European Road Fuel Demand

and Quality

Kenneth D Rose
First Fuel Additives Symposium, BASF
Ludwigshafen, Germany
5th June 2008
Reproduction permitted
with due acknowledgement
 CONCAWE: Research in Diverse Areas

CONservation
CON of
Clean The Oil Companies’ European association for health,
safety and environment in refining and distribution
(founded in 1963)
Air and

Water in

Europe

Automotive Emissions & Fuel Quality Refinery Technology Support

Air Quality Health Science
Water/Soil Quality & Waste Petroleum Products
Oil Pipelines Risk Assessment
Safety Implementation of REACH & GHS

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
2
with due acknowledgement
 CONCAWE Member Companies

Open to companies owning refining capacity in the EU

Currently 37 Members and 1 Associate Member
Representing ~100% of European crude oil refining capacity

AlmaPetroli IES OMV

api INA Petrogal
BP INEOS Petroplus
CEPSA IPLOM PKN Orlen
Chevron Koch Preem
ConocoPhillips KPI Repsol
DOW LOTOS Rompetrol
ENI LUKOIL SARA
ERG MOL SARAS
ExxonMobil Motor Oil Hellas Shell
Hansen & Rosenthal Murco StatoilHydro
Hellenic Petroleum Neste Oil Tamoil
Nynäs TOTAL

Association is >99% funded by Member Companies

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
3
with due acknowledgement
 Outline

World/EU Energy and Road Fuel Demand

EU Energy Directives and Road Transport

Fuel Manufacturing Efficiency
Engines and Powertrains
Biofuels

Opportunities for Fuel Additives

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
4
with due acknowledgement
 World Oil Demand
2.5

Average G row th Rate (% pa)

5,000

Total O il Demand (Mt/a)

2.0
4,000
1.5
3,000

1.0
2,000

1,000 0.5

0 0.0
2000 2005 2010 2015 2020
Asia Pacific Middle East North America
Latin America Greater Europe FSU
Sub-Saharan Africa Annual Grow th Rate (%)

¾ World oil demand is continuing to grow

¾ Large exploration, supply, & refining investments will be needed
¾ Wise choices are needed to maximize energy supply, minimize
CO2 emissions, and optimize investments
European Road Fuel Demand and Quality
Reproduction permitted
Kenneth D Rose (CONCAWE) Source: Wood Mackenzie (2007) 5
with due acknowledgement
 Long-term Energy Demand
8000
2030 Scenarios 2050 Scenarios
7000

Million tonnes oil equivalent

6000

5000

4000

3000

2000

1000

0
2005 Base Baseline Alternative ACT Map ACT Low TECH Plus
Case 2030 (WEO Scenario 2050 Efficiency 2050
2005) 2030 (WEO 2050
2005)

Oil Biofuels Synfuels Hydrogen

In any likely scenario, oil and gas will be a

significant contributor to long-term energy demand
European Road Fuel Demand and Quality
Reproduction permitted
Kenneth D Rose (CONCAWE)
Source: IEA World Energy Outlook (2006), Reference Scenario 6
with due acknowledgement
 Trends in EU-27 Petroleum Product Demand

800 719 734 734

676 693 LPG
700 651
Naphtha
600
Gasoline
500
Jet/Kero
M t/a
400 Road Diesel
300 Other gasoils

200 Res marine fuels

100 Other res fuels

Others
0
1995 2000 2005 2010 2015 2020
Year

¾ Moderate growth in total product demand (~0.7% 2006-2020)

¾ Steady increase in demand for diesel and jet/kerosene
¾ Steady decline in demand for gasoline and fuel oil
European Road Fuel Demand and Quality
Reproduction permitted
Kenneth D Rose (CONCAWE) Source: Wood Mackenzie (2006) 7
with due acknowledgement
 EU-25 Road Fuel Demand

180
160
140
120
Mt/a 100
80
60
40
20
0
1995 2000 2005 2010 2015 2020

Gasoline Diesel to personal cars

Heavy duty vehicles Total road fuels to personal cars

¾ Road fuel demand steadily shifting from gasoline to diesel

¾ Heavy duty diesel demand expected to grow while light duty peaks

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE) Source Wood Mackenzie (2006) 8
with due acknowledgement
 Global Diesel/Gasoline Demand Ratios

3.5
3.5

3.0
3.0

2.5
2.5

2.0
2.0

1.5
1.5 MD/(G+N)
MD/(G+N)

1.0
1.0
2020
2020

0.5
0.5 Diesel/Gasoline
Diesel/Gasoline

2005
2005
0.0
0.0
North
North Latin
Latin Asia
Asia Middle
Middle Russia
Russia Med
Med Central North
Central NorthWest
West Greater
Greater
America
America America
America Pacific
Pacific East
East and
and Europe
Europe Europe
Europe
Eastern
Eastern
Source: Wood
Source: Wood McKenzie
Mackenzie Europe
Europe

¾ Diesel/Gasoline demand ratios are higher in Europe than in

the rest of the world, projected to increase over the next decade

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
9
with due acknowledgement
 Supply/Demand Imbalance Expected to Grow

80
60 Greater Europe
40 Surplus

Balances (Mt/a)
20
0
-20
-40
Deficit
-60
-80
LPG Naphtha Gasoline Jet/Kero Diesel Gasoil

2005 2010 2015 2020

¾ CONCAWE estimates that holding the diesel/gasoline imbalance

at today’s level would require:
¾ 9-12 G€ of additional refinery investment
¾ Increase total refinery CO2 emissions by over 10%

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
Source Wood Mackenzie (2007) 10
with due acknowledgement
 EU Energy Directives and Road Transport

Climate Renewable Energy

Change Energy Efficiency

20% renewables
20% reduction of 20% reduction of primary
in total energy mix
GHG emissions (vs. 1990) energy consumption
10% (energy) biofuels
in road fuels

By 2020

+ Higher biofuel contents in petrol and diesel*

+ Mandatory 1%/year GHG reduction from fuel suppliers starting 2011
(based on 2010 baseline from conventional fuels)

Fuel Quality

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
* DG-TREN mandate to CEN 11
with due acknowledgement
 How to respond to EU Energy/GHG legislation?

Improve efficiency of fossil fuel production

Improve energy efficiency
Decrease GHG/CO2 emissions
Immediate impact as manufacturing efficiency improves

Improve efficiency of vehicles and road transport

Implement technology options
Implement non-technology options
Longer-term impact through fleet upgrade in road transport

Substitute biofuels for fossil fuels

Significant questions regarding availability, sustainability
Immediate impact as biofuels enter marketplace fuels

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
12
with due acknowledgement
 Efficiency of Fossil Fuel Production
EU Refineries: 13% improvement in energy efficiency over 15 years
Š Source: Solomon Associates
Trend will continue but technological limits are looming
Carbon Capture & Storage (CCS) still under development, likely
to be the exception rather than the rule over the next 15 years

Energy intensity in EU refineries will increase by 10-20% in the

coming decades due to:
Increasing demand for heavy-duty diesel for goods transport
Increasing shift in demand from gasoline towards diesel
Tighter fuel quality specifications and environmental legislation
Š A switch from residual marine fuels to distillate fuels could
increase total EU refinery CO2 emissions by 20%
Š Source: CONCAWE Study (2006)

Net result will be at best a stabilization and more probably an

increase in refinery GHG emissions
European Road Fuel Demand and Quality
Reproduction permitted
Kenneth D Rose (CONCAWE)
13
with due acknowledgement
 New Objectives and New Options
Modern Engine Systems
• Spark Ignition DI
+ SI Direct Injection
• Compression Ignition DI
+ CI Direct Ignition
CO, HC, NOx, O3 , Noise
Alternative Engine
Systems
• Advanced Combustion
+ HCCI, CAI
• Battery Technology
+ H2 Fuel Cell
• Hybrid Powertrains
European Road Fuel Demand and Quality
Reproduction permitted
Kenneth D Rose (CONCAWE)
with due acknowledgement
Modern Fossil Fuels
• 10ppm Sulphur
• Vapour Pressure
• Cetane Number
Urban • Additive Technology
Air Quality
(Local Pollution)
and
Energy Alternative Fuels
• Bio-fuels
Saving + Ethanol, RME, BTL
Global Pollution • Compressed Gases
+ LPG, CNG, DME, H2
CO2 , CH4 , N2 O …
• Gas-to-Liquids
+ Fischer-Tropsch
14
 Paths to the Future in a Carbon-constrained World

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
Source: MIT Consortium: “On the Road in 2035” (2008) 15
with due acknowledgement
 “Well to Wheels” Fuel Consumption

WTT and TTW Fuel Consumption (MJf/100km)

240 Well to Tank

Tank to Wheels
200
160
120
80
40
0 2002 2002 2010+ 2010+ 2010+ Hybrid 2010+ Hybrid
Conventional Conventional Conventional Conventional Gasoline Diesel
Gasoline Diesel Gasoline Diesel

¾ Tank to Wheels contributions are large relative to Well to Tank

¾ Significant potential for additional powertrain improvement

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE) Source: JRC-EUCAR-CONCAWE (JEC) WTW Study (2006) 16
with due acknowledgement
 Relative Changes for an Average US New Car

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
Source: L.W.Cheah, et al. MIT Consortium: “On the Road in 2035” (2008) 17
with due acknowledgement
 Trade-off Between Acceleration and Fuel Consumption

ERFC: Emphasis on Reducing Fuel Consumption

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
Source: L.W.Cheah, et al. MIT Consortium: “On the Road in 2035” (2008) 18
with due acknowledgement
 Emphasis on Reducing Fuel Consumption (ERFC)

Market Time Period Gasoline ERFC Diesel ERFC

France 1995-2006 68% 64%
Germany 1995-2006 54% 22%
Italy 1995-2001 83% 61%
UK 1995-2001 52% 51%
USA 1995-2006 8% ==

The Good News:

¾ Significant progress has already been achieved toward
emphasizing fuel consumption improvements for EU diesel and
gasoline light-duty vehicles
The Bad News:
¾ Future fuel consumption improvements in EU more challenging
¾ More dieselization, downsizing, and hybridization
¾ “Systems” approach needed to recover small fuel
consumption improvements from all engine/vehicle systems
European Road Fuel Demand and Quality
Reproduction permitted
Kenneth D Rose (CONCAWE)
Source: L.W.Cheah, et al. MIT Consortium: “On the Road in 2035” (2008) 19
with due acknowledgement
 Substituting Fossil Fuels with Biofuels

Biofuels are the only short/medium term option to meet EU and

Member State ambitions for:
Improving energy security
Reducing Green House Gas (GHG) emissions
Supporting agriculture

Availability of 1st Generation biofuels is limited

Availability of ethanol (including imports) is likely to be
higher than bio-diesel blending components for foreseeable
future
Biofuels are not 100% renewable and therefore contribute
only partly to GHG emission reductions (certification)
Methodology not yet developed to define sustainable
biofuels

CONCAWE has completed simulations to highlight the

challenge of meeting the proposed legislative targets
European Road Fuel Demand and Quality
Reproduction permitted
Kenneth D Rose (CONCAWE)
20
with due acknowledgement
 Biofuel Scenarios Analysed

Case 1: No biofuels base case

Case 2: Conventional domestic biofuels only
Conventional ethanol and FAME from EU domestic production
only
Case 3: Maximum domestic biofuels
Case 2 plus advanced biofuels from domestic sources
(ethanol from straw, BTL from wood waste) starting in 2010
Case 4: Meet the 10% biofuels target with biofuel imports
Case 3 plus import of ethanol and FAME to meet a 10% target
(on an energy basis)
Case 5: Meet the 10% Life Cycle GHG reduction target as well
Case 4 plus import of ethanol and BTL to achieve GHG target
Type Source WTW GHG savings compared to
% CO2eq/MJ
Gasoline Diesel
Ethanol (conv) EU cereal 40%
Ethanol (adv) Sugar cane or cellulosic 80%
FAME EU oil seeds 50%
BTL EU waste wood 90%
Source: JEC WTW Study
European Road Fuel Demand and Quality
Reproduction permitted
Kenneth D Rose (CONCAWE)
21
with due acknowledgement
 Bio-component Volumes Needed to Reach EU Targets

18%

Additional biofuel imports needed

16%
to meet Fuel Quality Directive target

14%

% biofuels in road fuels (energy)

Fuel Quality Directive target
12%
Renewable Energy Directive target
10%

Biofuel imports needed to

8%
meet Renewable Energy Directive target
ls
6% mestic Biofue
Advanced Do

4%

2% Conventional Domestic Biofuels

0%
2005 2010 2015 2020

10% bio-components in road fuels on an energy basis (Renewables Directive)

and 10% GHG reduction (Fuel Quality Directive) are NOT equivalent targets

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE) Source: CONCAWE, based on results of JEC WTW Study 22
with due acknowledgement
 What volumes of biofuels will be needed?

30
Ethanol conventional 28 Mt/a Ethanol
25 Ethanol adv domestic
Ethanol adv imports
FAME
20
BTL domestic
BTL imports

Mt/a
15
Case 2 Case 3 Case 4 Case 5 11 Mt/a BTL
10

0
Conventional Maximum 10% biofuels 10% LC CO2
domestic biofuels domestic biofuels target with EtOH reduction
imports
Source CONCAWE, adapted from JEC WTW study

28 Mt/a of ethanol represents about 250% of the 2004 Brazilian

production
11 Mt/a of Biomass-To-Liquids (BTL) would require
50 plants as currently planned by Choren in Germany
11 “world-scale” plants and 70 Mt/a of dry wood
European Road Fuel Demand and Quality
Reproduction permitted
Kenneth D Rose (CONCAWE)
23
with due acknowledgement
 Implications for Road Fuels

70%

Ethanol in gasoline
60%
FAME in diesel
BTL in diesel
50%

40%
% v/v

30%
Case 2 Case 3 Case 4 Case 5
20%

10%

0%
Conventional Maximum 10% biofuels 10% LC CO2
domestic domestic target with EtOH reduction
biofuels biofuels imports

Falling gasoline demand and higher ethanol availability

would drive up ethanol penetration in the gasoline pool

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
Source: CONCAWE, adapted from the JEC WTW study 24
with due acknowledgement
 Bio-component Technologies

Gasoline Components Diesel Components

Today – “1st Generation”
Conversion of Sugar Crops Natural or Esterified Oils
Ethanol Fatty Acid Methyl Esters
(also called bio-esters)
Ethanol Derivatives
• Rape Seed, Soy, Palm, etc.
• ETBE (Ethyl Tertiary-Butyl Ether)
FAEE (Ethyl Esters)
• TAME (Tertiary-Amyl Methyl Ethers)
Hydroprocessed Oils
• TAEE (Tertiary-Amyl Ethyl Ethers)
• “1.5 Generation” products?

Tomorrow – “2nd Generation”

Ethanol from lignocellulose BTL (Biomass to Liquids)
Biogas Dimethyl Ether (DME)

Winning technologies must demonstrate energy efficiency,

favorable GHG reduction, and sustainable development
European Road Fuel Demand and Quality
Reproduction permitted
Kenneth D Rose (CONCAWE)
25
with due acknowledgement
 JRC/EUCAR/CONCAWE Biofuels Programme

Objectives of the JEC Biofuels Programme:

Clarify the opportunities and barriers to
achieve 10% biofuels (energy basis) in road
fuels by 2020
A three-way Ensure that the introduction of biofuel blends
partnership to meet the 2020 target is seamless to
consumers and results in no detrimental
impact on vehicle performance and emissions
Programme time frame: 3 years (2008-2010)

Programme Plan:
First Step: Develop a consensus supply picture of biofuel types
and availability
Second Step: What are the biofuel performance issues with the
existing and near-term fleet?
Third Step: What can the future Light-duty and Heavy-duty fleet
handle?
Support CEN to adapt fuel specifications to higher biofuel levels

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
26
with due acknowledgement
 How can fuel additives enable performance
in an ever-changing fuel mix?
Efficiency Enhancers
1. Processing aids: Enhance efficiency of refinery and pipeline processes
2. Detergents: Ensure “like new” cleanliness of engine & fuel system
3. Lubricity: Reduce friction between engine’s moving parts
4. Combustion aids(?): Enhance fuel dispersion and combustion

Compatibility Enhancers
1. Antioxidants: Ensure long-term stability of bio-components and fuels
2. Corrosion Inhibitors: Protect fuel system parts from aggressive components
and oxidation products
3. Cold Flow Improvers: Ensure low temperature performance with more
diverse fuel compositions
4. Elastomer aids(?): Protect sensitive elastomers in older fleet
5. Aftertreatment Aids: Enhance performance of exhaust after-treatment

Marketing Enhancers
1. Specialty additives: Odorants, markers, etc.
2. Plus most of the above
European Road Fuel Demand and Quality
Reproduction permitted
Kenneth D Rose (CONCAWE)
27
with due acknowledgement
 European Road Fuel Demand and Quality

• Significant challenges are ahead to meet Global and EU energy

and road fuel demands

• Today’s advanced vehicles and fuels will continue to dominate

mainstream road transport for some time to come

• Emerging combustion, engine, and vehicle concepts offer

potential to continuously reduce fuel consumption/CO2 emissions
• Technological & “non-technological” options will be needed
• Comparable focus is needed on long-distance transport

• Alternative fuels should be energy & CO2 efficient on a WTW

basis and sustainably produced
• “1st Generation” biofuels: contributing but availability is limited
• “2nd Generation” biofuels: need much more research

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
28
with due acknowledgement
 Congratulations, Erich!

“Well, we just can’t stand around here all day doing nothing.
People will think we are ordinary workmen.”
Spike Milligan
British Comedian

“How has retirement affected my golf game?

A lot more people are willing to beat me now.”
General Dwight Eisenhower
34th American President

European Road Fuel Demand and Quality

Reproduction permitted
Kenneth D Rose (CONCAWE)
29
with due acknowledgement