1

Sustainable Development of Sustainable Development of BiofuelsBiofuels ProgramProgram

Swaroop Sarangan, Vice President

Biofuels 2010 - For Sustainable Rural Livelihood & Energy security

November 19, 2010, New Delhi, India

2

ContentsContents

1. Indian Biofuels context

2. Biofuels Development Challenges

3. Reliance Biofuels Initiative

4. Summary

3

India Energy Context India Energy Context

India’s energy demand is estimated to grow eight times to the year 2030.

Energy demand 315 million MTOE8 times growth envisaged to 203075% import dependentFossil fuel basedCrude oil consumption 111 million tonnes growing 5.6% per yearGasoline consumption 11 million tonnes, growing 5% per yearDiesel consumption 55 million tonnes, growing 5.2% per yearAdministered price regimeHigh taxes (30% of value chain)Limited alternate energy play (mainly wind)

44

Global Biofuels Opportunity

Global biofuels opportunity is significant, but current market penetration of biofuels is very low.

24%32%% Penetration of biofuel opportunity

Aspect Gasoline Diesel

Global consumption (million MT) 1600 900

% Blending with biofuels* 10% 5%

Biofuels opportunity (million MT) 160 45

Current biofuel consumption (million MT) 51 11

% Penetration of total fuels 3.2% 1.2%

Source : BP, US Energy Information Ad ministration, PFC Energy, US Chamber of Commerce, Reliance Research

* Biofuels (especially biodiesel) blending limit can potentially go up to 100% which would provide upside to the above projections.

Jatropha with Corn as intercrop

55

India Biofuels Opportunity

NA13%% Penetration of biofuel opportunity

Aspect Gasoline Diesel

Consumption (million MT) 12 60

% Blending with biofuels* 10% 5%

Biofuels opportunity (million MT) 1.20 6

Current biofuel consumption (million MT) 0.16 negligible

% Penetration of total fuel opportunity 1.3% NA

Source : Frost & Sullivan, Govt. of India Planning Commission, Ethanol India

* Biofuels blending limit can go up to 100% which would provide upside to the above projections.

India biofuels opportunity is also large, but current market penetration is negligible. India has 40 million ha of wasted land

Jatropha with Groundnut as intercrop

6

SocialSocial--Economic Opportunity Economic Opportunity

Biofuels have significant social benefits, most important among them being higher farm incomes and better rural life.

BenefitsBetter energy securityHigher farm incomesBetter quality of rural lifeUse of marginal landCarbon Sequestering

7

BiofuelsBiofuels –– Product/Market Product/Market

Biofuels primarily comprise bioethanol, biobutanol and biodiesel for blending with gasoline, diesel and fuel oils.

ProductsBioethanolBiobutanolBiodieselRenewable dieselBTL DieselDiMethyl EtherETBE

MarketsGasolineDieselJet fuelFuel oils

8

Renewable Biomaterials Renewable Biomaterials

Sugar and grain crops are used to make bioethanol, while vegetable oils, animal fats are used to make biodiesel.

Bioethanol/BiobutanolSugars

Sugarcane, Sugar beetStarch

Corn, Sweet Sorghum, Wheat

BiodieselVegetable Oils

Non-edible: Jatropha, Pongamia, Jojoba, SimarubaEdible: Palm, Rape seed, Soybean, coconut, others

Animal Fats and oilsAlgaeYeast

9

Technology Technology

While first generation technologies are commercially used, several second generation technologies are being developed.

First generationSugars/Starch to bioethanol

Fermentation; Downstream separation and purification

Oils & Fats to biodieselPre processing and trans-esterification

Second generationBiomaterials

Hybrids; Transgenics; Algae; YeastBiomass to bioethanol/butanol

Hydrolysis, fermentation, separationGasification, fermentation, membrane separation

ChemicalRenewable diesel (refinery hydrotreater)Pyrolysis or gasification and FT to jet fuel

August, 2007 November, 2007

December, 2009 July, 2008

Jatropha yield cycle, Andhra Pradesh, India

10

Govt. of India Govt. of India BiofuelsBiofuels Policy Policy -- Summary Summary Development of biofuels will be to utilisedegraded forest and wastelands for cultivation of biofuel crops, using non-food feedstocks20% blending of biofuels by 2017.Storage, distribution and marketing of biofuels would rest with Oil Marketing Companies (OMC). Policy proposes Minimum Purchase Price (MPP) for biodiesel by OMC’s. The policy proposes Minimum Support Price (MSP) for non-edible oilseeds. R & D grants would be provided for projects involving second generation biofuels, new feedstock development, utilization of byproducts etc.Any import or export of biofuels would be permitted only to extent necessary (exports only after meeting domestic requirements).

GOI biofuels policy revolves around growing non-edible crops on cultivable waste lands.

Jatropha with Black gram as intercrop

11

Biofuels Biofuels –– Competitiveness Challenge Competitiveness Challenge

Farm productivity, seed oil content and by-product value are critical drivers of biofuels productivity.

Competitiveness with prices of gasoline (51 Rs/L) and administered prices of diesel (41 Rs/L)Competitiveness drivers

Biodiesel (farm productivity, seed oil content)Bioethanol/Biobutanol (biomass cost, enzyme cost)Byproduct value

12

ContentsContents

1. Indian Biofuels Context

2. Biofuels Development Challenges

3. Reliance Biofuels Initiative

4. Summary

13

BiofuelBiofuel Development Issues (1) Development Issues (1)

Product IssuesSelection, blend ratios, GHG emission savings and oxygen content.

Industry IssuesFeed stock availability, site, technology and competitiveness

Supply chain IssuesPlantation material, plantation window, produce aggregation and transportation cost

Business IssuesOperability, scale, economics and sustainability.

There are significant development challenges for biofuels, primarily on the linkages, logistics and competitiveness.

14

BiofuelBiofuel Development Issues (2) Development Issues (2)

Farm IssuesFarm productivity, Yield and intercrop income

Technology IssuesFeed stock engineering, second generation technology, by-product value addition and IP

Socio-Economic IssuesNon-food crops, feed stock cost, subsidies, sustainability and farmers long term commitment

Other significant development challenges for biofuels are on the development of sustainable feedstock and technology.

15

Product Issues Product Issues

Biodiesel goes twice as far and is better on GHG, fossil energy savings and emissions, as compared to bioethanol.

Lubricity useful for ultra low sulphur fuels

Better cetane

Better lubricityOthers

NOx can be improved with ignition improvements

Better on CO and unburnt hydrocarbons

Better on NOxEmissions

60 % over diesel20 % over gasolineFossil energy savings

45 % over diesel

(Rapeseed-based BD)

30 % over gasoline

(Grain-based alcohol)GHG emissions savings

LowHighWater use in crops

30% additional efficiency of diesel engines

Remarks

5.3 mm BTU/bbl

(90 % of diesel)

Biodiesel

3.5 mm BTU/bbl

(67 % of gasoline)Energy content

BioethanolAspect

Source: CERA

16

Land ProductivityLand Productivity

Bioethanol crops score better from a land productivity point of view.

Source: CERA

Biofuels Crop Productivity (Litres/Ha)

5700

6000

4800

1500

500

1800

3700

3500

2000

0 1000 2000 3000 4000 5000 6000 7000

Soyabeans

Rapeseed

Wheat

Jatropha

Sorghum

Corn

Palm

Sugar Beet

Sugarcane

b

Jatropha bund plantation

17

Water UsageWater Usage

Water usage varies based on nature of crop and irrigation, but Jatropha and algae (brackish) perform best.

Biofuels Water Usage (CuM/MT of biofuel)

1162

444

2499

1110

736

3077

1226

703

9853

15596

0 5000 10000 15000 20000

Sugarcane under drip

Jatropha under drip

Calophylum under drip

Soybean under flood

Mustard under flood

Jatropha rainfed with support irrigation

Pongamia under drip

Madhuka under drip

Algae brackish

Maize under flood

b

Source: Reliance Life Sciences Research

18

Energy Ratios Energy Ratios -- Reliance StudyReliance Study

Biodiesel crops generally perform better from an energy ratio standpoint.

Biofuels Energy Efficiency Ratios

4.52

3.32

2.89

4.87

7.34

8.5

6.77

5.29

5.83

6.74

0 2 4 6 8 10

Sugarcane under drip

Jatropha under drip

Calophylum under drip

Soybean under flood

Mustard under flood

Jatropha rainfed with support irrigation

Pongamia under drip

Madhuka under drip

Algae brackish

Maize under flood

b

Source: Reliance Life Sciences Research

19

GHG EmissionsGHG Emissions

Both bioethanol and biodiesel crops perform better from a GHG emissions standpoint.

Source: Union for Promoting Oilseeds and Protein Plants

Greenhouse Gas Emissions (gCO2eq/MJ)

1

14

12

18

23

29

19

14

13

9

2

1

2

1

13

5

1

26

22

19

22

26

49

83.8

0 10 20 30 40 50 60 70 80 90

Biodiesel from w aste

Ethanol from sugar cane

Ethanol from sugar beet

Biodiesel from sunflow er

Ethanol from w heat w ith cogen

Biodiesel from rapeseed

Biodiesel from soybean

Biodiesel from palm oil

Fossil fuel

b

20

At current seed prices, biodiesel is not competitive. Bioethanol (sugarcane based) is competitive at US$ 50/bbl.

Cost Competitiveness

0.53700.5770

1.10BTL Biodiesel

0.48600.5060

0.60800.6480

Bioethanol, $/lit High/low 2009RM cost, $/kgRaw Material

Biodiesel, $/litHigh/low 2009

RM Cost, $/litHigh/low 2009

Raw Material

0.540Molasses0.930**Jatropha

0.4200.099Sugar Beet0.782/0.5850.710/0.498Palm

0.415/0.331Sugar Cane (Brazil)0.837/0.7250.764/0.628Soybean

0.545/0.4750.1588Corn0.917/0.7560.848/0.665Rape seed

Conventional0.43

0.34

Diesel*, $/lit

0.583

50

40

Crude, $/ bbl

Biodiesel

Conventional

Animal fat

0.3950

0.3240

Gasoline*, $/litCrude, $/ bbl

Bioethanol

* Ex Factory gate price; ** Jatropha seeds - Rs.12/kg

Cost Competitiveness Cost Competitiveness

21

Biofuels Biofuels –– Role of Bio Technology Role of Bio Technology

Biofuels can bring about rural transformation through higher farm incomes and better quality of life.

AgronomyPlantation in irrigated, rain fed conditionsCultivation with intercropsHybrid development

Plant Tissue CultureLeaf disc regenerationImmature embryo transformation

Plant Metabolic EngineeringTransgenic Jatropha

Bio-Process TechnologyFermentationEnzyme manufacturingBy-product value additionYeast to oil

22

ContentsContents

1. Indian Biofuels Context

2. Biofuels Development Challenges

3. Reliance Biofuels Initiative

4. Summary

23

Biofuels Architecture Biofuels Architecture

The biofuels initiative of Reliance group is unique in its architecture and content.

Biodiesel

Jatropha Oil

Jatropha Seeds

JatrophaFarming

Tissue CulturedPlants

Elite PlantsCharacterisation

And Sourcing

Hybrid PlantsDevelopment

Transgenic Plants Development

Extraction

Transesterification

JatrophaSeed Cake

Biobutanol

Glycerol

3GT BiopolymerVia

1,3 Propane Diol

Enzyme directedconversion

Protein

Bioethanol

CellulosicBiomass

24

Reliance Business Design PrinciplesReliance Business Design Principles

Business design is based on biodiesel non-edible crops on cultivable wasteland owned by marginal farmers.

PhilosophyEnergy securityRural transformation opportunity

Focus areaBiodiesel

CropsNon-edible seedsNon-compete with alcohol

AgronomyWork with marginal farmersFocus on rain-fed areasNo RIL land ownership

TechnologyFor higher farm yieldsFor higher oil content Pursue competing technologies

Hybrid variety of Jatropha with intercrop

25

Components (1) Components (1)

The agronomy and farm advocacy components focus on the farm to address productivity, incomes and scale.

AgronomyR&D (Kakinada, Nagothane, Gandhar)Plantation (Jatropha, Simarouba, Pongamia)Jatropha cultivation with intercrops (Pulses, Millets, beans, oil seeds, vegetables)Jatropha hybrid development

Farm AdvocacyScale-up of biofuel cropsFive states in India (Andhra Pradesh, Maharashtra, Madhya Pradesh, Gujarat, Chhatisgarh)NGO partnersMultiple points of engagement

26

Components (2) Components (2)

Plant and industrial biotechnology components focus on technology to address yields, costs and value addition.

Plant Metabolic EngineeringHigh expression of oils in JatrophaAlgal cultures

Plant Tissue CultureTransesterification

Pilot plant at Kakinada for feed stock validation and engine performance.

Industrial BiotechnologyGlycerol to 1,3 propanediol to polymerOil expression in yeastBiomass to bioethanol/biobutanol

EnzymologyEnzymes for bioethanol/biobutanol

27

ContentsContents

1. Indian Biofuels context

2. Biofuels Development Challenges

3. Reliance Biofuels Initiative

4. Summary

28

Summary Summary

Biofuels is an imperative for India for energy security and an opportunity for rural transformation.

India Biofuels ImperativeUS$ 1 trillion + economy1 billion + peopleSeriously energy deficient

India Biofuels EndowmentArable land (142 mill Ha)Cultivable waste land (40 mill Ha)Cost advantageBiotech talent

India Biofuels OpportunityHigher farm incomesBetter quality of rural lifeJatropha biodiesel and Sugar cane bioethanol are sustainable

ChallengesCosts and Competitiveness

29

Thank You