The Status and Future of Advanced The Status and Future of Advanced Biofuels in the United StatesBiofuels in the United States
Daniel NibargerI i l E iInternational EconomistOffice of Global AnalysisForeign Agricultural Service/USDA
What Will We CoverWhat Will We Cover
• Where does the U.S. Advanced Biofuel Market Stand?
• Where is the U.S. Going?
• What are the Challenges?g
Where does the U.S. Advanced Bi f l M k t St d?Biofuel Market Stand?
Tropics have Advantage in Biomass Production PotentialTropics have Advantage in Biomass Production Potential
G t t NA NPPG t t NA NPP
1,2001,200 gC/mgC/m22/year/year
Greatest NA NPPGreatest NA NPP
Regions with Greatest NPPRegions with Greatest NPP
2 6002 600 gC/mgC/m22/year/year
Regions with Greatest NPPRegions with Greatest NPP
Net Primary Productivity (gC/mNet Primary Productivity (gC/m22/year)/year)
2,6002,600 gC/mgC/m22/year/year
00 26252625 MissingMissing SeaSea
Net Primary Productivity (gC/mNet Primary Productivity (gC/m /year)/year)
Source: FAO
U.S. RFS2 Volume MandatesU.S. RFS2 Volume Mandates40
30
35
lons
20
25
ns of G
al
10
15
Billion
0
5
02006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
BioDiesel 0.5 0.65 0.8 1 1.28 1 1 1 1 1 1 1 1 1
"Other" Advanced 0.1 0.29 0.54 0.99 1.456 1 1.5 2 2.5 3 3.5 3.5 3.5 4
Cellulosic Biofuel 0 0.007 0.007 0.009 0.014 1.75 3 4.25 5.5 7 8.5 10.5 13.5 16
*
Source: EISA
Renewable Fuel 4 4.7 9 10.5 12 12.6 13.2 13.8 14.4 15 15 15 15 15 15 15 15
What is Advanced Biofuel?
Cellulosic Biofuel BiomassBased
Advanced Biofuel Renewable FuelCellulosic Biofuel Diesel
Advanced Biofuel Renewable Fuel
Greenhouse Gas Reduction %
60% 50% 50% 20%
Biofuel TypesCellulosic and Drop
in type fuels
Biodiesel, renewable diesel, & cellulosic
diesel
Sugarcane ethanol & All Cellulosic and Biomass
Based Diesel Fuels
Cornbased ethanol
(Plus all other categories)Based Diesel Fuels categories)
Feedstocks
Cellulose and hemicellulose based
Vegetable oils & fats; waste
Sugarcane ethanol & All Cellulosic
Corn starch & other grain
Feedstocksmaterials, nonfood
crops
waste greases/tallow
and BiomassBased Diesel Fuels
starches, sorghum
Transesterification, ifi i
Processes
Transesterification, thermochemical,
catalytic depolymerization, FT i
Transesterification, thermochemical,
gasification catalytic depolymerization,
Fermentation, hydrotreating(dedicated or
i )
Dry and wet mill, fermentation
FT, enzymatic hydrolysis
depolymerization, FT processes
coprocessing)
Source: FAS and Hart Energy
U.S. Advanced Biofuel Production
4 431
Capacity
4000
45004,431
3000
35003,378
Year
2000
2500
1 550n Liters/Y
1000
1500985
1,2411,550
Million
0
500
1000
0Cancelled Under
ConstructionNot Operating Operating Proposed
Source: Hart Energy, Global Biofuels Center, Capacity Database ‐ Data Accurate as of Jan. 31, 2013
U.S. Advanced Biofuel RINS
Source: 2012 EPA Moderated Transaction System http://www.epa.gov/otaq/fuels/rfsdata/2012emts.htm
Advanced Biofuel Support Programs
The Biomass Crop Assistance Program (BCAP)• Matching Payments• Annual Payments to Certain Producers.
USDA Loan Guarantees
Advanced Biofuel Production PaymentsAdvanced Biofuel Production Payments
Tax IncentivesTax Incentives• Cellulosic Biofuel Producer Tax CreditD i ti All f C ll l i Bi f l Pl t• Depreciation Allowances for Cellulosic Biofuel Plants
Where is the U.S. Going?
United States (expectations and key issues)United States (expectations and key issues)
Gl b l P d ti & T d i 2013 d B dGlobal Production & Trade in 2013 and Beyond• Remain largest producer & consumer• E15 enlarges market potential by additional 6 BG (22 BL)• Prices should go lower• Export potential
Key Market Determinates in 2013 and Beyond• Blendwall concerns and adoption of higher blendsBlendwall concerns and adoption of higher blends• Cellulosic production and “advanced” biofuel imports• Competing fuels for ethanol market• Competing fuels for ethanol market
2011 Fuel Ethanol ProductionThe US has rapidly outgrown Brazil to become the world’s largest ethanol producerThe US has rapidly outgrown Brazil to become the world s largest ethanol producer
and consumer.
4.61.4
52 2.2
0.51.3
23
0.5
Legend
Unit = Billion Liters (BLtrs)
20 BLtrs
Legend
Source: FAS Annual Biofuels Reports and FAS/Washington staff analysis.
( )Only larger trade flows are shown
2011 Fuel Ethanol Production & Key Trade FlowsThe US has rapidly outgrown Brazil to become the world’s largest ethanol producerThe US has rapidly outgrown Brazil to become the world s largest ethanol producer
and consumer. Trade….
4.61.4
52 2.2
0.51.3
23
0.5
Legend
Unit = Billion Liters (BLtrs)
20 BLtrs
Legend
Source: FAS Annual Biofuels Reports and FAS/Washington staff analysis.
( )Only larger trade flows are shown
2022 Fuel Ethanol OutlookUS i l t d d b t B il l thUS remains largest producer and consumer, but Brazil closes the gap.
Brazil reasserts its position as largest exporter, and US becomes net importer.
2.01.44.6
578.6
0.5
522.7
2.2
1.3
47
0.5
23
1.5 1.7
Legend2011 Actual vs 2022 Projected
47
1.12011 Actual vs 2022 Projected
Actual
Projected
Unit = Billion Liters (MLtrs)
20 BLtrs
( )Only larger trade flows are shown
Source: Outlook based on FAS/Washington staff analysis and generally consistent with USDA’s 2012 long-term projections.
World Ethanol ProductionWorld Ethanol ProductionMajor Markets and Rest of World (ROW)
160Billion Liters
120
140ROW non‐fuelROW fuelEU non‐fuel
80
100 EU fuelBrazil non‐fuelBrazil fuelUSA non‐fuel
40
60USA fuel
0
20
Sources: FAS staff analysis, FOLicht, OECD‐FAO; US fuel ethanol (WASDE, 2012 USDA Baseline)
World Ethanol ProductionWorld Ethanol ProductionSecondary and Minor Markets
Billion Liters
Sources: FAS staff analysis, FOLicht, OECD‐FAO; US fuel ethanol (WASDE, 2012 USDA Baseline)
What are the Challenges?
Challenges for Advanced Biofuel in the United StatesUnited States
Competition• Cheap Shale Gas• Electrified Vehicles• Cellulosic production and “advanced” biofuel importsp f p
The U.S. Blendwall‐13.4 Billion GallonsThe U.S. Blendwall 13.4 Billion Gallons• Will E15 and E85 Increase the market?
Challenges for Advanced Biofuel in the United StatesUnited States
Feedstock Supply• Competition for ligno‐cellulose
Credit Availability• Uncertainty in Credit MarketsUncertainty in Credit Markets
F i A i lt l S i /USDAForeign Agricultural Service/USDAGlobal Policy Analysis Division
Office of Global Analysis