter energy future.technology and research. One of the ron invested in Solazyme, a companyfirst leaders in the group, BP, has com- that creates biocrude from algae thatmitted approximately $1 billion to can be utilized in existing petroleumbiofuels business operations, and to a refineries. Biofuels Digest reported that About the Authornumber of R&D efforts, in order to Bill Gates and the Rockefeller family Will Thurmond is president of biofuelsdevelop the technologies, feedstocks raised more than $100 million for Sap- consulting firm Emerging Markets On-and processes required to produce phire Energy and its algae-based “green line, author of Biodiesel 2020: A Globaladvanced biofuels. They announced biocrude” technology. Market Survey, and serves as the chairman of research &an investment of $500 million at the Additionally, BP made two major an- development for the National Algae Association.University of California, Berkeley, noucements: Tropical — a joint ventureand the University of Illinois, Urbana in Brazilian sugar cane ethanol with plans W E B D I R E C TO RYChampaign, to advance renewable to invest $1 billion in two refineries; andenergy R&D. BP also formed a part- plans to invest $90 million in cellulosic- BPnership with DuPont on biobutanol, ethanol producer Verenium. w w w. b p. c o m / u s Forbes Magazine November 17, 2008