MADEIRA 2008 - Congresso Internacional de Desenvolvimento Econômico Sustentável da Indústria de Base Florestal e de Geração de Energia, 10 e 11 de Dezembro, Hotel Plaza São Rafael, Porto Alegre, RS.

1. Madeira 2008 December 10, 2008 Lynn Wright, WrightLink Consulting, Adjunct Faculty, University of Tennessee [email_address]

4. Feedstocks include : Corn starch – 99% Wheat starch Milo starch Barley starch Cheese whey Potato waste Brewery waste Wood waste * Sugar Cane Bagasse * * Two demo facilities are currently producing up to 3 mgy of cellulosic ethanol Total capacity is 11,051 million gallons per year (mgy) at 180 refineries Source: Renewable Fuels Association: www.ethanolrfa.org

5. 48 cellulosic projects total;29 projects are currently receiving US or Canadian federal and state support as of December 2008 Both US and Canada have recently announced new programs to assist advanced biofuels commercialization. Source: Lynn Wright survey of biomass information sources in 2008 Commercial Demonstration Pil0t Completed none 3 7 Under Construction 1 2 2 Plans Announced 14 13 6 Total 15 18 15

8. DuPont Danisco Cellulosic Ethanol, LLC and the University of Tennessee broke ground on October 14, 2008 for an innovative pilot scale biorefinery. The feedstocks will be corn cobs, corn fiber and switchgrass grown by Tennessee farmers Ethanol production is anticipated by end of 2009

9. Technology Product (s) Commercial projects Demo & pilot projects Thermochemical (Gasification/catalysis) FT liquids 4 4 Thermochemical (Gasification/fermentation) Ethanol, other chemicals 3 5 Biochemical (enzymatic hydrolysis – yeasts, various pretreatments) Ethanol & electricity from lignin 4 7 Biochemical (ICB and other) Ethanol 3 8 Fractionation & separation Sugars + fiber + lignin 1 2 Fermentation of Citrus peels ethanol 1 Combined thermo + bio processes and other Ethanol & chemicals 6

10. Based on reports Aug 2008 conference, both biochemical and thermochemical processes show similar estimated costs in $1.50 to $2.50/gallon range Graph from US National Biofuels Action Plan published October 2008: available from www.brdisolutions.com Some companies are already claiming new technologies with potential ethanol production price of < $1.00 per gallon Biochemical biofuels costs and 2012 targets

11. Ponderosa Mill – Base Case Biochemical Ethanol Process Substituted Source: Phillips, Jameel & Clark (NC State University), Aug 2008, TAPPI International Bioenergy and Bioproducts Conference Presentation “Technical and Economic Analysis of Repurposing a Kraft Pulp and Paper Mill to the Production of Ethanol”

12. Source: Phillips, Jameel & Clark (NC State University), Aug 2008, TAPPI International Bioenergy and Bioproducts Conference All cases assume $0.30 enzyme cost

13. Source: Koch et al (Georgia Institute of Technology), August 2008, TAPPI International Biomass and Bioenergy Conference. Effect on Minimum Ethanol Selling Price (MESP) = MESP $2.21 = MESP $1.89 = MESP $1.57 Feedstock cost significantly affects ethanol cost Key assumptions: total alcohol yield/dry ton ~92.5 gal (ethanol ~ 78 gal; higher alcohols ~ 14.5 gal); feedstock is bark and residue of southern pine; steam from gasifier used for pulping processes.

14. Scenario 1 Scenario 2 Scenario 3 Scenario 3 results in adequate feedstocks to meet 2022 mandate, at lowest price ~ $45 per dry ton. Inclusion of 4 Billion Gallons per year of biofuel imports reduces residue use more than energy crop production.

15. Most wood residue captured at < $30/dry ton (roadside) All types of forestland wood, is captured at < $50/dry ton (roadside) Source: Report by Biomass Research and Development Board entitled: “Increasing Feedstock Production for Biofuels”. Released Dec 2008. www.brdisolutions.com

16. Source; Report by Jake Eaton of GreenWood Resources at Aug 2008 Short Rotation Crops Meeting Poplar Biomass Production Costs 1 1 Growing costs reported as NPV (6.5% discount rate) per dry ton, inclusive of the cost of land rent, site preparation, planting stock, planting, and crop care through the rotation Region Farm Cost $/dry ton Harvest Cost $/dry ton Total Cost $/dry ton Pacific Northwest 31 32 63 North Central 30 30 60 Mississippi Valley 24 28 52

19. Source: Yang and Wyman, Aug 2008, TAPPI International Biofuels &Bioenergy Conference

20. Source: Draft paper by Ragland, Ostlie and Wright entitled “Electric Vehicles Compared to Ethanol-Fueled Vehicles (paper still in review as of Dec 2008) Estimated Vehicle Miles Traveled (VMT) using 20 million acres of land. 1 20 million acres of land is currently used to produce corn grain for ethanol fuels 2 Current total vehicle miles traveled in US is 2.69 trillion * US Energy Independence and Security Act of 2007 requires consideration of indirect land-use effects Vehicle Type Biomass Type Miles/acre Total VMT % U.S. VMT 2 Ethanol (current technology) Corn grain 4,640 93 billion 3.5% All-electric (current technology Hybrid poplar 34,000 688 billion 26% Biogasoline (new technology Hybrid poplar 34,000 660 billion 25% All-electric (new technology Hybrid poplar 134,000 2.68 trillion 100%

22. Ask me later about my hybrid poplar project in Minnesota