The Biofuel Market in Austria . Prospects for Central ... · Austria – Prospects for Central Eastern Europe Mag. Doris Wirth ... History • 1994 pilot scheme ... Potential bioethanol
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Competence – Markets – Speed
The Biofuel Market in Austria – Prospects for Central Eastern Europe
Mag. Doris WirthBLUEWATERS Environmental Consultants
Competence – Markets – Speed
Biofuels relevant
• FAME – fatty acid methyl ester (biodiesel)• Biogas• Bioethanol• Biodimethylether• Bio ETBE (ethyl-tertio-butyl-ether)• Bio-MTBE (methyl-tertio-butyl-ether)• Synthetic biofuels• Biohydrogen• Pure vegetable oil
Competence – Markets – Speed
Promotion of biofuels in the transportsector in Austria
• Tax exemption– Article 4(1)(7) of the mineral oil tax law provides tax
exemption for fuels produced from biogenic substances– Blending of up to 2% diesel is also exempt from law– Tax reduction for blending of up to 5% biogenic fuels
with petrol• Substitution requirement
– Persons who are liable to tax for petrol or diesel must substitute 2.50% of the total energy content of the petrol and diesel placed on the market in the transport sector each year
– Proportion must increase to 4.30% from 1 April 2007 – Proportion must increase to 5.75% from 1 April 2008
Competence – Markets – Speed
National Resources
• Biodiesel– 9 large scale and 3 pilot plants with a total capacity of
100.000 t/year• Ethanol:
– Currently no larger plant in operation– plant under construction in Wr. Neustadt, 200.000 cm
gas/yr, investment: 105 Mio Euro• Biogas:
– 34.5 Mio cm from 141 agricultural installations in 2003– 170 mio cm from waste and sludge treatment in 2003– All biogas is converted directly in electricity
Competence – Markets – Speed
Prognosis on Quantities
Statement/ Prognosis of the required quantities of biofuels based on achieving the Austrian objectives,assumption: with only biodiesel and ethanol
Competence – Markets – Speed
Bio-diesel is an environmentally friendly fuel
emits as much CO² as plants have absorbedduring their grow when burnt.
is made of reproducible raw materials.
sulphur-free (<0,001 %).
clear reduction of carbon black(up to 50%). does not contain benzole
or other aroma.
reduces the hydro-carbon emission.
is biodegradable and is not harmful to soil and ground water in accidents.
has high lubricity and protects the motor.
does not belong to dangerous goods(ignition point at 170°).
is an environmentally friendly alternative to conventional diesel.
Competence – Markets – Speed
Proven lower emissions
0 %
20 %
40 %
60 %
80 %
100 %
CO² NOx PM
sourcee: TÜV-Germany
0 %10 % 20 %30 %40 %50 %60 %70 %80 %90 %
100 %
CO² HC Nox PMDiesel Bio-Diesel without Catalyst Bio-Diesel with Catalyst
95100
CO2 HC NOx PM
70
18
100100
85
10
100 100
7055
Competence – Markets – Speed
Creation of regional value chains
regional farmers &
agroindustry
Oilmillbiodiesel plant
meatprocessing
animalfats
cattlebreeding
Slaughter-house
pig breeding tannery
Biogas plants
dairiesEndusers: restaurants,hospitals …
apicultures
used cooking oil
BiodieselRapeseed oil
Glycerine
Rapeseed cake
liquid manure
liquid manure
milk
cattle skins
ExportPropolis, Gelee
regional markethoney
Exportlongtermcontracts
regional market
bee meadows
Winter oilseedrape cultivation
rape
BiodieselRapeseed oil
Exportlongterm contractsenergy
energy
Products and by-products within
the biodiesel value chain
considerablyenhance the
regional productivity,
investments will help the local
agriculturalsector.
Competence – Markets – Speed
BIO DIESEL –Production plant
30.000 t/a
Oil press
31.500 t/a
Rape seedoil(degummed)31.500 t/a
Rape seed
90.500 t/a
Rape seedCake
58.500 t/a
Raw Glycerine8.400 t/a
biodiesel
30.000 t/a
Mass Balance – Austrian technology
Competence – Markets – Speed
Austrian Technological scheme of a biodiesel plant according to European standards
Competence – Markets – Speed
Clean City Management
Bio-Diesel applications in Austria
Taxi fleets
Ecological sensitive areas
Bio-Diesel is
98% bio-degradable
within 21 days!
Competence – Markets – Speed
Quality standards of Bio-Diesel
In 1991 the first Bio-Diesel Quality Standard (Ö-Norm C 1190) was laid down.
Other countries followed this example:
In 2002/2003 the same European Standard for Fatty Acid methylEster (FAME) was introduced.
Cech Republic CN 656507 (1994)Sweden SS 155436 (1996)USA SAE 971687 (1996)Germany DIN E 51606 (1997)
Competence – Markets – Speed
Raw Materials
Vegetable oils from
•Sunflower
•Rape seed
•Palm oil
•Cotton seeds
•Cynaria
But also
Used cooking oil
Animal fats from:
•Fowl
•Cattle
•Pigs
Competence – Markets – Speed
Biofuels Project Model
Project Company
Owner / Sponsor / Investor
Products
OperatorInvestmentPlant delivery
Outside CapitalBank
FeedstockVegetable oilsWaste oils/fats
BiodieselGlycerineFertilizer
BiodieselPlant
Own Capital
Loans
Subsidies
Consultant
Business Plan,Feasibility Study
Competence – Markets – Speed
Project Finance through export credit agency
export credit agency
BankOf Plant Supplier
Client’s BankClient
SupplierBiodiesel Plant
Positive ratingaudited by ÖKB
Positive ratingaudited by ÖKB
Biodiesel PlantGuarantee
LoanPay Back
audited by export credit agency
audited by export credit agencyAmount to be Invested
Project Financing Contract
Project Financing Contract
Competence – Markets – Speed
Business Plan – Contents I
• General project description• Macroeconomic data• Evaluation of market and competition
– Sales potential on local and international market– Forecast marketing
• Technical feasibility– Technical specification of the Biodiesel plant– Product quality and fuel standards– Variants and sensitivity
• Feedstock• Plant Capacity
• Socio-economic and environmental framework– Local added value and labour force potential– Synergies with other projects– Relations to EU directives and Kyoto Protocol
• Subsidies– Regional / national and international
• Phase plan
Competence – Markets – Speed
Business Plan – Contents II
• Financial analysis– Pricing – country specific costs and cost estimates of the engineers
• Investment costs (Plant, site & building, planning, duty & transport)• Operating costs (utilities, chemicals, energy, feedstock)• Working capital• Revenues• Personnel costs• Country specific taxes, outstanding accounts and accounts payable
– Discounted Cash Flow Analysis (DCF) – IRR, NPV, PBP– Sensitivity Analysis– Break Even Sales Values– Net Income Statement– Projected Balance Sheet– Operating Costs– Costs per Litre Biodiesel
• Risk analysis– Commercial, political, technical risk, force majeur
• Legal and organisational aspects• Project stakeholders
Competence – Markets – Speed
Best practice: Bus fleet in Graz
• Public Transport in Graz– 91,7 mio. passengers– 3,2 mio. km tram- and
8,5 mio. km bus-mileage– 70 trams und 134 buses– 7 tramlines und 25
buslines– linelength of tram network
51 kmlinelength of bus network186 km
– funicular and lifts– € 42,4 mio. turnover– ~750 employees
Competence – Markets – Speed
History
• 1994 pilot scheme• 1997 10 buses more• 2000 30% of the fleet• 2003 83% biodiesel buses• 2005 100% of the fleet
Competence – Markets – Speed
Technical requirements and results
• Requirements– exchange of fuel hoses and gaskets– check of all parts supplied with biodiesel (heaters)– certification from the engine manufacturer– consent from the producer of the injection pump
• Results– motor oil change every 30.000 km, no special motor oil is
needed– no greater wear in the engine– 33% fossil diesel oil in winter– 7% higher consumption– biodiesel price is lower– scientific research
Competence – Markets – Speed
Prospects in Graz
• equip the fleet with particlekatalysts or-filters
• continue the way to lowestpossible emissions
• support for other transportcompanies
• Further research
Competence – Markets – Speed
Prospects in CEEC - Drivers
• Global drivers– the reduction of energy dependency on energy imports and
thus, the increased security of supply – climate change mitigation and the CO2 – trade make projects
possible – long term perspectives, if residues are properly valorised and
dedicated energy crops are grown– Biomass has the capacity to penetrate every energy sector:
heating, power and transport. Bio-fuels can be stored easily and bioenergy produced when needed
– Bioenergy creates worldwide business opportunities for EU industries
– Biofuels are generally bio-degradable and non toxic, which is important when accidents occur.
Competence – Markets – Speed
Prospects in CEEC - Drivers
• Specific drivers– Extensive potential in agriculture in CEEC due to efficiency
measures– Long term experience in seed management– Development of new seed and agricultural methods and land
use approaches within the EU FP6 and FP7– Favourable land ownership structures in new Member States
in CEEC– stable employment opportunities in rural areas and among
small and medium sized enterprises; this in turn fosters regional development, achieving greater social and economic cohesion at community level
– “BIOFUEL Marketplace” filling an important gap in the economic setup of the RES market
Competence – Markets – Speed
Prospects in CEEC - Barriers
• Barriers– administrative and legislative bottlenecks, such as lack
of legislation for tax exemption– Insecure markets due to lack of environmental
consciousness in the public– costs of bio energy technologies and resources– competitiveness strongly depends on the amount of
externalities included in the cost calculations– resource potentials and distributions– lack of organisation of biofuel supply chains– local land-use and environmental aspects in transition
countries
Competence – Markets – Speed
Yields in selected EU 25 (BTG 2004)
0.627770.48607Slovakia
--0.73923Poland
0.61770n.an.a.Hungary
0.769610.881105Czech Republic
--0.941188United Kingdom
--1.031298The Netherlands
0.9211560.811023Italy
--1.021287Ireland
0.8210411.061343France
--0.941193Denmark
0.8811161.051327Germany
--1.081360Belgium
0.091130.841055Austria
toe/haLitres/hatoe/haLitres/ha
SunflowerRapeseed
Competence – Markets – Speed
Average biodiesel production costs in the EU-25 (BTG 2004)
90321.70.737
90621.70.739Total costs at petrol station
1232.90.1001232.90.100Distribution costs
120.3
0.010
120.3
0.010Blending costs (incl. adaptation of gasoline)
862.10.070
862.10.070
Conversion costs
68316.40.557
68516.40.559Subtotal feedstock cost
130.30.011
130.30.011
- Co-product credit
69616.70.56869816.80.570- Feedstock
Net feedstock cost
€/toe€/GJ€/L€/toe€/GJ€/L
Sunflower basedRapeseed based
Competence – Markets – Speed
Prospects on Biodiesel Price
• ECN study– current production costs of RME app 0.50 €/litre (equivalent to 15
€/GJ or 360 €/toe)– Main cost factors are
• prices of feedstock used • size and efficiency of the production plant• oil yield• value of by-products of the biodiesel production process (oil seed cake,
glycerine)– Longer-term projections indicate a future decrease in RME production
costs by more than 50%, up to approximately 0.20 €/litre (around 6 €/GJ or 250€/toe).
• BTG study, 2004– Current costs at fuel station of app 0,74 €/litre (22 €/GJ or 930 €/toe),
as shown in the table below. In this study, average prices of 233 f €/t for rape seed and 258 €/t for sunflower seed were used.
Competence – Markets – Speed
Potential bioethanol yields (wheat and sugar beet) in selected EU-25
1.783,4860.701,360Slovakia
2.074,0400.681,330Slovenia
1.823,5550.621,215Poland
n.a.n.a.0.701,365Hungary
2.554,9820.801,568Czech Republic
3.256,3551.382,686United Kingdom
2.705,2661.062,069Sweden
3.316,4721.452,839The Netherlands
4.097,9801.312,554France
3.286,3991.312,561Denmark
3.276,3841.342,620Germany
3.576,9701.462,847Belgium
3.426,6770.921,792Austria
toe/haLitres/hatoe/haLitres/ha
Sugar beetCommon wheat
Competence – Markets – Speed
Bioethanol production costs in EU-25 + Bulgaria, Romania
118428.40.6
116527,90.59Total costs at petrol station
1974.70.1200.50.01Distribution costs
992.4
0.05
992.4
0.05Blending costs (incl. adaptation of gasoline)
43410.40.22
55313.30.28Conversion costs
45410.90.23
49311.80.25Subtotal feedstock cost
591.40.03
2967.10.15- Co-product credit
51312.30.2679018.90.40- Feedstock
Net feedstock cost
€/toe€/GJ€/L€/toe€/GJ€/L
Beet basedWheat based
Competence – Markets – Speed
Prospects on bio ethanol Price
• Fermentation of sugars to ethanol is a mature technology– Applied commercially on a large scale– little chance of technological improvements that may significantly
reduce the current production costs• Main cost factors
– biomass feedstock prices (55 - 80% of the final price of ethanol) • ECN report:
– Present production costs for ethanol derived from sugar and starch crops are 20 €/GJ (corn, USA–0.42 €/L, or 834 €/toe) and 15-25 €/GJ (sugar beet, North West Europe)
– This is about 0.32-0.53 €/litre, or 625–1040 €/toe. • BTG, 2004 report:
– Assumptions: 140 EUR/t for wheat, 26.2 EUR/t for sugar beet – co-product credits for Dried Distillers Grains Soluble (DDGS) for
wheat, beet sugar ethanol for sugar beet pulp.
Competence – Markets – Speed
Summary
• Chances for CEEC– Structural funds to be used for development of regional
biodiesel value chains– Better price-cost structures for biodiesel due to high
potential in yield (oil content, yield per hectare, plant technology)
– Better economy of scale due to land structures, therefore better price, therefore better competitiveness
– Contributing to solving employment problem in rural regions
– SUSTAINABLE PRICE ADVANTAGE ENTAILS CHANCE FOR EUROPEAN (GLOBAL ?) MARKET LEADERSHIP
Competence – Markets – Speed
BLUEWATERS – services for investors and Biodiesel producers
• Project finance consulting : screening of national and international finance institutions, preparation of required documents
• Market studies• Research studies (baseline studies, PIN and PDD for JI/CDM
projects)• Networking, capacity building, Public awareness campaigns• Feasibility Studies • Business Plans / Bankable Documents
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