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WORLDWIDE REFINING & PETROCHEMICAL INDUSTRY MONITOR:

Biofuels Legislation, Production and Supply, and Construction Projects

HYDROCARBON PUBLISHING COMPANY Translating Knowledge into ProfitabilitySM

WORLDWIDE BIOFUELS LEGISLATION, PRODUCTION AND SUPPLY, AND CONSTRUCTION PROJECTS 1

World................................................................................................................................................................................. 1

1.1 Introduction to Biofuels ..................................................................................................................................................... 1 1.1.1 Status and Outlook for Global Biofuels Production.............................................................................................. 1 1.1.2 Growing Concerns about Biofuels Sustainability ................................................................................................. 3 1.1.3 The Cost of Biofuels: Subsidies........................................................................................................................... 4 1.2 Ethanol ............................................................................................................................................................................. 5 1.2.1 Production and Demand...........................................................................................................................6 1.2.2 Investment Opportunities for Refiners........................................................................................................7 1.2.3 Technology Developments .......................................................................................................................8 1.3 Biodiesel......................................................................................................................................................................... 10 1.3.1 Production and Demand.........................................................................................................................11 1.3.2 Feedstock Sources ................................................................................................................................12 1.3.3 Investment Opportunities for Refiners......................................................................................................12 1.3.4 Technology Developments .....................................................................................................................12 1.3.5 Construction Projects.............................................................................................................................13 1.4 Biobutanol and Others.................................................................................................................................................... 14 1.4.1 Biobutanol and "Green" Gasoline ............................................................................................................14 1.4.2 Algae-based Biofuels .............................................................................................................................16 1.4.3 Bio-Jet Fuel ..........................................................................................................................................18 1.4.4 New Biofuels Feedstocks .......................................................................................................................19 1.4.5 Bio-Hydrogen........................................................................................................................................20 2

United States and Canada............................................................................................................................................. 20

2.1 United States.................................................................................................................................................................. 20 2.1.1 Ethanol.................................................................................................................................................20 2.1.1.1 Legislation............................................................................................................................................. 22 2.1.1.1.1 Production ........................................................................................................................... 22 2.1.1.1.2 Fuel Blending....................................................................................................................... 22 2.1.1.1.3 Plant Emissions ................................................................................................................... 26 2.1.1.2 Production and Demand ....................................................................................................................... 27 2.1.1.3 Production Challenges and Concerns .................................................................................................. 28 2.1.1.4 Corn Production.................................................................................................................................... 29 2.1.1.5 Infrastructure Expansion and Challenges ............................................................................................. 30 2.1.1.6 CO2 Emissions...................................................................................................................................... 33 2.1.1.7 Technology Developments ................................................................................................................... 33 2.1.1.8 Construction Projects............................................................................................................................ 38 2.1.2 Biodiesel...............................................................................................................................................44 2.1.2.1 Legislation............................................................................................................................................. 45 2.1.2.2 Supply and Demand ............................................................................................................................. 47 2.1.2.3 State-specific Production ...................................................................................................................... 47 2.1.2.4 Infrastructure Expansion and Challenges ............................................................................................. 48 2.1.2.5 Technology Developments ................................................................................................................... 49 2.1.2.6 Construction Projects............................................................................................................................ 52 2.2 Canada........................................................................................................................................................................... 59 2.2.1 Ethanol.................................................................................................................................................59 2.2.1.1 Legislation............................................................................................................................................. 59 2.2.1.2 Technology Developments ................................................................................................................... 60 i Copyright © Hydrocarbon Publishing Company, Inc. All Rights Reserved

2.2.1.3 Construction Projects ............................................................................................................................60 2.2.2 Biodiesel .............................................................................................................................................. 61 2.2.2.1 Legislation .............................................................................................................................................61 2.2.2.2 Production and Demand .......................................................................................................................61 2.2.2.3 Construction Projects ............................................................................................................................62 3

Latin America and the Caribbean .................................................................................................................................63

3.1 Regional Overview..........................................................................................................................................................63 3.1.1 Ethanol ................................................................................................................................................ 63 3.1.1.1 Production and Demand .......................................................................................................................63 3.1.1.2 Construction Projects ............................................................................................................................64 3.1.2 Biodiesel .............................................................................................................................................. 65 3.2 Mexico ............................................................................................................................................................................66 3.2.1 Ethanol ................................................................................................................................................ 66 3.2.2 Biodiesel .............................................................................................................................................. 66 3.3 Venezuela.......................................................................................................................................................................67 3.3.1 Ethanol ................................................................................................................................................ 67 3.3.2 Biodiesel .............................................................................................................................................. 67 3.4 Brazil...............................................................................................................................................................................68 3.4.1 Ethanol ................................................................................................................................................ 68 3.4.1.1 Legislation .............................................................................................................................................68 3.4.1.2 Production and Demand .......................................................................................................................68 3.4.1.3 Infrastructure Expansion and Challenges .............................................................................................70 3.4.1.4 Exports ..................................................................................................................................................71 3.4.2 Biodiesel .............................................................................................................................................. 72 3.4.2.1 Legislation .............................................................................................................................................72 3.4.2.2 Production and Demand .......................................................................................................................72 3.4.2.3 Technology Developments....................................................................................................................73 3.5 Argentina ........................................................................................................................................................................74 3.5.1 Ethanol ................................................................................................................................................ 74 3.5.2 Biodiesel .............................................................................................................................................. 74 3.6 Colombia.........................................................................................................................................................................75 3.6.1 Ethanol ................................................................................................................................................ 75 3.6.2 Biodiesel .............................................................................................................................................. 75 3.7 Other Latin American Countries......................................................................................................................................75 3.7.1 Ethanol ................................................................................................................................................ 75 3.7.2 Biodiesel .............................................................................................................................................. 76 4 Western Europe .................................................................................................................................................................76 4.1 Regional Overview..........................................................................................................................................................76 4.1.1 Ethanol ................................................................................................................................................ 76 4.1.1.1 Legislation .............................................................................................................................................76 4.1.1.2 Production and Demand .......................................................................................................................77 4.1.1.3 Technology Developments....................................................................................................................78 4.1.1.4 ETBE.....................................................................................................................................................78 4.1.1.5 Construction Projects ............................................................................................................................79 4.1.2 Biodiesel .............................................................................................................................................. 80 4.1.2.1 Legislation .............................................................................................................................................80 4.1.2.2 Production and Demand .......................................................................................................................82 4.1.2.3 Production Challenges and Concerns...................................................................................................82 4.1.2.4 Technology Developments....................................................................................................................84 4.1.2.5 Construction Projects ............................................................................................................................85 ii Copyright Š Hydrocarbon Publishing Company, Inc. All Rights Reserved

4.2 France ............................................................................................................................................................................ 90 4.2.1 Legislation.............................................................................................................................................................. 90 4.2.2 Ethanol................................................................................................................................................................... 90 4.2.3 Biodiesel ................................................................................................................................................................ 91 4.3 Germany......................................................................................................................................................................... 91 4.3.1 Ethanol................................................................................................................................................................... 91 4.3.2 Biodiesel ................................................................................................................................................................ 91 4.4 Italy................................................................................................................................................................................. 92 4.5 United Kingdom.............................................................................................................................................................. 93 4.5.1 Ethanol.................................................................................................................................................93 4.5.2 Biodiesel...............................................................................................................................................93 4.5.2.1 Legislation............................................................................................................................................. 93 4.5.2.2 Production and Demand ....................................................................................................................... 94 4.5.2.3 Technology Developments ................................................................................................................... 94 4.6 Spain .............................................................................................................................................................................. 95 4.6.1 Biodiesel...............................................................................................................................................95 4.6.1.1 Legislation............................................................................................................................................. 95 4.6.1.2 Production and Demand ....................................................................................................................... 95 4.7 Other West European EU members............................................................................................................................... 96 4.7.1 Ethanol.................................................................................................................................................96 4.7.2 Biodiesel...............................................................................................................................................96 5

Central/Eastern Europe and the CIS ............................................................................................................................ 97

5.1 Regional Overview ......................................................................................................................................................... 97 5.1.1 Ethanol.................................................................................................................................................97 5.1.1.1 Legislation............................................................................................................................................. 97 5.1.1.2 Production and Demand ....................................................................................................................... 98 5.1.1.3 Construction Projects............................................................................................................................ 99 5.1.2 Biodiesel.............................................................................................................................................100 5.1.2.1 Legislation........................................................................................................................................... 100 5.1.2.2 Production and Demand ..................................................................................................................... 101 5.1.2.3 Construction Projects.......................................................................................................................... 102 6

Middle East................................................................................................................................................................... 103

6.1 Regional Overview ....................................................................................................................................................... 103 6.1.1 Ethanol...............................................................................................................................................103 6.1.2 Biodiesel.............................................................................................................................................104 7

Africa............................................................................................................................................................................. 104

7.1 Regional Overview ....................................................................................................................................................... 104 7.1.1 Ethanol...............................................................................................................................................104 7.1.2 Biodiesel.............................................................................................................................................105 7.1.2.1 Production and Demand ..................................................................................................................... 105 7.1.2.2 Construction Projects.......................................................................................................................... 105 7.2 South Africa.................................................................................................................................................................. 106 7.3 Nigeria .......................................................................................................................................................................... 106 7.4 Senegal ........................................................................................................................................................................ 106 7.5 Zimbabwe..................................................................................................................................................................... 106 7.6 Mozambique................................................................................................................................................................. 106 8

Asia-Pacific................................................................................................................................................................... 107 iii Copyright Š Hydrocarbon Publishing Company, Inc. All Rights Reserved

8.1 Regional Overview........................................................................................................................................................107 8.1.1 Ethanol .............................................................................................................................................. 107 8.1.1.1 Production and Demand .....................................................................................................................107 8.1.1.2 Technology Developments..................................................................................................................107 8.1.1.3 Construction Projects ..........................................................................................................................108 8.1.2 Biodiesel ............................................................................................................................................ 110 8.1.2.1 Production and Demand .....................................................................................................................110 8.1.2.2 Construction Projects ..........................................................................................................................110 8.2 China ............................................................................................................................................................................114 8.2.1 Ethanol .............................................................................................................................................. 114 8.2.1.1 Legislation ...........................................................................................................................................114 8.2.1.2 Production and Demand .....................................................................................................................115 8.2.1.3 Construction Projects ..........................................................................................................................115 8.2.2 Biodiesel ..........................................................................................................................................................115 8.2.2.1 Legislation ...........................................................................................................................................115 8.2.2.2 Production and Demand .....................................................................................................................116 8.3 Japan ............................................................................................................................................................................116 8.3.1 Ethanol .............................................................................................................................................. 116 8.3.1.1 Legislation ...........................................................................................................................................116 8.3.1.2 Production and Demand .....................................................................................................................117 8.3.1.3 Technology Developments..................................................................................................................118 8.3.2 Biodiesel ..........................................................................................................................................................118 8.3.2.1 Legislation ...........................................................................................................................................118 8.3.2.2 Production and Demand .....................................................................................................................119 8.4 South Korea..................................................................................................................................................................119 8.4.1 Ethanol .............................................................................................................................................. 119 8.4.2 Biodiesel ............................................................................................................................................ 119 8.5 India ..............................................................................................................................................................................120 8.5.1 Ethanol .............................................................................................................................................. 120 8.5.2 Biodiesel ............................................................................................................................................ 120 8.6 Australasia ....................................................................................................................................................................121 8.6.1 Ethanol .............................................................................................................................................. 121 8.6.2 Biodiesel ............................................................................................................................................ 122 8.7 Malaysia........................................................................................................................................................................122 8.7.1 Biodiesel ............................................................................................................................................ 122 8.7.1.1 Legislation ...........................................................................................................................................122 8.7.1.2 Production and Demand .....................................................................................................................123 8.8 Thailand ........................................................................................................................................................................123 8.8.1 Ethanol .............................................................................................................................................. 123 8.8.2 Biodiesel ............................................................................................................................................ 124 8.9 Indonesia ......................................................................................................................................................................124 8.9.1 Ethanol .............................................................................................................................................. 124 8.9.2 Biodiesel ............................................................................................................................................ 125 8.10 Philippines ....................................................................................................................................................................125 8.10.1 Ethanol.........................................................................................................................................................125 8.10.2 Biodiesel ......................................................................................................................................................126 9

Summary and Conclusions .........................................................................................................................................126

10 List of Tables ...............................................................................................................................................................10-1 11 References ...................................................................................................................................................................11-1 iv Copyright Š Hydrocarbon Publishing Company, Inc. All Rights Reserved