Biofuels in Asia Missions

Transcription

1 Office of Infrastructure and Engineering Bureau for Economic Growth, Agriculture, and Trade Infrastructure Workshop Module 11: Biofuels in Developing Countries Biofuels in Asia Missions December 15, 2010 David Walden, Winrock International 1/46 1

2 Biofuels Types Traditional Biofuels Advanced Biofuels 2

3 Biofuel Trade Flows 3/46 3

4 Thousand Barrels per Day Ethanol Production and Consumption in SE Asia, India and Pakistan Ethanol Production Ethanol Consumption US Production: 713,000 barrel/day US Consumption: 720,000 barrel/day US EIA 2009 Data 4

5 Thousand Barrels per Day Biodiesel Production & Consumption in SE Asia, India and Pakistan Biodiesel Production Biodiesel Consumption US Production: 33,000 barrel/day US Consumption: 21,000 barrel/day 5

6 Cost Favors Ethanol over Biodiesel World Market: Bioethanol is competitive against gasoline when the price for crude oil exceeds $50/barrel in Brazil and less than $80/barrel in Philippines Biodiesel requires crude to exceed $120/barrel or more to be competitive Mandated reductions of GHG such as required in the EU creates a market for biofuels even when their cost exceeds fossil equivalents Local Markets: By producing co-products as well as ethanol, sales can be made attractive In some more remote locations and island, fossil diesel prices exceed the cost of biodiesel or vegetable oil (SVO) produced locally Use of SVO can avoid the conversion cost to biodiesel but selection of engines designed for SVO is important 6

7 Climates in SE-Asia, India and Pakistan suit high yielding biofuel

8 Bioethanol Feedstocks and Main Countries Traditional (currently commercial) Sugar Cane (direct or via molasses) & Sweet Sorghum Philippines, Indonesia, Cambodia, India, Pakistan Cassava (fresh or dried chips) Corn China, Thailand, Vietnam, Cambodia China Advanced (future depends on commercial viability) Biomass (woody, herbaceous, crop residue, biomass fraction of garbage) Almost all countries 8

9 Biodiesel Feedstocks and Main Countries Traditional (currently commercial) Palm Oil Malaysia, Indonesia, Thailand Coconut Oil Philippines (potentially: India, Indonesia, Papua New Guinea, Thailand, and Vietnam) Jatropha India, others have trialed Animal Fats and Waste Cooking Oil Various at small scale Advanced (future depends on commercial viability) Biomass (woody, herbaceous, crop residue, biomass fraction of garbage) Algal (micro and macro) Almost all countries 9

10 Indonesia Biofuel - Comparisons Sugar cane Palm Oil Yield (t/ha) Ethanol (L/t feedstock) 86 Biodiesel 230 Ethanol (L/ha) 6364 Biodiesel 3910 Targets for 2015 Ethanol (million m3) Biodiesel 2.95 (16% gasoline) 3.5 (27% fossil) Areas to achieve targets (ha) 460,000 1,120,000 Area cultivated currently (ha) 350,000 4,600,000 Sources: FAO,2005/8 Icrisat, 2004, Eco-Asia Report

11 Initiatives for advanced biofuel production Initiatives may be in different stages of development 11/46 11

12 San Carlos Bioenergy Inc Philippines First Sugar Cane to Vehicle Ethanol Plant Started Operation: March

13 Policy and Government Support Biofuels Law of 2006 Mandates oil companies to blend at least 5% fuel ethanol by volume in 2009 (230 million liters), increasing to 10% (460 million liters) in 2011, with gasoline. Mandates 1% of biodiesel by mid-2007 and 2% by 2009 Supports domestic production but allows for imports until domestic production is adequate and cost effective It provides special incentives which include income tax holidays, which were put in place to encourage the development of the country s biofuels industry. 13

14 Why Philippine Government Encourages Bioethanol The Philippines sugar cane industry is an important source of jobs and income in rural areas. Sugar is sold to three markets: Domestic Export to US under quota Export at world price of sugar The income from the world export market fluctuates but is often relatively low due to the low cost of Brazilian sugar Using sugar cane for ethanol for domestic consumption does not impact sugar supply to the domestic market and allows some growth of cane yields/areas rather than stagnation or contraction Philippines has limited fossil fuel resources 14

15 Philippines Ethanol Demand Year Gasoline Demand (litres/yr) Ethanol demand E5 blend (litres/yr) Ethanol demand E10 blend (litres/yr) ,000,000, ,000, ,000, ,200,000, ,000, ,000, ,410,000, ,500, ,000, ,630,500, ,525, ,050, ,862,025, ,101, ,202, ,105,126, ,256, ,512,625 16/12/ /46 15

16 Main Plant Features Cane mill with crushing capacity of 1,600 tons/day Fuel ethanol distillery producing 125,000 liters per day of ethanol Cogeneration plant with a capacity of 8.2 MW Carbon dioxide capture and bulk storage plant (50 tons per day) Anaerobic digestion plant produces biogas and liquid fertilizer Windrow composting area for all solid waste Reverse Osmosis treatment of any non-recycled liquid effluent 16

17 Linked Processes and Multiple Products 17

18 CANE HARVESTING 18/46 18

19 CANE PREPARATION 19

20 CANE CRUSHING AND CANE JUICE EXTRACTION Milling Capacity: 1,500 Tons cane per day 20/46 20

21 POWERHOUSE 21/46 21

22 More Plant Facts SCBI operates for 300 days/y and produces 35 million liters annually. This is equivalent to about 14% of the country s total requirement for a 5% gasolineethanol blend in The sale of fuel grade ethanol to major local gasoline retailer, Petron, to displace gasoline imports generates balance of payment and foreign currency benefits to the Philippines. Approximately 400,000 tons of cane is needed per year, all of which will come from the 9,000 hectare San Carlos Sugar District The plant exports 2-4 MW of electricity to the local cooperative power company under a competitively negotiated long term power purchase agreement 22

23 Cane Harvest Trash is Energy 23/46 23

24 Cane Trash 24/46 24

25 Trash Collection Options Manual loading Round Bales 250 kg 25/46 25

26 Structured for Project Financing (30% Equity 70% Debt) Total Financed Cost: $70 million Design Build Contracts Shareholders Agreement Fuel Ethanol Sales Agreement Biomass Fuel Supply Agreements Site Agreement SCBI Electricity Supply Agreement CO2 Sales Agreement Development Management Agreement Bank Lenders Emission Reduction Purchase Agreement 26

27 Sustainability has Three Main Elements Environment Society Air and water quality Biodiversity GHG emissions Availability of food, water, and nutrients Social justice Community empowerment Sustainability Production and consumption costs Local economic development Balance of payments Economy 27

28 Potential sustainability benefits of biofuels Environmental benefits Opportunities to address GHG emissions & air quality Energy security (socio-political) Employment opportunities Social benefits Sustainability Alternative markets for products Rural development Economic benefits 28/46 28

29 Potential sustainability costs of biofuels Environmental costs Carbon from land use change, loss of biodiversity or increase in GHG emissions Production uses negative labor practices Stresses water, food, or land resources Social costs Fuels or feedstocks are more expensive than alternatives Economic costs Sustainability 29/46 29

30 Evolving biofuel standards attempt to deliver these outcomes and may affect market access and financing Mandatory Project financing Project financing Mandatory Renewable Energy Sources Directive World Bank Inter-American Development Bank Global Bioenergy Partnership California Air Resources Board Roundtable on Sustainable Biofuels UK Germany Netherlands RSPO (palm oil) RTRS (soy) Better sugarcane initiative Feedstocks: sustainability standards CSBP (advanced feedstocks) In operation 30

31 Biofuel sustainability frameworks, standards, and scorecards can be confusing! Source: FAO,

32 An illustration of performance-based indicators and monitoring tools for biofuel sustainability standards Criteria Indicator Tools or techniques Reduced GHG emissions Reduced GHG emissions compared to baseline (gco2eq / MJ biofuel) Environmental Impact Assessment (EIA) with GIS to identify and avoid nitrous oxide hotspots in field e.g. soil type, slope, and precipitation LCA assessment Soil quality Soil erosion (ton/ha.yr) EIA with GIS to identify soil erosion risks High Conservation Value assessment Water quality Nutrient run off avoided EIA with GIS to identify risk of run-off & appropriate practice with data on slope, elevation, soil type Use existing water quality monitoring programs Water use Water scarcity No water rights conflict Reduced water use per unit of product (m3/ unit) 1 Remote sensing to determine availability on a regional level Remote sensing for local water consumption & High Conservation Value assessment LCA for consumptive water use Conservation of carbon stocks Carbon payback time 2 (years) Soil carbon sequestration (tc/ha.yr) Remote sensing to identify land cover changes and above ground carbon stocks Modeling (with calibration) for soil carbon e.g. COMET-VR Land rights respected No violation of legal boundaries & free prior, informed consent. GPS mapping to define GIS map of land title, tenure, customary rights Guidance book on Free Prior Informed consent No contribution to food insecurity Increased crop yield (t/ha) Production on idle/degraded land Increased income ($/ha or $/family/yr) Leverage existing monitoring programs (e.g. GEOSS) Remote sensing for yield and land cover changes Social LCA (impact assessment) Contributes to rural & general economic development Increased crop yield (t/ha) Increased income ($/ha or $/family/yr) Number of jobs Remote sensing Income data with GIS for spatial links Social LCA (impact assessment) Conservation of biodiversity Number of & spatial extent of species or critical species High Conservation Value assessment 32

33 Typical GHG reduction - biofuel replacing fossil fuel (excluding land use change emissions) Source: FAO, 2008, from IEA, 2006 and FAO, 2008d 33

34 GHG emissions could be improved at the same time as delivering energy for processing Reference diesel emissions Around 80-90g CO2eq/MJ Source: JRC, EU CAR and Concawe,

35 How emissions from land use change can negate direct biofuel savings Reference diesel emissions Around 80-90g CO2eq/MJ Source: JRC, EU CAR and Concawe,

36 Estimated carbon payback times for various biofuel feedstock and land use conversions * Kim and Dale (2008) Corn, no-till & cover crops on grassland Peatland conversion payback period of 918 years Sources: Gibbs et al, 2008 and Kim and Dale,

37 Use of GIS could help identify where sustainable potential exists for oil palm concessions 37

38 Water footprints can be conducted in different ways...but sustainable outcomes depend on local water availability and demand Water consumption (high) m3/gj biofuel Water for whole bioenergy system m3/gj Sugarcane Corn Cellulosic* ** Oil palm ** Soybean ** Rapeseed * Hypothetical example ** Not calculated Source: Berndes (2002), Rajagopal & Zimmerman (2008) and own calculations 38

39 Indonesia s National Biofuel Development Team Targets for 2010 Jobs created for 3.5 M people Incomes increased for 3.5 M people on-farm and off-farm 5.25 million ha of biofuel cropland planted on currently uncultivated land 1,000 energy-self-sufficient villages created 12 special biofuel zones established US$10 billion saved from national reserves Domestic self-sufficiency and export availability established 39

40 Biogas is a biofuel that has many SE-Asia Applications. This is in Thailand from POME 40

41 Electricity Generation for Local Use or Grid Connection 41

42 Biogas creates GHG reductions Selected CDM-registered palm oil mills in Malaysia Properties Besout Maokil & Kemahang Serting Hilir Jerangau & Chalok Capacity (tonnes FFB/Year) 204, , , ,800 Emission Reduction (tonnes CO2/Year) projected when fully operational 22,803 42,779 37,694 32,679 Biogas Capture Systems Used Installed Biogas generator sets Covered lagoons Covered lagoons Enclosed Tank System Enclosed Tank System 450 kw 2 x 500kW 2 x 650 kw 1 x 500kW 1 x 375kW Use of captured biogas Biogas engine generating 573 MWh/y for on-site use. Balance of biogas to boiler. Biogas engines generating 1,016MWh/y for onsite use. Balance of biogas to boiler. Biogas engines generating 6,520 MWh/y with 5,450 MWh/y to grid. Biogas engines Generating 321MWh/y Balance of biogas to boiler. Source: CDM, /46 42

43 Monitoring compliance relies on several different options... encourage the development of multilateral and bilateral agreements and voluntary international or national schemes that cover key environmental and social considerations..... In the absence of such agreements or schemes, Member States shall require economic operators to report on these issues. Key issues: There is no Guidance document yet developed. The supply chain can be highly complex the traceability mechanism required is not established in biofuel markets. Can supply chains respond in time? Will these requirements restrict access to markets for producers, especially smallholders? Will these requirements deliver a sustainable outcome? 43

44 Monitoring mechanisms differ in different sectors and at different scales..e.g. Carbon stocks International Scale monitoring Regional to national scale monitoring Site-scale monitoring 44

45 Chemical Pattern Recognition to Identify Feedstock Source of Biodiesel An ESI-MS (electrospray ionization mass spectrometry) technique being developed at INMETRO in Brazil and NIST for providing a fingerprint for categorizing biodiesel by source 45/46 45

46 Sustainable Biofuels Observations Most countries have current and potential policies and measures to encourage sustainable biofuels. There is no single feedstock, production process, or activity that is universally sustainable. Planning and Research activities are key to identifying best practices developing regulations to deliver those benefits in different locations. Monitoring to ensure that sustainability outcomes are achieved is critical. 46/46 46

47 Innovation and Integration - the way forward? Motegi Biomass Town - Japan - Established in 2006 Community-based core facility that turns biomass generated in Motegi into compost. Processes 4,400 ton of household/business waste, green waste, rice husk, and livestock dung Produces 1,117 tons of compost and 894 tons of liquid fertilizer annually to sell to farms and schools. Reduces waste processing costs by $150,000 while saving $262,000 for forestry management Sources: MAFF, 2009a, MAFF, 2009b, MAFF, 2010a, MAFF, 2010b, Kanto Committee for Biomass Utilization, 2010 and Haywakari,