RIWKHSURFHHGLQJDUJXPHQWV

:KDW,UHIHUWRDVJHRSROLWLFVLQWKHFRQWH[WRIWKLVWKHVLVKDVWRGRZLWKWHUULWRULDO

VWUXJJOHVWKDWUHYROYHDURXQGWKHFDSWXUHRIEHQHILWVDQGFRQWURORYHUODQGDQGODQG

EDVHGUHVRXUFHVLQSODFHVZKHUHWKHHQHUJ\IRUOLTXLGELRIXHOSURGXFWLRQLVWREH VRXUFHG$VDUJXHGLQVHFWLRQWKHVHVWUXJJOHVDVVXPHDWHUULWRULDODVSHFWGXH

WRWKHµKLVWRU\RIJHRJUDSKLFDOO\XQHYHQGHYHORSPHQW¶DQGWKHµYDULHJDWHGQDWXUHRI

FDSLWDOLVP¶+HUH,ZRXOGOLNHWRHPSKDVL]HWKHUROHRIµFULVHV¶LQWKHVHWHUULWRULDO

VWUXJJOHV

%URDGO\FULVHVKHUHUHIHUVWKHWKUHDWHQHGIDLOXUHRIWKHVRFLRHFRQRPLFVWUXFWXUHV

ZKLFKLVLQKHUHQWWRFDSLWDOLVPLWVHOIEHFDXVH

>FDSLWDOLVP¶V@ HQGRJHQRXV G\QDPLFV IUHTXHQWO\ DQG FKDUDFWHULVWLFDOO\ SURGXFH

VLWXDWLRQVLQZKLFKLZRUNHUVFROOHFWLYHO\FDQQRWDIIRUGWREX\WKHFRPPRGLWLHV

WKH\ SURGXFHD FULVLVRI XQGHUFRQVXPSWLRQ LL PRUH FRPPRGLWLHV DUH SURGXFHG

WKDQFDQEHDEVRUEHGE\DOODYDLODEOHSXUFKDVLQJSRZHUDFULVLVRIRYHUSURGXFWLRQ

LLLFDSLWDOLVWVDFFXPXODWHPRUHFDSLWDOWKDQWKH\FDQLQYHVWLQSURILWDEOHHQWHUSULVHV

DFULVLVRIRYHUDFFXPXODWLRQRULYDODUJHSRUWLRQRIWKHWRWDOODERXUIRUFHFDQQRW

EHSURILWDEO\HPSOR\HGLQWKHSURGXFWLRQRIFRPPRGLWLHVDFULVLVRIXQHPSOR\PHQW



RUXQGHUHPSOR\PHQW7KHVHYDULRXVPDQLIHVWDWLRQVRIFULVLVDUHFORVHO\UHODWHGZLWK

RQHRIWHQOHDGLQJWRRUDFFRPSDQ\LQJDQRWKHU*UHJRU\HWDOSS 6KHSSDUG  S  XQGHUOLQHV WKDW WHUULWRULHV VHHN GLIIHUHQW GHYHORSPHQW

WUDMHFWRULHVGHSHQGLQJRQWKHLUUHODWLYHSRVLWLRQZLWKLQWKHEURDGHUUHJLRQDOSROLWLFDO

HFRQRP\ 7R SRVWSRQH D FULVLV ZLWKLQ D IUDPHZRUN RI XQHYHQ JHRJUDSKLFDO

GHYHORSPHQW µWHUULWRULDO DOOLDQFHV¶ FDQ HPHUJH +DUYH\ E PHDQLQJ WKDW

WHUULWRULDOLQWHUHVWVDQGFDSLWDOLVWLQWHUHVWVFROODERUDWHDQGRUFRPSHWHDJDLQVWHDFK

RWKHU7KLVLVZKHUH³WKHUHODWLYHVWUHQJWKRIGLIIHUHQWWHUULWRULDOO\EDVHGDOOLDQFHV

EHFRPHDQLPSRUWDQWIDFWRU´+DUYH\ESDVFHUWDLQWHUULWRULDODOOLDQFHV

EHFRPHLQFUHDVLQJO\SRZHUIXORYHUWLPHLQWHUPVRIWKHLUSROLWLFDOHFRQRPLFDELOLW\

WRSURWHFWDQGHQKDQFHWKHLUPDWHULDOLQWHUHVWV7RSRVWSRQHDFULVLVWKHVHDOOLDQFHV

PD\DWWHPSWWRSURWHFWYDULRXVLQWHUHVWVE\FDSWXULQJDQGFRQWDLQLQJWKHEHQHILWV

WKDWFDQEHGHULYHGIURPIORZVRIFDSLWDODQGODERXUSRZHUXQGHUWKHLUSROLWLFDO

HFRQRPLF FRQWURO +DUYH\ E SS  , XQGHUVWDQG WKH (8¶V

WHUULWRULDOLVDWLRQSURFHVVLHUHWHUULWRULDOLVDWLRQRIWKHVWDWHRQWRDVXSUDQDWLRQDO

VFDOH DQG WKH GHWHUULWRULDOLVDWLRQ WKURXJK WKH JOREDOL]DWLRQ RI FRPPRGLW\

SURGXFWLRQ DV WKH ZRUNLQJV RI VXFK D JHRSROLWLFDO DOOLDQFH VHH %UHQQHU 

+DUYH\D

3URFHHGLQJIURPWKHVHSUHPLVHV,JRRQWRGHYHORSWKUHHDUJXPHQWVLQWKHVHFWLRQV

WKDWIROORZ

)LUVWO\ , H[SODLQ KRZ OLTXLG ELRIXHOV EHFDPH DQ HQHUJ\ FRPPRGLW\ WKURXJK D

FRPSOH[DQGFRQWUDGLFWRU\JHRSROLWLFDOUHVSRQVHRIWKH(XURSHDQ&RPPLVVLRQ(& WRPXOWLSOHFULVHV,GRVRWKURXJKDKLVWRULFDODFFRXQWRIWKHSROLWLFDODQGHFRQRPLF

LQWHUHVWVLQOLTXLGELRIXHOVDVH[SUHVVHGE\WKH(&DQGFHUWDLQPHPEHUVWDWHV,DOVR

H[SODLQWKHUHJXODWRU\RXWFRPHVRIWKHVHSURFHVVHVLQWHUPVRIPHFKDQLVPV7KH

DFFRXQW LV EDVHG RQ D WKRURXJK GRFXPHQW DQDO\VLV LQIRUPHG E\ H[WHQVLYH

HQJDJHPHQWZLWKWKHDFDGHPLFOLWHUDWXUHRQ(8ELRIXHOVVHFRQGDU\VRXUFHVDQG

YDULRXV (& SXEOLFDWLRQV DQG OHJDO GRFXPHQWV DERXW OLTXLG ELRIXHOV SULPDU\

VRXUFHV

6HFRQGO\,H[SODLQKRZ(8ELRIXHOUHJXODWLRQFUHDWHGUHJXODWRU\PHFKDQLVPVZLWK

EHDULQJV RQ ILUPOHYHO GHFLVLRQPDNLQJ SURFHVVHV 7KHVH PHFKDQLVPV DUH

SRVLWLRQHG ZLWKLQ EURDGHU XQGHUO\LQJ VWUXFWXUHV RI FDSLWDOLVW VRFLDO UHODWLRQV RI

SURGXFWLRQDQGH[FKDQJHDQGDUHDUJXHGWRIXUWKHUSURPRWHLQWHQVLILFDWLRQRIODQG

XVH ,Q PRUH GHWDLO , H[SODLQ WKH QRUPDWLYH DVVXPSWLRQV GHFLVLRQPDNLQJ

PHFKDQLVPV DQG QHWZRUNV RI DFWRUV LQ WKH (8¶V µUHJXODWRU\ UHJLPH RQ OLTXLG

ELRIXHOV IRU WUDQVSRUW¶ DQG JR RQ WR FRQFHSWXDOLVH LW DV SDUW RI WKH µUHJXODWRU\

FDSLWDOLVP¶ /HYL)DXU  WKDW ZDV LQVWLWXWLRQDOL]HG LQ WKH UHQHZDEOH HQHUJ\

GLUHFWLYH 7KH DQDO\VLV LV EDVHG RQ SULPDU\ VRXUFHV VXFK DV OHJDO GRFXPHQWV

FHUWLILFDWLRQ VWDQGDUGV DQG VWDWLVWLFV UHWDLO SULFHV DQG GHOLYHUHGDPRXQWV RIDQG



VXEVLGLHVIRUOLTXLGELRIXHOVDQGVRPHVHFRQGDU\VRXUFHVDFDGHPLFOLWHUDWXUHRQ

(8ELRIXHOV

7KLUG LQ DFFRUGDQFH ZLWK P\ DSSURDFK WR VXVWDLQDELOLW\ VFLHQFH , FRQFOXGH WKH

FKDSWHU ZLWK D FULWLTXH RI (8 ELRIXHO UHJXODWLRQ IRFXVLQJ RQ WKH FODLP WKDW

UHJXODWLRQ FDQ DVVXUH WKDW HQHUJ\ FRPPRGLWLHV WKDW UHGXFH *+* HPLVVLRQV LQ

WUDQVSRUWZLOOEHGHOLYHUHG+HUH,UHODWHP\DQDO\VLVRIUHJXODWRU\PHFKDQLVPVDQG

WKHLUHIIHFWVRQILUPOHYHOGHFLVLRQPDNLQJWRRWKHUDVSHFWVRIP\HPSLULFDOZRUN

0RUHVSHFLILFDOO\WRP\DQDO\VLVRIWKHFRQWHQWRI(8ELRIXHOUHJXODWLRQDQGWKH

PDWHULDORXWFRPHVJHQHUDWHGLQWKH6ZHGLVKWUDQVSRUWVHFWRU,QSDUWLFXODU,UHIHUWR

WKHW\SHRIOLTXLGELRIXHOVGHOLYHUHGWKHW\SHVRIODQGEDVHGUHVRXUFHVXVHGDQGWKH

RULJLQVRIWKRVH

$KLVWRULFDODFFRXQWRI(8ELRIXHOVXSSRUW

$UHVSRQVHWRFULVHVRIHQHUJ\DQGUXUDOGHYHORSPHQW"

$OWKRXJK WKH LGHD RI XVLQJ SODQWV DQG YHJHWDEOH PDWWHU WR SURGXFH IXHO LV ROG^

JURZWKRISROLWLFDOHFRQRPLFLQWHUHVWVLQOLTXLGELRIXHOVFDQEHLGHQWLILHGLQPDQ\

(XURSHDQQDWLRQVWDWHVRQO\VLQFHDURXQGWKHRLOSULFHVKRFNVRIWKHV.XWDV

/LQGEHUJ 6WHHQEOLN3DFLQL6LOYHLUD GD6LOYD)LOKR7ULJJHUHGE\

WKHULVLQJSULFHVRIRLODQGLWVGHSHQGHQFHRQIRUHLJQRLOWKH*HUPDQJRYHUQPHQW

EHJDQWRSURPRWHELRIXHOVDVDQDOWHUQDWLYHDQGUHFHLYHGVXSSRUWIURPDQHPHUJLQJ

HQYLURQPHQWDOPRYHPHQW)UDQFRHWDOSS6LPLODUO\WKH6ZHGLVK

JRYHUQPHQWLQVSLUHGE\%UD]LOLDQHWKDQROHVWDEOLVKHGUHVHDUFKDQGGHYHORSPHQW

SURJUDPPHV IRU HWKDQRO SURGXFWLRQ UHFHLYLQJ VXSSRUW IURP WKH WUDGH XQLRQ DQG

GRPLQDQW DJULFXOWXUDO RUJDQL]DWLRQV ZKR IDFHG GLIILFXOWLHV EHFDXVH RI GRPHVWLF

RYHUSURGXFWLRQRIVXJDU(NO|I(NHUKRP 0nUDOGSS

+RZHYHULWZDVQRWXQWLOWKDWWKH(&LPSOHPHQWHGWKHILUVW(XURSHDQGLUHFWLYH

RQ³FUXGHRLOVDYLQJVWKURXJKWKHXVHRIVXEVWLWXWHIXHOFRPSRQHQWVLQSHWURO´(&

S,QWKLVGLUHFWLYHWKHFRPSOHPHQWDULW\RIOLTXLGELRIXHOVZDVKLJKOLJKWHG

DVLWZDVDUJXHGWKDWE\³EURDGHQLQJWKHUDZPDWHULDOVEDVHIRUWKHSURGXFWLRQRI

IXHOV IRU XVH LQ LQWHUQDO FRPEXVWLRQ VSDUNLJQLWHG HQJLQHV´ LELG S  PHPEHU



+HQU\)RUGLVNQRZQWRKDYHVDLGLQWKDW³>W@KHUH¶VHQRXJKDOFRKROLQRQH\HDU¶V\LHOGRIDQ

DFUHRISRWDWRHVWRGULYHWKHPDFKLQHU\QHFHVVDU\WRFXOWLYDWHWKHILHOGVIRUDKXQGUHG\HDUV´

.RYDULNS6ZHGLVKHWKDQROSLRQHHUDQGHFRQRPLVW(ULN-RKDQ/MXQJEHUJSUHVHQWHGD

VLPLODUDUJXPHQWWRWKH6ZHGLVKJRYHUQPHQWLQGHFODULQJWKDW³(WKDQROLVWKHIXHORIWKH

IXWXUH<RXQHYHUUXQWKHULVNRILWVGHSOHWLRQ$VORQJDVWKHVXQNHHSVVKLQLQJRQRXUILHOGVLW

ZLOOEHSURGXFHGHWHUQDOO\DQGKXPDQVQHYHUQHHGWRIHDUWKHGHSOHWLRQRIFRDOGHSRVLWV´

/MXQJEHUJS±WUDQVODWLRQIURP(NO|I(NHUKRP 0nUDOGS



VWDWHV FRXOG UHGXFH WKHLU RLO GHSHQGHQF\ EXW VWLOO ZRUN ZLWKLQ H[LVWLQJ HQHUJ\

SK\VLFDOLQIUDVWUXFWXUHDQGYHKLFOHIOHHWVLELG

7KH ILUVW PRUH DPELWLRXV ELRIXHO SURSRVDO ZDV SUHVHQWHG LQ  1RUGDQJnUG

SS&RQVLGHULQJWKHXSFRPLQJUHIRUPVRIWKHFRPPRQDJULFXOWXUDO

SROLF\(&D)UHQFKFRPPLVVLRQHU&KULVWLDQH6FULYHQHUSURSRVHG³D

VXEVWDQWLDOUHGXFWLRQLQWKHUDWHVRIH[FLVHGXW\RQIXHOVIURPDJULFXOWXUDOVRXUFHV´

(&  SDUD  6KH DUJXHG WKDW VXFK D WD[ UHIRUP ZRXOG VXSSRUW UXUDO

GHYHORSPHQWE\GLYHUVLI\LQJWKHPDUNHWVRQZKLFKIDUPHUVFRXOGVHOOWKHLUSURGXFH

WKHUHE\ FUHDWLQJ EHWWHU HFRQRPLF FRQGLWLRQV IRU DJURLQGXVWULDO SURGXFWLRQ (&



:KLOH 6FULYHQHU¶V SURSRVDO ZDV QRW DSSURYHG E\ WKH (& (&  S  WKH

FRPPLVVLRQVRRQWKHUHDIWHUVWDUWHGWKH$OWHQHUUHVHDUFKSURJUDPPHWKDWVXSSRUWHG

OLTXLGELRIXHOVDVRQHRIPDQ\IRUPVRIUHQHZDEOHHQHUJ\(&EFDSDEOHRI

DGGUHVVLQJ HQYLURQPHQWDO SUREOHPV DQG PRUH VSHFLILFDOO\ FOLPDWH FKDQJH

1RUGDQJnUG,QKLV3K'WKHVLV1RUGDQJnUGDUJXHGWKDWWKHZD\WKDW

WKH$OWHQHUUHVHDUFKSURJUDPPHFRLQFLGHGZLWKWKH(DUWK6XPPLWLQ5LRDQG

WKH.\RWR3URWRFROJDYHIXUWKHUSROLWLFDOPDQGDWHIRUWKHVXEVWLWXWLRQRIIRVVLOIXHOV

ZLWKELRIXHOV1RUGDQJnUGDUJXHGWKDWGXULQJWKLVSHULRGWKH(&HVWDEOLVKHGDQ(8

EDVHG SURELRIXHOV SODWIRUP ZKLFK LQFOXGHG HQYLURQPHQWDO 1*2V ZKR ZHUH

VXSSRUWHG E\ (8 ILQDQFLQJ SURJUDPPHV WR EH LQYROYHG LQ WKH IRUPDO GHFLVLRQ

PDNLQJSURFHVVHVLELG

7KHGXDOFULVLVORJLFH[SUHVVHGLQWKLVSHULRGZDVIXHOOHGE\ULVLQJRLOSULFHVFRXSOHG

ZLWK GHSHQGHQF\ RQ IRUHLJQLPSRUW IRU RLO DORQJVLGH RYHUSURGXFWLRQ LQ WKH

DJULFXOWXUDOVHFWRU%\VRPHOLTXLGELRIXHOVZHUHYLHZHGDVKDYLQJDKLJKGHJUHH

RIFRPSOHPHQWDULW\ZLWKWKHH[LVWLQJHQHUJ\LQIUDVWUXFWXUHHJYHKLFOHIOHHWURDGV

IXHOVWDWLRQVDVZHOODVWKHDOUHDG\H[LVWLQJDJULFXOWXUDOSURGXFWLRQV\VWHPV$Q

RSSRUWXQLW\WRNLOOWZRELUGVZLWKRQHVWRQH

$UHVSRQVHWRWKHFOLPDWHFULVLV"

'HVSLWHSURSRQHQWVRIELRIXHOEHLQJDURXQGVLQFHWKHVWKHVKDUHRIURDGWUDIILF

SURSHOOHG E\ ELRIXHOV LQ WKH (8 UHPDLQHG PLQLVFXOH VHH )LJXUH  6LJQLILFDQW

JURZWKRIOLTXLGELRIXHOFRQVXPSWLRQWRRNRIIRQO\DIWHUWKHLPSOHPHQWDWLRQRIWKH

(8¶VELRIXHOGLUHFWLYHRI(&DEF



)LJXUH/LTXLGELRIXHOFRQVXPSWLRQDQGILQDOHQHUJ\FRQVXPSWLRQLQWUDQVSRUWLQWKH(8FRXQWULHV

6RXUFHV(XURVWDWDE

,Q  RLO SULFHV UHDFKHG D WHQ\HDU KLJK ZKHQ 23(& 1RUZD\ DQG 0H[LFR

LQFUHDVHGWKHSULFHRQFUXGHRLOE\ORZHULQJLWVVXSSO\WRWKHPDUNHW1RUGDQJnUG

 S  'UDZLQJ RQ (8 FRPPLWPHQWV IURP WKH (DUWK 6XPPLW

FRPPXQLFDWLRQVIURPWKH(&LQGLFDWHGWKDWGHFLVLRQPDNHUVEHFDPHPRUHLQFOLQHG

WR XVH WD[DWLRQ SROLFLHV WR DFKLHYH IXWXUH UHQHZDEOH HQHUJ\ WDUJHWV ± UHQHZDEOH

HQHUJ\WKDWLQFOXGHGELRPDVV(&%\WKLVWLPHOLTXLGELRIXHOVKDGEHFRPH

PRUH H[SOLFLWO\ YLHZHG DV D YLDEOH DOWHUQDWLYH WKURXJK ZKLFK FOLPDWH FKDQJH

PLWLJDWLRQFRXOGEHDFKLHYHG

$OWKRXJK ELRPDVV IRU OLTXLG ELRIXHO SURGXFWLRQ ZDV DVVXPHG WR FRPH IURP

(XURSHDQ VRXUFHV GXULQJ WKLV WLPH (&   WKH (& DOVR YLHZHG OLTXLG

ELRIXHOVDVDSRWHQWLDORSSRUWXQLW\IRUWKH&DQGLGDWH&RXQWULHV^RIWKHWLPHZKLFK

KDG³PRUHDJULFXOWXUDOODQGDQGOHVVGLHVHODQGJDVROLQHFRQVXPSWLRQSHUFDSLWDWKDQ

SUHVHQW (8 PHPEHU VWDWHV´ (&  7KLV LV LQGLFDWLYH RI WKH SUHYDOHQFH DQG

DVVXPHGWUXWKRIWKHWKHRU\RIFRPSDUDWLYHDGYDQWDJHZKHUHRQHWHUULWRU\LVYLHZHG

DVKDYLQJWKHSRWHQWLDOWRSURGXFHJRRGVIRUDQRWKHURQHWKDWKDVPRUHODQGDQG

ORZHUHQHUJ\GHPDQGIRUH[DPSOHWKDWVXIIHUVIURPDGHILFLWRQHWKDWKDVOHVVODQG

DQG KLJKHU HQHUJ\ GHPDQG IRU H[DPSOH WKHUHE\ DFKLHYLQJ FRPSOHPHQWDULW\

EHWZHHQWKHWZR$VZHZLOOVRRQVHHLQWKHFRQWH[WRIOLTXLGELRIXHOVRYHUWKH\HDUV

WKHVFDOHRIWKLVWKHRU\ZLOOEHH[SDQGHGWRLQFOXGHWKHJOREDO6RXWK

+RZHYHU E\ WKLV SRLQW FRQWUDGLFWLRQV LQ SURELRIXHO DUJXPHQWV KDG PDQLIHVWHG

PRUHFOHDUO\ZLWKLQWKH(&,QH[WHUQDOFRPPXQLFDWLRQV(&WKH(&KDG



7KHVHFRXQWULHVZHUH&\SUXVWKH&]HFK5HSXEOLF(VWRQLD+XQJDU\/DWYLD/LWKXDQLD0DOWD

3RODQG6ORYDNLDDQG6ORYHQLDDQGWKH\IRUPDOO\HQWHUHGWKH(8LQ(8









































)LQDOHQHUJ\FRQVXPSWLRQLQURDGWUDQVSRUW HQHUJ\DPRXQW7:K /LTXLGELRIXHOFRQVXPSWLRQ HQHUJ\DPRXQW7:K

/LTXLGELRIXHO FRQVXPSWLRQ 7:K

)LQDOHQHUJ\

FRQVXPSWLRQLQ URDGWUDQVSRUW 7:K



DFNQRZOHGJHG WKUHH FRQVWUDLQWV LQ WKH ELRSK\VLFDO ZRUOG WKH ZRUOG KDV OLPLWHG

DPRXQWVRIDUDEOHODQGODQGXVHIRUELRPDVVSURGXFWLRQFRXOGFRPSHWHZLWKIRRG

SURGXFWLRQDQGHPLVVLRQVFDXVHGGXULQJFURSDQGIXHOSURGXFWLRQFRXOGLPSHGH

SRVVLEOH*+*VDYLQJVQRWOHDVWGXHWROLTXLGELRIXHOSURGXFWLRQFRPSHWLQJZLWK

RWKHUODQGXVHVVXFKDVIRRGSURGXFWLRQ7KHVHLQWHUFRQQHFWHGFRQVWUDLQWVUHPDLQHG

SHUWLQHQW LVVXHV WKURXJKRXW WKH UHJXODWRU\ GHYHORSPHQW WKDW IROORZHG DV , ZLOO

IXUWKHUGHPRQVWUDWHWKURXJKRXWWKHWKHVLV

1HYHUWKHOHVVGHVSLWHWKHORRPLQJGRXEWVWKH(&GHFLGHGWRDFWLYHO\SURPRWHOLTXLG

ELRIXHOV WKURXJK WKH QHZ GLUHFWLYHV RQ YROXQWDU\ WUDQVSRUW ELRIXHO WDUJHWV DQG

FRQVHTXHQWO\ ELRIXHO EOHQGLQJ REOLJDWLRQV ZHUH DGRSWHG LQ WKH (8 (& D

E F 7KHVH GLUHFWLYHV VHW YROXQWDU\ VKDUHEDVHG ELRIXHO FRQVXPSWLRQ

WDUJHWV^EXWPRUHLPSRUWDQWO\DOVRRSHQHGXSWKHSRVVLELOLW\IRUWKHDFWLYHWD[DWLRQ

SROLFLHV WKDW ZHUH QHFHVVDU\ WR PDNH OLTXLG ELRIXHO SURGXFWLRQ FRPSHWLWLYH

FRPSDUHGWRWKHSURGXFWLRQRIFRQYHQWLRQDOJDVROLQHDQGGLHVHO(&DE

F )XUWKHUPRUH WKHVH GLUHFWLYHV LQWHUVHFWHG ZLWK WKH (8¶V FRPPRQ

DJULFXOWXUDO SROLF\ ZKLFK RIIHUHG WD[ LQFHQWLYHV IRU HQHUJ\ SURGXFWLRQ RQ

DJULFXOWXUDOODQG.XWDVHWDO3DFLQLHWDO,QWKHGLUHFWLYHVWKH(&

PDLQWDLQHGWKHDUJXPHQWWKDWOLTXLGELRIXHOVFRXOGUHGXFHGHSHQGHQF\RQIRUHLJQ

RLODQGKDGQRZDGGHGWKHDUJXPHQWWKDWOLTXLGELRIXHOVFRXOGFRQWULEXWHWRUHGXFLQJ

*+*HPLVVLRQV±DJDLQHPSKDVLVLQJWKHFRPSOHPHQWDULW\RIOLTXLGELRIXHOVZLWK

WKHH[LVWLQJGLVWULEXWLRQLQIUDVWUXFWXUHDQGYHKLFOHIOHHW(&E

0DQDJLQJFULVLVWKURXJKVHOIUHJXODWLRQ"

%\WKHV(8ELRIXHOUHJXODWLRQKDGFRPHWRUHYROYHDURXQGWKUHHDUJXPHQWV

KHUHGLVDJJUHJDWHGE\)UDQFRHWDOS

%LRIXHOVZLOOHQKDQFHHQHUJ\VHFXULW\E\GLYHUVLI\LQJVRXUFHVEH\RQGRLOLQDQHUD

ZKHQLWVVXSSO\EHFRPHVVFDUFHUPRUHH[SHQVLYHDQGSROLWLFDOO\XQVWDEOH

%LRIXHOVZLOOVSXUUXUDOGHYHORSPHQWE\LQYLJRUDWLQJOLYHOLKRRGVFUHDWLQJQHZMREV

DQGGLYHUVLI\LQJLQFRPHVLQERWKWKHJOREDO1RUWKDQGJOREDO6RXWKLQFOXGLQJPDQ\

FRXQWULHVZKHUHUXUDOSRYHUW\LVPRVWFRQFHQWUDWHGDQGHQWUHQFKHG

%LRIXHOVSURGXFHGHLWKHULQWKH1RUWKRUWKH6RXWKFDQFRQWULEXWH>WR*+*@VDYLQJV

E\ UHSODFLQJ IRVVLO IXHO LQ DQ H[SDQGLQJ WUDQVSRUW VHFWRU DOWKRXJK WKH DPRXQW RI

VDYLQJV ZLOO YDU\ DFFRUGLQJ WR FHUWDLQ IDFWRUV WKDW DUH LGHQWLILDEOH DQG WKHUHIRUH

PDQDJHDEOH



,QWKHVHYROXQWDU\WDUJHWVWKH(&VXJJHVWHGWKDWE\DQGE\RIWRWDOHQHUJ\

FRQVXPSWLRQLQWUDQVSRUWVKRXOGFRPHIURPELRIXHOV(&E



1RWDEO\ DUJXPHQWV PDGH E\ WKH (& KDG E\ WKLV WLPH H[SDQGHG WKH VFRSH RI

SURVSHFWLYHDUHDVRIVRXUFLQJWRPRUHH[SOLFLWO\LQFOXGHWKHJOREDO6RXWK±VFDOLQJ

XSWKHUHDFKRIWKH(&¶VLPSOLFLWWKHRU\RIFRPSDUDWLYHDGYDQWDJH%UD]LOLDQVXJDU

FDQHEDVHGHWKDQROZDVSUDLVHGIRULWVHFRQRPLFDQGHQYLURQPHQWDOSHUIRUPDQFH

DQG,QGRQHVLD0DOD\VLDDQGWKH3KLOLSSLQHVZHUHYLHZHGDVSRWHQWLDOH[SRUWHUVRI

SDOPEDVHGELRGLHVHO(&,PSRUWDQWO\WKLUGFRXQWULHVZHUHDVVXPHGWR

³EHDEOHWREHQHILWIURPWKHSURPRWLRQRIUHQHZDEOHVLQWKH(8WKURXJKWKHVXSSO\

RIELRIXHOV>«@ZKLFKPHHWVXVWDLQDELOLW\UHTXLUHPHQWV´(&DS

,QGHHGDWWKH(&SROLWLFDODQGVFLHQWLILFFRQWHVWDWLRQKDGFRPHWRUHYROYHDURXQG

WKHFRQFHSWµLQGLUHFWODQGXVHFKDQJH¶,/8&,/8&UHIHUVWRKRZWKHVKLIWLQODQG

XVHIURPIRRGSURGXFWLRQWROLTXLGELRIXHOSURGXFWLRQFRXOGUHVXOWLQWKHPRYHPHQW

RIIRRGSURGXFWLRQWRQHZSUHYLRXVO\XQFXOWLYDWHGODQG7KHUHDVRQIRUZK\ODQG

XVHFKDQJHPDWWHUVIRUWKH*+*SHUIRUPDQFHRIOLTXLGELRIXHOVKDVWRGRZLWKWKH

FDUERQF\FOHDVGHPRQVWUDWHGLQWKHIROORZLQJTXRWHIURP6HDUFKLQJHUHWDO

%HFDXVH H[LVWLQJ ODQG XVHV DOUHDG\ SURYLGH FDUERQ EHQHILWV LQ VWRUDJH DQG

VHTXHVWUDWLRQ RU LQ WKH FDVH RI FURSODQG FDUERK\GUDWHV SURWHLQV DQG IDWV

GHGLFDWLQJODQGWRELRIXHOVFDQSRWHQWLDOO\UHGXFH*+*VRQO\LIGRLQJVRLQFUHDVHV

WKH FDUERQ EHQHILW RI ODQG 3URSHU DFFRXQWLQJV PXVW UHIOHFW WKH QHW LPSDFW RQ WKH

FDUERQEHQHILWRIODQGQRWPHUHO\FRXQWWKHJURVVEHQHILWRIXVLQJODQGIRUELRIXHOV

7HFKQLFDOO\ WR JHQHUDWH JUHHQKRXVH EHQHILWV WKH FDUERQ JHQHUDWHG RQ ODQG WR

GLVSODFHIRVVLOIXHOVWKHFDUERQXSWDNHFUHGLWPXVWH[FHHGWKHFDUERQVWRUDJHDQG

VHTXHVWUDWLRQJLYHQXSGLUHFWO\RULQGLUHFWO\E\FKDQJLQJODQGXVHVWKHHPLVVLRQV

IURPODQGXVHFKDQJHS

0RUHRYHU WKH DFDGHPLF GHEDWH RQ DJURIXHOV UHIHUHQFHG LQ P\ LQWURGXFWLRQ ZDV

JURZLQJ DQG WKH FULWLTXH IURP ERWK RXWVLGH RI DQG ZLWKLQ WKH (& KDG EHFRPH

LQFUHDVLQJO\YRFDOQRWOHDVWGXHWRUDSLGO\LQFUHDVLQJIRRGSULFHVLQDQG

5RVHJUDQW 0VDQJLVH[WHQVLYHUHYLHZRIOLWHUDWXUHRQWKHVRFLRHFRQRPLF

DQGODQGXVHFKDQJHLPSDFWVIURPELRIXHOSROLFLHVLQGLFDWHGWKDWELRIXHOSROLFLHV

WRJHWKHUZLWKRWKHUIDFWRUVKDGUHVXOWHGLQKLJKHUFRPPRGLW\SULFHVVHH)LJXUH

7KHFRQFOXVLRQRIWKHLUUHYLHZHFKRHVWKHFRQFHUQVLQWKHGHEDWH

6HYHUDOVWXGLHVKDYHUHSRUWHGLPSDFWVRQSRYHUW\DQGKXQJHUZLWKORZDQGPLGGOH

LQFRPHFRXQWULHVDIIHFWHGWKHPRVWEHFDXVHWKH\DEVRUEDODUJHVKDUHRIDQ\GHFOLQH

LQWKHZRUOGIRRGVXSSO\0RUHRYHUWKHELRIXHOH[SDQVLRQFHUWDLQO\DGGVWRRYHUDOO

FRPPRGLW\GHPDQGDQGUDLVHVWKHQXPEHURISHRSOHDWULVNIRUSRYHUW\DQGKXQJHU

GXHWRKLJKHUFRPPRGLW\SULFHV/LNHZLVHWKHIHHGDQGOLYHVWRFNVHFWRUVZRUOGZLGH

DUHQHJDWLYHO\DIIHFWHGEXWVRPHRIWKHORVVLVRIIVHWE\LQFUHDVHGDPRXQWVRIIHHG

E\SURGXFWV JHQHUDWHG E\ WKH ELRIXHO SURGXFWLRQ SURFHVV 5RVHJUDQW  0VDQJL

SS





)LJXUH5HODWLYHLPSDFWRIIDFWRUVEHKLQGIRRGSULFHVSLNHV6RXUFH5RVHJUDQW 0VDQJL

)URPWKH(&¶VSHUVSHFWLYHWKHVHHQYLURQPHQWDOSUREOHPVDQGVRFLDOKDUPVZHUH

GHHPHGPDQDJHDEOH YLDVHOIUHJXODWLRQ DQGRUSRVVLEOHWRPLWLJDWH YLDWHFKQRORJLFDO

LQQRYDWLRQ VHH DOVR )UDQFR HW DO  $V WKH (& ZDV WR JDWKHU WKH VFDWWHUHG

UHQHZDEOHHQHUJ\LQLWLDWLYHVWKDWH[LVWHGDOORYHUWKH(8LQWRDVLQJXODUUHQHZDEOH

HQHUJ\ GLUHFWLYH WKH (& VHW XS SXEOLFFRQVXOWDWLRQ URXQGV IRU WKHLU XSFRPLQJ

µVXVWDLQDELOLW\VDIHJXDUGLQJVFKHPH¶(&DE)HHGEDFNLQWKHSURFHVV

FDPHSUHGRPLQDQWO\IURP(XURSHDQDFWRUVHVSHFLDOO\IURPDSDQHORIH[SHUWV(&

E+HUHWKHSURELRIXHOVOREE\RUJDQLVDWLRQVWKDWKDGEHHQHVWDEOLVKHGZLWK

VXSSRUWIURPWKH(&LQWKHHDUO\VDOVRKDGVRPHPDQGDWHWRLQIRUP(8ELRIXHO

SROLF\)UDQFRHWDOS$OWKRXJKWKH(&KDGFRQVXOWDWLRQPHHWLQJVZLWK

UHSUHVHQWDWLYHVIURP%UD]LO0DOD\VLDDQG0R]DPELTXHDOOFRQVLGHUHGSRWHQWLDO

H[SRUW FRXQWULHV WKH SURFHVV KDV EHHQ FULWLFLVHG IRU ODFNLQJ PHDQLQJIXO

UHSUHVHQWDWLRQV RI LVVXHV LQ WKH JOREDO 6RXWK HVSHFLDOO\ VXE6DKDUDQ $IULFD 'L

/XFLD7KHQDWLRQDOQHJRWLDWRUIRU6ZHGHQZHQWVRIDUDVWRVD\WKDWWKHHQWLUH

UHJXODWRU\SURFHVVZDVUXVKHGGXHWRWKH(&ZDQWLQJGHPRQVWUDWHDXQLWHGIURQWRQ

WKH LVVXH DW WKH  81 &OLPDWH &KDQJH &RQIHUHQFH LQ &RSHQKDJHQ

$SSHQGL[,&

,QSDUDOOHOWRGHYHORSPHQWVDWWKH(8OHYHOQXPHURXVIRUPVRIUHJXODWLRQRQOLTXLG

ELRIXHOSURGXFWLRQKDGDOUHDG\VWDUWHGWRWDNHVKDSHRXWVLGHRIDQGZLWKLQWKH(8^ )RUH[DPSOHLQ6ZHGHQWKHQRQSURILWVWDWHRZQHGILUP6YDQHQ±ZKLFKSURGXFHV

JUHHQODEHOVHUYLFHVDQGLVIXOO\RZQHGE\WKH6ZHGLVKJRYHUQPHQW±KDGE\



$UHSRUWIURPWKH81&RQIHUHQFHRQ7UDGHDQG'HYHORSPHQW81&7$'LGHQWLILHGRYHU

VXVWDLQDEOHELRPDVVFHUWLILFDWLRQLQLWLDWLYHVDOORYHUWKHZRUOGPDQ\RIZKLFKZHUHGHYHORSHGE\

(8PHPEHUVWDWHV81&7$'



GHYHORSHGDODEHOWKDWIRFXVHGRQFHUWLI\LQJWUDQVSRUWIXHOV6YDQHQ^7KH

*RYHUQPHQWRIWKH1HWKHUODQGVHVWDEOLVKHGDFRPPLVVLRQLQWKDWFRQVLVWHGRI

SROLF\H[SHUWVDQGDFDGHPLFVWKDWZHUHWRGHYHORSFULWHULDIRUELRIXHOVWDQGDUGVDQG

WKH8QLWHG.LQJGRP¶VJRYHUQPHQWIRUPXODWHGDSDFNDJHRIUHJXODWRU\PHDVXUHVIRU

SXEOLFFRQVXOWDWLRQLQ81&7$'SS2WKHUJRYHUQPHQWVFROODERUDWHG

PRUHGLUHFWO\ZLWKFRUSRUDWHDFWRUV)RUH[DPSOHDOWKRXJKWKH*HUPDQJRYHUQPHQW

SDVVHGLWVRZQ%LRPDVV6XVWDLQDELOLW\2UGLQDQFHLQLELGSSLWDOVR

EDFNHG WKH FUHDWLRQ RI WKH ,QWHUQDWLRQDO 6XVWDLQDELOLW\  &DUERQ &HUWLILFDWLRQ LQ

\HWDQRWKHUDSULYDWHFHUWLILFDWLRQV\VWHPWDUJHWLQJOLTXLGELRIXHOVVHH$UWLFOH

,6LPLODUO\WKH6ZLVVJRYHUQPHQWGHYHORSHGLWVRZQV\VWHPLQ81&7$'

 SS  DQG ZDV VLPXOWDQHRXVO\ LQYROYHG LQ FUHDWLQJ WKH 5RXQGWDEOH RQ

6XVWDLQDEOH%LRIXHOV56%WKDWJDWKHUHG

HQYLURQPHQWDO RUJDQLVDWLRQV VXFK DV ::) DQG WKH ,8&1 ERWK LQLWLDWRUV RI WKH

56% ELJ FRUSRUDWLRQV 3HWUREUDV %RHLQJ 6KHOO %DQNV ,QWHU$PHULFDQ

'HYHORSPHQW %DQN HWKDQRO SURGXFHUV 81,&$ UXUDO GHYHORSPHQW 1*2V 81

RUJDQLVDWLRQ 81(3 81&7$' DQG JRYHUQPHQWV 6ZLW]HUODQG +HUPHOH 

SS

$VZHFDQVHHGXULQJWKHWLPHZKHQ(8ELRIXHOUHJXODWLRQZDVWDNLQJVKDSHWKH

SUREOHPVRIOLTXLGELRIXHOVZHUHQRWRQO\GHHPHGDVPDQDJHDEOHE\WKH(&EXW

WKH\ FRXOG HYHQ EH VROYHG WKURXJK YDULRXV IRUPV RI VHOIUHJXODWLRQ

,Q WKH FRQFOXGLQJ UHPDUN WKDW IROORZV , WDNH QRWH RI WKH VSHFLILF JHRKLVWRULFDO

FRQWH[WLQZKLFK(8ELRIXHOUHJXODWLRQZDVGHYHORSHGLQUHODWLRQWRJRYHUQDQFH

QHROLEHUDOLVPDQGFRQWHVWHGFODLPVRIµHFRORJLFDO¶PRGHUQL]DWLRQ

1HROLEHUDOJRYHUQDQFHDQGHFRORJLFDOPRGHUQL]DWLRQ

,Q WKLV VHFWLRQ , KDYH DUJXHG WKDW (8 ELRIXHO UHJXODWLRQ ZDV GHYHORSHG ZLWKLQ D

JHRSROLWLFDO FRQWH[W RI PXOWLSOH FULVHV HQHUJ\ UXUDO GHYHORSPHQW DQG PRUH

UHFHQWO\FOLPDWHFKDQJH0\DQDO\VLVDOVRVKRZVWKDW(8ELRIXHOUHJXODWLRQZDV

GHYHORSHG E\ WKH (& ZLWK D NH\ LGHRORJLFDO DVVXPSWLRQ WKDW SUREOHPV ZHUH

PDQDJHDEOH E\ SXUVXLQJ HIILFLHQW DQG UDWLRQDO GHFLVLRQPDNLQJ SURFHVVHV ZKHUH

VWDNHKROGHUV DQG H[SHUWV ZHUH EURXJKW WRJHWKHU WR GHYHORS LGHDO DQG SROLWLFDOO\

LPSDUWLDOSROLFLHVDQGUHJXODWLRQVHHDOVR+DUYH\DS





7KHDUJXPHQWEHLQJWKDWORFDODQGUHJLRQDOJRYHUQPHQWVWKDWZDQWWRGHYHORSIXHOSURFXUHPHQW

VWUDWHJLHVFRXOGUHO\RQWKH6YDQHQODEHODVDZD\WRGLVWLQJXLVKWKHJRRGIURPWKHEDGZKHQ

GHYHORSLQJSURFXUHPHQWFRQWUDFWV



7KLV µQHROLEHUDO¶^ PRGH RI JRYHUQPHQW LV OLNH FDSLWDOLVP YDULHJDWHG DQG WDNHV

GLIIHUHQWIRUPVGHSHQGLQJRQWKHLQVWLWXWLRQDOFRQWH[W%UHQQHU3HFN 7KHRGRUH

6LQFHSUHH[LVWLQJUHJXODWLRQPXVWILUVWEHGLVPDQWOHGWRJLYHZD\WRUHIRUP

WKHSURFHVVRIµQHROLEHUDOL]DWLRQ¶RIWHQJHQHUDWHVDPELJXRXVK\EULGVDVDFRQFUHWH

RXWFRPH LELG 7KH SURPLVHV RI OLTXLG ELRIXHOV DQG WKHLU ILW ZLWK µHFRORJLFDO

PRGHUQL]DWLRQ¶LVDFOHDUH[DPSOH,DUJXHRIQHROLEHUDOJRYHUQDQFH$VZHDUJXHG

LQ$UWLFOH,,DUHUHJXODWLRQKDVRFFXUUHGLQZKLFKSROLFLHVDQGUHJXODWLRQVRXJKW

WRIDFLOLWDWHWKHJURZWKRIOLTXLGELRIXHOPDUNHWVWKURXJKWKHDFWLYLWLHVRIILUPV±DQG

VWDWHVZHUHLQGHHGYHU\DFWLYHDJHQWVLQIDFLOLWDWLQJWKLVPRYHDQGPDLQWDLQLQJWKH

PRGHRIJRYHUQPHQWWKDWIROORZVDVDUHVXOW$VZHZLOOVHHLQWKHQH[WVHFWLRQ

PDQ\ RI WKH VHHPLQJO\ GLVSDUDWH JRYHUQDQFH LQLWLDWLYHV WKDW ZHUH WDNLQJ VKDSH

ZHUHVXEVXPHGLQWRDQGZHUHDOORZHGWREHXVHGWRGHPRQVWUDWHFRPSOLDQFHZLWK

WKH(8¶VUHQHZDEOHHQHUJ\GLUHFWLYHDQGLWVDVVRFLDWHGVXVWDLQDELOLW\FULWHULD

(8ELRIXHOUHJXODWLRQDVFRQWDLQLQJPHFKDQLVPV

In document Adding Fuel to the Fire North-South dynamics in the geographies of transport energy: the case of EU biofuels Harnesk, David (Page 44-53)