Cellulosic Ethanol Emerging Opportunities in India Feb 2015
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Enzymatic biomass conversion is the technology that enables Cellulosic fuels and chemicals Paddy Straw & Cotton Stalk Corn stover Cellulose Ethanol Cooking gel Energy cane Wheat straw Hemicellulose Electricity Textiles Wood chips Lignin Diapers Plastics Detergents 2
The commercialization of 2G ethanol started in Crescentino, Italy more than a year ago Novozymes supply October 9, 2013 September 24, 2014 December 2014 September 3, 2014 October 17, 2014 Exp. Q2 2015 3
From Fantasy Fuel to reality: 2014 was a breakthrough year with 6 commercially operating 2G plants at year-end Another 20-25 concrete projects worldwide await investment decisions within the next 12 months 2015 In operation In construction NZ supply Commercial-scale 2G ethanol plants in operation or under construction by region (2014) 2015 Future plants in India? 4
There is clear correlation between government actions in advanced biofuels policies and their advancement of the space EXAMPLES CALIFORNIA California 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 intensity of transportation fuels While corn ethanol has a lower carbon-intensity than petroleum, forms of cellulosic ethanol have an even lower carbon-intensity and widespread usage of cellulosic ethanol could make compliance with the LCFS easier for oil refineries ITALY Italy unveils first national mandate for advanced biofuels Declared fuel suppliers must have at least 0.6 per cent of advance biofuel in petrol or diesel, rising to one per cent in 2022 BRAZIL Increased 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 5
India - an attractive destination for 2G biofuels production Abundant biomass, in particular wheat straw, cotton stalk and paddy straw in the Northern states of Punjab, Haryana, UP and Gujarat However, much of the biomass today is being burnt; and the biofuels mandate (E10 planned to go to E20) has never been filled and is not enforced Advanced Ethanol (from biomass) is cost competitive with Bio Ethanol from sugar and corn starch, provides stable non-commoditized input costs and avoids the Food vs. Fuel debate India could become a trend-setter and leading example for the bioenergy sector in Asia Improve the balance of payments* by utilizing a new local resource to off-set oil imports; today India is the fourth largest importer and consumer of oil in the world * July 29, 2014 Meghan Sapp - India could save $3 billion in petroleum imports annually with E10 6
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) 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 Facilitate feedstock security De-risking incentives for first few plants to encourage local company participation Conducive climate/tools to attract investors Source: team analysis 7
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Annexure 9
India has substantial biomass resources, especially in Northern states 1 Biomass potential, million tons dry weight, 2011 Rice straw Wheat straw Cotton stalk Sugarcane bagasse 22.0 14.2 1.5 15.2 4.6 1.5 0.4 0.5 Chandigarh Haryana Jammu and Kashmir Punjab Himachal Pradesh Delhi Uttarakhand 40.0 13.6 0 11.0 4.5 6.6 0 0.5 Sikkim Arunachal Pradesh 12.2 1.6 1.2 0.2 Gujarat Rajasthan Madhya Pradesh Uttar Pradesh Bihar Jharkhand West Bengal Meghalaya Tripura Assam Mizoram Nagaland Manipur 1.6 3.4 7.7 2.2 Maharashtra Chhattisgarh Orissa 2.8 2.5 6.8 11.9 Goa Andhra Pradesh 4.7 0.4 0.9 4.7 Karnataka Lakshadweep Kerala Tamil Nadu Puducherry Andaman & Nicobar Islands 7.1 0 0.2 2.8 13.3 0 3.6 1.1 1 Only showing Top 10 states according to biomass potential Source: SVS, Report on Biomass Assessment of Selected Species in Potentially Promising Areas of India 10
There is large biomass residue potential Biomass potential, million tons, dry weight Cassava Coconut Maize Oil Palm Rice Sugar cane Cotton Wheat Wood residues Total 112 36 24 117 33 322 Excludes negligible biomass sources to simplify analysis SOURCE: FAO; Countries statistics on agriculture productions; ICIS; Literature review 11