BIOFUEL EXPERIENCES AND PRIORITIES WITHIN APEC

International Biofuels Conference 2007February 1-2, 2007Tokyo, Japan

Cary Bloyd, Ph.D.

Center for Energy, Environmental, and EconomicSystems Analysis (CEEESA)Decision and Information Sciences Division (DIS)Argonne National Laboratory9700 South Cass Avenue, Argonne, IL 60439

(phone) ++1-301-651-8899 (fax) ++1-301-388-0537

(email) bloyd@anl.gov (web) www.ceeesa.anl.gov

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Argonne is America's First National Laboratory and one of the World's Premier Research Centers

Founded in 1943, designated a national laboratory in 1946

One of 17 DOE National Laboratories

Managed by the University of Chicago for the Department of Energy

– About 3,200 employees and 4,000 facility users

– About $500M budget

– 1500-acre site in Illinois,southwest of Chicago

Broad research anddevelopment portfolio

Numerous sponsors

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Presentation Outline

APEC and Trade APEC Biofuels Mandates Alternative Transport Fuels in APEC APEC Biofuels Activities Closing Thoughts

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APEC and Energy

Asia-Pacific Economic Cooperation (APEC) was created in 1989

Objective: Promote trade liberalization, trade facilitation and technical assistance

Implements its activities through 11 working groups including the Energy Working Group (EWG)

EWG is assisted by 5 Expert Groups including the Expert Group on New and Renewable Energy Technologies (EGNRET)

APEC members account for over 50% of world GDP, 41% of world trade and over 50% of world energy consumption

(http:www.apec.org)

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The Energy Working Group is Supported by Five Expert Groups

Expert Group on Clean Fossil Energy  (EGCFE) – Chair: USA

Expert Group on Energy Efficiency & Conservation (EGEEC) – Chair: China

Expert Group on Energy Data & Analysis (EGEDA) – Chair: Japan

Expert Group on Minerals & Energy Exploration & Development (GEMEED) – Chair: Chile

Expert Group on New and Renewable Energy Technologies (EGNRET) – Chair: USA

(http://www.ewg.apec.org/)

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APEC Expert Group on New and Renewable Energy Technologies (EGNRET)

Mission: To facilitate the increase in the use of new & renewable energy technologies in the APEC region– Lead and work with EWG major initiatives

• APEC 21st Century Renewable Energy Development Initiative• EWG led Energy Security Initiative (2001)• Ministerial Level Clean Energy Financing Initiative (2004)• Ministerial Level Hydrogen Initiative (2004)• EWG led APEC Biofuels Task Force (2006)

– Organize workshops– Conduct research projects

• 44 have been completed since 1992• 8 are being implemented in 2007-2008

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APEC Alternative Fuels Activities

At EM6 in 2004 APEC Energy Ministers called “for accelerated cooperation on the development of alternative transportation fuels"

The EWG asked the EGNRET to examine alternative transport fuels under their Energy Security Initiative

Joint EWG/ISTWG project on Future Fuel Technology (2004-2006)– http://apecforesight.org/apec_wide/future_fuel_main.cfm

At EM7 in 2005 APEC Energy Ministers said “we direct the EWG to develop practical measures to enhance cooperation supporting the development of alternative transport fuels, including the establishment of a Biofuels Task Force”

The APEC Biofuels Task Force held its first meeting in Singapore in May 2006, the second meeting in Zhuhai, China in October 2006, and third meeting in January 2007 in Tokyo

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Expert Group on New and Renewable Energy Technologies Alternative Fuels Activities

The EGNRET establishes a working Collaborative (XI) on Alternative Transport Fuels in 2004– Produced “Alternative Transport Fuels in APEC”

Chinese Taipei hosted the 2005 International Bioenergy Symposium

Two APEC projects are being carried out in 2007– APEC 21st Century Renewable Energy Development Initiative

(Collaborative IX): Establishment of the Guidelines for the Development of Biodiesel Standards in the APEC Region (led by Thailand)

– APEC 21st Century Renewable Energy Development Initiative (Collaborative IX): Alternative Transport Fuels Policy Options for APEC Economies ( led by New Zealand)

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APEC Leads the world in ethanol production

APEC Ethanol Production (millions of gallons)*

2004 2005 2006 United States 3,530 4,264 5,000 China 964 1,004 Thailand 74 79 Canada 61 61 Indonesia 44 45 Japan 31 30 Australia 33 33 South Korea 22 17 Philippines 22 22 Mexico 9 12 Total APEC 4,790 5,567 Brazil 3,989 4,227 World total 10,777 12,150

* Source: http:www. ethanolrfa.org/industry/statistics/

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Comparison of ethanol production costs (US$ per liter)

Europe US Brazil Sugar beet Wheat Corn Sugar cane Net feedstock cost -Feedstock cost -Co-product credit

$0.20-0.31

$0.20-0.32 ($0.00-0.01)

$0.11-0.19

$0.22-0.34 ($0.11-0.15)

$0.13

$0.23 ($0.11)

$0.127

Operating cost -Labour/admin/ maintenance -Chemical cost -Energy cost

$0.20-0.25 $0.11

$0.05

$0.03 $0.04

$0.014

$0.010

$0.002 $0.002

Capital recovery $0.08-0.13 $0.05 $0.062 Other $0.22-0.28 $0.026 Total cost/liter (gate price)

$0.42-0.60 $0.35-0.62 $0.29 $0.23

Cost per gasoline-equivalent liter

$0.63-0.90 $0.53-0.93 $0.43 $0.34

Cost per gasoline-equivalent gallon

$2.39-3.42 $2.01-3.53 $1.63 $1.29

Adapted from: Biofuels for Transport, An International Perspective, IEA, OECD, Paris, France, 2004

Note: Regular gasoline from Singapore: 9/04: $1.24; 9/05: $1.78; 9/06: $1.52

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APEC Transport Energy Use and Ethanol Production (2004-KTOE)

Economy Transport1 Ethanol2 Economy Transport Ethanol

Australia 27,781 69 New Zealand 5411 -

Brunei 371 - PNG 374 -

Canada 50,154 128 Peru 3088 -

Chile 6641 - Philippines 8673 46

China 67,531 2022 Russia 41,063 -

HK, China 5626 - Singapore 4224 -

Indonesia 20,952 92 Chinese Taipei 12,808 -

Japan 84,488 65 Thailand 21,107 155

Korea 32,572 46 USA 616,908 7402

Malaysia 14,226 - Vietnam 5561 -

Mexico 61,867 19 TOTAL 1,091,426 10,045

1 EGEDA: http://www.ieej.or.jp/egeda/

2Renewable Energy Fuels Association: http://www.ethanolrfa.org/

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Production of Both Ethanol and Biodiesel are Expanding in APEC Economies (1)

Australia– Has set a target of 350 mega liters Bioofuels for 2010

(Ethanol & Biodiesel, up from 28 ML in 2005)– Has developed a Biofuels Action Plan

Canada – Will blend 35% of its gasoline to 10% ethanol by 2010 (61

mill. gal. to 350 mill. gal.)– Has been a lead in cellulosic ethanol production (Iogen)– Has established the Canadian Biomass Innovation

Network to coordinate RD&D activities (www.cbin.gc.ca)

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Production of Both Ethanol and Biodiesel are Expanding in APEC Economies (2)

China– Targets for Biofuel have been set under new Renewable

Energy Development Law: 2005112 Mt; 2010 220 Mt; 2020 1200 Mt

Japan– In 2006 announced “Utilization of Biomass Fuels for

Transportation” associated with Kyoto Protocol targets– Target is to blend 20% of gasoline with ethanol by 2010

(approximately 360,000 KL/yr (95 Mill. Gal.)

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Production of Both Ethanol and Biodiesel are Expanding in APEC Economies (3)

Chinese Taipei– Ethanol: Most gas stations (2,500) to provide E3 by 2011– Biodiesel: Green County Demonstration Program where all

diesel vehicles are fueled by B1 and local feedstocks used for fuel production

Korea– Korean Bioenergy Technology Road Map Established– Korean Biodiesel Standards set up in 2004 – Has set goal of 552,000 toe biodiesel by 2012

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Production of Both Ethanol and Biodiesel are Expanding in APEC Economies (4)

Thailand– Has both ethanol and biodiesel demonstration programs

and is the world’s second largest sugar exporter– A successful 200 liters/day community level biodiesel

program has been developed Malaysia

– Plans to produce 14 mill. gal. of biodiesel by 2008 New Zealand

– 2006 Biofuels Obligation Legislation applies to both ethanol and biodiesel and targets all transport fuels sales to include 0.25% biofuels in 2008 rising to 2.25% biofuels in 2012

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Production of Both Ethanol and Biodiesel are Expanding in APEC Economies (5)

USA– Targets are defined in terms of blending

• The target 4,000 mill. gal. in 2006 goes to 7,500 mill. gal. in 2012

– The US biofuel program is an example of partnerships • US Department of Energy• US Department of Agriculture• US Environmental Protection Agency • State biofuel programs• Industry trade associations• Private sector• Research institutions/universities

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APEC can be a leader in biofuel development

APEC economies are aggressively pursuing the expansion of biofuel production and use (doubling ethanol production by 2012)

APEC provides a large range of policies that support biofuels

New technologies are significantly reducing the costs of utilizing biofuels

There are multiple reasons for using biofuels– Environment – Cost – Energy security

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Thank you for your attention!