Fuel Ethanol in Thailand: What s Next?

Fuel Ethanol in Thailand: What s Next? 9 November 2016 Steigenberger Wiltcher's Hotel, Brussels, Belgium Pipat Suttiwisedsak Chief Operating Officer/ Managing Director Ekarat Pattana Company Limited Email: pipat@epcethanol.com www.epcethanol.com

Agenda 01 Thailand Biofuel Plan & Current Status 02 Update on Thailand Ethanol Market 03 Surviving in an era of cheap crude oil 04 KTIS More Than Sugar

Agenda 01 Thailand Biofuel Plan & Current Status 02 Update on Thailand Ethanol Market 03 Surviving in an era of cheap crude oil 04 KTIS More Than Sugar Statement by Prime Minister General Prayut Chan-o-cha at 2015 Paris Climate Conference (COP21) 30 November 2015, Paris, Republic of France On Thailand s part, we commit to decarbonize between 20-25 percent by the year 2030

TIEB: Thailand Integrated Energy Blueprint Source: Ministry of Energy AEDP 2015: Alternative Energy Development Plan Share of RE Target (%) in 2036 Electricity 20% Heat 35% 30% Bio-fuels 25% Source: Ministry of Energy

AEDP 2015: Alternative Energy Development Plan Preparation of raw materials and renewable energy technologies The drivers of renewable development strategies Development of alternative raw materials and potential areas for renewable energy production Development of the high efficient renewable raw materials management and utilization model Promote the development of appropriate technology for generation and utilization of energy Improve infrastructure to support the production of renewable energy appropriately Increasing renewable energy production, utilization and market potential Support people and a community to participate in the production and utilization of renewable energy Support the investment on renewable energy to manufactures and consumers both domestic and international Promote the reducing of production costs and make renewable energy market more performance Develop the renewable energy law and rules to encourage the development of renewable energy appropriately Create awareness and access to knowledge and facts of renewable energy Develop renewable energy databases and information management systems Publicize information, knowledge and statistical data on renewable energy Capacity building both in the theory and practice to make more ability in utilization of renewable energy Development of renewable energy and its related networks and encourage the participation of the whole network both nationally and international level Source: Ministry of Energy AEDP 2015: Feedstock & Product Strategies Cassava 2027 42.5 mln MT 2036 59.5 mln MT Ethanol Consumption & Blending Target 32% Now 30 mln MT MLPD 12 10 8 13% 24% 2,700 4,125 55% Sugar Cane & Molasses 2027 150 mln MT 6 mln MT Now 90 mln MT 3.8 mln MT 2036 180 mln MT 8.55 mln MT 6 4 2 0 34% 1,300 25% 66% 45% 75% Now 2027f 2036f Ethanol from Cassava Ethanol from Molasses Source: Ministry of Energy

Current Status of Alternative Energy Alternative Energy Target in 2036 as of July 16 Progress % Electricity (MW) 19,684.40 8,694.09 44.2 - Solar Energy 6,000.00 2,023.23 33.7 - Wind Energy 3,002.00 243.82 8.1 - Small Hydro Power 376.00 172.28 45.8 - Biomass 5,570.00 2,804.99 50.4 - Biogas 1,280.00 402.44 31.4 - MSW 550.00 140.93 25.6 - Large Hydro Power 2,906.40 2,906.40 100.0 Heat (ktoe) 25,088.00 4,103.00 16.4 - Solar Energy 1,200.00 0.24 0.0 - Biomass 22,100.00 3,839.00 17.4 - Biogas 1,283.00 212.00 16.5 - MSW 495.00 52.00 10.5 -Alternative Heat Energy 10.00 - n.a. Biofuels - Ethanol (MLPD) 11.30 3.61 31.9 - Biodiesel (MLPD) 14.00 4.09 29.2 - Pyrolysis Oil (MLPD) 0.53 - n.a. - CBG (ton/days) 4,800.00 - n.a. - Alternative Fuels (ktoe) 10.00 - n.a. 44.17% 16.35% 6.59% Source: Ministry of Energy Agenda 01 Thailand Biofuel Plan & Current Status 02 Update on Thailand Ethanol Market 03 Surviving in an era of cheap crude oil 04 KTIS More Than Sugar

Supply Side - Abundant feed-stocks Feedstock 2013 2014 2015 2016f 2017f Cane 100.003 103.666 105.959 94.047 91.000 Molasses 4.541 4.293 4.587 4.325 4.000 Ethanol 2.646 2.895 3.166 3.120 3.200 Cane for Ethanol 0.300 0.300 0.300 0.300 0.300 Cassava (Crop Survey) 28.276 30.228 33.610 31.810 32.640 Ethanol 1.634 1.864 2.169 2.200 2.420 unit: million ton Source: TSMC, TTTA, Custom Department of Thailand Supply Side - Install Capacity Ethanol Plants in Thailand Active Plants 2017 Newcomers Feedstock Plant Capacity Molasses & Cane juice 10 2,360,000 Molasses & Cassava 4 850,000 Sub-Total 64% 3,210,000 Cassava 7 1,830,000 Feedstock Plant Capacity Molasses & Cassava 1 200,000 Sub-Total 1 200,000 Cassava 2 420,000 Sub-Total 36% 1,830,000 Total 100% 21 5,040,000 Sub-Total 2 420,000 Total 3 620,000 2016 2017 2018 Molasses & Cane 3,210,000 3,410,000 3,410,000 Cassava 1,830,000 2,250,000 2,970,000 Total 5,040,000 5,660,000 6,380,000 Unit: Liter per day Source: TEMA, DEDE

Supply Side - Actual Ethanol Production by Feedstock Molasses Sugarcane Juice Cassava 1,173.79 1,060.70 Total Ethanol Production (Unit: ML) 949.09 346 29% 397.68 425.74 89 23% 148 36% 15 309 77% 263 64% 520.51 103 20% 37 80% 381 655.54 75 11% 49 89% 532 258 57 635 27% 73% 300 66 694 28% 72% 69 759 785.66 217 28% 43 71% 72% 526 2009 2010 2011 2012 2013 2014 2015 2016 As of Jul 16 Source: DEDE Supply Side - Gas Stations Service There are total 25,000 gas stations with about 18,500 small-non-brand stations E10 stations are well-spread in Thailand 3,038 3,171 2,665 2,045 E20 Stations 1,311 E85 Stations 830 542 194 271 4 5 10 38 67 280 596 807 893 2008 2009 2010 2011 2012 2013 2014 2015 2016 As of Sep 16 Source: DOEB

Supply Side - Gas Stations Gas Stations E85 893 E20 3,171 as of Sept 2016 Source: DOEB Demand Side - Domestic Mogas Development Energy Policy REDP 15 year 2008-2022 AEDP 10 year 2012-2021 AEDP 2015 30.0 25.0 Jan 08 Started E20 Flooding E85 20.0 E20 GSH95 E10 15.0 10.0 5.0 0.0 Jan'06 Jul'06 Jan'07 Jul'07 Jan'08 Jul'08 Jan'09 Jul'09 Jan'10 Jul'10 Jan'11 Jul'11 Jan'12 Jul'12 Jan'13 Jul'13 Jan'14 Jul'14 Jan'15 Jul'15 Jan'16 Jul'16 MLPD Sep 08 Started E85 GSH91 E10 ULG91 ULG95 Jan 13 Terminated ULG91 GSH95 E10 ULG95 Source: DOEB

Demand Side - Ethanol Consumption Development 4.00 Sep 16 *EtOH cons. = 3.54 MLPD 3.50 3.00 MLPD 2.50 2.00 1.50 1.00 0.50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 3.35 3.48 3.44 3.65 3.50 3.46 3.57 3.73 3.54 2015 3.12 3.16 3.15 3.30 3.17 3.19 3.28 3.23 3.17 3.27 3.31 3.55 2014 2.56 2.65 2.75 2.89 2.85 2.84 2.98 3.09 3.05 3.11 3.19 3.42 2013 1.95 2.11 2.25 2.34 2.33 2.35 2.40 2.50 2.36 2.46 2.57 2.62 2012 1.08 1.13 1.13 1.17 1.15 1.20 1.21 1.30 1.30 1.35 1.47 1.63 2011 1.17 1.22 1.17 1.24 1.19 1.24 1.21 1.17 0.99 0.87 0.84 1.09 2010 1.08 1.14 1.07 1.11 1.06 1.14 1.14 1.12 1.12 1.11 1.16 1.21 2009 1.15 1.13 1.15 1.14 1.15 1.10 1.11 1.10 1.10 1.11 1.08 1.17 2008 0.64 0.69 0.70 0.75 0.74 0.77 0.79 0.90 0.94 0.97 1.03 1.16 *Note: Ethanol consumption is calculated from minimum blending ratio Source: DOEB Demand Side - Ethanol Consumption Development 4.50 Sep 16 *EtOH cons. = 3.90 MLPD 4.00 3.50 MLPD 3.00 2.50 2.00 1.50 1.00 0.50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 3.68 3.82 3.78 4.02 3.85 3.81 3.93 4.11 3.90 2015 3.44 3.48 3.47 3.63 3.49 3.52 3.60 3.55 3.49 3.59 3.65 3.90 2014 2.82 2.92 3.03 3.18 3.14 3.13 3.28 3.41 3.37 3.43 3.52 3.77 2013 2.15 2.33 2.48 2.58 2.57 2.59 2.64 2.76 2.60 2.71 2.83 2.88 2012 1.19 1.24 1.25 1.29 1.27 1.33 1.34 1.43 1.43 1.49 1.62 1.79 2011 1.29 1.35 1.29 1.37 1.32 1.37 1.34 1.29 1.09 0.96 0.93 1.20 2010 1.20 1.26 1.19 1.23 1.18 1.26 1.27 1.24 1.24 1.22 1.29 1.34 2009 1.28 1.26 1.27 1.26 1.27 1.22 1.23 1.22 1.22 1.23 1.20 1.30 2008 0.71 0.77 0.77 0.84 0.82 0.86 0.88 1.00 1.04 1.08 1.15 1.29 *Note: Ethanol consumption is calculated from maximum blending ratio Source: DOEB

Demand Side - 2016 MOGAS & Ethanol Consumption Blending Ratio 35.00 4.20 30.00 13.4% 13.3% 13.3% 13.5% 13.5% 13.3% 13.5% 13.5% 13.5% 4.10 25.00 4.00 Mogas (MLPD) 20.00 15.00 3.90 3.80 Ethanol (MLPD) 10.00 3.70 5.00 3.60 0.00 Jan Feb Mar Apr May Jun Jul Aug Sep 3.50 ULG E10 95 E10 91 E20 E85 Total Ethanol Source: DOEB Demand Side - 5-year MOGAS & Ethanol Consumption Blending Ratio 35.00 4.50 Mogas (MLPD) 30.00 25.00 20.00 15.00 6.6% 0.10 1.00 5.79 13.8% 11.5% 0.91 0.38 3.25 2.63 3.68 2.59 9.12 9.85 13.4% 0.87 3.57 4.14 11.01 13.3% 0.863.88 4.76 11.21 4.00 Ethanol 3.50 3.00 2.50 Ethanol (MLPD) 10.00 5.28 2.00 5.00 8.88 1.39 8.27 7.54 9.00 10.71 1.50 0.00 2.10 1.53 1.60 1.55 1.00 2012 2013 2014 2015 2016 As of Sep 16 ULG E10 95 E10 91 E20 E85 Total Ethanol Source: DOEB

Demand Side - Ethanol Export Statistic 2013 2014 2015 2016 China 0 0 0 0 Japan 27,953 4 0 0 Korea R 10,306 0 0 0 Philippines 47,828 14,506 17,826 11,084 Singapore 9,315 0 0 0 Taiwan 10,431 2,849 96 0 Others 4,168 1,095 2,286 1,793 Total 101,001 18,454 20,208 12,877 unit: CBM As of Aug 16 Source: Custom Department of Thailand Agenda 01 Thailand Biofuel Plan & Current Status 02 Update on Thailand Ethanol Market 03 Surviving in an era of cheap crude oil 04 KTIS More Than Sugar

Source: oil-price.net Price Structure Of Petroleum Product in THAILAND As of 20 Oct 2016 UNIT (BAHT/LITRE) EX-REFIN. (AVG) TAX Fund VAT Marketing Margin VAT RETAIL ULG 15.19 6.93 6.56 2.01 2.12 0.15 32.96 GASOHOL95 E10 16.10 6.24 0.60 1.61 1.22 0.09 25.95 GASOHOL91 15.86 6.24 0.60 1.59 1.21 0.08 25.58 GASOHOL95 E20 17.00 5.54-2.75 1.39 2.02 0.14 23.34 GASOHOL95 E85 21.12 1.04-9.10 0.91 4.31 0.30 18.59 H-DIESEL 14.99 6.22 0.26 1.50 1.70 0.12 24.79 Source: EPPO Decarbonize Energy Security Why Biofuels? Feedstock Balance Economy: Investment, Jobs Create

Agenda 01 Thailand Biofuel Plan & Current Status 02 Update on Thailand Ethanol Market 03 Surviving in an era of cheap crude oil 04 KTIS More Than Sugar KTIS More Than Sugar Sugar Mill Kaset Thai Sugar, 7MMT Thai Identity Sugar, 2MMT Ruampol Sugar, 1.8MMT Bio Energy Kaset Thai Bio Power, 60MW Ekaluk Bio Power, 60MW Ruampol Bio Power, 60MW EPC Ethanol, 75,000 CBM Bio Product EPPCO Bagasse Pulp, 100,000 MT Kaset Thai Bio Fertilizer, 90,000 MT KTIS GROUP

KTIS More Than Sugar Domestic consumption is growing by E10 No surplus ethanol due to limit feedstock Conclusions Plants are running at full actual capacity Next year feedstock is expected to decrease Still needs support when crude oil is cheap Do not forget Climate change problem

Q & A Mr. Pipat Suttiwisedsak Chief Operating Officer / Managing Director Ekarat Pattana Company Limited Email: pipat@epcethanol.com Factory: 9 Moo 14, Nongpho sub-district, Takli district, Nakhon Sawan 60140 THAILAND Tel: +66 5633 8421-2 Office: 10 th Floor, SINOBRIT building, 133 Vibhavadi-Rangsit Road, Samsennai, Phayathai, Bangkok 10400 THAILAND Tel: +66 2644 8388