Biofuels in APEC: Biofuels in APEC: Crafting Messages for Crafting Messages for Ministers and LeadersMinisters and Leaders

Focus on EMM-8Focus on EMM-8

What are some key messages that What are some key messages that the Task Force can convey to the Task Force can convey to ministers by spring 2007?ministers by spring 2007?

How can we put those messages in a How can we put those messages in a form that ministers and leaders can form that ministers and leaders can bring to the APEC public?bring to the APEC public?

Can we work towards a Joint Can we work towards a Joint Statement of APEC Biofuel Potential?Statement of APEC Biofuel Potential?

Some Topical AreasSome Topical Areas

Biofuel Economics Biofuel Economics Biofuel Delivery InfrastructureBiofuel Delivery Infrastructure Biofuel-Capable Fuel-Flexible VehiclesBiofuel-Capable Fuel-Flexible Vehicles Biofuel Resource AvailabilityBiofuel Resource Availability Biofuel Trade PotentialBiofuel Trade Potential Cross-cutting: Biofuel PoliciesCross-cutting: Biofuel Policies Cross-cutting: Biofuel StandardsCross-cutting: Biofuel Standards

A Possible ApproachA Possible Approach

StartStart with a “working hypothesis” with a “working hypothesis”in each topical area of TF activity.in each topical area of TF activity.

LookLook for APEC economy examples for APEC economy examples that support the working hypothesis.that support the working hypothesis.

ReviseRevise the working hypothesis as the working hypothesis as needed, according to facts gathered.needed, according to facts gathered.

GroupGroup together final hypotheses as a together final hypotheses as a set of Biofuels Messages to Leaders.set of Biofuels Messages to Leaders.

These become the basis for a Joint These become the basis for a Joint Statement of Biofuels PotentialStatement of Biofuels Potential..

Biofuel EconomicsBiofuel Economics Possible Working HypothesisPossible Working Hypothesis

– At oil prices over US$50 per barrel, biofuels At oil prices over US$50 per barrel, biofuels represent a cost-effective opportunity to displace represent a cost-effective opportunity to displace conventional gasoline and diesel fuel for transport.conventional gasoline and diesel fuel for transport.

Example of Supporting EvidenceExample of Supporting Evidence– Australian Biofuels Taskforce reported in August Australian Biofuels Taskforce reported in August

2005 that “the long term world price of oil would 2005 that “the long term world price of oil would need to average US$42-47 per barrel in 2004-05 need to average US$42-47 per barrel in 2004-05 dollars… for a new ethanol producer to be viable dollars… for a new ethanol producer to be viable post-2015 without government assistance.”post-2015 without government assistance.”

– IEA World Energy Outlook projects 2020 price of IEA World Energy Outlook projects 2020 price of $46 per barrel in a “deferred investment” case.$46 per barrel in a “deferred investment” case.

Biofuel InfrastructureBiofuel Infrastructure

Possible Working HypothesisPossible Working Hypothesis– It should be affordable for several APEC It should be affordable for several APEC

economies to provide a network of filling economies to provide a network of filling stations for biofuels by 2015 that provides stations for biofuels by 2015 that provides substantial flexibility to shift away from substantial flexibility to shift away from conventional transport fuels.conventional transport fuels.

Example of Supporting EvidenceExample of Supporting Evidence– In the USA, the State of Illinois recently saw an In the USA, the State of Illinois recently saw an

increase from 14 to 114 in the number of E85 increase from 14 to 114 in the number of E85 filling stations from a $500,000 program – a filling stations from a $500,000 program – a public contribution of $5,000 per station to a public contribution of $5,000 per station to a total conversion cost of $7,000 per station. total conversion cost of $7,000 per station. (Source: Governors’ Ethanol Coalition)(Source: Governors’ Ethanol Coalition)

Fuel-Flexible VehiclesFuel-Flexible Vehicles Possible Working HypothesesPossible Working Hypotheses

– Fuel-flexible vehicles can be introduced into Fuel-flexible vehicles can be introduced into vehicle fleets at very low cost.vehicle fleets at very low cost.

– It is practical grow the portion of fleets that can It is practical grow the portion of fleets that can shift between biofuels and conventional fuels by shift between biofuels and conventional fuels by about 5 percentage points a year.about 5 percentage points a year.

Examples of Supporting EvidenceExamples of Supporting Evidence– GM reports that a new computer chip can give GM reports that a new computer chip can give

vehicles full flexibility to shift between gasoline vehicles full flexibility to shift between gasoline and E85 for just $30 extra per vehicle.and E85 for just $30 extra per vehicle.

– Vehicle fleets turn over in 20 years, so if all Vehicle fleets turn over in 20 years, so if all newnew vehicles were fuel-flexible, 5% of vehicles were fuel-flexible, 5% of totaltotal vehicles would become fuel-flexible each year.vehicles would become fuel-flexible each year.

Biofuel Resource AvailabilityBiofuel Resource Availability

Possible Working HypothesesPossible Working Hypotheses– Enough biofuels can be produced from Enough biofuels can be produced from

conventional crops to displace a significant conventional crops to displace a significant portion of APEC oil use.portion of APEC oil use.

– Development of new technology for use of Development of new technology for use of lignocellulosic feedstocks would boost the lignocellulosic feedstocks would boost the biofuels resource potential greatly.biofuels resource potential greatly.

Examples of Supporting EvidenceExamples of Supporting Evidence– US study found 1 billion tons of biomass US study found 1 billion tons of biomass

available for fuel, surplus to food needs.available for fuel, surplus to food needs.– US expects lignocellulosic technology to be US expects lignocellulosic technology to be

cost effective as soon as 2012.cost effective as soon as 2012.

Biofuel Trade OpportunitiesBiofuel Trade Opportunities

Possible Working HypothesesPossible Working Hypotheses– There are substantial opportunities for biofuels There are substantial opportunities for biofuels

trade among APEC economies.trade among APEC economies.– There are substantial opportunities to diversify There are substantial opportunities to diversify

transport fuels away from oil through imports transport fuels away from oil through imports of biofuels into APEC.of biofuels into APEC.

Examples of Supporting EvidenceExamples of Supporting Evidence– Biofuels are produced from different crops at Biofuels are produced from different crops at

different costs in various APEC economies.different costs in various APEC economies.– Japan is planning to import ethanol from Brazil Japan is planning to import ethanol from Brazil

to displace up to 3% of its vehicle oil use.to displace up to 3% of its vehicle oil use.

Biofuel PoliciesBiofuel Policies Possible Working HypothesesPossible Working Hypotheses

– An integrated set of policies regarding biofuel An integrated set of policies regarding biofuel production, biofuel distribution infrastructure production, biofuel distribution infrastructure and fuel-flexible vehicles can pave the way for and fuel-flexible vehicles can pave the way for expanded use of biofuels in APEC economies.expanded use of biofuels in APEC economies.

– Measures to cap feedstock prices do not Measures to cap feedstock prices do not contribute to a reliable biofuels supply.contribute to a reliable biofuels supply.

– Long-term expansion of biofuel markets does Long-term expansion of biofuel markets does not depend on financial incentives but will not depend on financial incentives but will mainly be driven by oil prices.mainly be driven by oil prices.

Example of Supporting EvidenceExample of Supporting Evidence– Recent shortages of biofuel feedstocks.Recent shortages of biofuel feedstocks.– Past shortages of natural gas in N. America.Past shortages of natural gas in N. America.

Biofuel StandardsBiofuel Standards Possible Working HypothesisPossible Working Hypothesis

– Mutually agreed quality standards for biofuels, Mutually agreed quality standards for biofuels, as well as technical standards for fuel-flexible as well as technical standards for fuel-flexible vehicles and fueling stations, can help to speed vehicles and fueling stations, can help to speed the penetration of biofuels in the marketplace the penetration of biofuels in the marketplace and boost biofuel trade in the APEC region.and boost biofuel trade in the APEC region.

Examples of Supporting EvidenceExamples of Supporting Evidence– Technical standards have boosted trade in Technical standards have boosted trade in

other areas like energy-efficient lighting.other areas like energy-efficient lighting.– Cars and filling stations today have widely Cars and filling stations today have widely

varying ability to use biofuels, in part because varying ability to use biofuels, in part because of different technical specifications.of different technical specifications.

– U.S. and Brazil are discussing ethanol standards U.S. and Brazil are discussing ethanol standards that might be adopted by APEC.that might be adopted by APEC.

Let’s put our experience Let’s put our experience and knowledge together and knowledge together

to build the case for to build the case for biofuels as an effective biofuels as an effective

strategy for energy strategy for energy security and trade.security and trade.