Biofuels Development Status and Potentials in Major Countries Michael Wang Center for Transportation Research Argonne National Laboratory Oct. 10, 2006.

Biofuels Development Status and Potentials in Major Countries

Michael Wang

Center for Transportation Research

Argonne National Laboratory

Oct. 10, 2006

2

A Complete, Robust Way Of Evaluating A Fuel’s Effects Is To Compare the Fuel With Those To Be Displaced

3

Accurate Ethanol Energy Analysis Must Account for Increased Productivity in Farming Over Time

Based on historical USDA data; results are 3-year moving averages

0.30

0.35

0.40

0.45

0.50

0.55

0.60

0.65

1965 1970 1975 1980 1985 1990 1995 2000 2005

Bu

shel

s/lb

. Fer

tiliz

er

?

Precision farming, etc.?

U.S. Corn Output Per Pound of Fertilizer Has Risen by 70% in The Past 35 Years

4

Improved Technology Has Reduced Energy Use and Operating Costs in Corn Ethanol Plants

From Argonne’s discussions with ethanol plant designers, USDA data, and other reported data

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Btu

/Ga

llon

Wet Mill Dry Mill

1980s

2000s

5

0

0.5

1

1.5

2

2.5

3

Cellulosic EthanolCorn EthanolGasoline

From Biomass

From Coal and Natural Gas

From Petroleum

The Type of Energy, As Well As the Amount of Energy, Is important in Addressing Energy Effects of Ethanol

Fossil Btu = 1.23

Btu required for 1 Btu available at fuel pump

Energy in the FuelFossil Btu = 0.74Petroleum Btu = 1.1

Petroleum Btu = 0.1

Fossil Btu < 0.1

Petroleum Btu = 0.1

6

Most Recent Studies Show Positive Net Energy Balance for Corn Ethanol

-120,000

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-20,000

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60,000

1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Net

En

erg

y V

alu

e (B

tu/g

allo

n)

Ho

Marland&Turhollow

Pim ente l

Pim ente lKeeney&DeLuca

Lorenz&Morris

Shapouri e t al.

Wang et al.

Agri. Canada

Kim &DaleGraboski

Wang

Pim ente l

Shapouri e t al.

Pim ente l&Patzek

Weinblatt e t al.

NR Canada

Cham bers et al.

Patzek

DelucchiKim &Dale

Wan

g

GR

EE

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w/P

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tel

Ass

um

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s

Energy balance here is defined as Btu content a gallon of ethanol minus fossil energy used to produce a gallon of ethanol

7

Though Electricity Requires a Large Amount of Fossil Energy Input, There Is No Substitute

Coal Mining

CoalTransportation

NGProcessing

NGTransmission

NGRecovery

Coal NG

Diesel FuelElectricity

NG

Diesel Fuel

NGElectricity

LPG, NGLs

NGElectricity

Electricity Generation

Electricity Transmissionand Distribution (8% loss)

1 mm Btu of Electricityat Wall Outlets

Uranium Ore Recovery

Petroleum Recovery

Uranium Petroleum

Uranium OreTransportation

PetroleumTransportation

OtherPetroleumProducts

Residual Oil

Electricity

Diesel Fuel

NG

Uranium Enrichment

Petroleum Refinery

Electricity

Refinery Gas

CoalNG

Uranium Fuel Transportation

Residual Oil TransportationDiesel Fuel

Residual Oil

ElectricityNG

Diesel FuelElectricity

NG

U.S. Electricity Generation:2.34 mm Btu Fossil Energy Input

8

Energy in Different Fuels Can Have Very Different Qualities

Increase in Energy Quality

Fossil Energy Ratio (FER) = energy in fuel/fossil energy input

10.31

1.36

0.980.81

0.45

0.0

0.5

1.0

1.5

2.0

Cell. EtOH Corn EtOH Coal Gasoline Electricity

9

The Role of Biofuels Is Affected by Land Availability and Oil Use in Individual Countries

Country Land Area,103

km2

Population, Million

Arable Land, 103 km2

Arable Land km2

per 103 people

Oil Use, mil. barrels a

day

USA 9,161 296 1,752 5.92 20.0China 9,326 1,306 1,436 1.10 6.3Japan 374 127 46 0.36 5.6Germany 349 82 118 1.44 2.7India 2,973 1,080 1,617 1.50 2.3Canada 9,093 32 451 14.09 2.2Brazil 8,457 186 588 3.16 2.1France 545 60 183 3.05 2.1The U.K. 241 60 57 0.95 1.7Spain 499 40 130 3.25 1.5Thailand 511 65 150 2.31 0.9Australia 7,617 20 499 24.95 0.8Pakistan 778 162 216 1.33 0.4Sweden 410 9 27 3.00 0.4

10

Intermediate Products Can Be Produced from Various Feedstocks via Various Technologies

11

Bio-Fuels Can Be Produced from Intermediate Products with Various Technologies

12

Feedstocks for Biofuel Production Vary Among Countries

Grain starch to ethanol– Corn in U.S., China, Canada – Wheat in Europe, Australia, and Canada

Sugar crops to ethanol– Sugarcane in Brazil, India, and Thailand– Sugar beets in Europe

Cellulosic biomass to ethanol– Managed biomass such as trees and grass – Crop residues such as corn stover, wheat straw, rice straw, sugarcane

bagasse– Forest wastes– Municipal solid waste

Oilseed crops to biodiesel– Soybeans in U.S. – Rapeseeds in Europe– Palm oil and other tropical oilseed crops in tropical countries– Waste cooking oil– Animal fats

13

Low-level blends of ethanol/gasoline can be used in gasoline vehicles without vehicle modifications– E5 in Canada and Australia– E3 in Japan– E6-E10 in U.S.– E10 in China and Thailand– E25 in Brazil

Low-level and high-level blends of biodiesel/diesel can be used in diesel vehicles without vehicle modifications– B2-B20 in different countries– B100 could be used

Flexible-fuel vehicles (FFVs) for E0-E85 require vehicle modifications

Liquid Biofuels Can Be Used in Vehicles at Low- or High-Level Blends

14

U.S. Corn Ethanol:

No.1 Ethanol Consumption Country with 4.2 billion gallons in 2005

15

U.S. Fuel Ethanol Production Has Experienced Large Increases, and the Trend Will Continue

Source: Renewable Fuels Association

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Mill

ion

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Actual Use2005 Energy Bill requirement

16

A Large Number of E85 FFVs Are in U.S. Fleet– Obtain fuel economy credits since 1993

– >5 million cars and trucks in use in 2005

– But they are powered virtually with gasoline

2004 U.S. Fleet Alternative Fuels Vehicles

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

LPG CNG LNG M85 E85

Fuel

17

General Motors Corporation’s E85 FFV Vehicle Production for U.S.

Approx. 1,500,000E85 FFV Trucks

produced through 2005 MY

Approx. 1,500,000E85 FFV Trucks

produced through 2005 MY

Forecast ProductionForecast Production

GM E85 FFV Vehicle Production

0

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300

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500

600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Model Year

Vo

lum

e i

n T

ho

usan

ds

Trucks Cars

Approx. 1.5 Million E85 FFV Trucks produced through 2005 MY

Forecasted E85 production includes 2.2 Million more cars and trucks

Approximately 3.7 Million E85 FFV Cars and Trucks produced through 2010 MY

18

Brazilian Sugarcane Ethanol:

No.2 Ethanol Consumption Country with ~4 Billion Gallons in 2005

19

Brazil Is the Largest Sugarcane Producing Country

Humid equatorial

Dry winter/humid summer tropicalSemi-arid tropical

Humid coastal

Humid subtropical

20

Production costs in Brazil reached 100 US$/ton in 2005

Sugar Production Cost

Estimated Cost (US$/Ton in Dec/00)

Sugar Cane

Production

(Mt) 200222,7 5,4 2,6 19,0 2,3 6,6 5,1 7,3 10,3 1,5 1,5 0,9

100

From Rainach (2006)

Brazil Has the Lowest Production Cost for Sugar

21

Brazil’s Low Sugar Production Cost Is Due to a Combination of Factors

From Rainach (2006)

STRONG WEAK

WATER

BrazilAustraliaIndiaCuba

LIGHT - TEMPERATURE

USABLE LAND

LABOR COST

SCALE OF PRODUCTION

GENETICS

cost (US$/Ton)

AGRICULTURAL TECHNOLOGY

100204248283

22

Brazil Now Uses About 4 Billion Gallons of Sugarcane Ethanol A Year

23

Yield of EtOH/Ha Has Increased Three Times in the Last 25 Years to 6,000 L/Ha (1,585 gal/Ha)

08 Nov 2005 Nastari / Datagro @ Proálcool 30 anos 11

Rendimento Agroindustrial – Brasil(em litros de álcool hidratado equivalente por hectare)

1500

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6500

Fonte: Datagro

+3,77% aa em 29 anos

5931

2024

l/ha

From Rainach (2006)

24

Ethanol Cost Has Been Reduced Greatly; It Is Now Lower Than That of Gasoline

1

10

100

0 50000 100000 150000 200000 250000 300000

Produção acumulada de etanol (milhares de m3)

(200

4) U

S$

/ GJ

Preço do etanol no Brasil Preço da gasolina em Rotterdam

19862004

2002

1999

1980

1990

1995

Goldenberg, 2005

25

Flex (Ethanol or gasoline) Ethanol (Pure) Gasoline Diesel

In Brazil, 70% of All New Cars Sold Now Are FFVs

0%

20%

40%

60%

80%

100%

jan/03 abr/03 jul/03 out/03 jan/04 abr/04 jul/04 out/04 jan/05 abr/05 jul/05 out/05

3%

26%

2%

69%

26

Chinese Corn Ethanol:

No.3 Ethanol Consumption Country with ~340 Million Gallons in 2005

27

Four Fuel Ethanol Plants in China Produce 340 Million Gallons of EtOH a Year from Grains

Company Location Annual Production in

tonnes

Jilin Fuel Ethanol Co., Ltd Jilin City, Jilin Province 300,000

Heilongjiang China Resources Corporation

Zhaodong City, Heilongjiang Province

100,000

Henan Tianguan Group Nanyang City, Henan Provice

300,000

Anhui BBCA Biochemical Bufeng City, Anhui Province

320,000

28

Supply of Grain-Based Ethanol in the U.S. and China May Be Limited

U.S. China

Population (in million) 296 1306

Gasoline market: billion gallons 140 16

Diesel market: billion gallons 50 24

Corn ethanol production: billion gallon

4.2 0.3

Corn production: million tons 332 128

Arable land: million hectares 186 130

29

U.S. Biodiesel Production

30

U.S. Biodiesel Production Has Increased Dramatically and Will Continue to Do So

31

U.S. Biodiesel Plant Location

32

Incentives and Policies Have Played a Major Role in Biofuel Use

U.S.– $0.51/gallon incentive for ethanol– $1.00/gallon incentive for biodiesel– The 2005 Energy Policy Act establishes renewable

fuel standards Brazil

– In early years, government had financial incentives– But sugarcane ethanol is now self-sustaining

economically China

– Grain ethanol producers receive RMB 1,200/tonne of ethanol

33

Potential Adverse Effects of Large-Scale Biofuel Production

Land availability in individual countriesFood vs. fuel debatePotential soil effects: erosion, carbon depletion,

etc.Water pollution by nitrate from intensive farmingWater resource requirementsEcological effects of land cultivation for biofuel

production