IN THE SPANISH BIOFUELS SECTOR APPA BIOCARBURANTES National - PowerPoint PPT Presentation

LATEST DEVELOPMENTS IN THE SPANISH BIOFUELS SECTOR APPA BIOCARBURANTES National Biofuels Associations Network 14 March 2012 Barcelona

Presentation Outline I. Update on the Spanish biofuels market 1. Production 2. Consumption & blending mandates 3. National RES-T targets for 2020 4. Fiscal incentives 5. Imports & Exports 6. Measures to prevent disloyal imports 7. Higher biofuels blends (technical specifications and use): B10, B20, B30, E10, E85 8. HVO & Other biofuels 9. Feedstocks II. Main regulatory developments 1. Implementation of the RED sustainability requirements 2. Double-counting 2

I. Update on the Spanish biofuels market

I.1. Production: Biodiesel Evolution of the annual biodiesel production in relation to installed capacity Source: APPA Biocarburantes & CORES & AEAT 5.000.000 4.000.000 3.000.000 mt 28% 2.000.000 14% 15% 18% 12% 1.000.000 0 2007 2008 2009 2010 2011 148.777 242.585 611.271 1.203.050 647.199 Production (mt) 815.190 2.070.020 4.110.400 4.371.400 4.589.400 Capacity (mt/y) 4

I.1. Production: Bioethanol Evolution of bioethanol production in relation to installed capacity Source: APPA Biocarburantes 62% 60% 79% 80% 78% 500.000 400.000 300.000 mt 200.000 100.000 0 2007 2008 2009 2010 2011 284.131 273.377 366.892 371.980 365.689 Production (mt) 456.000 456.000 464.058 464.058 464.058 Capacity(mt/y) 5

I.2. Consumption: Biodiesel Evolution of annual consumption of biofuels in diesel in Spain Source: APPA Biocarburantes & CORES 2.000.000 1.500.000 mt 1.000.000 500.000 0 2006 2007 2008 2009 2010 2011 62.909 292.646 588.402 1.028.407 1.349.538 1.632.782 Biofuels in diesel cons. (mt)* * Figures for 2011 include the consumption of HVO 6

I.2. Consumption: Bioethanol Evolution of annual bioethanol consumption in Spain Source: CORES 400.000 300.000 mt 200.000 100.000 0 2008 2009 2010 2011 144.157 236.240 361.584 356.199 Bioethanol consumption (mt) 7

I.2. Mandatory biofuels consumption targets 2011 2012 2013 Overall target* 6,2% 6,5% 6,5% Biofuels in 6,0% 7,0% 7,0% diesel target* Biofuels in 3,9% 4,1% 4,1% petrol target* * In energy content Limited flexibility as regards the type of biofuel to use to reach the global targets 8

I.3. National RES-T targets for 2020 Targets and trajectories for biofuels in the Spanish National  Renewable Energy Action Plan (NREAP):  Spain set a relatively high target compared to other MS: 13,6% RES in transport in 2020 → 4.322 ktoe  More than 87% would come from biofuels  Electric vehicles (EV) : modest share despite overly optimistic estimate (2,5 million in 2020)  Negligible contribution of biofuels other than biodiesel and bioethanol 9

I.3. National RES-T targets for 2020 Targets and trajectories for biofuels in the Spanish Plan for  Renewable Energies 2011-2020: The target is reduced compared to the NREAP:  11,3% RES in transport in 2020 → 3.651 ktoe  81% of the target will come from biofuels : 2.313 ktoe biodiesel – 200 ktoe 2nd generation  400 ktoe bioethanol – 52 ktoe 2nd generation  Although certain measures to develop higher blends are considered, the biofuels consumption targets are unjustifiably reduced and insufficient. 10

I.4. Fiscal incentives  Tax exemption for all types of biofuels incorporated into diesel and gasoline until 31 December 2012  It is highly likely that this tax exemption will not be extended beyond this date  APPA Biofuels has repeatedly asked the government to extend this fiscal incentive until 31 December 2018, at least for higher blends and second generation biofuels 11

I.5. Imports: Biodiesel (1) Evolution of the consumption of biofuels in diesel in Spain by origin Source: APPA Biocarburantes & CORES&AEAT 74% 2.000.000 62% 59% 1.500.000 63% mt 1.000.000 51% 0% 500.000 0 2006 2007 2008 2009 2010 2011 0 149.720 369.584 610.044 837.915 1.211.397 Biodiesel imports (mt) 62.909 142.926 218.818 418.363 511.624 421.386 Rest of national cons. (mt)* * Figures for 2011 include the consumption of HVO 12

I.5. Imports: Biodiesel (2) Evolution of pure biodiesel imports from Argentina and Indonesia Source: AEAT 800.000 600.000 mt 400.000 200.000 0 Argentina Indonesia 85 72.832 2008 197.368 36.009 2009 442.591 198.185 2010 719.473 325.470 2011 13

I.5. Imports: Bioethanol Evolution of annual bioethanol consumption in Spain by origin Source: APPA Biocarburantes & CORES 45% 45% 29% 400.000 300.000 mt 200.000 100.000 0 2009 2010 2011 67.685 164.424 158.942 Imports (mt) 168.555 197.159 197.257 National production (mt) 14

I.5. Exports: Biodiesel Evolution of Spanish biodiesel exports Source: AEAT 700.000 600.000 500.000 400.000 mt 300.000 200.000 100.000 0 2008 2009 2010 2011 23.767 192.908 691.426 225.813 Exports (mt) 15

I.5. Exports: Bioethanol Evolution of Spanish bioethanol exports Source: APPA Biocarburantes 54% 48% 46% 32% 400.000 34% 300.000 mt 200.000 100.000 0 2007 2008 2009 2010 2011 94.241 91.663 198.661 180.155 166.861 Exports (mt) 198.658 177.303 168.555 197.159 197.257 Spanish market (mt) 16

I.6. Measures to prevent disloyal imports (1)  Draft ministerial Order to prevent disloyal 74% of all biodiesel competition from third consumed in Spain in countries: 2011 was imported, mostly from Argentina  Allocation of biodiesel (59%) and Indonesia quantities to approved EU (27%) production plants to achieve national objectives  The quantities to be allocated are twice higher than the national biodiesel demand → fair competition Urgent measures against unfair is ensured biodiesel imports are  The system would run for an necessary initial period of 2 years, may be extended to 2 more 17

I.6. Measures to prevent disloyal imports (2)  Strong pressures from Argentina have led to a very long delay in the adoption of this Draft Ministerial Order  Many of the 51 biodiesel plants had to either stop their production or go into liquidation.  Investments of 1.400 million euros and 4.000 qualified jobs are currently at risk  Possible solutions at EU level? 18

I.7 Higher biofuels blends (1)  Technical specifications in Spain:  There are currently no technical specifications for higher biofuel blends (B20, B30, E85)  However, one of the key measures proposed by the Spanish Renewable Energy Plan 2011-2020 was to adopt national technical specifications for these blends, given the little progress achieved in CEN and the need to boost their consumption in Spain 19

I.7 Higher biofuels blends (2)  Technical specifications: the CEN work  CEN is working on the development of EN 590 – diesel specifications – to allow up to 10 % (V/V) FAME, following the Commission Mandate to CEN in 2006.  Some vehicle manufacturers have claimed that certain types of diesel particulate filters (DPF) systems are unable to use more than 7% (V/V) FAME due to increasing engine oil dilution and proposed to the Commission not to develop the B10 specification in EN 590 and to create a separated standard.  Enquiry period of EN 590 that introduces 2 tables (B7 and B10) finished on 6 March 2012. The result of the vote was 20 Yes, 3 No (Austria, Germany and Sweden) and 7 abstentions. Technical and editorial comments have been submitted. 20

I.7 Higher biofuels blends (3)  Use: Consumption of B100 in Spain Source: CORES 2.000.000 1.500.000 98% mt 1.000.000 97% 96% 500.000 83% 0 2008 2009 2010 2011 100.161 41.225 40.839 25.520 B100 (mt) 488.240 987.182 1.308.699 1.607.263 In blends (mt)* * Figures for 2011 include the consumption of HVO 21

I.7 Higher biofuels blends (4) PETROL STATIONS 34 petrol stations sell E85 in Spain 390 petrol stations sell higher biodiesel (Source: Abengoa Bioenergía) blends (Source: MINETUR, March 2012) 2 1 3 1 2 1 3 2 6 1 6 1 3 1 1 22

I.7 Higher biofuels blends (5)  Use:  Due to statistical limitations it is very difficult to estimate the exact consumption of higher biodiesel and bioethanol blends.  The number of petrol stations offering higher biodiesel blends decreased by 16% between October 2010 and March 2012  The modest use of these blends could be attributed to the following reasons:  The price difference between higher blends/diesel or gasoline is not attractive enough for consumers  No incentives for consumers and car manufacturers  Lack of information on the cars which could run on higher blends and on the benefits of higher blends in general 23

I.7 Higher biofuels blends (6)  APPA Biofuels believes that several tools need to be established to incentivize the wider use of higher biodiesel blends:  Mandatory use of higher blends in all public transports fleets.  Gradual introduction of higher blends in all petrol stations.  Incentives for vehicle manufacturers to guarantee their vehicles for the use of higher blends.  Encourage the acquisition of these vehicles by establishing exemptions in car taxes (registration…) and direct purchase subsidies. 24