Cellulosic EthanolEmerging Opportunities in IndiaFeb 2015
Cellulosic EthanolEmerging Opportunities in IndiaFeb 2015
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Safe Harbor Statement
This presentation and its related comments contain forward-looking statements, including financial expectations.
Forward-looking statements are by their very nature associated with risks and uncertainties that may cause actual results to differ materially from expectations.
The uncertainties may include unexpected developments in the international currency exchange and securities markets, market-driven price decreases for Novozymes’ products, and the launch of competing products in Novozymes’ core areas.
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Paddy Straw & Cotton Stalk
Cellulose Hemicellulose Lignin
Textiles DetergentsPlasticsDiapersCooking gel Electricity
Wheat strawEnergy caneCorn stover Wood chips
Ethanol
Enzymatic biomass conversion is the technology that enables Cellulosic fuels and chemicals
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The commercialization of 2G ethanol started in Crescentino, Italy more than a year ago
October 9, 2013
September 3, 2014
September 24, 2014
October 17, 2014
December 2014
Exp. Q2 2015
Novozymes supply
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From “Fantasy Fuel” to reality: 2014 was a breakthrough year with 6 commercially operating 2G plants at year-end
Commercial-scale 2G ethanol plants in operation or under construction by region (2014)
2015
Another 20-25 concrete projects worldwide await investment decisions within the next 12 months
NZ supply
In construction
In operation
2015
Future plants
in India ?
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BRAZILIncreased 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
ITALYItaly unveils first national mandate for advanced biofuels• Declared fuel suppliers must have at least 0.6 percent of advance biofuel in petrol or diesel, risingto one per cent in 2022
CALIFORNIACalifornia’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 intensityof transportation fuels
• While corn ethanol has a lower carbon-intensity thanpetroleum, forms of cellulosic ethanol have an even lowercarbon-intensity and widespread usage of cellulosic ethanolcould make compliance with the LCFS easier for oil refineries
There is clear correlation between government actions in advanced biofuels policies and their advancement of the space
EXAMPLES
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India - an attractive destination for 2G biofuels production
� Abundant biomass, in particular wheat straw, cotton stalk andpaddy straw in the Northern states of Punjab, Haryana, UP and Gujarat
� However, much of the biomass today is being burnt; and the biofuelsmandate (E10 planned to go to E20) has never been filled and is notenforced
� Advanced Ethanol (from biomass) is cost competitive with BioEthanol from sugar and corn starch, provides stable non-commoditizedinput costs and avoids the “Food vs. Fuel” debate
� India could become a trend-setter and leading example for the bio-energy sector in Asia
� Improve the balance of payments* by utilizing a “new” local resource tooff-set oil imports; today India is the fourth largest importer and consumerof oil in the world
* July 29, 2014 | Meghan Sapp - India could save $3 billion in petroleum imports annually with E10
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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)
� Facilitate feedstock security
� De-risking incentives for first few plants to encourage local company participation
� Conducive climate/tools to attract investors
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
Source: team analysis
THANK YOU
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Annexure
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India has substantial biomass resources, especially in Northern states1
Biomass potential, million tons dry weight, 2011Rice straw
Wheat straw
Cotton stalk
Sugarcane bagasse
Jammu andKashmir
Himachal Pradesh
PunjabChandigarh
UttarakhandHaryana Delhi
RajasthanUttar Pradesh
Bihar
SikkimArunachal Pradesh
Nagaland
Manipur
MizoramTripura
Meghalaya
Assam
West Bengal
Jharkhand
Orissa
Chhattisgarh
Madhya PradeshGujarat
Maharashtra
Andhra Pradesh
Karnataka
Lakshadweep
Kerala
PuducherryTamil Nadu
Andaman & Nicobar Islands
Goa
0.41.522.0
14.2
2.27.73.41.6
4.70.90.44.7
0 0.27.1 2.8013.3 3.6 1.1
013.6 11.040.0
11.96.82.52.8
Source: SVS, Report on Biomass Assessment of Selected Species in Potentially Promising Areas of India
04.5 0.56.6
1 Only showing Top 10 states according to biomass potential
0.21.6 1.212.2
0.51.515.2
4.6
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There is large biomass residue potential
TotalCass-ava
Coco-nut
Oil PalmMaize RiceSugar cane
Cotton Wheat
112 36 24 117 322
SOURCE: FAO; Countries’ statistics on agriculture productions; ICIS; Literature review
Excludes negligible biomass sources to simplify analysis
Wood residues
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Biomass potential, million tons, dry weight