1. Cellulosic Potentia Cellulosic Ethanol: An Assessment of the Potential Market in Belize Mark Lambrides and Kevin de Cuba Energy and Climate Change Division Organization of American States (OAS) With Financial Support Provided by: the Government of Canada - DFAIT

2. What are our objectives for today’s workshop? Present the findings of our initial assessment on the potential for Belize to develop and consume cellulosic ethanol –Discuss issues surrounding the opportunity –Review possible next steps if pursuing cellulosic approach Discuss other possible avenues for ethanol production (i.e. 1 st generation cane to ethanol) Discuss broad renewable energy needs/plans for Belize Consider future interventions/support from OAS and/or other institutions

3. How did we get here today? Project designed and funded (OAS and Canada/DFAIT) Initial desk study and telephone interviews (July 2008) 1 st Stakeholder Consultation (August 2008) in Belize City

4. 1 st Stakeholder Consultation - Participants Last nameFirst nameInstitutionTitle AveryJohnPublic Utilities CommissionChairman CantoGabinoMinistry of Agriculture and FisheriesCEO MonsantoMaximeDep. of the EnvironmentTechnician MonteroViannieBMDCAccountant NealDwightFriends of NatureConsultant SabidoWilberForest DepartmentCFO ThompsonRicardoMinistry of Agriculture and FisheriesHOE VanzieMarvinBelize Natural EnergyChemical Eng.

5. Field Visits / Stakeholder Interviews In August 2008, team of specialists from OAS met with key stakeholders before and after the consultation to obtain in depth briefing and collect key data Ministry of Economic Development, Commerce and Industry, and Consumer Protection Ministry of Agriculture and Fisheries Citrus Products of Belize Ltd. Ministry of Natural Resources and Environment National Emergency Management Organization (NEMO) Belize cane Farmers Association Ministry of Public Utilities, National Emergency, Transport and Communication Belize cane Farmers Association Banana Growers Association Forest Department Public Utilities Commission

6. How did we get here today? (2) Incorporation of input from consultations into technical report Elaboration of analysis Input from technical consulting firm – Hart Energy Production of draft assessment (White Paper)

7. CELLULOSIC ETHANOL

8. General Transportation Sector Conditions A vehicle fleet of approximately 54,225 (2007) Gasoline consumption of 12.6 Million gallons (2007) -> Projection of 13.9 Million gallons (by 2012) Gasoline prices dependant on international petroleum prices Very volatile petroleum prices US$ 30-148 per barrel during last 5 years Leading to volatile gasoline prices -> US$ 0.78 (Dec 24, 2008) – 3.41 (June 12, 2008) per gallon!! (SPOT prices, NY Harbour) Retail prices in Belize -> Import price (whole sale) + Taxes/Duties/Levies -> US$ 2.28 – 5.00 per gallon (Retail Prices)

9. 1 st generation, conventional ethanol is derived from the accessible sugars from starches 2 nd generation, cellulosic ethanol is derived from a wide variety of sources of cellulosic plant fiber (cellulose/hemicelluloses) Feedstocks may come from a wide range of stalks and grain straws and several kinds of agricultural and forestry residues Also, the organic fraction of municipal waste (paper, yard waste, food waste, sludge…) may also be used as a feedstock What is Cellulosic Ethanol?

10. What are the potential advantages of cellulosic ethanol over 1 st generation ethanol? Eliminate the Food vs Fuels challenge Cellulosic biomass residues are abundant and conversion into ethanol can represent an alternative to waste handling/treatment It is friendlier to the environment: less GHG emissions during the production phase It does not constitute a threat to biodiversity: there is no need for single-crop farming practice Support the agriculture sector: can be an aggregated value to farming

11. What is the Status of Cellulosic Ethanol Technology Today? Laboratory scale research and process development Pilot scale process development and demonstration Demonstration scale plant (2008) Commercial launch Increasing technology development and reducing costs 20002004 2006-20082012+

12. Hydrolysis on pretreated lignocelluloses materials, using enzymes to break complex cell walls, thereby providing access to the sugars followed by fermentation and distillation Cellulosic Ethanol – The Biochemical Process

13. Also involves breaking down biomass into its elemental components by using heat and chemical synthesis The carbon in the raw material is converted into synthesis gas (Syngas) through a heat process The syngas is converted either through a catalytic reaction or by bacteria into various products such as ethanol Cellulosic Ethanol – The Thermo-chemical Process

14. CELLULOSIC ETHANOL IN BELIZE POSSIBLE FEEDSTOCKS POTENTIAL YIELD ESTIMATED COSTS

15. Possible feedstocks in Belize (2008 conditions per sector; MT) AgricultureForestryMSW 1,121,353101,846160,000 Conversion Technology Total Potential Amount of Sustainable- harvestable Biomass from Agriculture, Forestry and MSW (MT) Biochemical Conversion 557,469 Thermo- chemical Conversion 717,469

16. Other input factors The average cost of collection and transport of the feedstock is estimated to be in the range of US$ 22.0 – 56.7 US$ per ton These values are calculated for transport distances ranging up to 52 miles radius (85km) from collection point to processing plant, where 90% of all available cellulosic biomass feedstock in Belize is available for collection or harvesting

17. Critical feedstock density and transport distances to a centralized CE processing plant in Belize

18. Potential sustainable cellulosic ethanol yields Conversion Technology Total Potential Amount of Sustainable- harvestable Biomass from Agriculture, Forestry and MSW (MT) 2008 Technology Ethanol Yield (gal/y) 2012 Theoretical Conservative Scenario, Total Ethanol Yield (gal/y) 2012 Theoretical Optimal Scenario, Total Ethanol Yield (gal/y) Biochemical Conversion 557,46939,022,84850,172,23458,701,513 Thermo- chemical Conversion 717,46946,347,50252,530,19568,897,408

19. Cost comparison of Sustainable CE production cost in Belize by Technologies Technology 2008 CE prod. cost (US$/gallon) 2008 CE prod. cost in gas equiv. (US$/gallon) 2012 CE est. prod. Costs (US$/gallon) Biochemical2.04 – 2.732.65 – 3.550.873 – 1.40 Thermo- chemical 1.64 – 2.172.13 – 2.821.029 – 1.493 Figure 2. Cost breakdown for the average production costs through a biochemical conversion (2008) Figure 3. Cost breakdown of the production costs of CE through a thermo-chemical process (2008)

20. Cost comparison of Sustainable Cellulosic Ethanol production Figure 1. Cost breakdown comparison between Belize (error bars for uncertainty in feedstock costs) and literature reported CE production costs vs. Gasoline NYC international spot prices (average value from 2004-2009; uncertainty range represents the lowest and highest values in the market in the last 5 years; Today’s market price is also represented)

21. Cost comparison of Sustainable Cellulosic Ethanol production Belize CE Biochemical (2008) Belize CE Biochemical (2008) Belize CE Thermo- chemical (2008) Feedstock US$ 0.31–0.81US$ 0.31-0.81US$ 0.34-0.87 @ US$ 22.0-56.7/mt - @ 85km - By-product- US$ 0.10-- EnzymesUS$ 0.40US$ 0.74- Other costs ** US$ 0.80-- Capital costsUS$ 0.55-- Conversion costs-US$ 1.34US$ 1.30 Total US$ 1.96 – 2.46 US$ 2.39 – 2.89 US$ 1.64 – 2.17 Global Results US$ 2.65 (USDA) US$ 2.40 (NREL) US$ 1.85 (NREL)

22. The Way Forward…

23. The Future Role of Ethanol in Belize By 2012+ cellulosic ethanol may offer the potential to produce up to about 60 million gallons/yr of ethanol at <$1.50/gallon…. –Offers potential to satisfy 10% of the gasoline market as an E10 blend and… –Still offer over 46 million gallons of ethanol for export –Creates added value for agriculture and forestry sectors –Address critical challenges for municipal waste –Creates new jobs and economic development potential –Great local and global environmental opportunity

24. What are the key challenges to this future? Market uncertainty Uncertain markets for ethanol; oil prices; other alternative fuels/vehicles; carbon markets; global economic crisis… Technology uncertainty Cellulosic technology commercialization and deployment; Feedstock supply; early access to technology… Current domestic energy policy environment Lack of overall energy policy/plan; lack of targeted incentives for ethanol/renewables; no mandate for ethanol blending in gasoline… Lack of experience/precedent in this arena No history with ethanol production; minimal experience with climate change mechanisms…

25. Key tools to overcome challenges…Ethanol Market Consider near term development of 1 st generation cane – ethanol development -Mitigates uncertainty with respect to 2 nd /3 rd generation ethanol -Helps to establish physical market conditions for ethanol production -Gain experience in production, use, blending, and export of ethanol (for example: CARICOM-Canada; CAFTA; CBI; EU…) -Offers potential for future upgrade of production facility Establish policy/regulatory conditions for ethanol market -Consider comprehensive biofuels policy that addresses production and consumption -Incentives for production -Market tools/infrastructure -Regulations: Production licenses; forestry management; feedstock handling -Fuel standards -Mandate for E10, other blending requirements?

26. Ethanol in the wider sustainable energy context Is Belize interested/committed to a transition toward sustainable energy? –If the answer is yes…then may wish to consider: National Sustainable Energy Policy/Plan Build on past efforts (i.e. UNDP) Assess renewable energy resource potential Alternatives for sustainable energy finance (i.e. MDBs, Carbon Finance, Private Sector, etc.) Multi-stakeholder collaboration to establish targets, plans, the way forward…

27. Best practices framework for promoting sustainable energy Principal Ministry in charge National Energy Policy National Sustainable Energy Plan Renewable Energy Specific Legislation National Energy Committee Regulatory Body PPAsRegulationsIPPs

28. DSD Energy Team Thank You! Mark Lambrides Chief Energy and Climate Change Division T: +1-202-458-6261 E: mlambrides@oas.orgmlambrides@oas.org Kevin de Cuba Energy and Environmental Specialist T: +1-202-458-6467 E: kdecuba@oas.orgkdecuba@oas.org Mark Lambrides mlambrides@oas.org Kevin de Cuba kdecuba@oas.org Francisco Burgos fburgos@oas.org Carolina Pena cpena@oas.org Juan Cruz Monticelli jmonticelli@oas.org Charlene Solozano csolozano@oas.org Ruben Contreras usdecpr5@oas.org Mauricio Solano usdeint1@oas.org URL: www.oas.org/dsdwww.oas.org/dsd