Biodiesel Potential Global Energy Outlook Petroleum is the largest single source of energy consumed by the worlds population,

exceeding coal, natural gas, nuclear, hydro and renewables1. Fossil fuels account for 80% of energy usage, and that percentage is expected to remain stable through 20302. Concerns about oil supply and energy security have motivated many countries to consider alternatives to imported petroleum. Liquid biofuels, renewable fuels derived from biomass, are arguably one of the best options to lead the transition away from petroleum fuels in the near-term and have made a recent resurgence in response to rising oil prices3. Figure 1 World Marketed Energy Use by Energy Type, 1980-2030

Source:

International Energy Outlook 2006, June 2006, Energy Information Administration, Office of Integrated Analysis and Forecasting, U.S. Department of Energy, Washington, DC 20585

A Comparative International Analysis of the Potential Gains from Biodiesel Production and Export, Matthew P. Johnston and Tracey Holloway Center for Sustainability and the Global Environment, University of Wisconsin Madison, Madison, WI, 53726 USA, Submitted to Environmental Science & Technology, October 13, 2006 International Energy Outlook 2006, June 2006, Energy Information Administration Office of Integrated Analysis and Forecasting, U.S. Department of Energy, Washington, DC 20585, www.eia.doe.gov/oiaf/ieo/index.html A Comparative International Analysis of the Potential Gains from Biodiesel Production and Export, Matthew P. Johnston and Tracey Holloway Center for Sustainability and the Global Environment, University of Wisconsin Madison, Madison, WI, 53726 USA, Submitted to Environmental Science & Technology, October 13, 2006

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Figure 2

Global Energy Demand by Fuel

Source:

www.exxonmobil.com/Corporate/Citizenship/Imports/EnergyOutlook06/slide_3.html

The International Energy Agency (IEA) now forecasts global demand for petroleum to increase 40% from 81 million barrels per day (bpd) this year to 121 million bpd in 20254. This demand surge has combined with supply-threatening political uncertainties in the Middle East as well as natural disasters in the USA' Gulf Coast region, to drive crude oil to prices not seen before. Global oil prices reached a high of USD78.40 per barrel of light sweet crude on July 14, 2006 5 , as shown in Figure 3. Projected oil prices from 2010 to 2030 are shown in Figure 4.

International Energy Outlook 2006, June 2006, Energy Information Administration Office of Integrated Analysis and Forecasting, U.S. Department of Energy, Washington, DC 20585, www.eia.doe.gov/oiaf/ieo/index.html. www.wikipedia.org

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Figure 3:

Light Crude Oil (CL, NYMEX) Monthly Price Chart

Source:

Figure 4:

http://futures.tradingcharts.com/chart/CO/M

Projected Oil Prices 2010 2030

Source:

International Energy Outlook 2006, June 2006, Energy Information Administration, Office of Integrated Analysis and Forecasting, U.S. Department of Energy, Washington, DC 20585

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Global Warming The global warming issue may be summarised as follows: Figure 5 Ozone Depleting Substances, Greenhouse Gases, Global Warming, Climate Change and Ultraviolet-B Radiation

Global Warming

Climate Change El Nino Floods Ozone Depletion Heatwave Freak Storms Rising Sea Level

Greenhouse Gases CO2 CH4 N2O

Class I CFCs Halons CCl4, Br

Crop Yields Plankton/Fish Marine Aquasystems Skin Cancer Cataracts Immune Suppression

Class II HCFCs

HFCs PFCs SF6 NF3 HFEs

Source: www.epa.gov and Aftaas analysis

UV-B Radiation

Global Initiatives to Combat Global Warming To control global warming and climate change, internationally countries have joined forces towards compliance to: 1. Montreal Protocol, 16th September 1987 - agreed to reduce the production of chlorine- and bromine-containing chemicals that destroy stratospheric ozone, such as CFCs, halons, methyl chloroform, carbon tetrachloride, bromides etc 2. Kyoto Protocol, 11th December, 1997 - agreed to reduce their anthropogenic greenhouse gas emissions (CO2, CH4, N2O, HFCs, PFCs, and SF6) by at least 5% below 1990 levels in the commitment period 2008 to 2012. United States Environmental Protection Agency (US EPA) has created the Significant New Alternatives Policy (SNAP) Program under section 612 of the Clean Air Act Amendments. SNAP evaluates alternatives to ozone depleting substances.

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Biofuel Emissions Figure 6 Greenhouse Gas Emissions by Fuel

Source:

Report on Bus Alternatives sponsored by HGCI, UOS, Ford Motor Company, and Harvard University, 31st July 2001 (www.greencampus.harvard.edu/ green_projects/afvp/rec/bus.pdf)

The above figure shows that compared to diesel, biodiesel use significantly reduces greenhouse gases, particulates, volatile organic compounds and carbon monoxide, with a small increase in nitrous oxides. 100% Biodiesel emits a third of carbon dioxide emitted by diesel.

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Biodiesel as a Biofuel Table 1 Comparison of Alternative Fuels

Source:

Biodiesel Production and Marketing in Germany: The Situation and Perspective, Dieter Bockey, Union Zur Forderung Von Oel- Und Proteinpflanzen E. V.(UFOP)

The above table shows that there are no restrictions in biodiesel use in terms of vehicle technique, security, tank time, radius of action and lubrication whereas there are some restrictions in selling and handling and restrictions in availability, bettered only by as yet in development fuel operated gas cell vehicles, and restrictions in costs, bettered only by compressed natural gas, liquid gas and methanol vehicles.

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Sources and Yields of Biodiesel Table 2 Average Oil Yields, Land Requirements and Major Producers of Oleaginous Plants

Source:

Liberalisation of Trade in Renewable Energy and Associated Technologies: Biodiesel, Solar Thermal and Geothermal Energy, Ronald Steenblik, OECD Directorate, 4th April 2006, Organisation for Economic Cooperation and Development

The above table shows that oil palm yields the highest feedstock oil per hectare, thus the lowest planting area displaced.

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Global Oil and Fats Market Figure 7 Global Oil and Fats Market 2006 Forecast 145 million tonnes

Source:

Oil World Annual 2006

Palm oil has overtaken soybean oil in the global fats and oils market.

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Figure 8 -

Major Vegetable Oil and Meal Trade Flows

Source:

Rabobank analysis based on Oil World and FAPRI, 2006, Drivers and Dynamics in the Oilseed Complex, Alejandro Reca, Executive Director, Food and Agribusiness Research- Americas, Rabobank International, 14th June 2006

Potential for Biodiesel by Country Figure 9 Global Biodiesel Potential from Existing Lipid Exports

Source:

A Comparative International Analysis of the Potential Gains from Biodiesel Production and Export, Matthew P. Johnston and Tracey Holloway, Center for Sustainability and the Global Environment, University of

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Wisconsin, Submitted to Environmental Science & Technology, October 13, 2006

Table 3 -

Top 10 Developing Countries with the Highest Profit Potential from Biodiesel Exports

Note: Source:

green signifies the country is in the top third of all countries, yellow in the middle third and red in the bottom third A Comparative International Analysis of the Potential Gains from Biodiesel Production and Export, Matthew P. Johnston and Tracey Holloway, Center for Sustainability and the Global Environment, University of Wisconsin, Submitted to Environmental Science & Technology, October 13, 2006

Malaysia has the highest biodiesel potential amongst developing countries. Production Cost of Biodiesel by Country Figure 10 Biodiesel Production Cost per Liter from Existing Lipid Exports

Source:

A Comparative International Analysis of the Potential Gains from Biodiesel Production and Export, Matthew P. Johnston and Tracey Holloway, Center for Sustainability and the Global Environment, University of Wisconsin, Submitted to Environmental Science & Technology, October 13, 2006

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Table 4 -

Top 10 Countries in Terms of Absolute Biodiesel Potential

Source:

A Comparative International Analysis of the Potential Gains from Biodiesel Production and Export, Matthew P. Johnston and Tracey Holloway, Center for Sustainability and the Global Environment, University of Wisconsin, Submitted to Environmental Science & Technology, October 13, 2006

Malaysias production cost is one of the lowest by far, comparable only by Indonesia and Philippines.

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