3rd Transatlantic Market ConferenceGrowth & Security:

Energy and Energy TransportationStatus and future developments of biofuels

in Europe and the US

Washington, D.C., 13.-15. May 2007

Dr.-Ing. Ludolf Plass, Lurgi AG

2

The Blue Planet at NightDistribution of Energy Consumption

3Group ResearchPowertrain

Dr.

Hei

nric

h/U

OP

R&D

Ref

inin

g P

anel

/ 19.

5.20

05

VOLKSWAGEN AG

Global Challenge ???

Increase in passenger car fuel consumption 2004:

India: 10% China: 15% Indonesia: 3 % EU: 1,2% USA: 0%

4

Fulfilling Mankind's NeedsA Challenge for the Technology

How to fulfill mankind's needs in futureHow to fulfill mankind's needs in future?

How to overcome the imbalance between How to overcome the imbalance between industrialized and developing countries?industrialized and developing countries?

5

Energy security: Few major concerns

World population rises by 240.000 people / day

200 Mio. new energy consumers per year

By 2015: 70% of world daily oil needs and 80% of oil tradeonly from three areas: - West Africa- Russia- Middle East (Saudi Arabia, Iran, Iraq)

Oil resources held by state owned companies hinder free flowing investments to asset rich producing and exporting areas:

~ 0,56 trillion $ / year investment required (IEA)~ 20% more than in 1990’s

6

Energy Security : Need for partnership

Strong inpendences between- public policy decision making - private sector action

Energy security / energy policy must be international

Typical examples - Baku-Tbilisi-Ceyhan Pipeline

(private sector with state owned companies / governments)- decarbonised fuels

(supportive regulatory and fiscal systems by governments)

Further developments- clear targets through public policy- externalities like carbon emissions priced

Next 20 years: fundamental change in energy business

7

Development of Energy Consumption

• Energy consumption will approx. double between 2000 and 2050

• In 30 years, renewable energy will be equivalent to the amount of energy from fossil fuels today

8

Long term oil demand / supply outlook

Developing countries show the strongest demand increaseOnly OPEC can increase supplies substantially

Area Demand SupplyMillion b/d 2005 2025 2005 2025

OECD 49,8 52,9 20,5 19,5Developing countries 28,7 52,9 16,1 19,9Transition countries 4,7 5,7 11,7 16,5Total no OPEC 83,2 113,1 50,1 58,9OPEC not counted 33,1 54,3

-------------------- --------------------World 83,2 113,1 83,2 113,1

Source: OPEC

9

Renewable resources: High potential worldwide..., but development is necessary

434

111137

North AmericaJapan

Ameri

0 0 0 0

Near East &

North Africa

1 232 39

W.Europe

014

32 40

harvesting residues

Oceania

America

1560

100125

E.Europe

1 8 14 17

East Asia

1021

178

221

410

sub-Saharan

41

149

331

Caribean &

Latin America

178

253

315

46

2

68

CIS &

Baltic States

South Asia

2,4

6,8

8

3,4

3,3

3,01,0

0,9

World energy consumption 2005 ~ 17 Bn t tce/Biomass ~ 10%World energy consumption 2050 ~ 27 Bn t tce/Biomass ~ 30%

Energy from renewable resources can be increased from ~10% today to ~30% by 2050

Mrd. t SKE

Source: Utrecht University Faaji 2006

10

Energy security, what can be done

“No go”Military means ⇒ no optionIsolation means ⇒ no optionSelf sufficiency means ⇒ no option

“Go”Develop maximum diversity of supply / infrastructureOil upstream investments have risenby >50% ≅$ 50 bn/a Investment required Global gas market emerging: more pipelines / LNGRaise recovery rates of existing oil / gas fields Develop next generation of supplies

Alternative energies, that are low in carbon

11

Alternative Energies Advance

Alternative energies will have a major effect on world energy demandon medium and long term

But requirements are:

Development of CDM (Clean Development Mechanism)CO2 emissions properly costedCO2 trading mechanism developed worldwide

Development of technologiesCarbon capture sequestration (CCS)CO2-utilization for enhanced oil recoveryWind / solar power / hydrogen / combined cycle gas turbinesCO2 recycle: Utilization of Alges, Methanol from sequested CO2and renewable Hydrogen

Synthetic fuels from biomass

12

Development of Fuel Mix in Europe: Vision 2030

SynFuel based onnatural gas

Oil based < 10 ppm Sulfur

SunFuelbased on Biomass

Others (Biodiesel, Bioethanol)

Oilbased

<500 ppmSulfur

today 10 20 30Years

Hydrogen regenerativ

~23% ~ 60 Mio. tpy

~35%

~38%

~4%

Vision 2030: only - 38% fuel based on oil

Less than 40 percent of fuel will be based on oil

Source: VW Fuel Strategy total fuel-consumption in 2030 ~ 250 Mio. tpy

13

Lurgi: Market leader for Biodiesel

66 Biodiesel plants on order20 Biodiesel plants in operation

14

Lurgi: Strong position in Bioethanol

Panda Hereford, USA150.000 tpa Ethanol from Corn, Power/Steam Production from cow manure

18 Bioethanol plants on order12 Bioethanol plants in operation

15

Fuel Production Technologies

Conventional fuels

Refinery UpgradingCrude Oil Convential Fuels

Nat. GasCoal

BiomassGasification

DME

Upgrading

Upgrading

Methanol

FTSynfuels

“real”Synfuels

Synfuels“equivalents”

Methanol

DME

Mt-Synfuel

FT-Synfuel

Methanation SNG

16

2nd Generation Biofuels : Much higher Biomass productivity

Biofuels – a comparison

Ethanol

1.200 – 3,200 l

BTL-Synfuel

4,000 l

Biodiesel

1.150 lPlant oil

1.250 l

Grainsugar

Complete plants

Plant oil

Liter diesel equivalentper year and hectare

Biofuels1st Generation

Biofuels2nd Generation

17

18

Second Generation BiofuelsFuel options of syngas and hydrogen

Based on Biomass gasification:

Fuel Cells

CO + H2

Hydrogen

MethanolDME

Medium BTU gas

GasolineDiesel

MTBE

Gasoline

CH4 (SNG)

I. Wender, Fuel Proc. Techn. 48 (1996) 189

19

Synfuels from Biomass

Lurgi’s BTL Technology is based on industrially proven process steps

FastPyrolysis

FastPyrolysis

Biomass

DieselHigh

Temp.Gasifi-cation

HighTemp.Gasifi-cation

MethanolMethanolMtSyn-fuels

MtSyn-fuels

Gasoline

LPG

Lurgi LR-CokerLurgi MPG Gasification

Lurgi Methanol Technolgy

Lurgi MTP Lurgi COD (South Africa)

20

Pyrolysis Process of Lurgi / FZK

M

HeizerSandkreislauf

M

Slurry

M

HeaterSand Cycle

M

Straw, Hay a.o.

Shredder

Cooler

Double Screw Reactor

Col

d, s

hred

ded

stra

who

t san

d ca

. 500

Pyrolysis Coke

Pyrolysis gas

Pyrolysis Oil

SlurryCoke

Source: FZKThe Lurgi flash-coker

21

Slurry mixed with Pyrolysis coke

Joint grinding of pyrolysis oil and

coke give pump able/ storable

slurry

Energy concentration from

biomass to slurry by factor 13

ca. 80% of the energy content of

the biomass is contained in the

slurry

22

MPG Gasifier

23

Lurgi‘s MtSynfuels® Route

Olefin Production

Olefin Oligo-merisation Gasoline

LPG

Kero/Diesel

H2from Methanol

synthesisWaterrecycle

Hydrocarbon Recycle

MethanolProduct

separation+ MD Hydrogenation

Hydrocarbon Recycle

Process water COD Plant South Africa

24

Forschungszentrum Karlsruhe

Energy- and mass balance

5-7 t Wood or Straw with 15 wt.% H2O

5.4 t Condensate/char - slurry plus ~ 1,8 t O2

1.2 t FTS-raw products

1 t Synthetic fuel

~ 40 % C 5+ FTS- ProdukteSynfuel ...

~ 5 % valuableC5-products

Lignocellulose 100 %

Schnellpyrolyse ~ 3 %

Kondensat/Koks – Slurry ~ 90 %

Flugstrom-Druckvergasung ~ 3 %

~ 13 %

ReaktionswärmeSynthese-Rohgas Synthese-Reingas

~ 76 %

FT- Synthese

FTS - Reaktionswärme

~ 18 %

~ 6 %

~ 5 %

nicht umgesetztes SyngasSyntheseprodukte

~ 51 %

~ 1 %

~ 1 %

~ 1 %

C5- - ProdukteTrennung

Lignocellulose 100 %

Fast pyrolysis~ 7 %

~ 3 %

Condensate/char – Slurry~ 90 %

Entrained -flow gasification ~ 3 %

~ 13 %

Heat of reactionSynthesis-raw gasSynthesis-clean gas

~ 76 %

FT- Synthesis

Heat of reaction

~ 18 %

~ 6 %

~ 5 %

Not converted SyngasSynthesis products

~ 51 %

~ 40 % C 5+ FTS- ProdukteSynfuel, waxes, olefines...

El. Power and HT steam:

~ 42 %Heat losses:Sum ~ 6 %

~ 1 %

~ 1 %

~ 1 %

C5 - Products

C5

Separation

Co-production of:chemicals, steam, electricity

25

regionale Pyrolyse- Anlagen

ZentralerCentral syngas and

fuel production

The slurry gasification concept

25 km

Regional intermediate fuel production

250 km

TransportationRadius

Energy density[GJ/m3]

Straw: 1.5

Slurry: 20

Diesel: 36

Distributed biomass

26

Zentralized / dezentralized Biofuels concept

Forschungszentrum Karlsruhein der Helmholtz-Gemeinschaft

Dezentralized pyrolysis

Zentralized Bio-Synfuels production

Synfuel potential Germany

Approx. 5 Mio. tpy Synfuelsfrom excess straw and wood waste

27

Road Map – time to Market – Lurgi’s BTL

Fast pyrolysis :

High temperature :Gasification :

MT Synfuels :

• Joint Development with FZK *)Start up Demo plant 6 /2007

• First contract expected 12/2007

• Development project in planning. Start ~ September 2007

• First contract expected 12/2009

• Development project with Volkswagen / Südchemie in planning, project start ~ September 2007

• First contract expected 12/2009

*) FZK: Forschungszentrum Karlsruhe

28

Combi Biofuel Plants for the Future

Bio syncurde

MtSynfuel-Production

160 kt/a Diesel

40 kt/a Gasoline

Gasification210 t/h

Biomass30 t/h

6 t/hsteam

Methanol

Biodiesel-Production

100 kt/a Biodiesel

32 t/h Saat

ca. 70 kha

14 t/hWaste

Bioethanol-Production

100 kt/a Bioethanol

35 t/hsteam

41 t/hGrain

40 t/hBiomass

ca. 70 kha

130 t/h Biomass

approx. 5 decentralLR-Pyrolysis-Plants

1. Plant 2. Plant 3. Plant

29

CoalGasification Gas cleaning Methanation SNG* to pipeline

Phase II

Phase I

Coal ExtensionGasification

ExtensionGas cleaning Mt-Synfuels Synfuels to

distribution

CO2 to Enhanced Oil Recovery

Phase III

Biomass Pyrolysis Bio-Syncrude

Montana: Coal/ Biomass to SNG/ Synfuels

GasificationGas cleaning

Mt-Synfuels Synfuelsto distribution

*SNG= Substitute Natural Gas

30

BTL is the winning option for the future

31

Summary II

The Development of the 2nd Generation „Synfuels“ based onCoals / Biomass / Natural Gas is the Winning Option in Future

- The spectrum of “Synfuels” will be broader in future

GTL / CTL plants will be large scale (> 30.000 bpd) and based on cheap coal / natural gas

Lurgi owns the complete technology chain

BTL plants will typically be in the range of 4.000 to 20.000 bpd = 0,2 – 1,0 tpy

Lurgi’s strategic goal is to own the complete technology chain

Biomass can cover 30%+ of the primary energy demand,but should primarily be used as Carbon Source

Biomass is the Key Alternative for Oil, Gas and Coal to reduceCO2 in transport sector

Biofuels based on Biomass Need :

- Demonstration of technology chain - Sustainable Support by Legislation

32

Back up’s

…. the following pages

33

Forschungszentrum Karlsruhein der Helmholtz-Gemeinschaft

40 Pyrolyseanlagen (20 M€)Kapazität ~ 0,2 Mt/a lufttrockenes Stroh

zentrale Vergasungsanlage (500 M€)Synfuel-Kapazität ~ 1 Mt/a

Grobe Kostenabschätzung:Diesel aus Öl ~ 0,4 €/kg

FT-Biosynfuel ~ 0,9 €/kg

Prozentuale Erzeugungskosten für BioSynFuel

Slurry Transport

Teuerer auf Grund von:hohem spezifischen Durchsatzkleineren Anlagenfestem Einsatzmaterial

32Überschussstroh

Restholz

Slurrytransport8

18

Strohtransport

Sauerstoff

Vergasungund FT Synthese

Schnellyrolyse

5

12

18

52Personal

34

MtSynfuels Pilotplant

35

Demonstration of FT Synthesis

36

Forschungszentrum Karlsruhe

Synfuels from coal: Fischer-Tropsch-

synthesis

Titan, Trinidad ca. 8 Mio. t/a

n CO + 2 n H2 (-CH2-) + n H2O

Sasol, South Africaca. 6 Mio. t/a

Cat., 200 °C

30 bar

Methanol synthesis

37

Forschungszentrum Karlsruhein der Helmholtz-Gemeinschaft

40 Pyrolyseanlagen (20 M€)Kapazität ~ 0,2 Mt/a lufttrockenes Stroh

zentrale Vergasungsanlage (500 M€)Synfuel-Kapazität ~ 1 Mt/a

Grobe Kostenabschätzung:Diesel aus Öl ~ 0,4 €/kg

FT-Biosynfuel ~ 0,9 €/kg

Prozentuale Erzeugungskosten für BioSynFuel

Slurry Transport

Teuerer auf Grund von:hohem spezifischen Durchsatzkleineren Anlagenfestem Einsatzmaterial

32Überschussstroh

Restholz

Slurrytransport8

18

Strohtransport

Sauerstoff

Vergasungund FT Synthese

Schnellyrolyse

5

12

18

52Personal

38

EU Biofuel Marketwhen meeting the EU Directive

EU 15 States; all notes in 1000 t, Basis Fuel Consumption 1998References: EU-Commision (KOM (2001) 547 fin.)

39

Biodiesel-FeedstockBa

umw

olle

Palm

öl

Rap

s

Altfe

tt

Palm

kern

Palm

olei

n

Soja

Riz

inus

öl

Coc

onut

Sonn

enbl

ume

Jatro

pha

Kara

nja

Lurgi has industrial experience with all Feedstock sources

40

Gasification HP POX - Freiberg

Demonstration plant for production of Syngas from Natural Gas, Liquid Hydrocarbons/Slurriesat pressures up to 100 bar sponsored by BMWA, SMWK, mg technologies

41

Biomass from agricultural waste

Forschungszentrum Karlsruhein der Helmholtz-Gemeinschaft

Bio-/Grünabfall6%

Altholz9%

Industrierestholz10%

Waldrestholz22%

Stroh (Überschuss-)21%

Gülle15%

Klärschlamm (kommunal, roh)4%

Hausmüll (Rest-)13%

Deutschland 2002: rd. 70 Mio. Mg oTS

Hausmüll (Rest-)11%

Klärschlamm (kommunal,

roh)4%

Gülle12%

Stroh (Überschuss-)

12%

Waldrestholz31%

Industrierest-holz11%

Altholz10%

Bio-/Grünabfall

8%

Baden-Württemberg 2002: rd. 8 Mio. Mg oTS

ITASLL

Aufkommen biogener Reststoffe und Abfälle

42

Key factors for BTL-success

43

GtL production capacity woldwide

source: various industrial publications

0

100

200

300

400

500

600

700

2005 2006 2007 2008 2009 2010 2015year

capa

city

[100

0 b/

d]

under discussion

under development

under construction

existing

CtL: Sasol 150,000 b/d existingChina 200,000 b/d under construction

2,000,000 b/d under discussion

100.000 bbl/d = 4.5 mt/year

44

CO2 reduction potential and area demand of biofuels

Share of biofuels: 15 mtoe (5.75% total fuel share EU 25)

0

25

50

75

100

CO2 reduction potential area demand

CO

2re

duct

ion

pote

ntia

l %

0

5

10

15

20

area

dem

and

(m

ill. h

a)ethanol conventionalbiodieselSunFuel (full plant)

45

Biomass potential in EU 25 in 2005

Group ResearchPowertra in VOLKSW AGEN AG

Biomass potential in EU 25 in 2005RENEW_EU-25 geography

SOUTH

WEST

EAST (CEE-8)

UK and Ireland

NORTH

Alpineregion

Overall potential

Maximum: 4380 PJ (102 mtoe)

Realistic: 3445 PJ (82 mtoe)

source: EC BREC, Renew, 2004

46

Biomass potential for BtL fuel 2004EU 15 EU 25 EU 28

Land coverage [mill. ha]

Arable land [mill. ha]

Forest area [mill. ha]

Permanent grassland [mill. ha]

Inhabitants [million]

Setaside land (17% of arable land), approx. 2020 [mill. ha]

Setaside land (9 % of arable land), 2004 [mill. ha] 9.0

Agricultural residues* (straw, maize res., perm. crops) [mtoe] 21.6

Forestry residues + wood industry byproducts* [mtoe] 25.5

Energy crops* [mtoe] 35.0

Total potential for SunDiesel from 9 mill. ha (today) [mtoe] 82.0 today

510397323

74

110

47

141

380

103

143

55

455

163

74

550

17.5 23.912.5

Source: * EC BREC, RENEW, 2004

European Centre Baltic Renewable Energy Centre: potential in 2040 = 80 mill. ha

47

Comparison of Biofuels

48

CO2 Reduction potential in power stations worldwide

Power stations account for > 40% of CO2 emissions

Power demand grows ~ 2,5 % p.a. worldwide

China starts a power plant every 3 days !

Less than half the generating capacity for need in 2030has been built so far (investment 9 trillion $)

Unique opportunity- place new capacities to reduce dependence and emissions

49

The international framework in agencies

IEA : International Energy Agency

Founded in 1973 to oversee energy security

Must match market conditions of today, not 1973 !

Include new significant consumers- China - India- OPEC countries- Russia

Supplies must be managed more effectively

50

Biomass potentials estimation for the EU 28 member states in 2040

source: EC Brec, Renew, 2004

Ener

gy

[mto

e/a]

Fuel

shar

e [

%]

substitution 2020total diesel

biomasspotential

trafficshare

fuelshare

50

100

150

200

250

300

10

20

30

40

50

60

woodyresidues

energyplants

0

agriwaste

0

70350 Boundary conditions:- 60% of the arable land for energy farming(no progress in yield/ha)

- 50% of biomass for transportation- Efficiency of production η = 50% - FT- diesel share 80%, kerosene + naphta20%

400 80