biofuels and waste to energy activities · † other biomass could be integrated as a ... india...
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Biofuels and waste to energy activitiesBrief Outlook
Strictly Private and ConfidentialDraft
28 February 2020
28 February 2020Strictly private and confidentialDraftPwC
1 Outlook of our venture in Biofuels 3
2 Integrating waste to energy activities 10Agenda
Biofuels and waste to energy activities2
Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
28 February 2020Strictly private and confidentialDraftPwC
Outlook of our venture in Biofuels
1 Outlook of our venture in Biofuels
Biofuels and waste to energy activities3
Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
28 February 2020Strictly private and confidentialDraftPwC
Govt. of India commitment to green energy is demonstrated through supportive policies
1 Outlook of our venture in Biofuels
Biofuels and waste to energy activities5
GoI has set an indicative target of20% blending by 2030 and proposedsetting up of 12 2G bio refineries01Assured Off-take price of C-heavy, B-heavy molasses and 100% sugarcanejuice at INR 43.75/L, INR 54.27/L andINR 59.48/L respectively02Agreement for assured off-take ofethanol derived using 2G technologyby public sector OMCs for a period of15 years03
41,6
22,9
42,4
24,5
43,7
25,2
Foreign Company Domestic Company
Effective tax rate(% of taxable income)
Income <= INR 1 cr
Lower taxes on domestic companies encourage JV with foreign companies
India’s rapid improvement in “Ease of Doing Business” ranking to occupy 63rd rank in 2019 may be an important factor in attracting foreign investors
National Biofuels Policy, 2018
GoI mandates the fuel retailers to have at least 5% outlets in rural areas and sell at least one of the alternative fuels (CNG, LNG, etc)
Revised Effective Tax Rates
28 February 2020Strictly private and confidentialDraftPwC
GoI’s 20% ethanol blending mandate by 2030 is poised to have huge implications on the bio-fuel demand
1 Outlook of our venture in Biofuels
Biofuels and waste to energy activities7
Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
2628
3133
3638
4245
4852
5761
66
5 6 6 7 7 8 8 9 10 10 11 12 13
2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
Ethanol Demand Outlook for India (20% blending with Gasoline in MMTPA)
MS Demand Ethanol Demand
• Last decade witnessed about 10% YOY growth in gasoline consumption
• Considering a pessimistic growth rate in gasoline demand of about 6%, ethanol demand would reach around 10 MMT
• To meet 20% blending target many more bio-refineries needs to develop
28 February 2020Strictly private and confidentialDraftPwC
Every bio-feedstock needs to be utilised in optimal manner to meet such a demand
1 Outlook of our venture in Biofuels
Biofuels and waste to energy activities4
$0,76$0,79
$0,50$0,55
$0,58
Switch grass Sugarcanebagasse
Wheat straw Bamboo Corn stover
Cost of Production of Biofuels from selected feedstocks ($/L)* Key Highlights:
• Since the pre-treatment process contributes to high price of production of ethanol from bamboo, other solvent could be tried to reduce the cost further
• Government support may also help in bringing the price down
• Bamboo and switch grass can be harvested throughout the year compared to other sources
• Other biomass could be integrated as a feedstock which will help in diversifying the dependency on a single source of feedstock
Source: Wang L. (2014), The Royal Society of Chemistry * Dilute acid treatment process is assumed in all the cases except sugarcane
Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
28 February 2020Strictly private and confidentialDraftPwC
Despite holding about 50% share in global cultivation area, India accounts for only 5% share by market value
1 Outlook of our venture in Biofuels
Biofuels and waste to energy activities5
Contruction20%
Rural household
20%Pulp & Paper35%
Fuel8%
Crafts10%
Others7%
Industry-wise end usage of bamboo (%)
Construction and rural households accounts 40% usage of bamboo without significant value addition
165 11
3
54
11
India PRC RoW
Bamboo Area2 vs Market share of Countries
Cultivation Area (million ha) Market Share (USD billion)
4035
2521
11
PRC Phillipines Ethiopia Myanmar India
Country-wise average growing stock (MT/ha)
NER has around 39% (66 MMT3) of India’s total bamboo green weight
2 Inclusive of Forest and Non-Forest bamboo area
Source: Grand View Research, 2019: INBAR
Source :World Bamboo Resources Source: Assam Bamboo and Rattan Policy, 2003
170 million MT
57 million MT
48 million MT 9 million MT1
Growing stock(Forest + Non
Forest)
Annual availability(Forest+ Non Forest)
Annual availability NER
(Forest)
Annual availability NER
(Non Forest)
Availability of bamboo
Source :FSI 2017; World Bamboo Resources
3 Since bamboo is harvested every 3 years hence the total bamboo available would be around 22 MMT(1/3rd of 66 MMT)
Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
28 February 2020Strictly private and confidentialDraftPwC
Schematic representation of Integrated bamboo park
1 Outlook of our venture in Biofuels
Biofuels and waste to energy activities8
Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
28 February 2020Strictly private and confidentialDraftPwC
Bio-gas can supplement domestic natural gas supply and cater to government’s vision of providing clean fuel
1 Outlook of our venture in Biofuels
Biofuels and waste to energy activities9
An Indian technology has given a proof of concept of its technology. It has the potential to produce 5MT of Bio CNG per day from about 30 MT per day of multiple biomass feedstockAn Indian technology has given a proof of concept of its technology. It has the potential to produce 5MT of Bio CNG per day from about 30 MT per day of multiple biomass feedstock
• The pilot plant required an initial investment of INR 21 Cr with a payback period of 3.5 years and annual biomass of 10 TMTPA
• The pilot plant required an initial investment of INR 21 Cr with a payback period of 3.5 years and annual biomass of 10 TMTPA
Source: Indian Technology
Food waste
Agro waste
Other organic waste
Purification to Bio CNG
Biogas
Pressurization and Storage
Distribution
Transportation Fuel
Cooking Fuel
Power Generation
109% 97% 88% 87% 74% 63% 46%
NER LPG coverage (2019)
LPG coverage (%)Source: MOPNG Annual Report 2018
• Opportunities in Nagaland and Meghalaya• IOCL’s EOI inviting entrepreneurs for
CBG*
• Opportunities in Nagaland and Meghalaya• IOCL’s EOI inviting entrepreneurs for
CBG*
Assuming all the residuals to be aggregated at the aggregation points, even 10% of the total capacity at each aggregation point i.e.,1000 MT will suffice one 5 MT/day stand alone Bio-CNG plant; Additionally, residuals from the processing of the agarbatti can also be used as feedstock
Assuming all the residuals to be aggregated at the aggregation points, even 10% of the total capacity at each aggregation point i.e.,1000 MT will suffice one 5 MT/day stand alone Bio-CNG plant; Additionally, residuals from the processing of the agarbatti can also be used as feedstock
*CBG- Compressed Bio-Gas
Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
28 February 2020Strictly private and confidentialDraftPwC
Integrating waste to energy activities
2 Integrating waste to energy activities
Biofuels and waste to energy activities10
Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
28 February 2020Strictly private and confidentialDraftPwC
Global waste production is poised to become a major concern unless tackled by a "circular economy”
Biofuels and waste to energy activities11
Urbanization
EnvironmentEcology
Industrialization
Sustainable Development
• The waste generation is heavily dependent on per capital income
• High income countries are now witnessing a declining trend in waste generation which indicates waste generation decoupling from economicgrowth
• Uncontrolled waste disposal is major concern and focus now is shifting onthis
Global waste production is predicted to rise by 70% by 205070%
Waste management is a major concern globally
North America and Members of Europe
China And India
Global population share: 16%
Global population share: 36%
Global waste production share: 34%
Global waste production share: 27%
Per capita income: Per capita income:
Useful Component
Recycling/ Reuse
Raw material
Circular Economy
2 Integrating waste to energy activities Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
28 February 2020Strictly private and confidentialDraftPwC
Effective waste management is the key to convert the waste into useful feedstock for energy generation
Biofuels and waste to energy activities12
• Organic waste and paper, comprises of 63% of global waste, these are biodegradable and can be used to generate energy
• Plastics, accounting for 10% of global solid waste, could be extracted and used to produce useful products
Organic 46%
Paper17%
Plastic 10%
Glass 5%
Metal4%
Other18%
Global solid waste composition
01
02
03
Organic waste end up being landfills
Health risks associated with landfills
Plugging of sewage pipe by plastics
04Production of more virgin plastics
Effects of waste mismanagement
Source: What a waste: A Global review of solid waste management’, World Bank Report, 2012
2 Integrating waste to energy activities Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
28 February 2020Strictly private and confidentialDraftPwC
PwC Survey- The rise of the circular economy
2 Integrating waste to energy activities
Biofuels and waste to energy activities13
Senior management of corporations indicated three major trends which together are the drivers of the circulareconomy
1.changing consumer needs
2. resource limitations
3. technological breakthroughs
Response from the Business Houses Response from the Consumers
Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
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The study concluded that advance technologies will form the backbone of waste to energy
2 Integrating waste to energy activities
Biofuels and waste to energy activities14
Innovative productdesign
Advanced technologies in waste to energy activities
Share idle capacities viadigital platforms
Thermal conversion ofwaste in dumping yards
Plastic –to –fuelconversion
Internet of Things and data analysis, robotics
and AI
Alternative fuel and raw material like bio-plastic and
bio-fibers
3 Rs
Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
28 February 2020Strictly private and confidentialDraftPwC
Multiple benefits can be reaped by investing in waste management and waste to energy technologies
Biofuels and waste to energy activities16
2 3 44
Employment generation
Encouraging entrepreneurs
Environmental benefits
1
Reduction of energy
imports
2 Integrating waste to energy activities Integrating waste to energy activitiesOutlook of our venture in Biofuels Agenda
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© 2019 PricewaterhouseCoopers Private Limited. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Private Limited (a limited liability company in India), which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.
Deepak MahurkarPartner & Leader - India Oil & Gas Industry PracticeEmail: [email protected]
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