Published in Forbes magazine. Written by Will Thurmond, CEO, Emerging Markets Online. Author, Algae 2020 and Biodiesel 2020 studies of biofuels markets, feedstocks and technologies, For more information, visit www.emerging-markets.com

1. S pe ci al A dv er ti si ng S ecti on
Biofuels’
Bright
Future By Will Thurmond, Emerging Markets Online
2001: The Biofuels Revolution on foreign oil and producing renew-
S
even years ago, a biofu- able sources of transport fuels. Each
els revolution was born of these emerging market nations has
in Europe from ambitious targets to replace from 5% to 20%
environmental, energy secu- of total transport consumption with
rity and national security ethanol or biodiesel.
policies. Starting with the EU’s Bio- Around the world, these biofuels
fuels for Transport initiative in 2002, initiatives have received government
these revolutionary biofuels policies support in the form of mandates, sub-
took root in the U.S. in 2005 with the sidies, tax incentives and large R&D
birth of the Renewable Fuel Standard initiatives. In the U.S. these initiatives
(RFS) under the Energy Policy Act. and tax benefits have helped to accel-
Not long thereafter, several countries, erate the growth of the biofuels indus-
including India and China, followed try, with over 150 new ethanol plants
suit and enacted policies aimed at and more than 185 biodiesel enter-
reducing pollution and dependence prises through 2007 (see figure 1).
7 Figure 1: U.S. Ethanol Production 1997 – 2007
Billions of Gallons per Year
6
5
4
3 6.5
4.8
2 3.4 3.9
2.8
1 1.5 1.6 1.8 2.1
1.3 1.4
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: Biodiesel 2020: A Global Market Survey, 2nd edition, RFA, EIA
Forbes Magazine November 17, 2008

2. Adv er tisement 2
Since 2000, ethanol markets in the this project could tap 1.3
U.S. have seen impressive growth fig- billion sources of renew-
ures, from 2.1 billion gallons of pro- able energy every day.
duction in 2002 to 6.5 billion gallons To handle China’s fast
in 2007. Similarly, growth in the U.S. energy growth, MIT notes
biodiesel markets has been impressive, the country is currently
starting with 25 million gallons of pro- constructing the equivalent of two
duction in 2004, reaching 250 million 500-megawatt, coal-fired power plants
gallons by 2006 and 500 million gal- per week and adding capacity compa-
lons of production by 2007 — a 20-fold rable to the entire U.K. power grid each
increase. Clearly, market growth and the year. According to biofuels consult-
stimulus of the 2005 RFS have helped ing firm Emerging Markets Online, if
to accelerate the impressive growth of China could sequester the carbon from
these markets (see figure 2). these coal-fired power plants to produce
algae for biodiesel and ethanol, it could
Emerging Markets for Biofuels deliver a quadruple-benefit of carbon
In Brazil, India and China, major national reduction, clean fuels production, job
biofuels programs are now under way. creation and economic growth.
In 2006, India initiated a biodiesel devel- In Brazil, more than 50% of the trans-
opment program to replace 20% of die- portation fuel consumed today comes
sel fuels with Jatropha-based biodiesel from ethanol, compared with U.S. ethanol
fuel by 2012. In January 2008, Brazil consumption at only 5% of total trans-
officially delivered the first orders for its port fuels, as cited in the landmark study
national biodiesel program to replace Biodiesel 2020: A Global Market Survey.
2% of diesel fuels by 2008 and 5%
by 2013, complementing its impressive 2007: Welcome to
ethanol program of 20-plus years. The Biofuels Evolution
The International Energy Agency Brazil’s successful efforts toward achiev-
notes that China will consume energy ing energy independence have often
at an increased rate of 6% to 8% per been applauded by President Bush and
year for the next ten years. To deal with the U.S. Congress. In December 2007,
these growing demands, China’s Minis- with the imminent arrival of $100-per-
try of Science and Technology (MOST) barrel oil, the U.S. Congress swiftly
has set aside an area the size of Eng- acted to upgrade the 2005 biofuels ini-
land (approximately 32 million acres) tiative and RFS from its original target
to grow Jatropha for biodiesel. In a few of 7 billion gallons by 2012 to a revised
years, this project could produce up to RFS target (passed in December 2007)
6 billion gallons of biodiesel. China is of 36 billion gallons of biofuels produc-
also fast at work testing next-genera- tion by 2022.
tion technologies to turn municipal The 2007 RFS and Energy and Inde-
waste into biofuels. If implemented, pendence Security Act designates 22
Figure 2: U.S. Biodiesel Production 2004 – 2007
600
Millions of Gallons per Year
500
500
400
300 250
200
100 75
25
2004 2005 2006 2007
Source: Biodiesel 2020: A Global Market Survey, 2nd edition, RFA, EIA
Forbes Magazine November 17, 2008

3. Adv er tisement 4
billion gallons of the 36 billion gal- “BP’s strategy is to focus on better,
lons in the RFS mandate to come from more sustainable biofuels only,” says
advanced, non-food-based feedstocks Susan Ellerbusch, president of BP Biofu-
such as algae, switch grass, sorghum, els N.A., “as they can make significant
camelina, woody biomass, miscanthus contributions to reducing greenhouse
and municipal waste. Most of these gas emissions and can be produced in
new non-food feedstocks offer greater an environmentally and economically
production yields per acre compared to sustainable manner.”
corn and soy, and do not compete with By October 2008, more good news
the food supply to provide biofuels. arrived, as the U.S. Congress and Presi-
BP, a global leader in the biofuels dent Bush extended the biofuels produc-
industry, has embarked on a con- tion and blender’s tax credits for biodiesel
tinuum of biofuels development in and ethanol for another year — a hard-
keeping with this mandate, beginning fought victory for the biofuels industry.
with a growing investment in ethanol In support of these R&D efforts, sev-
from Brazilian sugarcane, and moving eral new private industry groups and
to investments in more efficient fuel a next-generation premium biofuel associations have emerged to accelerate
molecules like butanol and advanced molecule. investment, innovation and commer-
biofuels like cellulosic ethanol, which Several other companies, too, have cialization of next-generation biofuels,
is produced from non-food energy made groundbreaking contributions including the U.S. National Algae Asso-
grasses and “for-purpose” feedstocks, to the effort: ciation, the American Biofuels Council,
such as miscanthus and energy cane. Conoco-Philips partnered with the National Sorghum Producers Asso-
According to the U.S. Department Tyson® foods to create renewable ciation for cellulosic ethanol production
of Energy (DOE), the U.S. has invested diesel from chicken fat; and the Brazilian Jatropha Grower’s
$7 trillion dollars in its petroleum refin- Shell has partnered with HR Bio- Association, to name a few. Each of these
ing, pipeline and distribution infra- petroleum to produce biofuels groups’ endeavors creates new markets
structure. For these reasons, the DOE is from algae in Hawaii; and accelerates the commercialization
sponsoring R&D projects at more than and, Chevron invested in several of next-generation biodiesel, biocrude,
a dozen universities and research centers biofuels R&D projects at universi- aviation and ethanol biofuels.
to develop biofuels and “renewable die- ties and research labs, including an
sel” from wood waste, waste vegetable algae-to-biodiesel initiative at the Biofuels’ Bright Future
oil, municipal waste and algae. This will U.S. National Renewable Energy For thousands of years, biofuels were no
create a liquid biofuels feedstock called Laboratory and a sorghum-based different than the “hooch” Henry Ford
“biocrude” or “bio-oil” that can be cellulosic ethanol initiative at used in his first alcohol-combustion en-
directly integrated into the existing petro- Texas A&M University. gines, or the fuel Rudolf Diesel used to
leum production infrastructure today to By 2008, investment in the biofuels run an engine on peanut oil in the late
create clean fuels for tomorrow. industry had moved from Woodstock 1800s. A hundred years later, the bio-
to Wall Street, demonstrating greater fuels industry continues to accelerate,
Next-Generation Biofuels direct investment in private compa- evolve and grow rapidly, creating new
Investments nies and increased confidence in the markets, renewable-energy jobs, entre-
In 2006 and 2007, most investments viability of next-generation projects. preneurial wealth, and a cleaner, more
in next-generation biofuels went to For example, earlier this year, Chev- prosperous and brighter energy future.
technology and research. One of the ron invested in Solazyme, a company
first leaders in the group, BP, has com- that creates biocrude from algae that
mitted approximately $1 billion to can be utilized in existing petroleum
biofuels business operations, and to a refineries. Biofuels Digest reported that About the Author
number of R&D efforts, in order to Bill Gates and the Rockefeller family Will Thurmond is president of biofuels
develop the technologies, feedstocks raised more than $100 million for Sap- consulting firm Emerging Markets On-
and processes required to produce phire Energy and its algae-based “green line, author of Biodiesel 2020: A Global
advanced biofuels. They announced biocrude” technology. Market Survey, and serves as the chairman of research &
an investment of $500 million at the Additionally, BP made two major an- development for the National Algae Association.
University of California, Berkeley, noucements: Tropical — a joint venture
and the University of Illinois, Urbana in Brazilian sugar cane ethanol with plans W E B D I R E C TO RY
Champaign, to advance renewable to invest $1 billion in two refineries; and
energy R&D. BP also formed a part- plans to invest $90 million in cellulosic- BP
nership with DuPont on biobutanol, ethanol producer Verenium. w w w. b p. c o m / u s
Forbes Magazine November 17, 2008