Asia Uses All Available Types of Alternative Fuels

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Asia Uses All Available Types of Alternative Fuels

Lucky Nurafiatin | Manager

Roundtable F, SIEW | October 30, 2014

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Agenda

Overview

Alternative Fuels Usage

Background

Future Trends

Summary

Q&A

Overview


Many types of alternative fuels are used/researched/available in the region

Overview

• Asia is a diverse region, each country has its own fuel policy

• A petroleum importer

• An ethanol importer, but biodiesel exporter

• Wide variety of alternative transportation fuels available/in research:

• CNG

• Auto LPG

• Ethanol

• Biodiesel

• DME

• Methanol

• Preferential tax scheme and governments’ mandate are the most used

methods to promote alternative fuels usage

Background

Aim to utilize domestic resources to reduce petroleum imports


• Accounted for 55% of the world population in

2012

• China and India accounted for 67% of Asia’s

population

• Population grew at a rate of 6.8% (2000-2012)

• Population projected to reach 4.7 billion by 2030

(BAU)

• GDP per capita grew at a CAGR of 1% (2000-

2012)

Population GrowthEmerging economies with China projected to overtake US as the largest economy

Source: World Bank analyzed by Stratas Advisors

-

100

200

300

400

500

600

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9

Th

ou

san

ds U

S$

Billio

n P

eo

ple

Population GDP per capita


Energy ConsumptionNatural gas is the second largest energy source but the third consumed after oil and coal

Global Primary Energy

Consumption by SourcePrimary Energy Consumption in

Major Countries/Regions

Source: The Institute of Energy Economics, Japan


Petroleum ConsumptionAsia is the driver behind the growth of petroleum consumption

Oil Consumption in Major Regions Asia’s Gasoline and Diesel Demand

Source: The Institute of Energy Economics, Japan Source: Stratas Advisors

0

1

2

3

4

5

6

2004 2005 2006 2007 2008 2009 2010 2011 2012

Mb

pd

Gasoline On road diesel


Petroleum and Natural Gas ReservesAsia’s natural gas reserves are larger than petroleum

North America

14%

South & Central America

19%

Europe & Eurasia

9%

Middle East48%

Africa8%

Asia Pacific2%

North America

6%South & Central America

4%

Europe & Eurasia

31%

Middle East43%

Africa8%

Asia Pacific8%

Natural Gas Reserves in 2013

(total 1,705,028 million mtoe)

Petroleum Reserves in 2013

(total 246,433 million mtoe)

Source: Stratas Advisors citing data from BP Statistical Review 2014

Asia’s natural gas reserves stood at 139,516 million mtoe

Asia’s petroleum reserves stood at 6,146 million mtoe

Alternative Transportation Fuels Usage

CNG, LPG and Biofuels are the most popular


Situation

• Common drivers: CO2 reduction and improving

air quality

• Specific drivers: utilizing domestic resources and

reducing petroleum imports

• Japan has the highest number of hybrid vehicles

• Pakistan has the highest number of CNG

vehicles

• South Korea has the highest number of LPG

vehicles

• Alternative fuels promotions:

– Preferential tax scheme

– Incentives for vehicles’ conversion

Where are Alternative Fuels (non-biofuels) Used?

LPG and CNG are the most used

Auto LPG

CNG

Hybrid & Electric

Methanol

Source: Stratas Advisors, October 2014


Situation

• Common driver: reduce CO2 emissions

• Specific drivers:

– Reducing petroleum imports

– Utilizing domestic resources

– Increasing farmers’ income

• Biofuels are commonly use in the region

• Biofuels are available in almost all countries in

the region

• Methods to promote biofuels:

– Preferential tax scheme

– Mandate (blending level/volumetric)

– Incentives for biofuels producers

Where are Biofuels Used?Used in most countries but Thailand is the most successful country

Ethanol

Biodiesel



Higher penetration of biodiesel in Indonesia*, Malaysia and Thailand

Current Biofuels Policy


Australia: Ethanol to account for

6% of total volume of gasoline

sold in New South Wales (July

2011); B2 (January 2010)

Indonesia: Ethanol to

account for 0.5% of total

gasoline sold and biodiesel

to account for 10% of total

diesel sold (January 2014)

Malaysia: B5 (partial

mandate from June

2011, nationwide from

December 2014)

Philippines: E10 (2013);

B2 (February 2009)

Japan: Volumetric

target of 7 vol% ETBE

and E3

S. Korea:

B2 (2010)

China: E10 (April 2008);

B5 (January 2010) –

partial mandates

India: E5 (2013, delayed

from 2007)

Thailand: E10 (January

2013); B7 (2014)

Taiwan: B2 (2010 –

July 2014)

Note: * indicates that mandate was

not met

Future Trends

CNG, auto LPG and biofuels will stay, electric vehicles may increase


Less targets set on CNG/LPG but higher biofuels blend levels and electric vehicles number

Future Policies on Alternative Transportation Fuels


Indonesia: Ethanol to account for

2% of total gasoline sold and

biodiesel to account for 20% of total

diesel sold (January 2016); all taxis,

75% buses run in Jakarta run on

CNG by 2015; 15% of total natural

gas production will be allocated for

the transportation sector in 2015 -

2019

Malaysia: B7* (2015);

EVs to account for

10% of passenger

vehicles in 2020

Philippines: E10 & B5

(2015); 50,170 EVs,

20,200 LPG taxis & 1,000

CNG buses in 2015

Japan: Volumetric

target of 7 vol% ETBE

and E3; EV to account

for 15% - 20% of LDV

sales in 2020 S. Korea: B5* (2016); EV to

account for 20% of total

passenger cars in 2020

China: widen areas of

E10; 500,000 EVs &

hybrid vehicles by 2015

India: E10 (2017); 6 to 7

millions EVs by 2020

Thailand: 9 million liters of

ethanol and 5.47 million liters of

biodiesel per day in 2020; 1

million FFVs by 2018

Taiwan: 45,000 smart

EVs by 2016

Note: * Indicates proposed

Summary


Summary

• CNG, LPG and biofuels are the most common alternative transportation fuels used in the region

• China is the only country where methanol blends are commercially available

• Research on DME is carried out in China, Japan and South Korea

• Many countries are setting targets for deployment of EVs but development is slow for lack of infrastructure

• Development of CNG in the transportation sector is hindered by high capex on infrastructure

• Gasoline and diesel will still be used but alternative transportation fuels are also developed to secure energy supply,

reduce gasoline/diesel usage, reduce CO2 emissions and improve air quality

• Governments promote the use of alternative fuels by:

– Preferential tax schemes

– Incentives for auto manufacturers to produce green vehicles such as FFVs, EVs, hybrids, etc.

– Incentives for CNG/LPG conversion kits

– Incentives for establishing refueling stations or charging stations

– Incentives for biofuels manufacturers

Infrastructure is the biggest hindrance to the development of all types of alternative fuels

Contact Information

Q & ALucky Nurafiatin | Manager [email protected] | +65.6353.6127

Bogotá | Brussels | Denver | Houston | London | Melbourne | Mexico City

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Asia – Net Oil Importer

Asian Oil Production-Consumption Balance



Common Usage of Natural GasTransportation sector accounts for the lowest share

Global Natural Gas Consumption by Sector


Asia Uses All Available Types of Alternative Fuels

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