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					Outlook for European Ethanol market
                              2008
    Sommaire
               - Production

               - Consumption

               - Outlook for 2020

               - Profitability




2
Production
  Europe’s ethanol production (m3) increases,
  but its share in the World remains small.

70 000 000
                 EU
60 000 000       USA
                 Brésil
50 000 000
                 Rest of World
40 000 000

30 000 000

20 000 000

10 000 000

        0
             2000 2001 2002 2003 2004 2005 2006 2007 2008
European alcohol production increase is due
to Agricultural origin
4 500 000      Synthetic (m3)
4 000 000      Agricultural ( m3)

3 500 000
3 000 000
2 500 000
2 000 000
1 500 000
1 000 000
 500 000
       0
            2004        2005        2006   2007
Starch and Sugar beet are the main raw
material for alcohol production in Europe
3 500 000
                  Starch
3 000 000         Sugar Beet
                  raw
2 500 000         Miscelaneous

2 000 000

1 500 000

1 000 000

 500 000

       0
            1998 1999 2000 2001 2002 2003 2004 2005 2007
  6 MS produce 80% of EU agricultural alcohol :
  France,Espagne,Allemagne,Pologne,Suède, Italie
                                                                                  France
1 200 000                                                                         Espagne
                                                                                  Allemagne
                                                                                  Pologne
1 000 000                                                                         Suède
                                                                                  Italie
                                                                                  Hongrie
 800 000                                                                          Paysbas
                                                                                  Rép Tchèque
                                                                                  Slovaquie
 600 000
                                                                                  UK
                                                                                  Irlande
 400 000                                                                          Finlande
                                                                                  Grece
                                                                                  Lettonie
 200 000                                                                          Lituanie
                                                                                  Danemark
                                                                                  Autriche
       0                                                                          Belgique
                                                              K


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                                                                                  Slovénie
 European Alcohol production is increasing
 but its share in total EU alcohol market is
 reducing     % of european alcohol consumption

100%


80%

60%


40%
                         European production share on consumption


20%

 0%
       2004     2005     2006                2007
Consumption
 Fuel ethanol market grows more
 rapidly than traditionnal markets in
 the EU
5 000 000    Fuel (m3)
4 500 000    Traditionnal (m3)
4 000 000
3 500 000
3 000 000
2 500 000
2 000 000
1 500 000
1 000 000
  500 000
        0
            2004       2005      2006   2007
European fuel ethanol market grows,
despite constant reduction in
Petrol/Gasoline EU market
140 000 000

120 000 000

100 000 000

 80 000 000

 60 000 000

 40 000 000              essence
                 Tonnes d'

 20 000 000

         0
         03

         05

         07

         09

         11

         13

         15

         17

         19
       20

       20

       20

       20

       20

       20

       20

       20

       20
 Reduction in Petrol/Gasoline EU market is
 due to reduction in share compared to Diesel

       Petrol/Gasoline Share in Total road fuel consumption

50%
45%
40%
35%
30%
                                                              EU
25%
                                                              France
20%
15%
10%
5%
0%
      2000    2001     2002     2003    2004     2005
  Petrol consumption per habitant is high in
  Sweden, low in France and Poland.        Ireland
                                           Greece

         Kg/habitant/year                  Sw eden

500                                        Finland
                                           Denm ark
450                                        UK

400                                        Slovenia
                                           Netherlands
350                                        Czech Republic
                                           Austria
300                                        Estonia

250                                        Germ any
                                           Italy
200                                        Hungary
                                           Latvia
150                                        Spain
100                                        Portugal
                                           France
 50                                        Belgium

  0                                        Slovakia
                                           Poland
                       Sl UK
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               C
Outlook
 Hypothesis :
 Petrol consumption will stabilize
 EU will achieve the 10% 2020 target
                left : tons ; wright : %

140 000 000                  12,0%
120 000 000                  10,0%
100 000 000
                             8,0%
 80 000 000
                                           Petrol
                             6,0%          Gasoline
 60 000 000                                (tons)
                             4,0%
 40 000 000                                Ethanol rate
 20 000 000                  2,0%          (% energy
         0                   0,0%          content)
         03
         06
         09
         12
         15
         18
       20
       20
       20
       20
       20
       20
  Combination of these 2 hypothesis results in
  a theoretic 2020 market of 17 millions m 3
  ethanol in the EU
18 000 000
16 000 000
14 000 000
12 000 000
10 000 000
 8 000 000                                                                                current
 6 000 000                                                                                consumption
 4 000 000                                                                                (m3)
                                                                                          Theoretic
 2 000 000
                                                                                          consumption
        0
             1998
                    2000
                           2002
                                  2004
                                         2006
                                                2008
                                                       2010
                                                              2012
                                                                     2014
                                                                            2016
                                                                                   2018
                                                                                          2020
EU production will probably be less than that
: We suppose 70% of the theoretic level


 Ethanol development in Europe is 2 or 3 years
 late on current targets

 Imports will take a share of the market
   Already announced projects cover 80%
   of 2020 potential for EU production.
                current consumption (m3)
                Theoretic consumption
                current production
                Production capacity with announced projects
18 000 000      Potential EU Production
16 000 000
14 000 000
12 000 000
10 000 000
 8 000 000
 6 000 000
 4 000 000
 2 000 000
        0
             1998
                    2000
                           2002
                                  2004
                                         2006
                                                2008
                                                       2010
                                                              2012
                                                                     2014
                                                                            2016
                                                                                   2018
                                                                                          2020
  Germany and UK ethanol markets will
  be the biggest
                                                                                                                                             Germ any

                              Fuel Ethanol 2020 consumption (m3)                                                                             UK
                                                                                                                                             Italy
                                                                                                                                             France

3 500 000                                                                                                                                    Spain
                                                                                                                                             Greece
3 000 000                                                                                                                                    Netherlands
                                                                                                                                             Poland
2 500 000                                                                                                                                    Sw eden

2 000 000                                                                                                                                    Czech Republic
                                                                                                                                             Rom ania
1 500 000                                                                                                                                    Ireland
                                                                                                                                             Finland
1 000 000                                                                                                                                    Hungary
                                                                                                                                             Austria
 500 000                                                                                                                                     Denm ark

       0                                                                                                                                     Portugal
                                                                                                                                             Belgium
                      Italy




                                                                       Finland
                                      Netherlands




                                                                                                               Bulgaria
                              Spain


                                                    Sweden
            Germany




                                                             Romania


                                                                                 Austria


                                                                                                      Cyprus




                                                                                                                                   Estonia
                                                                                           Portugal




                                                                                                                          Latvia
                                                                                                                                             Cyprus
                                                                                                                                             Slovakia
                                                                                                                                             Bulgaria
                                                                                                                                             Slovenia
                                                                                                                                             Latvia
                                                                                                                                             Lithuania
                                                                                                                                             Estonia
    UK and Germany could overcome France on
    Fuel ethanol production if all projects come
    on stream.
                  Fuel ethanol Production capacity (m3)

2 000 000
1 800 000
1 600 000
1 400 000                                                                 UK
1 200 000                                                                 Germany
1 000 000                                                                 France
 800 000                                                                  Spain
 600 000                                                                  Italy
 400 000
 200 000
       0
            2 005 2 006 2 007 2 008 2 009 2 010 2 011 2 012 2 013 2 014
Despite a low share for petrol compared to
Diesel, France’s alcohol position could
remain high in the years to come thanks to :

 High availability of raw materials. 2007 crop
 (cereals + sugar beet) covers 18 times what is
 needed to achieve the 10% target

 High Targets : France will be among the first
 MS to achieve the 5,75% target

 High historical position on « traditional
 markets ».
  France and Poland rank first for agricultural
  raw material availability : 18 and 14 times
  more that what is needed for the 2020 target.
                                                                 France

       Raw material availability against need for fuel ethanol   Lithuania
                                                                 Poland
                                                                 Bulgaria

20,0                                                             Slovakia
                                                                 Hungary
18,0                                                             Denm ark
16,0                                                             Spain

14,0                                                             Latvia
                                                                 Rom ania
12,0                                                             Belgium
10,0                                                             Germ any

 8,0                                                             Austria
                                                                 Czech Republic
 6,0                                                             Estonia

 4,0                                                             Italy
                                                                 Finland
 2,0                                                             Sw eden
 0,0                                                             UK
                                                                 Slovenia
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                                                                 Netherlands
                                                                 Cyprus
 For the coming years, french targets
 will be among the highest in Europe.

12,0%

10,0%

8,0%

                                                                 France
6,0%
                                                                 Average EU
4,0%

2,0%

0,0%
    03

           05

                  07

                         09

                                11

                                       13

                                              15

                                                     17

                                                            19
  20

         20

                20

                       20

                              20

                                     20

                                            20

                                                   20

                                                          20
EU Ethanol Profitability :
 impact of wheat prices
  World wheat production increases while
  harvested area remains stable : yield increases 40
  kg par hectare and per year (world average)
800

700
                                                Wheat
600                                             Production
                                                (million metric
500                                             tons)

400                                             Wheat
                                                Consumption
                                                (million metric
300                                             tons)

200                                             Wheat
                                                harvested area
100                                             (million
                                                hectares)
  0
  60

  65

  70

  75

  80

  85

  90

  95

  00

  05
19

19

19

19

19

19

19

19

20

20
 From 1997 to 2007, low prices were
 dissuasive for wheat production: now, better
 prices are an incentive to produce wheat.
700                       10
680
660
                               Wheat
640
                               Production
620                            (million metric
600                       5    tons)
580
560                            right scale :
540                            Wheat Price
520
                               (2007 $/bu)
                               (previous year)
500                       0
  97

  99

         01

         03

         05

                   07

                   09
19

19

       20

       20

       20

                 20

                 20
     Long Term Trend : wheat gets cheaper and
     cheaper (Average reduction of 10 ç a bushel per year)

40
                                                      Wheat price $/bu ( 2007$)
35
                                                      1910-1970 Trend
30
25
20
15
10
 5
 0
     1912
            1920
                   1928
                          1936
                                 1944
                                        1952
                                               1960
                                                      1968
                                                             1976
                                                                    1984
                                                                           1992
                                                                                  2000
                                                                                         2008
On the other side, oil margins are
increasing since the 70’s
120


100
        Oil US $ 2007 par baril
        Wheat price $/bu ( 2007$)
 80     1910-1970 Trend


 60


 40


 20


  0
  12

  20
  28

  36

  44

  52

  60

  68

  76
  84

  92

  00

  08
19

19
19

19

19

19

19
19

19

19

19

20

20
      oil barrel price is now 14 wheat bushels far
      from the past level of 1 for 1

30

25
                   25 bushels per barel
20                 : no more public
                   support needed
15                 Bushels of wheat for
                   one barel of oil
10

 5

 0
     1912
            1919
                   1926
                          1933
                                 1940
                                        1947
                                               1954
                                                      1961
                                                             1968
                                                                    1975
                                                                           1982
                                                                                  1989
                                                                                         1996
                                                                                                2003
                                                                                                       2010
                                                                                                              2017
European Fuel Ethanol Market .

                         2008

				
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