Carbon Recycling International Designer Fuels and Carbon Recycling

Carbon Recycling International Designer Fuels and Carbon Recycling August 2012 Ómar Freyr Sigurbjörnsson, Director of Research Carbon Recycling International

Talk outline Historical perspectives and drivers Renewable fuels clarified Basics of Biofuel: pathways & challenges Renewable fuels in Iceland, EU and US Overview of Carbon Recycling International Facts on Renewable Methanol Carbon Recycling International

Strategic resources & historical perspectives 1700 s • Coal replaces wood for heating 1800 s • Coal replaces Sail 1850 s • Petroleum replaces whale oil for lighting 1920 s • Petroleum replaces coal in ships 1900 s • Petroleum dominant in transportation 2000 s 3 • Renewable fuels replace petroleum? • Gas and Coal to Liquids replace petroleum? Carbon Recycling International

Going from imported fossil fuel to local renewable resources Reykjavík Early 1900’s Coal heating 4 Reykjavík Early 2000’s Geothermal District heating Carbon Recycling International

Drivers for Renewable Fuels Unsustainable use of fossil fuels • Increasing demand prices over time Energy Security • Geopolitical influence of oil Climate Change • International efforts to address climate change • Regulation, mandates and taxes focusing on GHG reduction and greater share of renewables 5 Carbon Recycling International

Renewable Fuel Targets EU Directives 2003/30/EC Directive on the promotion of the use of biofuels or other renewable fuels for transport. 5, 75% of all transportation fuels by 31. December 2010. 2009/28/EC Directive on the promotion of the use of energy from renewable sources. 10% Renewable content of all transportation fuels by 2020 binding. 2009/30/EC Directive regarding the specification of petrol, diesel and gas-oil and introducing a mechanism to monitor and reduce greenhouse gas emissions. Aims to reduce life cycle GHG emissions from transportation fuels by 10% before 2020. Each member state is responsible for implementation 6 Carbon Recycling International

Changing fuel throughout Europe Mandated 3%-7% share of Renewables Carbon Recycling International

Renewable Fuel Targets - US 8 Carbon Recycling International Proprietary and Confidential

Renewable Fuels in Iceland 80% of primary energy used in Iceland is from renewables. Remaining 20% are mostly from imported fossil fuels used for transportation (ships, cars and airplanes). Iceland has one of the largest and most polluting car fleets in Europe per capita. 666 cars per 1000 inhabitants in 2007 Highest average CO 2 emission from new vehicles in Europe Renewable fuel represents less than 0. 5% of the total transportation fuels consumed in Iceland. (World average 1. 8%) World leaders in renewable electricity and district heating Lagging behind in renewable transportation fuels • • 9 Carbon Recycling International

What is Petroleum? Complex mixture of hundreds of different hydrocarbon molecules Straight and branched chains, cyclic and aromatic Gasoline: 5 to 12 carbon atoms Kerosene (Jet fuel): 12 -15 carbon atoms Diesel: 10 -25 carbon atoms Made from fractional distillation of crude oil High energy density, increases with number of carbons Octane number is a measure of resistance to knock in an SI engine. i. e. Exploding v. s. Burning. Not a measure of energy content! Cetane number is a measure of the delay of ignition in a CI engine 10 Carbon Recycling International

Wishlist for a designer transport fuel of the future Sustainable Inexpensive Does not deplete limited natural resources No associated pollution or environmental risk No emission of green house gases Competitive in price with oil without subsidies Minimal or no change in infrastructure needed Inexpensive vehicle technology possible with the same or better usability as existing vehicles Scalable 11 Can replace oil in the near term Not limited to specific geographic regions Carbon Recycling International

Technology Trap 12 Carbon Recycling International

What are Renewable Fuels? Renewable Fuels Renewable Energy Carriers Biofuels Biometane Bio Alcohols Hydrogen Biodiesel Fuels from Syngas CO/CO 2 FT Diesel Synthetic Diesel Methane Methanol DME Gasoline 13 Batteries FT Diesel

Production of 1 st Generation Biofuels Biomethane formed by anaerobic digestion of biomass Bioethanol from fermentation of starch/sugars C 6 H 12 O 6 → 3 CH 4 + 3 CO 2 C 6 H 12 O 6 → 2 C 2 H 5 OH+ 2 CO 2 Biodesel from Transesterification of Triglycerides (vegetable oils, animal fat) 14 Carbon Recycling International

Recent Rise in Biofuel Production 15 Carbon Recycling International

Issues with 1 st generation biofuels Production of 1 st generation biofuels has increased rapidly in the last decade Limiting factors: Sustainability and land use change Biomass limit True GHG reduction potential Food vs. Fuel Need for second generation fuels 16 More sustainable : Non-food crops Significant savings in GHG emissions: >60% compared to fossil Carbon Recycling International

Production of Ethanol: Resources and environmental impact Ethanol plant Cosan, Costa Pinto, Piracicaba, Brazil Carbon Recycling International

Difficulty of meeting mandated CO 2 reduction and sustainability with 1 st generation biofuels Mandated reduction of CO 2 compared to gasoline 100% CRI methanol from CO 2 and waste Brazilian ethanol (sugarcane and –bee 2018: 60% US ethanol (corn) 2012: 35% European ethanol (wheat) Carbon Recycling International

75% -100% Feb-02 May-02 Aug-02 Nov-02 Feb-03 May-03 Aug-03 Nov-03 Feb-04 May-04 Aug-04 Nov-04 Feb-05 May-05 Aug-05 Nov-05 Feb-06 May-06 Aug-06 Nov-06 Feb-07 May-07 Aug-07 Nov-07 Feb-08 May-08 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 March 2 2012 Wild fluctuations in prices after 2007 Global commodity prices (deviation from 2008 -12 average) Five years prior to February 2007 Corn Five years after February 2007 50% 25% 0% -25% -50% -75% +/- 25% +/- 50% Wheat Sugar Carbon Recycling International

Going from Current to Advanced Biofuels 1 st generation - Current: Bioethanol from sugar, starch (f. ex. Corn, Wheat & Sugarcane) Biodiesel from vegetable oil, animal fats (f. ex. waste cooking oil, soybean oil, sunflower and rapeseed oil etc. ) 2 nd generation - Advanced: Non-food crops – lignocellulosic biofuels Examples: Waste biomass from agriculture and forestry, energy crops 3 rd generation - Advanced: Algea oil Advanced Biofuels must have substantial GHG emission savings over conventional 1 st generation biofuels. 20 Carbon Recycling International

Components of Lignocellulosic Biomass 21

Biomass Conversion Pathways

Advanced Biofuel Production Pathways Biochemical processes : Low temperature and pressure Microbes, yeast & enzymes Slow Potential for low CAPEX Examples: Genetic engineering, metabolic engineering, systems biology etc. 23 Thermochemical processes: High temperature and pressure Solid phase catalysts Fast Higher CAPEX Feedstock agnostic Examples: Gasification and syngas conversion, pyrolysis and liquid processing, etc. Carbon Recycling International

2 nd gen. ethanol from agriculture waste: Major logistical and techncial challenges POET feedlot, Scotland, South Dakota: 24, 000 tons to make 7. 6 ML ethanol 25% carbon conversion Carbon Recycling International

Importance of Carbon Conversion Efficiency Current oil extraction (85 million bbl/day) amounts to roughly 3. 5 Gigatons of carbon extracted annually Replacing that all with biomass (assuming 50% carbon in biomass) gives: Carbon conversion efficiency Biomass needed annually Land requirement 100% 14 Gigatons 400 Million Ha 25% 200 Million Ha 50% 7 Gigatons 28 Gigatons 800 Million Ha Worlds forests cover around 4 billion Ha IEA 2011: 27% transport fuel from Biomass in 2050 Requires: 3 Gigatons of Biomass and 100 million Ha Carbon Recycling International

Biomass gasification Biomass conversion to Syngas Partial oxidation at high temperature (800 -3000°C) Diverse feedstocks possible – Organic waste and biomass Pure oxygen required for fuel production from syngas C/H ratios varies – Lack of hydrogen, H 2/CO=2 CHXOy + O 2 + H 2 O(g) → CO 2 + CO + H 2 + CH 4 + ash + tar CO + H 2 O → CO 2 + H 2 (water gas shift) Carbon lost as CO 2 emissions Combining hydrogen production with gasification can increase carbon conversion efficiency 26 Carbon Recycling International

Chemicals and Fuels from Syngas 27 Carbon Recycling International

Biofuel Challenges Sustainable feedstock Logistics Biomass deconstruction Efficient conversion pathway 28 Carbon Recycling International

Renewable Energy Carriers/Designer fuels Renewable Fuels Renewable Energy Carriers Biofuels Biometane Bio Alcohols Hydrogen Biodiesel Fuels from Syngas CO/CO 2 FT Diesel Synthetic Diesel Methane Methanol DME Gasoline 29 Batteries Carbon Recycling International FT Diesel

Energy Density of Fuels – Liquid is Key! 30 Carbon Recycling International

Renewable Fuels as Energy Carriers Not all renewable fuels are primary sources of energy, rather they are carriers of energy. Renewable Electricity Renewable Material Feedstock Renewable Fuel Example: Renewable Electricity + Water = Hydrogen is not compatible with current infrastructure Alternative: CO 2 can be recycled and used as an energy carrier by combining it with hydrogen from renewable electricity to make liquid fuel. Compatible with current infrastructure. → Liquid Electricity! 31 Carbon Recycling International

Capturing renewable power in a liquid CO + 2 H 2 → CH 3 OH CO 2 + 3 H 2 → CH 3 OH + H 2 O 2 CH 3 OH → CH 3 OCH 3+ H 2 O CH 3 OCH 3 , CH 3 OH → C 5+ + H 2 O Longer carbon chains → less efficient process Oxygenated feedstock → oxygenated fuels 32 Carbon Recycling International

Overview of CRI: Research to Revenue el? fu 2 to CO Startup and R&D 2006 -2009 Founded in Reykjavik, Iceland by group of Icelandic and US entrepreneurs Equity financing & construction 2010 Construction starts on first production plant Scale production & product launch Building project pipeline 2011 2012 Production starts and RM 3 blend tested in Icelandic market Sites in Iceland abroad in project pipeline Carbon Recycling International 33

Feedstock processes for Renewable Methanol Renewable Energy (RED) Solar Electrolysis Recycled Emissions Recycling Wind Hydro H 2 + CO 2 Renewable Methanol Synthesis Geothermal Biomass Gasification Carbon Recycling International Renewable Product

Renewable Methanol from geothermal feedstock Renewable Energy Solar Electrolysis Emissions Recycling Wind Hydro H 2 + CO 2 Renewable Methanol Synthesis Geothermal Biomass Gasification Carbon Recycling International Renewable product

GO Plant Blue Lagoon and Svartsengi power plant, Reykjanes 36

After Phase 1 1. 5 Kt CO 2 2 MWe 1, 7 ML/yr methanol After Phase II 4. 5 Kt CO 2 5 MWe 5 ML/yr methanol George Olah Plant, Svartsengi, Reykjanes Peninsula

Emission free gasification Biomass and waste Cleanup Gasification Stage II Stage I Renewable Methanol Syngas* Catalytic reaction Renewable power Oxygen Electrolysis Hydrogen Process water * Carbon monoxide, carbon dioxide and hydrogen Carbon Recycling International Distillation

Energy Density – Liquid is Key 39 Carbon Recycling International

Ethanol vs. renewable methanol Renewable fuel Ethanol Methanol H Chemical H C O H Feedstock Carbon intensity C 2 C 1 Food chain impact 0 Water footprint Land footprint CO 2 (WTT) 0/ Returns to scale Carbon Recycling International H

Methanol as a motor fuel Fyrst engines developed for combusting alcohols Used in racing for decades Eu standards allow 3% methanol in Gasoline Significantly improved efficiency possible with improved engines Large scale use started in Chine and developments elsewhere Methanol Racecar 41 Ford T FFV Ford Focus FFV Carbon Recycling International E 85 in BNA

Why is methanol an attractive fuel to meet future transportation needs sustainably? Liquid fuel: minimal switching costs Engines: gasoline engines modified at modest cost Flexible: multiple options for production and drive train Efficient: optimized engines comparable to diesel Emissions: better than gasoline, both fossil & renewable Renewable: fossil scale can be matched by renewable Safe fuel: safety comparable or better than gasoline. Bromberg L. and Cheng, W. K. , "Methanol as an alternative transportation fuel in the US: Options for sustainable and/or energy-secure transportation" 42 Carbon Recycling International

43 Higher blends: FFVs Gasoline 3% As MTBE 60% 6% Carbon Recycling International Methanol Metanol Gasoline Low blends – all vehicles Metanol (MTBE) Gasoline Fyrst steps and future development

Flexible fuel vehicles for 85% alcohol blends cost the same as conventional vehicles 44 Carbon Recycling International

Can Iceland become the next Brazil? Brazil is the world leader in biofuel production and use Produces 40% of all bioethanol used as fuel in the world In 1976 Brazil made it mandatory to blend ethanol into gasoline. Hasn‘t always been economical – they stuck with it National 25% ethanol blend now mandatory 50% share of “gasoline” market, large export volumes Iceland does not have sugarcane but it has Over 90% af all new cars in Brazil are flex fuel plenty of renewable electricity and CO 2 vehicles emissions to make renewable fuel! 45 Carbon Recycling International

Benefits of RM Blending For Conventional Vehicles: Tailpipe emissions go down Boosts Octane number No loss in mileage for low volume blends (up to 15%) For Iceland: Domestic utilization of energy, less fossil fuel imports, energy security Improves balance of trade Reduces GHG emission – Helps to meet Kyoto protocol obligations Diversification of Industry – Job creation, new technology and skills 46 Carbon Recycling International

The use of Methanol in our daily lives Today: Biodiesel, DME and MTBE production. Low volume gasoline blending (RM 3, RM 10) High volume blending for flex fuel vehicles (RM 50, RM 85, RM 100) The Methanol Economy Nobel laureate George Olah 47 Future: Methanol fuel cells (DMFC and reform fuel cells) Starting material for a green chemical industry:

Examples of Methanol Fuel Cell Applications 48

Methanol facts – is it safe? Currently one of the largest chemical commodities traded on the world market (over 40 million metric tons consumed annually) Compare: Large Methanol Spill vs. Large Oil spill Dispersion to below toxic levels in hours with methanol, not so for oil. Methanol is biodegradable – used in wastewater treatment Forms naturally with ingestion of fruits and artificial sweeteners Non carcinogenic, unlike some known gasoline components Hazardous when ingested – mistaken identity or intentional Avoided by denaturing Used in racing for its improved fire safety over gasoline 49

Conclusions Strong drivers in place for increased use of renewable fuels in the coming decades Various different types of renewable fuels are likely to co-exist in the marketplace Several challenges still ahead for advanced biofuels Technical, regulatory, market Brazil has shown it is possible to develop a renewable fuel economy Iceland can become energy independent and reduce its GHG emissions To reach that goal recycling carbon into Renewable Energy Carriers is a key development and can be deployed today! 50 Carbon Recycling International

Thank You Ómar Freyr Sigurbjörnsson Carbon Recycling International

Electric cars: 100 miles a 100 years ago Nissan Leaf Volt Ford Focus

Electric cars continued Chevrolet Volt Price in USA $ 42. 500 Chevrolet Cruze USA prices $ 16. 995 50 km on a single charge (36 KWh) + 550 km on gasoline Gasoline car Batteries can loose 10% charging capacity annually 53