GG2L – GREEN GAS TO LIQUID INDUSTRIAL PRODUCTION OF GREEN FUEL FOR THE AVIATION INDUSTRY PHASE 1 – PROOF OF CONCEPT CONSTRUCTION OF A 10 BPDGREEN-GAS-TO-LIQUID (GG2L) FACILITY FOR THE PRODUCTION OF SUSTAINABLE AVIATION FUEL (SAF) PRESENTATION AT HANNOVER MESSE 25 APRIL 2018 DR. RÜDIGER SCHWARZ, MANAGING DIRECTOR CCS/ALF „Power -to- X“ Hannover 25/04/2018 Green-Gas-to-Liquid – GG2L
CONTINUED GROWTH OF AVIATION MARKET Kerosene consumption is expected to quadruple by 2050 • Air traffic will continue to grow by annually 4.7 per cent over the coming 20 years • Airbus: 6,000 new orders (01/2016) • Annual kerosene demand is expected to rise by 3 – 3.5 per cent • Aviation sector depends on crude oil • Crude oil is a scarce commodity Source: International Civil Aviation Organisation Reliable and cost-effective provision of crude oil based jet fuels: will become more difficult in the future Strategic reorientation : long-term disassociation of the aviation industry from crude oil New foundation: alternative fuels „Power -to- X“ Hannover 25/04/2018 2 Green-Gas-to-Liquid – GG2L
PRICE DEVELOPMENT I It is difficult to obtain accurate predictions on the evolution of the oil price for a period of more than one year. However, all the experts agree that the world economy will be burdened by a pronounced price increase . Source: www.iata.org Source: World Bank Price development of jet fuel and World Bank forecast: crude oil from 2011 to 2018 oil price development until 2025 „Power -to- X“ Hannover 25/04/2018 3 Green-Gas-to-Liquid – GG2L
PRICE DEVELOPMENT II Why does the fall in prices for refinery products not fully reflect the oil price decrease? • The world refinery capacity is limited and grows by 0.6 per cent a year only • Consumption of refinery products is annually growing by 1.7 per cent • In addition, stricter environmental requirements reduce the output of older refineries Source: www.dual-h.com Development of spot market prices for gasoline, diesel, jet fuel and crude oil (Brent ) Crude oil price in right scale, product prices as difference in left scale Why do capacities not grow to meet the growing demand? • Refinery margins fell from 10 USD/barrel to 5 USD/barrel during the last decade • This price erosion, further aggravated by the drop of crude oil prices, makes investments in new refineries unattractive „Power -to- X“ Hannover 25/04/2018 4 Green-Gas-to-Liquid – GG2L
CLIMATE PROTECTION REQUIREMENTS The „Paris Agreement“ of the 21. United Nations Climate Change Conference (COP21) and its ambitious climate protection targets put even more pressure on the need for the development of alternative and environmentally friendly fuels. Target: carbon-neutral growth (not decarbonisation) Article 2.1 “This Agreement, in enhancing the implementation of the Convention, including its objective, aims to strengthen the global re sponse to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty, including by: a) Holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change;” Article 4.1 “In order to achieve the long -term temperature goal set out in Article 2, Parties aim to reach global peaking of greenhouse gas emissions as soon as possible , recognizing that peaking will take longer for developing country Parties, and to undertake rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century, on the basis of equity , and in the context of sustainable development and efforts to eradicate poverty.” Article 5.1 “Parties should take action to conserve and enhance, as appropriate, sinks and reservoirs of greenhouse gases as referred to in Article 4, ….” „Power -to- X“ Hannover 25/04/2018 5 Green-Gas-to-Liquid – GG2L
POTENTIAL FOR ALTERNATIVE AVIATION FUELS • The international aviation industry (IATA) has agreed on ambitious goals for climate protection: • from 2020 onwards carbon neutral growth • to reduce the CO 2 emissions by 50% by the year 2050 (basis year 2005) • This goal will be achieved by: • using more efficient engines • optimization of traffic logistics and • IATA actions for reduction of CO 2 emissions - 1: more efficient fuels by 2020; 2: stabilization of net mainly by the use of alternative emissions by CO 2 -neutral growth; 3: halving CO 2 emissions by 2050 on basis of 2005 (ATAG, Air Transport fuels (blue area in Figure) Action Group, 2013, p. 2) • As a result of this agreement the demand for clean fuels has been increased significantly • The increasing demand for alternative fuels led to rising R&D activities e.g.: Deutsche Lufthansa, German Aerospace Centre (DLR), Airbus Group, U.S. Department of Defense (DoD) • The „Aviation Initiative for Renewable Energy in Germany e. V.“ (aireg) was founded in 2011 in order to support the development and use of alternative aviation fuels „Power -to- X“ Hannover 25/04/2018 6 Green-Gas-to-Liquid – GG2L
SPK – A NEW FUEL • Proven technology: based on the Fischer-Tropsch • New CCS+U technologies allow coal to be used as synthesis (FT) – developed in Germany in 1923 – raw material: possibility to make the best fuels can be produced from carbon sources: economic use of CO 2 (inter alia enhanced oil „Carbon -to- Liquid“ ( CtL), but recovery, production of methanol and other raw materials for the chemical industry) • Innovation in technology and product • Lignite coal as native resource: span of more than development has been made outside Europe during the last 20 years 250 years and inexpensive and reliable • Technology leadership : Republic of South Africa‘s • Pricing: regardless of worldwide oil price SASOL and accompanying R&D landscape evolution • Worldwide use: production of fuels (diesel, • Clean Fuel : fewer emissions of sulphur and gasoline, kerosene), wax, fertilizer, chemical raw nitrogen oxides as well as CO 2 when burnt materials for the chemical industry • Efficient Fuel : longer maintenance intervals and • Biogas, natural gas and bio-methane from the turbine operation times German gas pool can be used for SPK SPK – Synthetic Paraffinic Kerosene = drop-in fuel for the aviation industry „Power -to- X“ Hannover 25/04/2018 7 Green-Gas-to-Liquid – GG2L
ADVANTAGES OF SYNTHETIC FUELS DLR – measurement flight confirms Clean Fuel properties of synthetically manufactured fuels Short-term: drop-in fuels already certified Fully synthetic kerosene SASOL 1. Technical performance can be increased 2. Harmful substances can be reduced a. Double climate effects: CO 2 and soot particulates b. Health effects around airports Proof: DLR Project ECLIF 1. ECLIF – Emission and Climate Impact of Alternative Fuels 2. Soot particulate reduction by up to 50 per cent depending on aromatic content and structure Long-term: Near drop-in fuels with modified specifications 1. Further increase of technical performance: range, ignition capability, anti-freeze, thermal stability 2. Further massive reduction of sooth, sulphur and CO 2 3. Development of an ideal Boutique Fuel 4. High-efficiency engines with extremely low levels of harmful emissions can be developed Research must pave the way – quite a special opportunity for Germany Source: Presentation by Manfred Aigner, 30.11.2015 – Chancen von synthetischen Treibstoffen „Power -to- X“ Hannover 25/04/2018 8 Green-Gas-to-Liquid – GG2L
SYNTHETIC KEROSENE – OVER 2,000 COMMERCIAL FLIGHTS* In September 2010, Sasol took the world’s first “… by 2025 to have 70% of our aviation fuel coming from fully synthetic jet fuel flight coal- based sources”, M. Aimone, the US Air Force ass. dep. (http://visfinger.blogspot.de/2010/09/sa-with-another-first.html) chief of staff for logistics. (http://www.ausairpower.net/APA-USAF-SynFuels.html) January 2013 - Qatar Airways and Shell introduced a new synthetic jet fuel (http://www.qatarairways.com/sg/en/csr-fuels.page) DLR test flight with alternative fuels (http://www.dlr.de/dlr/en/desktopdefault.aspx/tabid-10081 /151_read-15388/#/gallery/20878) * http://www.bdl.aero/download/2139/10_alternative-kraftstoffe_roetger_iata_tisch-10_bdl- klimaschutz.pdf and http://www.iata.org/whatwedo/environment/Documents/safr-1-2015.pdf „Power -to- X“ Hannover 25/04/2018 9 Green-Gas-to-Liquid – GG2L
PROJECT ORGANISATION – TEAM CCS GmbH and Holland & Hausberger (Pty) Ltd jointly established the Germany-based Advanced Liquid Fuel (ALF) company to cover the international market in 2016. Project team : ▪ ▪ Dr Rüdiger Schwarz Dr Brendon Hausberger Project Director Technical Project Director Managing Director Managing Director CCS GmbH, ALF Advanced Liquid Fuel UG Holland & Hausberger (Pty) Ltd, Johannesburg ▪ ▪ Axel Juch Dr Erhard Tschirner Project Manager Dr. Ralf Boback Director CCS GmbH Technical Team „Power -to- X“ Hannover 25/04/2018 10 Green-Gas-to-Liquid – GG2L
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