Biofuels in a climate of change Ian Thomson July 2016

Canadian Renewable Fuel Use (2010-2014) Source: Clean Energy Canada – Navius, March 2016

Greenhouse gas emissions by economic sector, Canada, 1990 to 2014 Sam Ori, executive director of the Energy Policy Institute at the University of Chicago US CO2 emissions from transport exceeded those from power gen in the 12 months thru Feb 2016. First time since 1979. Source: ECCC Canada’s GHG Inventory 2015

Environment Canada • Transportation GHG Emissions (Historical) Cars, SUV/LD trucks, HD trucks EIA • Change in Transportation GHG Emissions (Projected) 2012-2040 Gasoline Cars SUV, Light-Duty Truck Heavy-Duty Diesel

Deep Decarbonization Pathways Project: Canada 2015 Biofuels play critical role beyond EV, hydrogen NexGenPathway4: MovetoZero Emission Transport Fuels Deep Decarbonization Pathways Project: Canada 2015

Trottier Energy Futures Project – 2016 Report R60 = 60% reduction by 2050

GHG Abatement costs – EU Passenger Vehicles 2030 [EUR/ton CO2e] B7 – B/HDRD33 E10 - E85 GHG Abatement costs – EU Medium, Heavy-duty Vehicles 2030 [EUR/ton CO2e] B7 – B/HDRD33 EU Auto Fuel Coalition: BMW, Daimler, Honda, NEOT/St1, Neste, OMV, Shell, Toyota and Volkswagen. Source: Roland Berger

Abatement costs in perspective – Experience Curve Imperative Crude Cane ethanol HDRD Real $US/bbl Sources: EIA, UNICA, Waterfall

Policy Measures and Growth Signals RFS LCFS Carbon Tax Cap & Trade Lower CI = lower volumetric demand Simple, No market- based signal on fuel LCA emissions No LCA differentiation for biofuels (zero rated) strong weak

The carbon pricing silver bullet? “Transportation Policy Recommendations Carbon Pricing mechanism most effective GHG reduction option for all sectors No need for inefficient, duplicative measures (e.g., renewable fuel standards)” … leaves fuels largely untouched: “Studies over the past years have indicated that the price of gasoline is fairly inelastic so the impact [of gasoline price changes] has been relatively small. “ "Of the policy options being considered by governments, we believe a revenue-neutral carbon tax is the best.” VP Govt Affairs, Exxon Sources: Exxon, Entelligent

actual No markets, No finance: why 2G fuels need 1G shoulders (aka, the challenge of ‘phantom fuels’) GHG Neutral ‘Sustainable’ Competitive 2030 Drop-In Fuels Commodity Food Crops Semi-fungible Fuels 2016 New Technology & Feedstocks Investor Returns Market Access