Investing in pol ish bio - fuels sector the characteristics of the business environment Doing business in C.E.E. Henry Sichel Wirtschaftuniversitaet - Wien
Investing in polish bio-fuels sector the characteristics of the business
environment
Doing business in C.E.E. Henry Sichel Wirtschaftuniversitaet - Wien
Doing business in C.E.E. Henry Sichel
Front-runners products for climate change issue
Bio-ethanol – substitute of gasoline
Bio-diesel - blended with mineral fuel
First generations – food-crops derived
Second generation – non-food crops; better environmental potential
The bio-fuels generations…
100 agricultural refineries and few big players, but lack of incentives
Huge fossil fuel competition, but interesting growth
1. The business sector
Doing business in C.E.E. Henry Sichel
Large agricultural surface for specifical energy crops
Liberalization of energy market
Kyoto Protocol and European engagement (10% in 2020)
Biofuel Promotion Plan, 2007
Availability of projects and market attractiveness
Confusing government decisions and enforcement of law
Possibility to export profits
Grants for investments and training and Special Economic Zones
Easy termination of employment
2. Why investing here?
Production
• Pattern equally split between bio-diesel and bio-ethanol
• Potential plenty of raw materials
• Distribution problems (blending)
Prices
• Bio-fuels are not competitive
• Bio-fule Promo Program 2008/14: excise exemption;
• -19% surplus costs over the production of fossil fuels
• 45€/ha. of subsidization for farmers
• Fines for below-the-bar blended fuels producers
Consumers
• German market
• Poland: bio-ethanol ¼ gasoline share, bio-diesel 1/9 diesel one
• Lack of awareness
• Opposition of car manufacturers
Players • 400 SMEs interested in producing biocomponents
• few big players with high capacity and investment plans
3. The market environment
Doing business in C.E.E. Henry Sichel
Europe • D. 2003/96/EC (excise exemptions are accepted)
• An E.U. strategy for Bio-fuel (mandatory bio-fuel targets)
National legislation
• supportive measure for plants producing equipment for the generation of bio-fuels/bio-components
• Bio-fuel Support Program 2008-14
• Bio-components and Liquid Biofuels Act (2006)
Financing • National private and public
• International private and public (E.U. structural cohesion fund)
Popularity • Of low environmental pollution solutions
Fossil fules • The variable of fossil fuels prices and availability
NIMC • Not-In-My-Car syndrome
Land-use • Natural, food or bio-fuel destination
4. The non-market environment
Hierarchy, authority, formalities
Polarization between We (workers) and They (managers)
Hofstede index
High Power Distance: weak work ethic, no ask for suggestions, temptation to «fight against the common enemy»
High Uncertainty Avoidance: lack of control about personal destiny
Low Individualism: engagement is important, but leadership is accepted
High Masculinity: personal success is not always welcome
5. Economic culture of polish managers and workers
Doing business in C.E.E. Henry Sichel
Main problems: • Bio-fuels are expensive; • Confusing regulation and many «stops-and-go» • Technical barriers (specially for second generation bio-fuels) • R&D barriers (needs for improvement in ethanol production
techs) • Distortive role of personal connections
Prospects • Perspectives are interesting, because of European and national
interest; • The game will be played on the field of different crops varieties,
increased productivity and consisten policy-making
6. Main problems and perspectives
Doing business in C.E.E. Henry Sichel