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Future Energy: Renewable options

Biomass - different types, sources of biofuels - potentially v. large resourcebut transportation and logistics issues

Hydropower - advantage of peak load capability

Solar photovoltaic and solar thermal

Wind doubled every 3 yrs for past decade government supportnecessary. More political than technology hurdles ?

Geothermal hot fluids that can be reached economically

Tidal schemes localized solutions, but highly predictable

Nuclear

Most require stable investment and political climates and subsidies/tax credits

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Biofuels: DriversShell is currently the lead distributor of biofuels, ca. 3 billion liters in 2005.All based on first generation biofuels, i.e. corn ethanol, and FAME.

Crude oil replacement

Fits with Shells Sustainable Development strategy, improved feedstockflexibility

EU directive EC 2003/30/EC: 2 % by 31 December 20055.75 % by 31 December 2010 on

energy content basis of all petrol and diesel for transport purposes

Mandatory blending from 2007+ inHolland, Austria, Czech Republic,Germany, Sweden, Brazil and Thailand

US Renewables Fuels Standard targetsand UK Renewable Transport Fuel Obligation

Fossil-fuel based CO 2 emission abatement

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Shells biofuels/biorefining activities

Iogen: ethanol from straw

CHORen: paraffins via gasification and FT synthesis

BIOCOUP: pan-European consortium on pyrolysis oil upgrading

Others

Aim: to develop second generation bio-based componentsvia partnerships

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Waste biomass or energy crops as

feedstock > 5 GT/a availableResidues from agriculture and forestry

Main product GT/a GT/a residue

Rice 0.6 1.1 straw, husks

Sugar 0.08 0.7 tops, bagasse

Wheat 0.6 1.0 straw

Soybeans 0.16 0.6 straw, pods

Corn 0.6 1.2 stalks

Wood construction 0.5 0.3 waste

paper 0.5 0.3 waste

Sourcing must be done in a sustainable way!

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0

20

40

60

80

100

120

140

160

180

200

1 9 9 8

2 0 0 0

2 0 0 2

2 0 0 4

2 0 0 6

2 0 0 8

2 0 1 0

2 0 1 2

2 0 1 4

2 0 1 6

2 0 1 8

2 0 2 0

M i l l i o n

t o n s

2% biofuels in 2005 5.75% biofuels in 2010

diesel

gasoline

bio-fuel

? % biofuels after 2010

USAbio-fuel based on Vision for bio-energy and bio-based productsin the USA

Projected transport fuels demands

EU15bio-fuels based on EUdirective

0

100

200

300

400

500

600

700

1990 1995 2000 2005 2010 2015 2020

M i l l i o n

t o n

( o i l e q u

i v . )

bio-fuel

diesel

gasoline

gasoline + diesel

Source:Harts fuel conference, May 2001

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Various biofuels options

For gasoline : Bio-ethanol from fermentation of glucose to ethanol by S. Cerevisiae

using sugar cane (Brazil), sugar beet, corn stover (USA) Iogen , Abengoa, NREL etc ETBE Ethyl ethers of Light Cracked Naphthas others

For diesel : FAMEs from trans-esterification of vegetable oils CHORen BTL Hydrotreated vegetable oils (e.g. Neste NExBTL,

Petrobras H-Bio, BP etc) dme (Volvo) others

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Iogen: ethanol from ligno-cellulosicbiomass

Shell took minority sharein Iogen (~US$ 30 mln)

Higher CO 2 reductionpotential (90%)

April 2004 start of eco-

ethanol production Full scale commercial

plant expected 2008/9 Capacity 100-200 million

litre; 350 700 Kton dmwheat straw

Photos: Iogen

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CHOren: BTL from lignin or ligno-cellulosic biomass

Shell took minority share in CHOREN

Higher CO 2 reduction potential

Carbo-V - process for syngas production;FT-synthesis from Shell

Pilot plant in Freiberg is running

Small scale demonstration plant:18 million

litre BTL capacity; start up in 2007 inFreiberg/D (67 kton biomass feedstock/a)

Large scale industrial plant: 200 kton BTL/a,

planned for 2009/10 in Germany;1 million ton/a feedstock requirement

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Biorefining

(Co)processing triglycerides in standard refinery units

Anonymised products - removal of O has fuel energy density benefits Complementary to the blending of discrete bio-components

Seamless integration of products in diesel supply chain and allowsphased implementation

Technical and economic challenges

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Some of our issues and concerns

Not all biofuel components generate the same CO2/GHG benefits.

There should be internationally recognised systems to determine this -it might be worth considering biofuel legislations based on CO2/GHGbenefits.

Biofuel sustainability is a key concern for Shell - by sustainability wemean environmental and social dimensions involved in the productionof the biofuel components, from biomass to end-product.

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Conclusions

Renewables will remain a complex and varying mix real winnersnot yet clear but biofuels expected to be a major contributor

Bio-fuels are real, Shell is actively involved in developing/investingin biofuels initiatives

Shell footprint global reach/global responsibilities