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Renewable jetfuel UPEI Autumn meeting – Oct ’11 Bart-Willem ten Cate Director Biofuels

Renewable jetfuel UPEI Autumn meeting – Oct ’11 Bart-Willem ten Cate Director Biofuels. Key figures North Sea Group. 90+. Founded in 2009 following the merger of the Van der Sluijs Groep and FNR + European based: marketing and physical trading of mineral oil products and biofuels

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Renewable jetfuel UPEI Autumn meeting – Oct ’11 Bart-Willem ten Cate Director Biofuels

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  1. Renewable jetfuel UPEI Autumn meeting – Oct ’11 Bart-Willem ten Cate Director Biofuels

  2. Key figures North Sea Group 90+ • Founded in 2009 following the merger of the Van der SluijsGroep and FNR+ • European based: marketing and physical trading of mineral oil products and biofuels • Significant terminal infrastructure years of history 350 employees worldwide 15,000,000,000 liters of fuel 725,000m3 storage capacity

  3. Our history in road transport biofuels 1st MARKET PLAYER TO START BLENDING BIOFUELS IN HOME MARKETS • biodiesel 2006 • bio ethanol 2007 • → North Sea Group 1st player to offer Benelux consumers lower carbon transport fuels FRONTRUNNER SUSTAINABILITY BIOFUELS • sustainability = license to operate • focus on highest CO2 reduction and sustainability • biodiesel from waste streams • bio ethanol from sugarcane Awarded ‘Bioethanol Corporation of the Year 2010’ by World Refining Association

  4. Volumes & feedstock BIOFUELS VOLUMES BIOFUELS FEEDSTOCK MIX

  5. Main driver for renewable jetfuel is CO2 • Aviation contributes for 2% to global green house gas emissions (IPCC, 2007) • Governments are introducing mechanisms to force GHG reduction (e.g. Emission Trading Scheme) • Interest of aviation in renewable jet fuel is rising • Effective way to reduce GHG as 97% of emissions from commercial airline come from flight operations (combustion of kerosene) • Solution to move to more sustainable aviation • Green marketing / PR / branding • Unpredictable oil price fluctuations / secure future supply • → Biofuel requirements airlines: safe, drop-in, sustainable, affordable

  6. To reduce aviation’s GHG emissions there are only three realistic options; technical & operational improvements & low carbon fuels CO2 reduction options for aviation till 2020 GHG emissions Low Carbon fuels Baseline Market price of fossil fuel 2005 2020 2010 2015 Technological improvements (e.g. wing tips, fleet renewal) Operational improvements (e.g. direct routes, gliding) Business as Usual; forecasted emission growth without reduction measures UPEI Autumn meeting

  7. Technical & operational improvements are already on the agendaThere is need to make the market for renewable jetfuel! Founding partners Sustainability Advisory Board SkyNRG aims to develop and sell renewable jetfuel for global aviation market that is: Copernicus Institute • Technically accepted • Sustainable • Economically viable

  8. An important hurdle has been removed per July 1st 2011: ASTM certification for Hydrotreated Renewable Jetfuel (HRJ) is a fact – we can fly on bio jetfuel Bio-kerosene (HRJ) often exceeds current jet fuel specification 50% blend Fischer-Tropsch Dec ‘08 Jun ‘09 ASTM ballot ASTM approved Certification milestones of first two renewable jetfuels 1 2 Although already certified, there is currently no production capacity for bio-based Fischer-Tropsch jet fuel 50% blend HRJ DEC ‘10 June ‘11 ASTM ballot ASTM approved!

  9. Our main priority was to start a first continuous stream of renewable jetfuel right after ASTM out of Schiphol: we did it! → into-plane delivery → volumes low as prices currently very high compared to Jet A1 2011 customers Route Volume 2011 Feedstock Used Cooking Oil Camelina Jatropha Babassu 500 ton bio 50% blend Amsterdam - Paris 500 ton bio 50% blend Used Cooking Oil Camelina Amsterdam - Helsinki Used Cooking Oil 500 ton bio 50% blend Birmingham- Palma 5 (to 10) airlines Various Undisclosed Undisclosed

  10. Other technologies are not that far away, they will result in significant price decreases in the mid term INDICATIVE & CONCEPTUAL Certification timeline & Cost curve Technology Feedstock Non existing (BtL) new build Fischer-Tropsch • Organic material • MSW 2 existing new build HRJ • Veg oils • Waste oils • Starch/Sugars • Cellulosics Alcohol upgrading Pyrolysis • Agri-waste • All biomass Thermal upgrading • Cellulosics • Lignine 2020  2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (pre-) ASTM certification pathway (expected) Construction production capacity Cost curve

  11. So aviation is ready for a new fuel era, but what does this market currently look like?  A near perfect chicken & egg situation “We would like to install a mandate but there is no supply yet” “We would like to fly on it but we can’t afford it” Off takers Government Producers “We’re not producing bio jet fuel because nobody wants to buy it and we can make more money with biodiesel”

  12. To break this deadlock, we position SkyNRG as market maker SkyNRG: Facilitating the entire chain • Sustainability guarantees • Aggregate demand • Into plane logistics Current situation Desired situation The need for government interference is still under debate. As of 2012, biokerosene in The Netherlands can be used to fulfill road transport obligation “We would like to fly on it but we can’t afford it” “We would like to install a mandate but there is no supply yet” Government Off takers Off takers Government Producers Producers “We’re not producing bio jet fuel because nobody wants to buy it and we can make more money with biodiesel”

  13. Our short-term (2011-2012) proposition to airlines: ‘one stop shop’ that guarantees delivery, sustainability & best all-in price Supply chain sustainable jet fuel Upstream Midstream Downstream Support Feedstock Sourcing Logistics Refining Blending & Logistics Quality Assurance Into Plane Paper Work Proposition Sustainability is key along the entire value chain – It is our main focus point Order placed Feedstock screened Feedstock bought Feedstock refined Biofuel delivered Our approach to sustainability, in absence of a global standard (a bridge solution till e.g. RSB is there) OK?  next phase Not OK?  no more contact OK?  next phase Not OK?  no more contact All ok?  Green light to buy 1 2 3 Supplier fills in a “quick scan” and has the chance to give additional reports, studies etc. Have our independent Sustainability Advisory Board assess the documentation and if needed ask more questions • If needed: • Additional documentation • Field visit • New SB meeting

  14. In the longer run it’s all about getting the premium down €/ton 1 2.400 • Aggregate demand • Vertical integration • New technologies 2.200 2.000 Biokerosine 1.800 1.600 Bio jet premium (up-stream integration) 1.400 1.200 1.000 Fossil kerosene + carbon taxes 800 Fossil kerosene 2 600 • Legislation • Co-funding programs (e.g. airports, corporates, governments) 400 200 0

  15. Final remarks • Air passenger travel forecasted to befastestgrowing transport sector till 2050 (OECD, 2010) • Air transport 1 of few industries that have no alternative for liquid fuels for short and medium term • The route to renewable and sustainable jetfuel in aviation is very challenging; the costs need to come down substantially and permanently • This can be achieved through innovation, collaboration and the right legislation that stimulates bio jet fuel in the airline industry • North Sea Group has decided to take action and start making this market UPEI members, feel free to join us on our road to sustainable aviation! 0 Time

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