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DME Industry and Association

Overview

Ben Iosefa

IDA Chairman

Patron Members

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About the Association –

Membership

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About the Association –

Strategic Partnerships

The IDA maintains close ties with regional DME association and related industry bodies, uniting

those organizations most active in the development of DME worldwide:

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DME Market –

Global Project Overview** **Selected projects only

Indonesia 800 ktpy planned

China 7 mtpy capacity 30 – 50% in operation

India 265 ktpy planned

Sweden World’s first BioDME plant (2011)

Uzbekistan 100 ktpy planned

Vietnam Project announced

United States 12,000 liter/day modular plant (2013)

Papua New Guinea 200 ktpy planned (2016)

Japan 80 ktpy operational

Trinidad & Tobago 100 KTA plant planned

Mitsubishi Corp. & Mitsubishi Gas Chemical

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DME Market –

China

Heilongjiang

Xinjiang

Tibet

Qinghai

Inner Mongolia

Gansu

Liaoning Beijing

Shandong

Anhui

Zhejiang Hunan Jiangxi

Guangdong Guangxi Yunnan Hong Kong

Jilin

Jiangsu

Sichuan

Shaanxi

Shanxi

Guizhou Fujian

Macau

Hubei

Chongqing

Tianjin

Shanghai Henan

Hebei

Hainan

Ningxia

Highest operating rates in East

and South China (>45%)

Lower operating rates in inland

China (<30%)

1. Largest market

In MTPY

ENN and various industry sources 2012, adj. to reflect idle capacity

2. Incentive China’s VAT (tax) on DME reduced from 17% to

13%

3. Production Via methanol from coal using a dehydration

process

Year DME Capacity DME Production Rate

2001 22 10 45%

2002 30 20 67%

2003 70 40 57%

2004 100 30 30%

2005 200 100 50%

2006 480 320 67%

2007 2746 900 33%

2008 5211 1330 26%

2009 5423 1550 29%

2010 5915 2050 35%

2011 5915 2300 39%

2012 6338 2430 38%

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Factors Driving Growth

Volvo FH DME truck at the

Chemrec BioDME production

facility, Piteå

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Factors Driving DME Fuels Growth –

DME / LPG Blending

More than 80% of DME currently

produced is blended with LPG

Blending ~20% DME / 80% LPG

Model works best in countries that

Import LPG

Have local feed stocks to produce

DME

Largest market is China, but

regulations & standards must be put in

place and applied.

Several countries preparing to enter

this market

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Factors Driving Growth –

Chemical Intermediate & Niche Applications

Very Attractive Chemical Feedstock

Behaves as liquid synthesis gas – may be used in production of:

Olefins (MTO) – DME is an essential step for producing olefins in the biomass/gas/coal to olefins process

Synthetic gasoline (MTG)

New Markets Appearing

Up to 10% of China production used for welding, cutting and brazing applications

Volvo DME Truck

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Factors Driving DME Fuels Growth –

Transportation Fuel

Opportunities

Can be used in conventional diesel engines with a modified fuel injection system

Large potential market High cetane Clean burning (sootless – no smoke or

particulates) 100% SOx reduction Quiet combustion LPG-like distribution infrastructure Challenges Lower lubricity Lower viscosity Government regulations and support

Volvo DME Truck

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Factors Driving DME Fuels Growth –

Transportation Fuel

Isuzu DME Diesel Truck Nissan NTSL DME Diesel Truck SAIC DME Diesel Bus

Volvo DME Diesel Engine

Much Work Underway

Japan DME Association members

Volvo & BioDME Consortium

Alternative Fuel Technology

Isuzu Advanced Engineering Center

Haldor Topsøe work on OBATE (On

Board Alcohol to Ether) for SPIRETH

project

SAIC DME Diesel Engine

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Projects Leading the Way

Volvo FH Heavy Truck running on

DME as part of the vanguard

BioDME Project

In 2007, Volvo demonstrated with 7 renewable fuels to find a

sustainable solution.

Liquid fuels Combination Gaseous fuels

1: Bio diesel

2: Synthetic Diesel

3: DME

4: Methanol/

Ethanol

5: Biogas

6: Biogas +

Biodiesel

7: Hydrogen +

Biogas

Volvo Demonstration Project

Background and Rationale

Fuels: • Biodiesel (B100)

• Methanol/Ethanol (Spark Ignition)

• Hydrogen + Biogas (Spark Ignition)

• CNG (Spark Ignition)

• LNG (Compression Ignition + pilot injection)

• Synthetic Diesel

• DME (Compression Ignition)..rated highest

Criteria: • Climate Impact

• Energy Efficiency

• Land Use Efficiency

• Fuel Potential

• Vehicle Adoption

• Fuel Cost

• Fuel Infrastructure

Volvo Demonstration Project

Results from the Seven Fuels Tested

Feedstock: Black liquor from paper mill Output: 4 tons Bio-DME/day

Volvo Demonstration Project

10 Trucks – 1 Million Kilometers

The Benefits

DME Climate Impact

• Non-toxic

• High well-to-wheel efficiency

• Low global warming potential

– GWP = 1.2 @ 20 yr; 0.3 @100 yr

• Synthesis from variety of bio-based feedstocks

• High biomass-to-fuel conversion efficiency

• Synthesis from natural gas

The Benefits

DME Does Not Emit Soot

No DPF (Diesel Particulate Filter)

The Benefits

DME Fits 97% of all Truck Segments

Vocational/Construction Straight Truck

LCOE= Low Cab over Forward (Refuse)

Long Haul - sleepers

Regional Haul

3%

Technology

demonstrated

Excellent

environmental

properties

Energy-efficient

Easy Vehicle/Driver/

Mechanic Adoption

Infrastructure already

developed

Made from natural

gas or biomass

The time is right; the opportunity is here!

The Benefits

Summary

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SPIRETH Project

Low Emission Marine Fuel

1. Project Objectives Identify best replacement for diesel and heavy

fuel oil to enable shipping industry to comply

with upcoming emission regulations

Full scale pilot test of methanol and DME use

onboard a ship

2. Project Methodology Develop and install onboard conversion

process for methanol to DME

Install auxiliary engine running on DME

Verify rule compliance, function, and

endurance

3. Potential Potentially universal availability of methanol /

DME

Emissions meet Tier 3 Nox requirements

without aftertreatment

Cost for conversion/adaptation is a fraction of

the cost of converting to LNG

SPIRETH

Alcohol (Spirit) and Ether as Marine Fuel

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The Opportunities

80,000 TPA DME Production Plant

Fuel DME Production Company

Niigata, Japan

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Moving Ahead –

Current Opportunities

1. Introduction of standards International standards to be introduced in

2014

Likely to encourage confidence, investment,

and growth in market

2. Low-emission fuel requirements BioDME in combination with fossil-based

DME offers attractive option to regulators and

fleet owners required to introduce clean

transportation fuels

3. LPG blend stock Already commercial at small but rapidly

growing scale

Utilizing existing LPG infrastructure for

distribution and utilization

4. Natural gas and coal monetization Market pull for new energy supplies, security

of supply

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Moving Ahead –

Future Opportunities

1. Renewable feedstock integration e.g. BioDME

Electricity + H2O + CO2 Wind and solar

2. Integration with existing fuels LPG

Diesel

Other ethers

3. No integration use Dedicated road transport fleets

Maritime transport

Turbine

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DME Industry and Association

Overview

Ben Iosefa

IDA Chairman

Patron Members

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6th International DME

Conference

San Diego

California

7 – 9 October 2014

Southern California is home to the

first DME for fuel production plant

and some of the first fleet vehicles

running on DME

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About the Association

Meetings and Site Visits Focused on New Developments

DME 1

2004 | Paris

DME 2

2006 | London

DME 3

2008 | Shanghai

DME 4

2010 | Stockholm

4th IDA Meeting

2002 | Copenhagen

DME Seminar

2006 | London

6th IDA Meeting

2003 | Phoenix

7th IDA Meeting

2005 | Stockholm

DME 5

2013 | Ann Arbor

DME 6

2014 | San Diego

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6th International DME Conference (DME 6)

Launching DME as a Transportation Fuel

Conference

Commercial program featuring representatives involved in production, project development, infrastructure, fuels and engines

Technical program featuring presentations and discussion about key challenges and new R&D

Truck Display

Volvo DME truck display

Site Visit

Visit to the first DME for fuel production facility in North America: Oberon Fuels’ DME Plant No. 1

Volvo VNL D13

Oberon Fuels Plant No. 1