Presented: Martin Kubů, PREOL (a member of AGROFERT HOLDING) 6th April 2009 THE FUTURE ROLE OF...

Presented: Martin Kubů, PREOL (a member of AGROFERT HOLDING) 6th April 2009

THE FUTURE ROLE OF RENEWABLE RAW-MATERIALS

CHANCE AND CHALLENGE FOR THE CHEMICAL REGIONS

DyStar – Aliachem meeting2

AGROFERT HOLDING, a.s. Leading company in CZ/SK agriculture with substantial stakes in chemistry and food industry with consolidated turnover more than 100 bln CZK in 2008.

Martin Kubů Worked in KAUČUK, a.s., ČESKÁ RAFINÉRSKÁ, a.s. , PARAMO,a.s. and ALIACHEM, a.s.. Recently responsible for group renewable business, motor fuel trading and biofuels. Chairman of the Board of PREOL, a.s., a competence centre of AGROFERT and AGROPOL for biofuels, motor fuels and renewable energy.

INTRODUCTION INTRODUCTION

DyStar – Aliachem meeting

CHEMISTRY, KEY PLAYER ON ENERGY CHEMISTRY, KEY PLAYER ON ENERGY MARKETMARKET


WORLD ENERGY DEMAND AND TRENDSWORLD ENERGY DEMAND AND TRENDS


ENERGY CONSUMPTION TRENDS ENERGY CONSUMPTION TRENDS OECD/non-OECDOECD/non-OECD


Regional leader in industrial (non energetic) NG consumption (as „feedstock“ )

AND

Important regional electricity buyer

AND

at the same time utility producer at chemical plants

AND

due to participation in regional agriculture important player in biomass sourcing/consumption

=

HIGH POTENCIAL FOR SYNERGIES BETWEEN RENEWABLES, REGIONAL RELATIONSHIP AND CHEMICAL PRODUCTION

GROUP SYNERGY GROUP SYNERGY CHEMISTRY/RENEWABLES CHEMISTRY/RENEWABLES


BIOMASS usage as renewable energy/chemical feedstock in CZ is influenced:

DIRECTLY by:

(i) CZ local conditions for substitutes (WIND, CNG, SOLAR, etc.) and

(ii) subvention allocations (frequently non consistently applied – SOLAR/WIND

availability, Excise tax for BIOFUELS/CNG, Green bonuses , etc.)

INDIRECTLY by:

(i) differences in BIOMASS SUPPORT SCHEMES in neighbor areas

Decision to run business in renewable segment is FREQUENTLY INFLUENCED BY OTHER FACTORS than relating to BIOMASS PRODUCTION CYCLE

OUR BUSINESS FINDINGS OUR BUSINESS FINDINGS


Example: CZECH WOOD Example: CZECH WOOD PELLETS BORDER CROSSING PELLETS BORDER CROSSING

8


FEEDSTOCK POTENCIAL FOR 1G FEEDSTOCK POTENCIAL FOR 1G BIOFUELS PRODUCTION IN CZ BIOFUELS PRODUCTION IN CZ

FAME ETOH

FEEDSTOCK HARVEST (RAPE SEED 75%, GRAIN 25%)

kt Cca 1 250 Cca 6 000

BIOFUEL PRODUCTION POTENCIAL Kt 372 402

FOSSILE FUEL REPLACEMENT POTENTIAL

% (w.) 8,13% DIESEL 12,21%

MOGAS


% (v.) 8,89%

DIESEL

20,3%

MOGAS


% (e.o.)

5,35%

MOTOR FUELS

4,17%

MOTOR FUELS

TOTAL FOSSILE FUEL REPLACEMENT POTENTIAL

% (e.o.)

9,52 %


FEEDSTOCK POTENCIAL FOR 1G FEEDSTOCK POTENCIAL FOR 1G BIOFUELS PRODUCTION IN CZ BIOFUELS PRODUCTION IN CZ

FAME ETOH

FEEDSTOCK HARVEST (RAPE SEED 75%, GRAIN 25%)

kt Cca 1 250 Cca 6 000

BIOFUEL PRODUCTION POTENCIAL Kt 372 402


% (w.) 8,13% DIESEL 12,21%

MOGAS


% (v.) 8,89%

DIESEL

20,3%

MOGAS


% (e.o.)

5,35%

MOTOR FUELS

4,17%

MOTOR FUELS

TOTAL FOSSILE FUEL REPLACEMENT POTENTIAL

% (e.o.)

9,52 %

Including feedstock for 2G biofuels (biomass, FGW, etc. ) in CZ exists higher potencial than EU recommended target 8% of motor fuel born on renewable used for transport in 2020.


MOTOR FUEL EXCISE TAX in EU MOTOR FUEL EXCISE TAX in EU AND IN CZ/GERMANYAND IN CZ/GERMANY

11

COUNTRYGASOLINE DIESEL LPG CNG

TAX (€/l) VAT(%) TAX(€/l) VAT (%) TAX (€/l) VAT (%) TAX (€/GJ)*VAT (%)

EU min. 0,359 0,302 0,125 2,600

CZ 0,400 19 0,336 19 0,133 19 0,000 19GERMANY 0,654 16 0,486 16 0,180 16 1,290 19FRANCE 0,589 19,6 0,417 19,6 0,108 19,6 0,370 19,6AUSTRIA 0,417 20 0,297 20 0,261 20 1,650 20POLAND 0,356 22 0,290 22 0,204 22 0,000 22SLOVAKIA 0,398 19 0,373 19 0,201 19 2,570 19SWEDEN 0,536 25 0,455 25 0,146 25 1,130 25GB 0,682 17,5 0,692 17,5 0,132 17,5 0,600 17,5

Source : European Union of Natural Gas Industry and VSCHT


MOTOR FUEL EXCISE TAX in EU MOTOR FUEL EXCISE TAX in EU AND IN CZ/GERMANYAND IN CZ/GERMANY

12

COUNTRYGASOLINE DIESEL LPG CNG

TAX (€/l) VAT(%) TAX(€/l) VAT (%) TAX (€/l) VAT (%) TAX (€/GJ)*VAT (%)

EU min. 0,359 0,302 0,125 2,600

CZ 0,400 19 0,336 19 0,133 19 0,000 19GERMANY 0,654 16 0,486 16 0,180 16 1,290 19FRANCE 0,589 19,6 0,417 19,6 0,108 19,6 0,370 19,6AUSTRIA 0,417 20 0,297 20 0,261 20 1,650 20POLAND 0,356 22 0,290 22 0,204 22 0,000 22SLOVAKIA 0,398 19 0,373 19 0,201 19 2,570 19SWEDEN 0,536 25 0,455 25 0,146 25 1,130 25GB 0,682 17,5 0,692 17,5 0,132 17,5 0,600 17,5

Source : European Union of Natural Gas Industry and VSCHT Fossile fues Excise tax worth

0,0856 €/l…… ……Energy tax on biofuel in Germany

worth 0,09 €/l…….and will grow


Biomass (biofuels) vs Fossil fuels in CZ


Biomass (biofuels) vs. Fossil fuels in CZ


RENEWABLE VS. FOSSILE

0

2

4

6

8

10

12

14

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Mil

iard

y C

ZK

Goverment subvention of "alternative " fuels in CZ till 2020

BIOPALIVA (B/E) Fosilní paliva (CNG,LPG)

Till 2020 supports for „ fossil fuels“ might be 104 bln CZK

Till 2020 supports for renewable Biofuels might be 18,2 bln only = 14,5% of theoretical support for other fossil fuels


Electricity Full Cost

17 14 14 146 6 6

7 7 7 7

4 4 4

4

23 23 23 49 49 492

3 3 3

3 3 316

477

22

2

3

0

10

20

30

40

50

60

70

80

90

100

Nuclear Coal 60€/t(CO2=4€/t)

Coal 60€/t(CO2=20€/t)

Coal 60€/t(CO2= 60€/t)

Gas25€/MWh(CO2 4€/t)

Gas25€/MWh

(CO2=20€/t)

Gas25€/MWh

(CO2=60€/t)

€/M

Wh

CO2

Taxes

Fuel

O & M

Capital (IRR 8%)

SOLID BIOMASS: Decision to run business in renewable segment is FREQUENTLY INFLUENCED BY OTHER FACTORS than relating to BIOMASS PRODUCTION CYCLE/MARKET PRICE


PREFFERED CONDITIONS PREFFERED CONDITIONS FOR FOSSIL ENERGY SOURCES (FES) COMPARING FOR FOSSIL ENERGY SOURCES (FES) COMPARING BIOMASS (I) INCREASE SUPPORT NEEDED FOR BIOMASS, (II) BIOMASS (I) INCREASE SUPPORT NEEDED FOR BIOMASS, (II) REDUCE FES ATTRACTIVNESS REDUCE FES ATTRACTIVNESS AS FEEDSTOCK FOR AS FEEDSTOCK FOR REGIONAL CHEMICAL INDUSTRY DUE TO STEADILY REGIONAL CHEMICAL INDUSTRY DUE TO STEADILY GROWING PRICES GROWING PRICES

IT INCREASES COMPETITION FOR REGIONAL CHEMICAL IT INCREASES COMPETITION FOR REGIONAL CHEMICAL INDUSTRY DUE TO (I) LOWER UTILISATION OF LOCAL INDUSTRY DUE TO (I) LOWER UTILISATION OF LOCAL SOURCES, (II) INCREASE PRODUCT FLOW INTO EU MARKET SOURCES, (II) INCREASE PRODUCT FLOW INTO EU MARKET


PREFFERED CONDITIONS PREFFERED CONDITIONS FOR FOSSIL ENERGY SOURCES (FES) COMPARING FOR FOSSIL ENERGY SOURCES (FES) COMPARING BIOMASS (I) INCREASE SUPPORT NEEDED FOR BIOMASS, (II) BIOMASS (I) INCREASE SUPPORT NEEDED FOR BIOMASS, (II) REDUCE FES ATTRACTIVNESS REDUCE FES ATTRACTIVNESS AS FEEDSTOCK FOR AS FEEDSTOCK FOR CHEMICAL INDUSTRY DUE TO STEADILY GROWING PRICES CHEMICAL INDUSTRY DUE TO STEADILY GROWING PRICES

USA: $7.20

Canada: $7.10UK: $8.65

Belgium: $8.50

Russia: $1.50

Qatar: $1.80

Trinidad: $1.65

Japan: $8.70

South Korea: $8.80

China: $6.30

India: $3.70

Bolivia: $1.85

Argentina: $4.85

Iran: $1.25

Saudi Arabia: $0.75

Oman: $1.00

Ukraine: $3.60

Belarus: $3.15

Mexico: $6.85

Brazil : $4.90

Germany: $7.60

Libya: $1.00

Source: ACC

Global Natural Gas Costs – 1st Quarter 2007

($US per million BTUs)


RES PRICING RES PRICING

19

PetrochemicalsProduction [mio t / a]

Price* [ € / t ]

C H OCarbon [ € / t C ]

Ethylene C2H4 110 890 86% 14% - 1035

Propylene C3H6 75 850 86% 14% - 988

Benzene C6H6 45 830 92% 8% - 902

BioRenewablesProduction [mio t / a]

Price* [ € / t ]

C H OCarbon [ € / t C ]

Glucose C6H12O6 143 300 40% 7% 53% 750

Bio-Ethanol C2H6O 36 365 52% 13% 35% 700

Source: Evonik Industries

* Prices as of May 24th , 2007, Bio-Ethanol price for Brazil


AVAILABLE POTENCIAL AND AVAILABLE POTENCIAL AND BIOMASS USE (ČR, BIOMASS USE (ČR, TJ.rTJ.r-1-1 ) )

20

BIOMASS (Biofuel)

POTENCIAL TJ.r-1

UTILISATION 2006, TJ.r-1 %

WOOD, WOOD REST 32 800 16 200 49.4

STRAW I (grain) 6 050 39 0.6

STRAW II (rape seed & others)9 800 170 1.7

ENERGETIC CROPS12 000 0 0

BIODIESEL9 200 2 300 25

BIOGAS7 000 1 000 14.2

TOTAL 76 850 19 709 25.6


CZECH „BIOGAS CZECH „BIOGAS COVERAGE“ COVERAGE“

21


TRENDS IN RENEWABLE IN TRENDS IN RENEWABLE IN CHEMISTRY CHEMISTRY

22


TRENDS IN RENEWABLE IN TRENDS IN RENEWABLE IN CHEMISTRY CHEMISTRY

23

AGROFERT forecasts future replacement cheapest bio compounds used as motor fuel by other more sophisticated applications

AGROFERT expects future coexistence of bio fuel IG and IIG due existing synergies (use of byproducts from IG as feedstock for IIG)


Taking off curve of the Ren. Energy Sources Taking off curve of the Ren. Energy Sources in the EU and reaction of AGROFERT Groupin the EU and reaction of AGROFERT Group

24

Decision about investing into the production of Ist gen. biofuels, 400. 000 mt source material, 100.000

biofuels, 230.000 energetic product

• Tender announcement regarding to the „BIOMASS TO

ENERGY“ project• 2-4 biogas production

units projects

R&D center for Biomas to Syngas

???


AGROFERT GROUP: AGROFERT GROUP: REACTION TO THE TRENDREACTION TO THE TREND

Biomass sources in the Group (as of 2008)

780 000 mt/y of Biomass

I. Gen. Biofuels Biogas plants Biomass to energy R&D Biomass to Syngas


SHARED BIO/CHEMICAL HUB

Loading unloading

Rapeseed, meal storage

FAME

Glycerin production

Product storages

Oil mill, extraction

POWER GENERATION PLANT

FERTILISER PRODUCTION PLANT


Total emissions from the biodiesel production chain calculated according newly issued sustainable criteria by EU

GHG Emission Savings

• EF = 83.8 g CO2 / MJ (RED)

• EB = 47.49 g CO2 / MJ

GHG EMISSIONSGHG EMISSIONS, CZ CASE , CZ CASE

Module [g CO2 / MJ]

Cultivation (eec) 30.69

Direct land use change (el) 0

Processing (ep) 15.82

Transport and Distribution (etd) 0.98

Biofuel in use (eu) 0

TOTAL (EB) 47.49

GHG savings = (EF – EB) / EF

GHG savings = 43.33 %

Presented: Martin Kubů, PREOL (a member of AGROFERT HOLDING) 6th April 2009 THE FUTURE ROLE OF...

Documents

Transcript of Presented: Martin Kubů, PREOL (a member of AGROFERT HOLDING) 6th April 2009 THE FUTURE ROLE OF...