Cellulosic Ethanol Emerging Opportunities in India2015.re-invest.in/presentations/03_New_Emerging_Technologies/... · 3 The commercialization of 2G ethanol started in Crescentino,

Cellulosic EthanolEmerging Opportunities in IndiaFeb 2015

Cellulosic EthanolEmerging Opportunities in IndiaFeb 2015

1

Safe Harbor Statement

This presentation and its related comments contain forward-looking statements, including financial expectations.

Forward-looking statements are by their very nature associated with risks and uncertainties that may cause actual results to differ materially from expectations.

The uncertainties may include unexpected developments in the international currency exchange and securities markets, market-driven price decreases for Novozymes’ products, and the launch of competing products in Novozymes’ core areas.

2

Paddy Straw & Cotton Stalk

Cellulose Hemicellulose Lignin

Textiles DetergentsPlasticsDiapersCooking gel Electricity

Wheat strawEnergy caneCorn stover Wood chips

Ethanol

Enzymatic biomass conversion is the technology that enables Cellulosic fuels and chemicals

3

The commercialization of 2G ethanol started in Crescentino, Italy more than a year ago

October 9, 2013

September 3, 2014

September 24, 2014

October 17, 2014

December 2014

Exp. Q2 2015

Novozymes supply

4

From “Fantasy Fuel” to reality: 2014 was a breakthrough year with 6 commercially operating 2G plants at year-end

Commercial-scale 2G ethanol plants in operation or under construction by region (2014)

2015

Another 20-25 concrete projects worldwide await investment decisions within the next 12 months

NZ supply

In construction

In operation

2015

Future plants

in India ?

5

BRAZILIncreased biofuels demand due to government action• Mandatory blend up from E25 to E27• Biofuel demand expected to rise from 23 to 63 billion liters towards 2020 (as per Renewable Energy Matrix)

• New plans for increased land for sugarcane production not enough, hence need for cellulosic biofuels

ITALYItaly unveils first national mandate for advanced biofuels• Declared fuel suppliers must have at least 0.6 percent of advance biofuel in petrol or diesel, risingto one per cent in 2022

CALIFORNIACalifornia’s Renewable Fuels policy incentivizes Advanced Biofuels use• Adopted a low carbon fuel standard (“LCFS”) that requires

the state to achieve a 10% reduction in the carbon intensityof transportation fuels

• While corn ethanol has a lower carbon-intensity thanpetroleum, forms of cellulosic ethanol have an even lowercarbon-intensity and widespread usage of cellulosic ethanolcould make compliance with the LCFS easier for oil refineries

There is clear correlation between government actions in advanced biofuels policies and their advancement of the space

EXAMPLES

66

India - an attractive destination for 2G biofuels production

� Abundant biomass, in particular wheat straw, cotton stalk andpaddy straw in the Northern states of Punjab, Haryana, UP and Gujarat

� However, much of the biomass today is being burnt; and the biofuelsmandate (E10 planned to go to E20) has never been filled and is notenforced

� Advanced Ethanol (from biomass) is cost competitive with BioEthanol from sugar and corn starch, provides stable non-commoditizedinput costs and avoids the “Food vs. Fuel” debate

� India could become a trend-setter and leading example for the bio-energy sector in Asia

� Improve the balance of payments* by utilizing a “new” local resource tooff-set oil imports; today India is the fourth largest importer and consumerof oil in the world

* July 29, 2014 | Meghan Sapp - India could save $3 billion in petroleum imports annually with E10

7

Enforcement of the 2G blending mandate and mobilization of biomass for 2G ethanol production would contribute to tremendous economic growth

India 2G policy Potential opportunity by 2020

Proposed government initiatives:

� Domestic off-take guarantee (2G Ethanol blend mandate enforced)

� Facilitate feedstock security

� De-risking incentives for first few plants to encourage local company participation

� Conducive climate/tools to attract investors

Direct impact:

� ~2 million tonnes 2G ethanol

� ~$5billion investment for 20 plants

� ~15,000 good jobs (7,400 high-value)

� Additional annual income ~$5billion

� Off-set oil import (balance of payments)

� Rural development

Source: team analysis

THANK YOU

99

Annexure

1010

India has substantial biomass resources, especially in Northern states1

Biomass potential, million tons dry weight, 2011Rice straw

Wheat straw

Cotton stalk

Sugarcane bagasse

Jammu andKashmir

Himachal Pradesh

PunjabChandigarh

UttarakhandHaryana Delhi

RajasthanUttar Pradesh

Bihar

SikkimArunachal Pradesh

Nagaland

Manipur

MizoramTripura

Meghalaya

Assam

West Bengal

Jharkhand

Orissa

Chhattisgarh

Madhya PradeshGujarat

Maharashtra

Andhra Pradesh

Karnataka

Lakshadweep

Kerala

PuducherryTamil Nadu

Andaman & Nicobar Islands

Goa

0.41.522.0

14.2

2.27.73.41.6

4.70.90.44.7

0 0.27.1 2.8013.3 3.6 1.1

013.6 11.040.0

11.96.82.52.8

Source: SVS, Report on Biomass Assessment of Selected Species in Potentially Promising Areas of India

04.5 0.56.6

1 Only showing Top 10 states according to biomass potential

0.21.6 1.212.2

0.51.515.2

4.6

1111

There is large biomass residue potential

TotalCass-ava

Coco-nut

Oil PalmMaize RiceSugar cane

Cotton Wheat

112 36 24 117 322

SOURCE: FAO; Countries’ statistics on agriculture productions; ICIS; Literature review

Excludes negligible biomass sources to simplify analysis

Wood residues

33

Biomass potential, million tons, dry weight