Bioeconomy Coalition of Minnesota:
2014 Legislative Priorities
Mission of the Bioeconomy Coalition
of Minnesota
Articulate and implement a Minnesota
state policy and regulatory agenda t...
Coalition Organizers
Coalition Partners
www.mnbioeconomy.org
Displacing the WHOLE Barrel of Oil

Other Products

US Department of Energy 2005

Slide courtesy of
6
BioIndustrial Partne...
Renewable Chemical Value

Slide courtesy of
BioAmber
Large forestry biomass resource
and large (but declining) forest
products industry

Large agricultural biomass
resource, a...
Minnesota’s Biobased Chemicals Cluster
XL Terra
Segetis
Reluceo

Lonza
Cortec

Butrolix
Entropy
Solutions

EarthClean
Carg...
Renewable Materials Value Chain

Next Generation
Biorefinery

Farmers/Foresters

Formulator/
Refinery

End Product
Manufac...
Company Highlight:
• Headquarters: Golden Valley, MN
• Base bio-derived compound: Levulinic ketals
• Used to replace petro...
Greenhouse Gas Reductions from Biofuels
According to existing federal policy (EPA’s RFS2)
100%

20%

90%

Reduction

80%

...
Iowa
Company Highlight:
• Headquarters: Elk River, MN
• Produce syngas from biomass
• Use syngas coupled with commercial
thermo...
2013 Legislative Achievements
• Biobased Chemical Funding:
– Language added to NextGen Energy Board Statute allowing
inves...
2014 Policy Priorities
Success of MN’s 1st Generation Plants

18
Policy 1: Producer Incentive
• Summary: Provide production-based
incentives for production of biobased
chemicals, advanced...
Policy 1: Producer Incentive
• Why do this?
– Make Minnesota a world-class destination for building
commercial-scale advan...
Policy 1: Producer Incentive
• Eligibility and Incentive levels
– Biobased Chemicals
• $0.03/Ib
• Up to $60,000,000 over 1...
Policy 1: Producer Incentive
• Qualified Facilities
– Must source raw materials (sugar, biomass) from
Minnesota
– Raw mate...
Policy 2: Public/Private Equity
Investments
• Summary: Create a new state-funded public/private
investment pool to make eq...
Policy 2: Public/Private Equity
Investments
• Why do this?
– Already permitted under state statute governing the Environme...
Policy 2: Public/Private Equity
Investments
• Policy detail:
– State should aim to make 5-10 total investments of $2-10 mi...
Policy 2: Public/Private Equity
Investments
• Only invest in companies that are:
– Headquartered in Minnesota and have the...
Policy 3: Bonding for Community-Scale
Biomass Thermal Projects
• Summary: Provide bonding funding for capital
investments ...
Policy 3: Bonding for Community-Scale
Biomass Thermal Projects
• Biomass heating and district energy are proven
technologi...
Policy 3: Bonding for Community-Scale
Biomass Thermal Projects
• A few examples of projects that would
immediately benefit...
Other policies
• Support Department of Biosystems
Engineering Bonding Request
• State procurement of biobased products
• P...
Additional context slides
Renewable Materials Value Chain

Next Generation
Biorefinery

Farmers/Foresters

Formulator/
Refinery

End Product
Manufac...
Existing Biorefineries Across Minnesota

33
Minnesota –
World Leading
Cluster of
Biochemical
Company
Headquarters

34
Mississippi

35
Louisiana

36
Energy Use In Production

Energy use (MJ
/kg)

Energy Savings 52%
100
90
80
70
60
50
40
30
20
10
0

88.8

88.7

42.69

Bio...
Ontario, Canada 30K MT Production of Bio-Succinic
Acid Will SAVE 212,000 tonnes of CO2e per year

Slide courtesy of
BioAmb...
Sarnia Production of 30,000 MT Bio-Succinic Acid
will SAVE 1.6 Trillion Btu of energy per year

Slide courtesy of
BioAmber
Bio-SA: Lower Cost Than Petroleum SA
Lower Cash Cost TODAY

Historical Data past
29 years when oil >
$30/barrel

Petroleum...
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Bioeconomy Coaltion of Minnesota overview

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A summary of the Bioeconomy Coalition of Minnesota, presented by the Great Plains Institute

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  • 95 percent of products coming from petroleum can be made from biobased alternatives (LUX RESEARCH)
  • Even so, there is a substantial reduction in energy savings. Again here we see that one can provide twice as much product for the same amount of energy.
  • 30K MT capacity = GHG Savings 211,700Tonne CO2e per/yearThe CO2 emissions of Petro Succinic is 213,000 tonnes Co2/yearThe co2 emission of Bio Succinic is 1,300 tonnes Co2e/yearThat is a savings of 211,700 tonnes of Co2e per yearElectricity Reductions (kilowatt-hours) The Greenhouse Gas Equivalencies Calculator uses the Emissions & Generation Resource Integrated Database (eGRID) U.S. annual non-baseload CO2 output emission rate to convert reductions of kilowatt-hours into avoided units of carbon dioxide emissions. All C02 equivalency metrics calculated from the Environmental Protection Agency equivalency calculator http://www.epa.gov/cleanenergy/energy-resources/calculator.html)
  • 1.6 Trillion Btu per year according to our LCAThis is the savings, NOT the USE for BIO-SA production. That means this is the difference between the energy our process uses and the energy of Petro derived SA.
  • Bioeconomy Coaltion of Minnesota overview

    1. 1. Bioeconomy Coalition of Minnesota: 2014 Legislative Priorities
    2. 2. Mission of the Bioeconomy Coalition of Minnesota Articulate and implement a Minnesota state policy and regulatory agenda to expand biobased chemical, advanced biofuel, and biomass thermal energy industries, along the entire value chain from R&D through commercial production and use.
    3. 3. Coalition Organizers
    4. 4. Coalition Partners
    5. 5. www.mnbioeconomy.org
    6. 6. Displacing the WHOLE Barrel of Oil Other Products US Department of Energy 2005 Slide courtesy of 6 BioIndustrial Partnership
    7. 7. Renewable Chemical Value Slide courtesy of BioAmber
    8. 8. Large forestry biomass resource and large (but declining) forest products industry Large agricultural biomass resource, and successful track record in creating an ethanol industry through effective state policy
    9. 9. Minnesota’s Biobased Chemicals Cluster XL Terra Segetis Reluceo Lonza Cortec Butrolix Entropy Solutions EarthClean Cargill Industrial Oils West Central Ammonia Development BioAmber Natur-tec Natureworks Agristrand Biocomposites Butamax Gevo Cargill BioH Starch Tech CHS Slide courtesy of 9 BioIndustrial Partnership
    10. 10. Renewable Materials Value Chain Next Generation Biorefinery Farmers/Foresters Formulator/ Refinery End Product Manufacturing Retail, End Uses 10
    11. 11. Company Highlight: • Headquarters: Golden Valley, MN • Base bio-derived compound: Levulinic ketals • Used to replace petroleum in the manufacture of: – Plasticizers (PVC), polyols for polyurethane materials or use in polyester thermosets or thermoplastics and cleaning solvents
    12. 12. Greenhouse Gas Reductions from Biofuels According to existing federal policy (EPA’s RFS2) 100% 20% 90% Reduction 80% 50% 70% Reduction 60% Reduction 60% 50% 80% 40% GHG Intensity 30% 50% GHG Intensity 20% 10% 40% GHG Intensity 0% Gasoline Corn Ethanol Advanced Biofuel Cellulosic Biofuel Compared to gasoline: Corn Ethanol 20% GHG Reduction Advanced Biofuel 50% GHG Reduction Cellulosic Biofuel 60% GHG Reduction e.g. bio-butanol e.g. ethanol from corn stover or wood Source: EPA RFS2 Threshold Levels; graph and slide by GPI
    13. 13. Iowa
    14. 14. Company Highlight: • Headquarters: Elk River, MN • Produce syngas from biomass • Use syngas coupled with commercial thermochemical processing technology to produce gasoline, diesel fuel and chemical products – integrated biorefinery
    15. 15. 2013 Legislative Achievements • Biobased Chemical Funding: – Language added to NextGen Energy Board Statute allowing investment in biobased chemicals – ~$2.5 million over 2 years – Planned RFP for Fall 2013 • Next Gen Biofuels: – Modifying MN “ethanol” mandate to be biofuelneutral, allowing butanol and other biofuels to enter market. – Establishes 30% by 2025 biofuel goal – Taskforce to recommend incentives to commercialize advanced and cellulosic biofuels in MN
    16. 16. 2014 Policy Priorities
    17. 17. Success of MN’s 1st Generation Plants 18
    18. 18. Policy 1: Producer Incentive • Summary: Provide production-based incentives for production of biobased chemicals, advanced biofuels, and biomass thermal energy.
    19. 19. Policy 1: Producer Incentive • Why do this? – Make Minnesota a world-class destination for building commercial-scale advanced biofuel and biobased chemical plants – Production incentive can be included in financing, and will attract projects to Minnesota. – Legitimate government role in helping to build “first-of-a-kind” facilities, for which other forms of financing do not exist. – Protection for the state. No payment occurs until production occurs. No risk of boondoggle projects. – State government doesn’t pick technology winners. They simply award the projects that cross the finish line. – Minnesota has history with this approach, through the state’s ethanol producer payment.
    20. 20. Policy 1: Producer Incentive • Eligibility and Incentive levels – Biobased Chemicals • $0.03/Ib • Up to $60,000,000 over 10 years – Advanced Biofuels • $0.10/gal • Up to $30,000,000 over 10 years – Cellulosic Biofuels and Cellulosic Diesel • $0.20/gal • Up to $60,000,000 over 10 years – Certain Biomass Thermal projects • $10/mmbtu • Up to $2,000,000 over 10 years • Additional sustainability bonus for use of certified feedstocks, or for following state-approved best management practices
    21. 21. Policy 1: Producer Incentive • Qualified Facilities – Must source raw materials (sugar, biomass) from Minnesota – Raw material must be from agricultural or forestry sources, or from organic content of municipal solid waste. – Facility must be located in Minnesota – Facility must begin operation after January 1, 2015 (including existing facilities with significant retrofits to allow new production after January 1, 2015)
    22. 22. Policy 2: Public/Private Equity Investments • Summary: Create a new state-funded public/private investment pool to make equity investments in Minnesota-based biobased chemical and advanced biofuel companies to support growth and innovation, and help companies cross the “valley of death” to commercialization.
    23. 23. Policy 2: Public/Private Equity Investments • Why do this? – Already permitted under state statute governing the Environment and Natural Resources Trust fund – Secure MN’s leadership in a potentially $500 billion industry – Support innovative MN start-up companies, in a sector where MN is currently the world leader – Assure MN companies stay in the state, despite competition from other states; counteract venture fund pressure to move companies to CA and other states where funds are located. – Attract $4 in outside funding for every $1 invested by the state of MN – Significant outside match assures vetting of companies and technologies by outside investors, and protects state investments. – State also manages risk by making multiple investments.
    24. 24. Policy 2: Public/Private Equity Investments • Policy detail: – State should aim to make 5-10 total investments of $2-10 million each (total state investment of between $10-100 million). – The state should form a partnership with a qualified lead investor who will take responsibility for attracting other investors, and conducting due diligence and company valuations and negotiating investments. – State should require a 4:1 match for any state investment, represent no more than 20% of total investment in a given company (required by statute). – Favor companies that receive SBIR investment in scoring system, along with other criteria. – Possible source of funding: State Environment and Natural Resources Trust fund, or other state investments managed by the State Board of Investment.
    25. 25. Policy 2: Public/Private Equity Investments • Only invest in companies that are: – Headquartered in Minnesota and have the majority of their operations in Minnesota. – Primary operations devoted to developing biobased chemical or advanced biofuel technology. – Evidence of movement towards commercial-scale production. – Investment targeting companies in “pre-commercial” stage to assist moving towards commercial scale. – Invest in companies that have already attracted significant venture capital investment (more than $50 million) (include SBIR as a criteria)
    26. 26. Policy 3: Bonding for Community-Scale Biomass Thermal Projects • Summary: Provide bonding funding for capital investments in biomass heating plants and district energy facilities to support that state’s biomass thermal industry while reducing energy bills and environmental impact.
    27. 27. Policy 3: Bonding for Community-Scale Biomass Thermal Projects • Biomass heating and district energy are proven technologies that are being operated at scale in Minnesota and around the world. • There are numerous biomass heating projects proposed around the state. • Bonding funding helps communities to finance large, multi-building projects and projects at public facilities that are difficult to finance. • Several studies show strong economics for these facilities.
    28. 28. Policy 3: Bonding for Community-Scale Biomass Thermal Projects • A few examples of projects that would immediately benefit from a state bonding bill include: – City of Grand Marais District Heating Project – City of Ely District Heating Project – Itasca Community College – Itasca State Park – Soudan Underground Mine State Park
    29. 29. Other policies • Support Department of Biosystems Engineering Bonding Request • State procurement of biobased products • Product stewardship
    30. 30. Additional context slides
    31. 31. Renewable Materials Value Chain Next Generation Biorefinery Farmers/Foresters Formulator/ Refinery End Product Manufacturing Retail, End Uses Slide courtesy of 32 BioIndustrial Partnership
    32. 32. Existing Biorefineries Across Minnesota 33
    33. 33. Minnesota – World Leading Cluster of Biochemical Company Headquarters 34
    34. 34. Mississippi 35
    35. 35. Louisiana 36
    36. 36. Energy Use In Production Energy use (MJ /kg) Energy Savings 52% 100 90 80 70 60 50 40 30 20 10 0 88.8 88.7 42.69 BioAmber S * A Petro AA (Thermal) Petro AA (Catalytic) *Field-to-Gate Energy and Greenhouse Gas Emissions Associated with Succinic Acid Produced At BioAmber’s Facility In Sarnia Ontario, August 2012 Slide courtesy of BioAmber
    37. 37. Ontario, Canada 30K MT Production of Bio-Succinic Acid Will SAVE 212,000 tonnes of CO2e per year Slide courtesy of BioAmber
    38. 38. Sarnia Production of 30,000 MT Bio-Succinic Acid will SAVE 1.6 Trillion Btu of energy per year Slide courtesy of BioAmber
    39. 39. Bio-SA: Lower Cost Than Petroleum SA Lower Cash Cost TODAY Historical Data past 29 years when oil > $30/barrel Petroleum Succinic CASH COST Competitive with Oil at $35 / Barrel Bio-Succinic Cost Advantage for BioAmber Cost Advantage for Petroleum @ $80 barrel oil @ $6.00 bushel corn Cost Advantage Will Drive Market Share Growth In This $3.8 Billion Market Opportunity Slide courtesy of BioAmber

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