ChallengesChallenges && OpportunitiesOpportunities inin DevelopingDeveloping aa SustainableSustainable BiomassBiomass InfrastructureInfrastructure P.P. NairNair UOPUOP LLC,LLC, AA HoneywellHoneywell CompanyCompany CO2 Summit: Technology & Opportunity June 6-10, 2010 Vail, Colorado © 2009 UOP LLC. All rights reserved. Honeywell Corporate Overview • 125,000 employees in more Transportation & Power Systems than 100 countries • A Fortune 100 company – Specialty Materials sales of $34.5 billion in 2008 Aerospace • Global leader in advanced 15% technology products, 36% services 15% UOP and solutions 34% Automation & Control Technology Company, Financially Strong and Global UOP Proprietary What UOP Does UOP creates knowledge via invention and innovation and applies it to the energy industry y 1,570 Scientists and Engineers y Process Technology y 2,600 active patents y Catalysts y Expertise y Adsorbents y Experience y Equipment y Services Since 2007 Petroleum Petrochemicals Natural Gas Renewables Today More Than 60% of the World’s Gasoline and 85% of Biodegradable Detergents are Made Using UOP Technology UOP 5158-03 Agenda y Global Context: – Energy Demand – Regulations y UOP Vision for Sustainable Biomass Infrastructure y Technology Solutions: – Green Diesel – Green Jet – Lignocellulosic Conversion paths y Summary Macromarket Summary: Through 2020 y Global energy demand is expected to grow at CAGR 1.6%. –Primary Energy diversity will become increasingly important over this period with coal, natural gas & renewables playing bigger roles. y Fossil fuels are expected to supply 83% of energy and 95% of liquid transportation needs y Biofuels are expected to grow at 8-12%/year to ~3.0 MBPD Biofuels: A Growing Presence Source: IEA, 2008 Petroleum Refining Context Butane Light Ends Gas Processing Sulfur Plant Sulfur Unit Butane- Alcohol Isobutane Butylene H2 Etherification Alkylation Iso-octane Iso-octane y Refining: ~100 years Fuel Gas Isomerate Production Light Naphtha LPG Isomerization Alkylate Gasoline Jet Crude Oil Flue Gas Fuels H2 H y ~750 refineries Catalytic 2 Reformate LPG Solvents Reforming Crude Treating Naphtha Naphtha Diesels H Aromatics & Desalting Hydrotreating 2 BTX Light Production Distillates y ~85M BBL of crude Heating Light Distillate Distillates (Topping) H Oils 2 Hydrotreating Latest Refining Heavy Diesel and Heating Oil refined daily Technology Crude Oil Distillation Crude Distillate Geases Development Heavy Distillate & Licensing Hydrotreating Light Olefins Production Fuel Oil H2 Fluid Catalytic Atmospheric Cracking Gasoline y ~50M BBL transport Gas Oil Gasoline, Naphtha, Middle Distillates, Gas Oil H Hydrotreating 2 Gasoline Kerosene and Jet Fuels fuels; ~6M BBL of Gas Oil Hydrocracking Diesel and Heating Oils Product Treating Blending aviation fuel Lube Oils Vacuum Distillation Lube Oil Lube Oils Solvent Production Extraction & Deasphalting Heavy Fuel Oil y Complex but efficient Vacuum Resid Visbreaking Asphalt Asphalts conversion Diesel Gasification Syngas/Steam Coking Electricity Coke processes Natural Gas Natural Gas, Fuel Oil Energy Conservation & Plant Environmental Maintenance/ Plant Upgrades Hydrogen Production/ Controls Management & Revamps Gas-to-Liquids (Power Reliability/ Purification/Recovery Production) Safety Fuel, Wax H2 Fossil fuel production has 100 years head start relative to sustainable biofuels – but technology is catching up fast. Biofuels: A Quickly Changing Landscape 2007 2008 UOP Position y All biofuels are good y Not all biofuels are good y Emphasis on life y More, faster y Concern for food chain cycle analysis as a impact & competition way of measuring y No criteria to “sustainability” measure impact of for land/water adopting biofuels y Measured biofuel y Ensure technology is adoption feedstock flexible y Availability of nd “inexpensive” bio y Utilization of LCA y Focus on 2 feedstocks analysis to “qualify”: generation technologies y Government link to GHG, energy, mandates and sustainability y Create partnerships incentives favor y Bio feedstocks tracking between feedstock ethanol and biodiesel energy prices suppliers and fuel producers y Government mandates/ incentives increasingly technology neutral y Emphasis on “real” biofuels Increasing Awareness of Potential Impact Charting the EU Renewable Landscape Renewable Energy Directive Fuel Quality Directive (RED) (FQD) y 20% of EU gross energy y GHG Emissions: Fuel Suppliers consumption from renewables to reduce 2020 levels by 6% by 2020 relative to 2010 levels y Transport Fuels: 10% renewable y Carbon footprint reduction for content by 2020 all land transport fuels y Incentives for renewable power y Sustainability criteria y Sustainability criteria y Fuel quality specs y State specific targets y 3 pieces of legislation adopted Emissions Trading Scheme (ETS) y Each member state must comply: y CO2 Cap and Trade system y Broad industry coverage – Timetables may differ y Includes air transport – Financial penalties or incentives will vary – Mix and total energy targets vary by state – Wide differences on starting point Charting the US Renewable Landscape Renewable Power Standard Renewable Fuel Standard (RPS) (RFS) y State mandated ~2.5M BPD biofuels by 2022 renewable power yCorn ethanol, capped at y More than 30 States have RPS ~1M BPD ySustainability targets will force transition to 2nd generation feedstocks yTechnology neutral Mandatory RPS State Renewable Goal Carbon Legislation y California LCFS: Fuel Carbon Legislation Adopted Intensity reduction yFederal Mandates for y North Eastern States GHG Cap & transport fuels - RFS Trade initiative y Federal Carbon Cap legislation yState mandates controlling introduced carbon emissions yState Mandates for renewable power Global Legislation Overview: Ground Transport Fuels Canadian Law C-33 Mandates: EU-27 – Adopted Mandates: • E5 by 2010 • RED – 10% by Energy content by 2020 • B2 by 2012 • FQD – 6% GHG reduction by 2020 from 2010 levels • B5 in British Colombia by 2010 • E10/B5 targets EISA 2007: • E10 mandate • RFS mandate -36 Billion • E20/B20 by 2017 Gal by 2022 • Several State mandates in effect • California – LCFS Mandates: • E5-E10 mandates mandated • Brazil: E25/B3 • B1-B5 mandates • GHG initiatives • Argentina: E5/B5 (2010) established in NE States • Colombia: E10/B5 E_ : Renewable content in Gasoline B_ : Renewable content in Diesel Global Biofuels use Trending Towards a Nominal E10 & B5 Specific Drivers for Aviation Biofuels • Commercial aviation commitments to carbon neutral growth – Visibility of aviation – European ETS dictates C redu – • US DefenseATA/AITA Sector disconnect commitments pulls industry dictates sustain – Air Force: 50% of all domestic aircr – • GlobalNavy: jet fuel50% ofconsumption all systems runni (2008) ctions starting in 2012 alternative fuels (not ju – 5 M bpd or 80 B gpy – US Military: 0.3 M bpd or 4.5 B gpy ability is a key factor ng onaft alternatives running on by 50/5 2020 Key Drivers of Emissions Reductions st biofuels) into the mix 0 blend by 2016 Emissions 2 Forecasted Emissions Growth CO w/o Reduction Measures Ongoing Fleet Renewal / Presented to ICAO GIACC/3 February 2009 by Paul A Technology Developm TM In ent Baseline vestm Using less fuel ents /Impro vemen y Low Carbon Fuels ts Efficient Airplanes y Carbon Neutral Timeline Operational Efficiency OEM’s and US Steele Military on behalf of ACI, DrivingCANSO, IATA and Green ICCAIA ChangingJet Demand the fuel y Sustainable Biofuels 2050 Agenda y Global Context: – Energy Demand – Regulations y UOP Vision for Sustainable Biomass Infrastructure y Technology Solutions: – Green Diesel – Green Jet – Lignocellulosic Conversion paths y Summary UOP Biofuels Vision • Produce real “drop-in” fuels instead of fuel additives/blends • Leverage existing refining/ transportation infrastructure to lower capital costs, minimize value chain disruptions, and reduce investment risk • Focus on path toward second generation feedstocks Renewable Hydrocarbon Biofuels Oxygenated Biofuels Energy Fuel & Ethanol Biodiesel Fuel & Diesel Jet Gasoline PowerPower “Other” Oils: Camelina, Jatropha, Halophytes First Second Generation Generation Lignocellulosic Natural oils biomass, (vegetables, greases) algal oils US/EU: Second Generation Feedstock Focus Feedstock: – Significant R&D being invested into development 2nd generation and transition feedstocks • Algae • Camelina • Cellulosics y Time line for commercial production: – Camelina – 2010 – Cellulosics – 2012 – Algae – 2017? Algae Provides the Greatest Substitution Potential Biofuel Production: Regional Feedstock Trends Global Trend: – Food based to First Generation Transition Second Generation non-food based Edible Grains, Oils Inedible Grains, Oils Cellulose, Algae y US/EU: – Food vs fuel – Sustainability InedibleInedible – GHG emission TransitionTransition FeedstockFeedstock reduction targets y China/India – Non-food feedstocks • Jatropha, cassava, sweet sorghun, pongamia Source: IFQC y SE Asia/S America – Feedstock advantaged, palm, soy, castor Increased focus on 2nd Generation & Transition Feedstocks Time-lines for Commercial Scale Production Vary Forthcoming Feedstocks Camelina Pennycress y Current markets Northwest US and y Member of mustard family Southern Canada y High seed & oil yield y Wide-spread acreage y Off season from as rotation crop Corn & Soy y >200 million gallons (87M & 78M by 2012 in the US acres planted in 2009) y Potential for >100M gpy by 2015 Jatropha Animal Fats/Greases y Yields high quality oil y Considered as waste biomass y Seed quality, cultivation