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EU/US/Japanese Markets, Supply Chains, Global Supply World Bioenergy Association Webinar Pyrolysis Oil Markets & Growth in Global Supply Jan 31, 2017 Douglas Bradley- President, Climate Change Solutions 402 Third Avenue, Ottawa,

SLIDE 1

EU/US/Japanese Markets, Supply Chains, Global Supply

World Bioenergy Association Webinar “Pyrolysis Oil Markets & Growth in Global Supply”

Jan 31, 2017

Douglas Bradley- President, Climate Change Solutions 402 Third Avenue, Ottawa, Canada 613-321-2303 douglas.Bradley@rogers.com www.climatechangesolutions.net

SLIDE 2

Markets, Supply Chains, Some Global Supply Options

 Producers- New commercial players in 2014-15-16  Capacity up 50% (operating or under construction)  Markets expanding

 End uses (eg. co-blending in oil refineries)  Geographically

 Supply chains lengthening (from road/rail to ships)  Supply concepts from Canada, Australia, Malaysia,

Namibia…

SLIDE 3

Energy Density

Calorific Value Bulk Density Energy Density

GJ/t t/m3 GJ/m3 Wood Pellets 16-18 .65 10.9 Torrefied Pellets 19-23 .7 14.5 Pyrolysis Oil 16-19 1.2

21

Twice as much energy as pellets, per unit volume

SLIDE 4

Production- Status 2016

 Operating

 1989+ Red Arrow, Wisconsin, US- 5 small plants  2006 Ensyn, Renfrew, Canada- Ensyn technology  2014 Fortum, Joensuu, Finland- Valmet technology  2015 Empyro- Hengelo, Netherlands- BTG-BTL technology  2016 Pyrobiom- Parent, Quebec

 Under Construction

 Green Fuel Nordic- Lisalmi, Finland- Ensyn technology

SLIDE 5

Ensyn Pyrolysis Development

 Port Cartier- Quebec, Canada

 45,000 t  Under construction

 Vienna- Georgia, US

 90,000 t  Prelim. Eng. largely complete

 Aracruz- Brazil

 98,000 t  Prelim. Eng. largely complete

Target Markets

Co-processing in refineries in US
Heating and cooling markets in US

SLIDE 6

Commercial Plant Capacity

000tpa

100 200 300 400 500 600 700 800 2011 2012 2013 2014 2015 2016 2017 2018 2019 Pyrobiom-3 Pyrobiom-2 Pyrobiom- Parent2 Ensyn-Georgia, US Ensyn-Aracruz, Brazil Green Fuel Nordic- Fin. Ensyn-Port Cartier Pyrobiom- Parent Empyro- Hengelo Fortum- Joensuu Ensyn-Renfrew Red Arrow- Wisconsin

Under Construction Prelim Engineering 95-100% complete Operating

SLIDE 7

Market Summary

 Food ingredients /specialty chemicals, Wisconsin  Building Heat- eg Ohio DH, New England hospitals, Finnish

CHP plants

 Process Steam- eg Friesland Campinas dairy (BTG)  Small power- Turbine (2009), Diesel (2013)  Co-processing in oil refineries  Large Power- replace oil or gas in boilers  Marine bio-fuel- best option for low-cost, large

volume biofuel- testing in ships 2017

SLIDE 8

New Markets Refinery Co-processing

 Up to 5% pyrolysis oil processed with petroleum  Provides comparable yields by volume  Product indistinguishable from 100% fossil product  Lowers refiners capex and opex of compliance

SLIDE 9

Japanese Markets

 Many Japanese power plants

multi-fuel

 Kansai uses 29% petroleum

 90% low-sulfur crude  10% HFO

 How get renewable?

 Pellets substitute for coal



High infrastructure costs

 Pyrolysis oil substitute for HFO



Easier



Low infrastructure costs

SLIDE 10

Japanese Power Producer Fuel Demand

Thermal Power Plants (red) Power Companies Using Oil

Company Plants Capacity (MW) Tokyo 6 9,015 Chuba 4 5,325 Kansai 5 7,946 Kyushu 2 3,324 Hokuriku 1 1,000 Tohoku 1 3,966 Shikoku 2 6,925 Chugoku 1 3,800 Total 22 41,301 Plants Mtoe Oil used 22 11.26 Pyrolysis Oil 441 25.74

All on coasts- no land transfer needed

SLIDE 11

Australia

Prospective Pyrolysis Oil Exports

source: National Forestry Plantations http://data.daff.gov.au/mapserv/plant/region.phtml

Japan, Korea Japan, Korea Europe

SLIDE 12

Australia Oil Product Imports Shipping Routes

25-55,000 DWT ships available for back haul

ie low cost shipping

SLIDE 13

EU Markets for Pyrolysis oil

 Replace oil or gas for process heat

 Dairies, kilns, limekilns, metallurgy

 Replace oil in DH plants  Replace gas in DH plants

 DH plants that converted to gas are inefficient  Gas supply often at risk

 Replace oil in power stations, as fuel, or back up fuel

SLIDE 14

Pyrolysis oil Markets Million tonnes

MTOE EU-7 Japan @$50/bbl oil 49 75 @$80/bbl oil 77 108

SLIDE 15

Pyrolysis Oil EU Market Segments

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

000 toe

1st Markets- Industry 30 Mtoe

SLIDE 16

Oil Price to Markets vs Pyrolysis Oil Delivered Cost

5 10 15 20 25 30 35

$110/bbl $50/bbl Pyrolysis Oil delivered Rotterdam

$/GJ

SLIDE 17

Supply Chains 2013

Ensyn- Renfrew

SLIDE 18

Supply Chains- 2016

Ensyn- Renfrew Pyrobiom- Parent

SLIDE 19

Supply Chains- 2018

Ensyn- Renfrew Pyrobiom- Parent Ensyn- Port Cartier

SLIDE 20

Supply Chains- 2020

Ensyn- Renfrew Pyrobiom- Parent Ensyn- Port Cartier Pyrobiom- 2

SLIDE 21

Potential from Namibia

 12 million ha infested by

acacia

 Removal to preserve

cheetah habitat

 100 million tonnes

biomass!

Map- PyNews21

Walvis Bay

SLIDE 22

Malaysia- Major Palm Oil Exporter

SLIDE 23

Sabah- Malaysia

 Liquids supply chains

already in place

 Lahad Datu liquid bulk

terminal

 Capacity for exports to

Japan

Lahad Datu Liquid Bulk Terminal

SLIDE 24

Long Distance Supply Chains

Actual Ensyn Plan

SLIDE 25

Long Distance Supply Chains

Actual Ensyn Plan Conceived

SLIDE 26

Summary

 Pyrolysis oil has been produced since 1989  Now 4 technology companies producing in 9 plants  World Capacity from 75,000t 2013 to 700,000t-2019  Energy density advantage of pyrolysis oil opens up new

producing regions for export

 Markets

 Japanese power market 75MT- essentially limitless  Many EU market niches- 49MT

SLIDE 27

Thank you

World Bioenergy Association

Webinar Jan 31 “Pyrolysis oil Markets & Global Supply”

Douglas Bradley- President, Climate Change Solutions Vice-President, World Bioenergy Association

402 Third Avenue, Ottawa, Canada

613-321-2303 douglas.Bradley@rogers.com www.climatechangesolutions.net