Tree diversityday2012 sharma.pptx

Forests are more than just wood!

Bioeconomy From Sustenance to Value Creation

1 Navin Sharma, Chief Scientist – Agriscience, ITC R&D Centre, ITC Ltd, India

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"All views expressed herein are my personal views and in no way, expressed or implied, are that of or necessarily represent the positions of ITC Limited, my current employer."

Bioeconomy: Revenue Potential Agricultural

inputs Biomass

Production Biomass trading

Biorefining inputs

Biorefining fuels

• Co-firing • Dedicated CHP

15 10 30 89 80

Biorefining chemicals

Downstream chemistry

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Biomass power and heat

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• Seeds • Crop protection • fertilizers

• Energy crops • Sugarcane • Short rotation forestry

• Biomass aggregation • Logistics • Trading

• Enzymes • Organisms • Pretreatment chemicals

• 1st & 2nd generation biofuel production

• Fermentation of bulk chemicals

• Polymerization, dowm-stream reactions

There are significant revenue potentials along the entire biomass value chain. The values given are approximate business potential in US$ billions by 2020

http://www3.weforum.org/docs/WEF_FutureIndustrialBiorefineries_Report_2010.pdf

World Wide Mandates & Subsidies United States

Mandate of 36 billion gallons of biofuels by 2022 Volumetric tax credit: USD 0.51/gal ethanol + USD 1.00/gal biodiesel Cellulose biofuel producer tax credit: USD 1.01/gal. Small producer tax credit: USD 0.1/gal USD 1 billion in support for 2nd generation technology.

* CORN/ Lignocellulose

Brazil

30+ year commitment to ‘alcohol program Annual blending target for ethanol (25%) Biodiesel target of 5% by 2013 Lower taxes for ethanol (E100) than gasoline. FFV sales tax of 14% compared to 16% for gasoline-only vehicles

*Sugarcane

European Union

5.75% blending target by 2010 and 10% by 2020 Discussion on target waiver triggered by food crisis, but no change of policy so far. Country-level subsidies average USD 1.90/gal for ethanol and USD 1.50/gal for biodiesel Penalty fee in 5 countries for noncompliance with biofuel target.

*Rapeseed/ Lignocellulose

China

Plan to substitute 20% of crude imports by 2020. Target of 1.7 billion gallons of ethanol by 2010. Investments in feedstock-rich countries. Commitment to develop non-food based biofuels COFCO (Nat. Food Corp.) with PetroChina and Sinopec – 2nd generation multiple projects.

*Lignocellulose/ Various

India

Blending targets in current drafts are 5% by 2012. 10% by 2017, 20% for long term. Target of 20% biofuels by 2020 Duty-free imports of Jatropha to support biodiesel Individual states may set additional measures to promote biofuels or restrict transport of molasses over state boundries.

* Various

World wide mandates and subsidies. Current policy status in five major world regions. (*)denotes key feedstock http://www3.weforum.org/docs/WEF_FutureIndustrialBiorefineries_Report_2010.pdf

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o  Blending targets in current drafts are 5% by 2012. 10% by 2017, 20% for long term. Target of 20% biofuels by 2020

o  The intermediate target of 5% have not been achieved and the present target stands at 5%.

o  The shortfall in bioethanol blending is mainly attributed to the issues of availability due to limited production from molasses and competing demands and pricing, whereas in case of biodiesel it is the lack of availability of basic raw material i.e. vegetable oil.

Mandates by India &

Status

Over reliance on Molasses and Jatropha Shortage of Raw Material is the Main Reason – How to Build Year Round Supply of Raw Material?

Source: MNRE report on Biofuels, ethanol, biofuels incentives, biofuels subsidy, biodiesel, ethanol

Sustainable plantations as a solution for India

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19.4%  of  land  Natural  Forests  

4  global  biodiversity  

hotspot  

68  million  ha  under  Forest  Cover  

64  million  ha  of  degraded  land  

available  

Gained  3M  ha  between  

1990-­‐  2010  

AfforestaGon  

RestoraGon  of  degraded,  salinized  and  semi-­‐arid  land  

Desert  control  

No  planGng  in  Riparian  zones  

and  watersheds  

Water  Security  High value revenue

options

Food Security

Agro-­‐forestry  pracGces  

Avoided  Deforest-­‐aGon  

340  million  Tonnes  CO2  sequestraGon:  Target  to  enhance  50-­‐60  million  T  CO2  sequestraGon  by  

2020  

34%  of  biomass  returned  to  soil  

Soil  restoraGon  

Biodiversity  

Adapted from: Hirsch Stanley, CEO Futuragene India’s forests and REDD+: Ministry of Environment and Forests GOVERNMENT OF INDIA

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v  Diversity or monoculture

v  Agroforestry o  Selection of Appropriate Species o  Quality planting material o  Short rotation crops o  Remunerative to small farmers

v  Availability (seasonal, quality, consistency)

v  Supply and demand effects on costs - Competing users in agriculture - Competing users in forestry - Competing users in other sectors

Challenges

o  From the total wasteland availability of 64 million hectares, only 17 million hectares is suitable for energy crops

o  Meeting 5% blending target additional 4.1 million hectares of appropriate species need to be brought under cultivation

Feedstock costs represent from 50-75% of the cost of producing biodiesel

School children taking out a jatha to mark International Biodiesel Day in Hassan.

Hassan to get country’s first bio fuel bunk

Karnataka is all set to open the country’s first bio-fuel distribution bunk of Bharat Petroleum Corporation Ltd in Hassan. Speaking at an event organised by the State Biofuel Development Board on Thursday, its Executive Chairman Y.B. Ramakrishna said, “We have several biofuel-related projects going on. We already have a Green Fuel Park at Madenur village, which produces about 300 litres of biofuel and Bharat Petroleum will open a green fuel outlet within the next three months in Hasan”.

Jul 06, 2012 | DC | Bengaluru

Biofuel Park –Overview (Hassan, Karnataka) (on Farm pond contours & Bunds)

Source: Prof. Balakrishna Gowda, .Project Coordinator, Biofuel Park,UAS, Bangalore, India

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SUCCESSFUL EXAMPLE IN INDIA : KARNATAKA

v  Inclusion of multiple & locally adapted species Pongamia (Pongamia pinnata)

Madhuka ( Madhuka latifolia), Neem (Azadirachta indica) Simarouba (Simarouba glauca), Jatropha (Jatropha curcus) Amoora (Amoora rohiyuka) & Surahonne (Calophyllum inophyllum L) v  Smart farming system e.g. bund planting v  Area covered – 17,558 acres

v  No of seedlings – 1.5 millions

LEARNING FROM OTHER INDUSTRIES: PAPER

§  Trigger – The Paper Business §  Forest Conservation Act §  Use of Marginal Land §  The Requirements:

§  Use of Marginal land §  Compressing Harvesting Cycle from 7 years

to 4 years §  Improving Survival Rate to 90 % in harsh

conditions §  Increased Resistance to Disease §  Customized Extension Services §  a willing buyer at remunerative rates,

reducing farmer’s risk

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Value

Volume

Intellectual Property

The Bioeconomy : Future…

Pulp

Bioenergy

Biofuels for transport

Biochemicals

Biomaterials

Cosmetics & Drugs

Chips, Pellets, Bio-oil, Bio-gas

Next Generation Biodiesel

Various Protective Agents

Bio-polymers

Antiaging, antidiabetic

Create Value Ladder

Paper & Paper Board

Extractives as source of high value chemicals E. globulus extractives

o  Promising pharmacological and nutraceutical applications o  High commercial value From Armando Silvestre, Universidade de Aveiro

~12 g/kg ~4.0 g/kg

OH

OH

COOH

OH

COOH

Ursolic acid Oleanolic acid

OH

COOH

Betulinic acid

O

COOH

Betulonic acidβ-Sitosterol

Lipophilic bark extractives : Outer bark is particularly interesting

Cou

rtes

y Si

mon

Pot

ter,

CSI

RO

Where does that leave us?

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v Compete globally; Include Locally

v Support Large Farmers; Protect Small Farmers

v Step up Productivity; Conserve Nature

v Create Realistic Value Chains

Risks are here today; Institutions still evolving

THANK YOU