Jec biofuels programme

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Jec biofuels programme

  1. 1. JEC Biofuels Programme Overview of Results A joint study by JRC / EUCAR / CONCAWE
  2. 2. Presentation Outline Slides Note 3 1. Executive Summary 4 – 5 2. JEC Biofuels Programme 6 – 8 3. Background to the Study 9 – 11 4. “Fleet & Fuels” Model 12 – 18 5. Non-road Transport Sectors 19 – 20 6. Reference Case 21 – 25 7. RED Implementation Scenarios 26 – 33 8. Sensitivity Analysis 34 – 38 9. Biofuel Supply Outlook 39 – 46 10. Summary 47 – 48 11. JEC Biofuels Programme: Contributors 49 12. Appendix 50 – 89Reproduction permitted 06 July 2010with dueacknowledgement Slide 2 of 89
  3. 3. Note The JEC Biofuels Program is a technical exercise intended to assess possible biofuel implementation scenarios for achieving EU renewable energy targets in the transport sector by 2020. These scenarios have been assessed by modelling and other analyses. The JEC “Fleet & Fuels” (F&F) Model is a simulation tool for scenario assessment What the model does: The model is a scenario assessment tool that enables the user to simulate the possible development of the European vehicle fleet as well as the total fuel and biofuel demand to 2020. The model is based on a historically reasonable 2010 reference case and assumes trends in the fleet, fuel and market development over the coming decade. It further allows the evaluation of important RED and FQD targets as well as the sensitivity of the results to vehicle fleet, fuels, and biofuels assumptions. What the model does not do: Due to the assumptions and simplifications selected for this study, the model is not a quantitative tool for predicting the future. No model can truly do this. The model does not lead to a single globally optimized solution but does allow a side-by-side comparison of various scenarios of fleet and fuel development. The model does not assess the cost implications associated with the fleet & fuel scenarios. Disclaimer This exercise is not intended to commit the JEC partners to deliver any particular scenario or conclusion included in this study.Reproduction permitted 06 July 2010with dueacknowledgement Slide 3 of 89
  4. 4. 1. Executive Summary: Key Conclusions The JEC RED scenario analysis is characterized by its objectives: Focus is on the technical feasibility of the 10% energy RED*) target with an associated calculation of FQD**) Article 7a GHG savings Realistic assumptions made regarding vehicles, fuels and renewables Study does not assess viability, costs, or logistics of analyzed scenarios Study also does not assess commercial readiness of analyzed scenarios “Integrated Approach”, i.e. all transport modes and actors are considered although with a focus on road transport Overall the RED implementation scenarios should be viewed in light of: RED-% from each scenario depends on the underlying assumptions and should be considered as “theoretically achievable” Scenario results have been further studied by sensitivity analyses *) RED: EU Renewable Energy Directive (Dir 2009/28/EC) **) FQD: EU Fuel Quality Directive (Dir 2009/30/EC)Reproduction permitted 06 July 2010with dueacknowledgement Slide 4 of 89
  5. 5. 1. Executive Summary: Key Conclusions Scenarios exist that achieve the RED 10% energy target for renewable energy in the transport sector with the given assumptions None of these scenarios achieves the minimum 6% GHG target (FQD Art. 7a) with the given assumptions (ILUC* not considered) Realization of the scenarios depend on : Biofuel supply, especially the availability of sustainable biofuels to Europe CEN specifications, potential vehicle compatibility and pace of introduction Compatibility of the supply and distribution system for all fuel products Non-road contributions to RED-%, especially HVO/BTL use by the aviation sector Each scenario would need policy measures (including incentives) to enable a smooth transition from today to the “theoretically achievable” projections Much more technical work is needed to ensure feasibility of these scenarios and compatibility with upcoming Euro 6 emissions limits Compatibility of vehicles with higher biofuel blends still to be proven and will require time, testing and investment Multi-stakeholder coordination and timely decisions will be essential Seamless transition is important to ensure continued customer confidence ILUC*: Indirect Land Use ChangeReproduction permitted 06 July 2010with dueacknowledgement Slide 5 of 89
  6. 6. 2. JEC Biofuels Programme: A Short History The JEC research collaboration was initiated in 2000 by JRC: Joint Research Centre of the European Commission EUCAR: European Council for Automotive R&D CONCAWE: Research Association of the European Oil Refining Industry Collaborative Projects 2000-2007: Projects Completed Well-to-Wheels (WTW) Study Versions 1, 2b, and 2c ( http://ies.jrc.ec.europa.eu/WTW ) WTW Study Version 3: enhancing pathways and vehicles ( http://ies.jrc.ec.europa.eu/WTW ) Impact of ethanol on vehicle evaporative emissions (SAE 2007-01-1928) Impact of ethanol in petrol on fuel consumption and emissions (report in preparation) 2008-2011: Projects In-progress 2009-11: Major revision of WTW Study (Version 4) 2008-10: JEC Biofuels Programme for a 2020 time horizonReproduction permitted 06 July 2010with dueacknowledgement Slide 6 of 89
  7. 7. 2. JEC Biofuels Programme: Objectives Objectives of the JEC Biofuels Programme: Clarify the opportunities and barriers to achieve 10% renewable energy (on an energy basis) in the transport sector by 2020 Focus on road transport with the development of an EU27+2 “Fleet & Fuels” Model as the main supporting tool Focus on conventional and alternative fuels and biofuel blends while accounting for growth in alternative powertrains over decade Develop biofuel implementation scenarios in which the introduction of biofuel blends to meet the 2020 target is seamless to consumers and results in no detrimental impact on vehicle performance and emissions Three-year JEC Program initiated in February, 2008 (2008-2010)Reproduction permitted 06 July 2010with dueacknowledgement Slide 7 of 89
  8. 8. 2. JEC Biofuels Programme: Approach Develop a consensus demand and supply picture of biofuel types and availability needed to meet the 2020 Renewable Energy Directive target Review and analyze projections and other data for 2008-2020 Biodiesel, ethanol, and others, including conventional and advanced products Consider domestic production and imports Include most recent updates on WTW energy and GHG implications Analyze possible biofuel implementation scenarios within the 2010-2020 regulatory framework, including pros and consReproduction permitted 06 July 2010with dueacknowledgement Slide 8 of 89
  9. 9. 3. Background: The Coming Decade for European Road Transport Vehicles: More advanced engines & aftertreatment, diversification in engines and fleet Fuel consumption of LD vehicles falling, HD diesel demand slightly increasing Increasing pressure on CO2 emissions with associated higher cost Customer preferences potentially in conflict with mobility policies Refineries: Increasing diesel/gasoline demand ratio Higher CO2 emissions due to diesel demand and product specifications Increasing pressure on CO2 emissions with associated higher cost Biofuels and other Renewables: Renewables in transport fuels mandated to 10% (energy basis) by 2020 Conventional biofuels widely available but with sustainability concerns Slower than expected pace of development for advanced biofuels Pace/priorities differ across Member States, potentially leading to fuel diversity CEN specifications are struggling to keep pace with legislative mandatesReproduction permitted 06 July 2010with dueacknowledgement Slide 9 of 89
  10. 10. 3. Background: EU Regulatory Environment Renewable Energy Directive (RED) Requires Member States to meet 10% renewable energy share in the transport sector by 2020 Requires sustainable cultivation and production of Biofuels as well as minimum greenhouse gas (GHG) savings per energy unit Fuels Quality Directive (FQD) Requires fuel suppliers to achieve at least 6% GHG saving from fuels supplied in 2020 with indicative targets Specifies an E10 main grade with E5 ‘protection grade’ for older vehicles Vehicle Regulated Emissions Light-duty (LD) passenger cars: Euro 5/5b to 2014, Euro 6 from 2015 onwards Heavy-duty (HD) vehicles: Euro V to 2013; Euro VI from 2014 onwards Vehicle CO2 Emissions LD passenger cars: new vehicle fleet average 130g/km by 2015 and review of 2020 targets Light Commercial Vehicle (LCV) fleet: Commission proposal of new fleet average of 175g/km by January 1st 2016, review of 2020 targetsReproduction permitted 06 July 2010with dueacknowledgement Slide 10 of 89
  11. 11. 3. Background: Current Projections of Transport Demand EU27+2 Transport Energy 2008 2020 JEC F&F 2020 Demand: [Mtoe] EuroStat Reference Scenario DG TREN (1) On-Road 303 281 350 Diesel 188 186 Light Duty 69 Heavy Duty incl. Vans 117 Gasoline 100 66 Biofuels 10 21.5 1) DG TREN: "European Energy and transport trends to 2030, Update 2007“ Other: CNG, LPG, electricity 5 7.8 Rail (Diesel & Electricity) 9.5 10 Aviation 54 73 Inland navigation 6.5 6 Other off-road (Diesel) 14 20 *) Total 387 390 **) 419 Other studies have been used to base case JEC projections and provide input on non-road energy demand (see Appendix 12.7) DG TREN: data for non-road transport sectors are used (**) TREMOVE: historical data and methodology, used as basis for fleet development in ‘Fleet & Fuels’ model iTREN2030: implementation of the economic recession Wood Mackenzie: biofuel supply projections and other off-road diesel demand (*) “Apples to apples” comparisons for the energy demand projections towards 2020 were not always straightforward amongst the studiesReproduction permitted 06 July 2010with dueacknowledgement Slide 11 of 89
  12. 12. 4. ‘Fleet & Fuels’ Model: Model Overview A spreadsheet-based model has been developed to simulate the EU27+2 vehicle fleet development and the demand for fossil fuels and biofuels The model can be used to simulate different combinations of vehicles, fuels, and biofuels to assess different biofuel implementation scenarios Total fuel demand and diesel/gasoline balance Total biofuels demand, including ethanol and biodiesel, HVO, etc Total renewable energy demand, including electricity, biogas, etc Renewable energy demand for road transport to be used for RED calculations GHG emissions reduction according to FQD Article 7a Parameters relevant to fuel demand included (for example): Passenger car, van, bus and coach and heavy-duty truck demand Vehicle efficiency and improvement in efficiency over time Percentage diesel in new car sales Introduction of alternative vehicles (FFV, LPGV, CNGV, electric vehicle, etc.) Vehicle model year (vintage) assumed compatible with fuel gradeReproduction permitted 06 July 2010with dueacknowledgement Slide 12 of 89
  13. 13. 4. ‘Fleet & Fuels’ Model: Model Overview TREMOVE data and other sources used to provide historical input on vehicle fleet Fleet composition Fleet fuel economy Activity (km driven) Per vintage Separate diesel and gasoline vehicles Forward-looking input for the development of the fleet to 2020 New sales, total population, and total activity (km driven) % diesel of new car sales Vehicle scrappage rate assumed to follow a typical S-curve Alternative vehicle fleets (e.g. CNGV, FFV, EV) Fuel economy of new cars is based on NEDC ‘Real world’ factor included to estimate total fuel demand Impact of the 2008-2009 economic recession factored in: Model incorporates latest HD sales data (ACEA) and iTREN methodologyReproduction permitted 06 July 2010with dueacknowledgement Slide 13 of 89
  14. 14. 4. ‘Fleet & Fuels’ Model: Vehicle and Fuel Options Seven LD passenger car types (and fuel type options) Gasoline, Diesel, Flex-Fuel Vehicle (FFV) Compressed Natural Gas (CNG), Liquefied Propane Gas (LPG) Plug-in Hybrid Electric Vehicle (PHEV), Battery Electric Vehicle (BEV) Three Van classes (and fuel type options) Gasoline (Gasoline, CNG, LPG, xEV) Small Diesel <2.5 tonnes (Diesel, CNG, LPG, xEV) Large Diesel >2.5 tonnes (Diesel, CNG, LPG, xEV) Five Heavy-duty vehicle classes (and fuel type options) 3.5 to 7.5 tonnes (Diesel, CNG) 7.5 to 16 tonnes (Diesel, CNG) 16 to 32 tonnes (Diesel, CNG, E95, DME) > 32 tonnes (Diesel) Buses and coaches (Diesel, CNG, E95) xEV: represents the various electrified vehicles as BEV, PHEV, FCEVReproduction permitted 06 July 2010with dueacknowledgement Slide 14 of 89
  15. 15. 4. ‘Fleet & Fuels’ Model: Vehicle and Fuel Options Adjustable parameters that can be changed individually for each vehicle type Sales and stock annual growth rate Vehicle activity: annual km driven (LD, LCV), annual t-km (HD) Vehicle fuel efficiency Alternative vehicle 2020 sales share Alternative vehicle sales start year % replacement of gasoline or diesel cars by alternative vehicle % use of alternative fuel in alternative fuel vehicles (e.g. E85 take-up rate for FFV) Fuels implementation Optimistic assumption for biofuel blending at max allowed specification (e.g., 10% v/v ethanol minus 0.1% v/v blending tolerance) Up to 3 different gasoline grades: ‘protection grade’, main grade, and E85 Up to 2 different diesel grades: ‘protection grade’ and main grade For the main diesel grade, market uptake by HD, LCV, LD vehicle and vehicle vintage compatibility can be independently set Vehicle vintage compatible with each fuel grade HVO or BTL are included in diesel pool assuming full backward compatibility Advanced Ethanol (lignocellulose based) is replacing/added to gasoline Other Oxygenates (e.g. ETBE): not specifically modeled but would be allowed up to the maximum oxygen specification Renewable Energy Directive specifics are implemented including “extra credits” for advanced biofuels and renewable electricityReproduction permitted 06 July 2010with dueacknowledgement Slide 15 of 89
  16. 16. 4. ‘Fleet & Fuels’ Model: Example Model Outputs Car: Share of powertrain types in new sales Vehicle fleet development for 100% the BEV Reference Scenario (1) 80% PHEV FFV 60% LPG LD new car sales showing 40% CNG the growth of alternative Gasoline 20% vehicles Diesel 0% 2005 2010 2015 2020 Car: Share of powertrain types in total stock 100% 80% BEV PHEV 60% FFV LD vehicle fleet showing LPG the impact of new car 40% CNG sales on the overall fleet 20% Gasoline Note growth in the LD Diesel diesel fraction over the 0% decade 2005 2010 2015 2020Reproduction permitted 06 July 2010with dueacknowledgement Slide 16 of 89
  17. 17. 4. ‘Fleet & Fuels’ Model: Example Model Outputs Energy demand by fuel type in road transport sector 350 Road transport fuel demands Electricity 300 Biofuel toe] 250 LPG to HD Reference Scenario (1) and [M LPG to LD 200 including the impact of the Road fuel dem CNG to HD 150 economic recession CNG to LD 100 Gasoline to LD Diesel to HD 50 Diesel to LD 0 2005 2010 2015 2020 Energy demand by fuel type in road transport sector 350 Electricity 300 Biofuel toe] 250 LPG to HD and [M LPG to LD 200 Road fuel dem CNG to HD 150 Reference Scenario excluding CNG to LD the impact of the economic 100 Gasoline to LD recession Diesel to HD 50 Diesel to LD 0 2005 2010 2015 2020Reproduction permitted 06 July 2010with dueacknowledgement Slide 17 of 89
  18. 18. 4. ‘Fleet & Fuels’ Model: Renewable Energy Calculations Focus of the JEC Biofuel Programme: Model renewable energy in road transport. Use RED methodology to calculate ROAD-% contributions. These ROAD-% must be combined with assumptions for other transport sectors to calculate the RED-%. Calculation of the contribution of road transport to the RED 10% target: All types of energy from renewable sources consumed in road transport ROAD-% = Petrol, diesel, biofuels consumed in road and rail transport and electricity (in transport) but excluding off-road 2) Calculation of the overall RED-% of renewable energy in transport (Art. 3(4) of the RED): All types of energy from renewable sources consumed in all forms of transport1) RED-% = Petrol, diesel, biofuels consumed in road and rail transport, and electricity (in transport) but excluding off-road 2) 1) Renewable energy in Road, Rail, Aviation, Inland Navigation and Pipeline Transport 2a) Off-road means mobile machinery (forestry, agriculture, and construction) ~20Mtoe 2b) CNG & LPG in road transport are not included, BUT: Biogas ( = biofuel) is included Application of factors: “Advanced Biofuels” count 2 times in numerator (support) - Definition: biofuel from waste, residue and non-food cellulosic material, Article 21(2) “Green Electricity“ for road transport counts 2.5 times in numerator & denominator (efficiency factor) - Definition: electricity from renewable sources, Article 3(4)Reproduction permitted 06 July 2010with dueacknowledgement Slide 18 of 89
  19. 19. 5. Non-road Transport Sectors: Outlook Aviation Projections range from 562) - 731) Mtoe consumption by 2020 Jet fuel specification likely to allow only HVO or BTL in this decade HVO/BTL or ETS certificates are options to offset GHG emissions Aviation fuel consumption excluded from FQD but included in RED Rail ~10 Mtoe consumption by 2020 1) 2) Fuel by 2020: ~70% electricity, ~30% Diesel (DG TREN1) ) Rail Diesel: likely shifts to road diesel quality fuel by 2020 Diesel will likely contain FAME, HVO, BTL, the same as road diesel (i.e. B7 = reference blend) Inland navigation ~6 Mtoe consumption by 2020 1) 2) Likely shifts to road diesel quality fuel by 2020 Diesel will likely contain FAME, HVO, BTL, the same as road diesel (i.e. B7 = reference blend) Other off-road diesel ~20 Mtoe consumption by 2020 (JEC estimate) Diesel will likely contain FAME, HVO, BTL, the same as road diesel (i.e. B7 = reference blend) Other off-road fuel consumption excluded from RED but included in FQD 1) DG TREN: "European Energy and transport trends to 2030, Update 2007“ 2) iTREN 2030, 2009Reproduction permitted 06 July 2010with dueacknowledgement Slide 19 of 89
  20. 20. 5. Non-road Transport Sectors: 2020 Outlook RED denominator 2020: Road transport energy demand: 281 Mtoe, RED: 275 Mtoe Rail transport energy demand: 10 Mtoe, RED: 10 Mtoe Fuel demand non-road sectors (Mtoe) Rail fuel Inland navigation energy demand: 6 Mtoe, RED: 6 Mtoe "fossil" Electricity 4,6 Sum denominator RED methodology: 291 Mtoe* Renewable Electricity 2,5 Fossil Diesel 2,8 FAME 0,2 Sum rail 10,0 Rail 2020: Aviation fuel Gasoline 0,15 ~70% of rail fuel demand by electricity: 7 Mtoe Kerosene 72,9 Assuming 35% RES: 2.45 Mtoe: ~0.85% RED* Sum aviation 73,0 ~30% of rail fuel demand by diesel: 3 Mtoe Inland navigation fuel Fossil Diesel 5,6 Assuming B7: 0.2 Mtoe: ~0.07% RED* FAME 0,4 Sum inl. nav. 6,0 Inland navigation 2020: Other off-road fuel Fossil Diesel 18,7 6 Mtoe diesel, B7 in total sector 0.4 Mtoe: ~0.1% RED* FAME 1,3 Sum other off-road 20,0 Aviation 2020: second largest energy share, ~73 Mtoe RED Contributions non-road (%) Assumption: no contribution Rail 0,9% Water 0,1% Aviation 0,0% Other off-road 2020: Other off-road 0,0% 20 Mtoe, assumption: B7 in total sector: 1.3 Mtoe Sum RED-% non-road 1,0% No RED-contribution as other off-road fuel consumption excluded from RED *: applied in RED calculations for all scenariosReproduction permitted 06 July 2010with dueacknowledgement Slide 20 of 89
  21. 21. 6. Reference Case: Scenario 1 - Fleet Parameters Passenger cars New car average CO2 target in 2020: 95g/km (used for calculation purpose, figure is proposal for 2020 but subject to review) Diesel / gasoline sales share 2020: 50% / 50% Sales in 2020: 20 mil/a; Fleet in 2020: 270 mil Alternative fuel vehicles enter the market Financial crisis impacts miles travelled, however fleet mileage increases to 2020 Vans New van average CO2 target in 2020: 175g/km (used for calculation purpose, legislation under negotiation) Sales in 2020: 1.5 mil/a; Fleet in 2020: 28 mil Alternative fuel vehicles enter the market Financial crisis impacts miles travelled, however fleet mileage increases to 2020 HD trucks New truck average YoY efficiency improvement: ~1.5% Sales in 2020: 0.8 mil/a; Fleet in 2010: 15 mil Financial crisis impacts tkm and sales, but dynamic growth to 2020 Alternative fuel vehicles enter the market in specific HD classes (and MS markets)Reproduction permitted 06 July 2010with dueacknowledgement Slide 21 of 89
  22. 22. 6. Reference Case: Scenario 1 - Alternative Fleet Parameters Alternative Fuel Passenger Cars In 2020 New Sales In 2020 Vehicle Fleet1 Flex-Fuel Vehicles (FFV) 1% 0.5% 4% 2% Compressed Natural Gas Vehicles (CNGV) 0.8 Million ~5 Million 2% 2% Liquefied Propane Gas Vehicles (LPGV) 0.4 Million ~5 Million Electric Vehicles 3% 1% Battery Electric (BEV) & Plug-in Hybrid (PHEV) 0.6 Million 2.7 Million Alternative Fuel Vans In 2020 New Sales In 2020 Vehicle Fleet1 Compressed Natural Gas Vehicles (CNGV) 4% 1.7% Liquefied Propane Gas Vehicles (LPGV) 1% 0.4% Flex Fuel Vehicles (FFV) 1% 0.3% Electric Vehicles 2% 0.4% Battery Electric (BEV) & Plug-in Hybrid (PHEV) 24 Thousand 90 Thousand In 2020 New Sales Alternative Fuel Heavy Duty Vehicles 3.5t to 7.5t 7.5t to 16t 16t to 32t Bus-Coach Compressed Natural Gas Vehicles (CNGV) 2% 1% 1% 5% Di-Methyl Ether Vehicles (DMEV) == == 0.5% == 95% Ethanol (E95) Vehicles == == 1% 2% 1: Cars in 2020 from TREMOVE baseline: 270 million in vehicle fleet; 20 million in new car salesReproduction permitted 06 July 2010with dueacknowledgement Slide 22 of 89
  23. 23. 6. Reference Case: Scenario 1 – Fuel Parameters Biofuel grades Biofuel blends in EU market Ramping up to E5 by 2011 20% • No vehicle compatibility restriction 18% Gasoline Grade 1 (E5) (protection grade) 16% Gasoline Grade 2 (E10) New E10 (main) grade from 2011 14% Diesel Grade 1 (B7) 12% Diesel Grade 2 • Vehicle compatibility with E10 from 2005+ %vol 10% model year 8% Ramping up to B7 by 2010 6% • No vehicle compatibility restriction 4% Assumes 1 Mtoe FAME/HVO coming from 2% waste oils 0% 2005 2010 2015 2020 • RED-factor of two, source: DG ENER • High quality of FAME required Additional biofuels Ramping up of HVO, BTL, Adv. Ethanol Biomass-to-Liquids Hydrogenated Vegetable Advanced Ethanol (BTL) Oils (HVO) Start year 2012 2009 2012 + 1.6 Mtoe step to 2012 Production simulation Linear ramp to 2020 + 1.4 Mtoe linear ramp from Linear ramp to 2020 2012 to 2020 Availability in 2020 [Mtoe] 0.25 3.0 0.64Reproduction permitted 06 July 2010with dueacknowledgement Slide 23 of 89
  24. 24. 6. Reference Case: Scenario 1 - Results Road fuel (Mtoe) 2005 2010 2020 Fossil Gasoline to car 118 87 66 Energy demand by fuel type in road transport sector Fossil Diesel to car 58 61 69 Fossil Diesel to HD 123 114 117 350 Sum fossil Diesel 181 175 186 Electricity Diesel to Gasoline ratio (road only) 1,5 2,0 2,8 CNG 0,42 0,85 3,26 300 CBG 0,82 Biofuel LPG 4,17 3,32 3,24 Road fuel demand [Mtoe] FAME 1,50 11,90 12,80 250 HVO 0,00 1,00 3,00 LPG BTL 0,00 0,00 0,25 DME 0,00 0,00 0,09 200 Total Ethanol 0,72 2,47 5,32 CNG EtOH conv. 0,72 2,47 4,68 150 EtOH Adv. 0,00 0,00 0,64 "Fossil" Electricity 0,00 0,00 0,28 Diesel to HD Renewable Electricity 0,15 100 Sum road fuel demand 306 281 281 Diesel to LD RED Contributions 50 Non-road 1,0% Road 8,6% Gasoline Sum RED-% 9,7% 0 FQD GHG saving -4,4% 2005 2010 2015 2020 Results comparing 2010 and 2020: Fossil demand changes: Gasoline demand decreases by 24% Diesel demand increases by 6% Diesel demand increases 13% for LD and 3% for HD Diesel/gasoline ratio increases from 2.0 to 2.8 Large biofuel volumes will be needed, increasing demand for CNG & CBG RED: 9.7% with 1.0% contribution from non-road sectors FQD: -4.4% GHG emissions savings reachedReproduction permitted 06 July 2010with dueacknowledgement Slide 24 of 89
  25. 25. 6. Reference Case: Scenario 1 - Results Alternative fuel demand in all transport sectors 30 15,0% FAME 20 CNG Total Ethanol 25 RED: road 12,5% LPG RED: all sectors 16 20 10,0% FAME % RED Mtoe/a 12 Mtoe/a HVO 15 7,5% BTL 8 10 5,0% EtOH conv. 4 EtOH adv. 5 2,5% Electricity 0 0 0,0% 2005 2010 2015 2020 2005 B7, E10 Alternative fuel demand results: FAME dominates biofuel market FAME demand increasing to 2010 driven by B7 specification Ethanol demand increasing to 2010 driven by E5 specification Ethanol demand increasing beyond 2010 driven by E10 introduction HVO and BTL demand follow availability assumptions (backward compatible - not grade dependent) CNG/CBG demand driven by introduction of CNGV mainly in LD but also in HD FAME / Ethanol demand by 2020, RED development FAME demand in all transport sectors will be ~15 Mtoe/a, increasing from 1.5 Mtoe (2005), 7.9 Mtoe (2008) Ethanol demand will be ~5 Mtoe, increasing from 0.7 Mtoe (2005), 1.8 Mtoe (2008) RED renewable content: 9.7% with 1.0% contribution from non-road sectorsReproduction permitted 06 July 2010with dueacknowledgement Slide 25 of 89
  26. 26. 7. RED Implementation Scenarios: Biofuel Scenarios Scenario 1 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Gasoline Grade 1 E5 Gasoline Grade 2 E10 Gasoline Grade 3 Diesel Grade 1 B7 Scenario 1: Reference Case Diesel Grade 2 Scenario 2 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Gasoline Grade 1 E5 E10 Gasoline Grade 2 E10 E20 Gasoline Grade 3 Diesel Grade 1 B7 Diesel Grade 2 Scenario 3 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Gasoline Grade 1 E5 Gasoline Grade 2 E10 Scenarios 2 - 4: Gasoline Grade 3 Diesel Grade 1 Diesel Grade 2 B7 B10 (all) High Biofuel Grades all vehicles Scenario 4 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Gasoline Grade 1 E5 E10 Gasoline Grade 2 E10 E20 Gasoline Grade 3 Diesel Grade 1 B7 Diesel Grade 2 B10 (all) Scenario 5 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Gasoline Grade 1 E5 Gasoline Grade 2 E10 Gasoline Grade 3 Diesel Grade 1 B7 Diesel Grade 2 B15 (HD) Scenarios 5 - 6: Scenario 6 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Gasoline Grade 1 E5 E10 High Biodiesel Grades HD only Gasoline Grade 2 E10 E20 Gasoline Grade 3 Diesel Grade 1 B7 Diesel Grade 2 B10 (HD)Reproduction permitted 06 July 2010with dueacknowledgement Slide 26 of 89
  27. 27. 7. RED Implementation Scenarios: Biofuel Scenarios Scenario 7 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Gasoline Grade 1 E5 Gasoline Grade 2 E10 Gasoline Grade 3 E85 Diesel Grade 1 B7 Diesel Grade 2 Scenario 8 Gasoline Grade 1 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 E5 E10 Scenarios 7 - 9: Gasoline Grade 2 Gasoline Grade 3 E10 E85 E20 Additional Flex-Fuel Vehicles (FFV) Diesel Grade 1 B7 Diesel Grade 2 Scenario 9 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Gasoline Grade 1 E5 Gasoline Grade 2 E10 Gasoline Grade 3 E85 Diesel Grade 1 B7 Diesel Grade 2 B10 (HD) The FFV scenarios feature a sales share of 4.5%, which results in a 2.5% FFV-stock (6.5 mil) in 2020. Scenario 7: The FFV fleet requires a comparable Ethanol supply as in scenario 2 (B7, E20) and leads to the same RED-% as in scenario 2. Scenario 8: E20 and FFVs increase the Ethanol demand and the RED-%. Scenario 9: The FFV fleet requires a comparable Ethanol supply as in scenario 2 & 7.Reproduction permitted 06 July 2010with dueacknowledgement Slide 27 of 89
  28. 28. 7. RED Implementation Scenarios: Grades & vintage years Grades in Scenarios: Grade E5 E10 E20 B7 B10 B15 Year of grade introduction now-2011 2011 2017 now-2011 2017 2017 Cars & Vans compatible from All 2005 2017 All 2017 None HD vehicles compatible from All 2017 2017 Sensitivity cases: Grade E5 E10 E20 B7 B10 B15 Year of introduction 2015 2015 2015 Cars & Vans compatible from 2015 2015 None HD vehicles compatible from 2015 & All 2015 & All All scenarios: actual biofuels content is 0.1%v/v less than the maximum specification limitReproduction permitted 06 July 2010with dueacknowledgement Slide 28 of 89
  29. 29. 7. RED Implementation Scenarios: Scenario Summary 30 15,0% FAME EU27+2 Transport FAME and Ethanol demand (Mtoe/a) Total Ethanol 25 12,5% RED: Road RED: all sectors 20 10,0% RED-% 15 7,5% 10 5,0% 5 2,5% 0 0,0% 1 2 3 4 5 6 7 8 9 E10, B7 E20, B7 E10, B10 E20, B10 E10, B7, B15H E20, B7, B10H E10, E85, B7 E20, E85, B7 E10, E85, B7, B10H FAME demand: 14.6 to 17.2 Mtoe (compared to 5.7 Mtoe in 2007 as per “EurObserv’ER Biofuels Barometer”) Ethanol demand: 5.3 to 9.0 Mtoe (compared to 1.2 Mtoe in 2007 as per “EurObserv’ER Biofuels Barometer”) ROAD-% contribution: 8.6% to 9.8% RED-% (all sectors according to Directive): 9.7% to 10.9% For further details of these scenarios refer to section 12.3Reproduction permitted 06 July 2010with dueacknowledgement Slide 29 of 89
  30. 30. 7. RED Implementation Scenarios: Scenario Summary 1 8 9 Scenario ( Ref ) 2 3 4 5 6 7 E5, E10, E10, E20, E5, E10, E10, E20, E5, E10, E10, E20, E5, E10, E10, E20, E5, E10, E85, Blends in B7, B7, E85, E85, B7, 2020 B7 B7 B7, B10 B7, B10 B15 (HD) B10 (HD) B7 B7 B10 (HD) 1st Gen 6.4% 7.0% 7.0% 7.6% 7.2% 7.3% 6.4% 7.0% 6.7% Biofuels HVO, BTL, RED 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% 1.4% Adv. Ethanol Contri- bution by Alt. vehicles LD: CNGV, EV, FFV 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 1.4% 1.4% 1.4% HD: CNGV, E95V, DMEV RED: Road contribution 8.6% 9.2% 9.2% 9.8% 9.5% 9.5% 9.2% 9.8% 9.6% *) RED-% calculations using energy consumptions in 2020 by rail and inland water transport as discussed in Section 5. Calculation methodology described on page 20. RED contributions Road 8.6% 9.2% 9.2% 9.8% 9.5% 9.5% 9.2% 9.8% 9.6% Rail 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% Water 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% Aviation 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Other off-road 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% RED-% *) 9.7% 10.3% 10.3% 10.9% 10.5% 10.6% 10.3% 10.9% 10.6% *) might show rounding effectsReproduction permitted 06 July 2010with dueacknowledgement Slide 30 of 89
  31. 31. 7. RED Implementation Scenarios: FQD Article 7a Impact of Renewable Fuels on Fuel Quality Directive Article 7a (2009/30/EC): GHG savings includes fuels used in on-road vehicles, non-road mobile machinery (including rail and inland marine), agricultural and forestry tractors and recreational craft GHG savings assumptions for biofuels and alternative fuels (vs. 2010 fossil fuel baseline): 2010 fossil fuel baseline emissions per unit energy = 86.7g CO2/MJ 1) GHG savings do not assume potential improvements in biofuel production higher than 60% GHG reduction ♦ 50% GHG reduction for existing biofuel plants up to 1/1/2017 ♦ 60% GHG reduction for new biofuel plants from 1/1/2017 Reductions apply uniformly to all ethanol, FAME, HVO, BTL, DME, road electricity, and biogas component in CNG CNG is assumed to contain 20% biogas in 2020 Road electricity receives a 2.5 times credit; Rail electricity is excluded 1) Source: JEC WTW Version 2c fossil fuel default values and 2010 fossil fuel demandReproduction permitted 06 July 2010with dueacknowledgement Slide 31 of 89
  32. 32. 7. RED Implementation Scenarios: RED vs. FQD Scenario 1 2 3 4 5 6 7 8 9 Gasoline 1 E5 E10 E5 E10 E5 E10 E5 E10 E5 Gasoline 2 E10 E20 E10 E20 E10 E20 E10 E20 E10 Biofuel Gasoline 3 E85 E85 E85 Blends In 2020 Diesel 1 B7 B7 B7 B7 B7 B7 B7 B7 B7 B10 B10 B15 B10 B10 Diesel 2 (ALL) (ALL) (HD) (HD) (HD) ROAD-% Road only 8.6% 9.2% 9.2% 9.8% 9.5% 9.5% 9.2% 9.8% 9.6% RED-% All modes 9.7% 10.3% 10.3% 10.9% 10.5% 10.6% 10.3% 10.9% 10.6% GHG Savings -4.4% -4.7% -4.7% -5.1% -4.9% -4.9% -4.7% -5.0% -4.9% FQD Art 7a Contribution of renewable fuels is sufficient to achieve the RED target but not enough to meet the FQD Article 7a target for the scenarios evaluated in this study To achieve the 6% GHG saving target (FQD Art.7a), average GHG savings for all biofuels assumed in these scenarios would need to be in the range of 63 - 73%Reproduction permitted 06 July 2010with dueacknowledgement Slide 32 of 89
  33. 33. 7. RED Implementation Scenarios: Pros and Cons 1 Scenario 2 3 4 5 6 7 8 9 (Reference) Petrol 1 E5 E10 E5 E10 E5 E10 E5 E10 E5 Petrol 2 E10 E20 E10 E20 E10 E20 E10 E20 E10 Blends E85 E85 E85 E85 in 2020 Diesel 1 B7 B7 B7 B7 B7 B7 B7 B7 B7 Diesel 2 B10 (ALL) B10 (ALL) B15 (HD) B10 (HD) B10 (HD) 10% RED Target Possible Possible Possible Possible Possible Possible Possible Possible B15 B10 B10 Compatible Optimisation Optimisation Compatible Optimisation Vehicle compatibility compatibility compatibility with existing to E20 to E20 with existing to E20 compatibility with current with current with current fleet possible possible fleet possible Pros HD fleet HD fleet HD fleet Fuel Existing One diesel One diesel One diesel grades and logistics grade grade grade infrastructure B10 standard B10 standard FFV is known FFV is known FFV is known Others in preparation in preparation technology technology technology 6% CO2 target No No No No No No No No Customer Customer Customer Petrol Vehicle Dedicated Dedicated Dedicated acceptance of acceptance of acceptance of Compatibility E20 vehicle E20 vehicle E20 vehicle FFV? FFV ? FFV? B10 B10 B15 B10 B10 compatibility compatibility Diesel Vehicle compatibility compatibility compatibility with with Compatibility with with with LD fleet & new LD fleet & new new HD fleet new HD fleet new HD fleet HD fleet HD fleet Cons Fuel E85 refuelling E85 refuelling E85 refuelling infrastructure infrastructure infrastructure grades and infrastructure Two diesel Two diesel Two diesel Two diesel Two diesel grades grades grades grades grades Sustainable Sustainable Sustainable Sustainable Sustainable Sustainable Sustainable Sustainable supply? supply? supply? supply? supply? supply? supply? supply? CEN standard CEN standard CEN standard CEN standard CEN standard Others for E20 for E20 for B15 for E20 for E20 Potential air quality and human health concerns associated with higher biofuel gradesReproduction permitted 06 July 2010with dueacknowledgement Slide 33 of 89
  34. 34. 8. Sensitivity Analysis: Reference Scenario 1 The Fleet & Fuel Model has many adjustable parameters that influence the 2020 projections. These parameters can be grouped into three types: Passenger Car Vans and Heavy Duty Fuels Some parameters are linked to an introduction year or can be modelled by a ramp- up function, resulting in additional sensitivity of the model projections. Current calculations assume an immediate uptake by compatible vehicles upon first introduction of a higher blend maximum The next pages display the sensitivity of Reference Scenario 1 to changes in these adjustable parameters. Sensitivities are displayed as %-changes in renewable energy demand in transport (using the RED methodology).Reproduction permitted 06 July 2010with dueacknowledgement Slide 34 of 89
  35. 35. 8. Sensitivity Analysis: Reference Case Scenario 1 – Pass Cars Parameter impact to RED-% 0,6% Passenger Cars Parameter reference min max Parameter min Sales M cars/a in 2020 20,20 16,2 24,2 Parameter max Total fleet M cars in 2020 270 216 324 0,4% Total Mileage % yoy growth (2011+) 2,25% 1,8% 2,7% CO2 sales avg 2020 g/km 95 95 120 0,2% Diesel reg. 2020 % of G+D 50% 30% 70% Impact to RED-% CNGV sales 4,0% 2,0% 6,0% sales start year 2006 0,0% LPGV sales 0,40% 0,0% 2,6% FFV sales 1,00% 0,0% 4,0% sales start year 2005 car vkm car CNG car sales car stock car diesel reg. car LPG car FFV car EV car CO2 -0,2% Electric vehicle sales 3,00% 1,5% 10,0% sales start year 2011 -0,4% -0,6% Sales assumptions for some alternative vehicles impact the RED-%Reproduction permitted 06 July 2010with dueacknowledgement Slide 35 of 89
  36. 36. 8. Sensitivity Analysis: Reference Case Scenario 1 – Vans & HD Parameter impact to RED-% 0,6% Vans Parameters reference min max CO2 sales avg 2020 g/km 175 160 175 Parameter min vkm YoY growth 2011-2020 1,00% 0,8% 1,2% Parameter max CNGV sales share 2020 4,0% 2,0% 6,0% 0,4% FFV sales share 2020 1,0% 0,0% 4,0% HD Parameters Efficiency 2011+ ALL HD classes 0,2% YOY improvement 2011 - 2020 -1,45% -1,00% -1,45% Load factor ALL HD classes w/o bus&coach Impact to RED-% Load YOY growth 2005-2020 0,080% 0,06% 0,10% Transport demand ALL HD classes w/o bus&coach tkm YoY growth 2011-2020 2,250% 1,8% 2,70% 0,0% HDV Vehicles 3.5-7.5 Tonnes CNGV sales share 2020 2,0% 0,00% 4,00% van CNG HD Bus&C. CNG van vkm van eff. HD 7.5t-16t CNG HD 3.5t-7.5t CNG HD 16t-32 CNG HD load factor HDV Vehicles 7.5-16 Tonnes HD Bus&C. E95 van FFV HD eff. HD tkm HD 16t-32 E95 HD 16t-32 DME CNGV sales share 2020 1,0% 0,00% 2,00% -0,2% HDV Vehicles 16-32 Tonnes DME sales share 2020 0,50% 0,00% 1,00% E95 sales share 2020 1,00% 0,00% 2,00% -0,4% CNGV sales share 2020 1,00% 0,00% 2,00% HDV Vehicles bus&coach E95 sales share 2020 2,00% 1,00% 4,00% -0,6% CNGV sales share 2020 5,0% 0,00% 10,00% Sensitivity assumptions for vans and HD do not make a significant difference to the RED-%Reproduction permitted 06 July 2010with dueacknowledgement Slide 36 of 89
  37. 37. 8. Sensitivity Analysis: All Scenarios - Fuels Parameter impact to RED-% 0,6% Biofuels availability 2020 reference min max Parameter min HVO [Mtoe/a] 3,0 1,5 4,5 Parameter max 0,4% BTL [Mtoe/a] 0,25 0,0 0,5 Adv. Ethanol [Mtoe/a] 0,64 0,00 1,28 0,2% Impact to RED-% 0,0% Ethanol HVO BTL -0,2% Adv. -0,4% -0,6% Pace of development of advanced biofuels significantly impacts RED-%Reproduction permitted 06 July 2010with dueacknowledgement Slide 37 of 89

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