Bioethanol in Sweden

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Bio-ethanol in Sweden

• Nicholas Källsäter
• Fuel manager, Statoil Retail Sweden

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Agenda

• Presentation (30 min)
• Statoil Sweden brief introduction
• Background why are biofuels desirable and how
  has the market evolved in Sweden?
• Sales development
• Technical issues and investments
• Questions (30 min)

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Statoil SwedenBrief intro

• 100 owned by Statoil ASA of Norway
• Operates 600 service stations in the swedish
  market
• Total fuel sales in 2005 exceeding 1,6 billion
  litres
• Total turnover 15 billion SEK
• Market share gasoline 24

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Why bio-fuels are desirable

• Reduce/eliminate the emission of Green House
  Gases (GHG)
• Bio-ethanol reduces CO2-emissions by 30-80,
  depending on feedstock, production method and use
  of biproducts
• Decelerate/halt the depletion of finite fossil
  fuel reserves
• Crude oil
• Natural Gas
• Coal
• Reduce the economys dependence on energy
  supplies from politically unstable/unpredictable
  regions
• Improve air quality in urban areas (minor as
  todays fuel specs in new engines produce
  virtually zero harmful emissions except for CO2)

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Examples of alternative fuels impact
Illustrative
H2 in fuel cells
Reduce oil dependence

• DME
• FT Diesel
• FT Petrol
• Biomass

Ethanol Sugar cane

• DME
• FT Diesel
• FT Petrol
• From NG

• DME
• FT Diesel
• FT Petrol
• From coal

CNG in ICEs
Ethanol Grain
Biogas
Ethanol Biomass
FAME 5 admixture

• Engine development will enhance impact
• ICEs
• Hybrids

Diesel Crude oil
MK1
Petrol Crude oil

• Requires three major breakthroughs
• Fuel cells become technically and commercially
  feasible
• H2 can be produced without CO2 emissions
• H2 can be stored and distributed efficiently

Do nothing to 2020
Reduce GHG emissions
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Bio-ethanol in SwedenThe ethanol products in the
swedish market
E5 low blend
5 bio ethanol is blended in all 95-octane
gasoline sold on the swedish market
In 2005, 250 million litres of fossil fuel was
replaced by renewable ethanol
E85 high blend
85 bio ethanol, 15 gasoline offered on 10 of
stations in the country
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Bio-ethanol in SwedenDevelopment
Consumer demand
Increased availability
EU Fuel directive
Favourable national taxation

• Tax incentives in combination with record high
  gasoline and diesel prices (2005 onwards) have
  made Ethanol very attractive to consumers
• 10 of new cars sold are currently FFVs
• Government agencies, municipalities etc demand
  alternative fuel availability in tenders

• Aim is to increase bio fuel share of total fuel
  sales
• 2,0 in 2005
• 5,75 in 2010

• All bio ethanol (low and high blend) relieved
  from taxation in 2004
• 900 msek in incentives
• Taxation of FFVs and other green vehicles
  reduced 20-30

• Increasing consumer demand and new legislation
  result in a rapidly increasing number of
  E85-sites
• 1 june 2006, 377 stations offered E85 on the
  swedish market (approx 10 of total stations)

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The pump price differencesek/litre
12,09
10,39
7,99
VAT
Gross margin
Taxes
Cost of product
Price adjusted for lower energy content 30
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Sales development (Statoil)
Tax exemption
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Technical challenges investments

• Blending at depots requires low initial
  investments
• Before release of E5 at station, storage tanks
  have to be cleared of water to avoid contamination

E5 low blend
Ethanol is very easily and effectively inserted
in the existing distribution chain

• Storage tanks, pipes and pumps at stations have
  to be approved for ethanol (plastic coating and
  ethanol resistant materials)
• Investment per site similar to cost of ordinary
  gasoline pump

E85 high blend