Solid Biofuel - Overview

EVE Research and
EVE Innovations Inc.

December 15, 2011 E X E C U T I V E S U M M A RY

The patent pending catalytic thermo-chemical process described
herein converts almost every organic waste material efficiently and
cost-effectively into a solid biofuel that has an energy density equal
to metallurgical coal. Moreover, unlike coal, this patent pending
biofuel is environmentally friendly as it burns clean and does not
generate sulfur, nitrous oxides, creosols or heavy metals.


OVERVIEW OF THE COMPANY AND TECHNOLOGY
Eve Innovations Inc. is a company incorporated in British Columbia, Canada (“Eve
Innovations”). Eve Innovations is the primary licensee of Eve Research Inc. for a patent
pending process that converts most forms of organic waste into a stable solid biofuel (the
“Patented Process” and “Patented Biofuel” respectively).

The Patented Biofuel has an energy density equivalent to high quality coal (27-30 GJ/tonne)
and can be produced from a wide variety of feedstock. Some of the organic waste materials
already converted into the Patented Biofuel include:

 agricultural wastes such as straw from rice, wheat, corn, plant cuttings, animal manure,
bagasse, cassava, water hyacinth, milfoil, palm oil waste, and rice husks;
 wood waste such as bark, forest cuttings, construction and demolition waste;
 municipal waste such as construction material, food waste, yard waste, paper, and
cardboard packaging; and
 fast food packaging, coated drinking cups and coffee grounds.

By converting the organic waste to a commercially viable energy source, the process removes
the need to dispose of the cellulose waste. This will often reduce the costs, liabilities and
logistics involved with waste disposal and any ongoing management. Our diversity of
feedstock also avoids competition with alternative uses such as food and feed grains
experience with ethanol and lumber with wood pellets.

The end products from the Patented Process are water and the Patented Biofuel. There is no
waste product such as sludge that requires disposal or handling.

Burning the Patented Biofuel produces heat/energy, carbon dioxide, and less than 0.5% ash..
Burning coal may produce comparable heat/energy (if high quality coal), similar amounts of
carbon dioxide and anywhere from 6 to 15% ash. The major difference between the two fuels is
that coal gives off heavy metals, sulfur, creosol and tar deposits; the Patented Biofuel does not.

The solid fuel markets are already established and large. Given the Patented Biofuel is
effectively a green coking coal, a key niche market is the steel industry. Alternative uses are
electrical power plants, industrial thermal plants and the retail market (pellet stoves).

The uniqueness of the technology and the broad scope of the technology’s application
provides for a wide variety of applications – globally.

Eve Innovations Converts Waste Problems into Profitable Green Energy Solutions

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MANUFACTURING PROCESS
The process for making the Patented Biofuel uses existing technology centered around a
catalytic1 thermo-chemical reaction in a water-based solution at elevated temperatures and
pressure. This process is similar to that used in pulp and paper digesters.

Step 1 Step 2 Step 3
Pre-processing feedstock Patented Process Pelletizing/Transport

The Patented Biofuel product is filtered out of the solution, and then easily compressed into
pucks, pellets or blocks for transport. If the end user prefers to burn the fuel in a powder form,
simple mechanical crushing can be performed prior to burning.

The feedstock gathering and preparation processes, bioreactor process and biofuel handling
processes all utilize existing technologies which minimizes the risk profile typically associated
with a breakthrough technology. The only unique aspect of the technology is the proprietary
reagents invented by Alexis Fosse Mackintosh who has assigned all patent applications for the
Patented Process and the Patented Biofuel product to Eve Research Inc. In turn, Eve Research
licensed the technology to Eve Innovations. PCT patent applications are pending.

A summary of detailed applications is found in the last section – Competitive Advantages.

ENERGY DENSITY / NET ENERGY GAIN
The energy density of cellulose feedstock is approximately 14 GJ/tonne. In comparison, the
energy density of the Patented Biofuel is typically 27 – 30 GJ/tonne. Through the Patented
Process, approximately 1.4 tonnes of cellulose are converted to 1 tonne of the Patented Biofuel.
In other words, 21 GJ/tonne of cellulose is converted to 27 – 30 GJ/tonne of the Patented

1
The identity of the catalyst is confidential and steps have been taken to prevent reverse engineering of the catalyst.

Page 2 Confidential


Biofuel. The energy density increase is due to the proprietary reagents in the process that
cause a fundamental change of the molecular structure of the feedstock. As a result, for every
tonne of the Patented Biofuel produced, an extra 6 – 9 GJ of energy is made3 available. With
proper heat recycling in place, the typical energy cost to produce a tonne of the Patented
Biofuel product is approximately 2 - 3 GJ/tonne. As a result, the net energy balance is an
increase of up to 6 GJ/tonne of Patented Biofuel.

BURN CHARACTERISTICS OF THE PATENTED BIOFUEL
The characterization of the Patented Biofuel was conducted in two ways: (i) total heat content;
and (ii) thermogravimetric analysis.

Total Heat Content
The energy density of the Patented Biofuel was analyzed by an independent laboratory in
British Columbia (Powertech Labs, a division of BC Hydro). A copy of the test report is
provided below. Their results confirmed energy density up to 13,100 Btu per pound, the
equivalent of 30 GJ/tonne.

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Thermogravimetric analysis (“TGA”)
A second aspect of testing uses TGA which measures the burn characteristics of the Patented
Biofuel. The process measures the weight loss of a sample as it is heated in either an oxidizing
or non-oxidizing atmosphere. The non-oxidizing atmosphere determines the volatile
components of the Patented Biofuel while the oxidizing atmosphere determines the burn
characteristics of the fuel. The general characteristics of the Patented Biofuel are shown in
Graphs 1 and 2 below, while Graph 3 shows the detailed burn characteristics.

Graph 1: TGA analysis of four fuels

Graph 1 compares hemlock, cellulose, anthracite coal and the Patented Biofuel.
Three items are important to note:

 The Patented Biofuel is completely volatilized by 450oC while the coal
requires at least 900oC.
 Burning of the Patented Biofuel produces almost no ash (typically less
than 0.5% whereas coal produces a typical ash volume of 6-15%).
 The cellulose and wood materials show the typical response of cellulosic
materials. It is important to note that the hemlock was fresh cut and had
significant moisture as evidenced by the initial steep decline on the left
side of the graph. In the burning process, water has to be boiled and

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evaporated before energy is created. With the Patented Biofuel’s low
moisture content, more net energy is made available.

Graph 2: Comparison of Mountain Beetle killed pine raw material and the Patented Biofuel
made from the same pine.

Graph 2 illustrates the difference in burn characteristics between Mountain Beetle
killed pine and the Patented Biofuel made from similar pine material. The raw pine
graph (green Line – lower line) shows several zones of weight decrease which
indicates that several molecular species are volatizing as the temperature increases.
The first zone is where the water is removed between 0oC and 250oC. The moisture
content is significantly lower in the Patented Biofuel (2.2%) compared to the
unprocessed Pine material (5.5%). As mentioned above, this difference is extremely
important as less heat is required to evaporate the moisture in the fuel which results
in more energy available in the burn of the biofuel. The second and third weight loss

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zones of the pine represent the hemicellulose and the cellulose volatizing
respectively. The tail is due to the lignin content in the fuel. The Patented Biofuel
curve (blue line – upper line) shows a more continuous decline because it is a
polymeric compound that is volatilizing more proportionately over the temperature
range of 350oC and 650oC.

Graph 3: Detailed TGA analysis of the Patented Biofuel.

Graph 3 is a detailed analysis of the Patented Biofuel made from Mountain Beetle killed pine
showing the two major components of the Patented Biofuel. The first sharp trough at 300 oC
(red line) represents the combustion of the remaining lignin while the second peak at 354oC
(black line) represents the Patented Biofuel burning off. From this analysis, it is apparent that
the lignins are modified and retained to contribute to the total heat content. The ash residue of
0.18% which is low due to the purity of the wood used this analysis. The ash content is
typically less than 0.5%. The burn characteristics of the Patented Process also destroy all
biological contaminants from the organic material used in the process. None of the
contaminants will remain in the final product making shipping and handling safe. The
Patented Process can therefore be used to convert diseased waste (for example, animal

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carcasses with blue tongue or mad cow disease, or trees infected with the Mountain Pine
Beetle), into a safe biofuel. At the same time, the process eliminates the difficult and expensive
disposal of infected waste.

“HYBRID” PATENTED BIOFUEL
The Patented Biofuel can also be combined with other materials, such as coal fines, in order to
capture the energy within those materials for further use.

Coal fines cannot be used in metallurgical process or otherwise burnt because of their small
size and the risks of spontaneous fire and explosion. As such, they are worthless and need to
be properly managed, typically in an aqueous waste slurry. The Patented Biofuel can be
combined with the coal fines to create a pellet that is a mixture of both. The mixed pellet can
then be burnt in lieu of pure coal. In this way:

 the costs and environmental issues associated with slurries are replaced with a revenue
stream

 in a 50/50 mix of Patented Biofuel and coal fines, emissions of sulfur, nitrous oxides
and heavy metals are reduced by 50%, results that far exceed other solutions that are
typically capex intensive;

 two streams of waste products (cellulose and coal fines) can be converted into one high
energy solid fuel, each providing a new energy source and new revenue stream.

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COMPETING SOLID FUELS
The primary solid fuels are coal, wood pellets and char. The Patented Biofuel is an
improvement over these fuels in several ways, as per the following table and text that follows.
Torrification /
Parameter Coal Wood Pellets Patented Biofuel
Char

Energy
18-30 18.5 20 - 25 27-302
(Gigajoule/tonne)

Energy (Btu/lb) 7,700 – 13,000 7,900 8,500 – 11,000 12,000 – 13,100

Yield during production* 99% 15 – 40% 65 - 70%

Moisture content (%) 6-15 8-10 2–3 4

Ash (%) 6-15 0.3 – 0.7 <1 <0.5

Heavy metals Yes No No No

Sulfur Yes No No No

Tar and creosol Yes Yes No No

Fire & explosion risk
Yes Yes No No
with fines

Bulk handling Yes No Yes Yes

* Yield = weight of dry biofuel output / weight of dry feedstock input

Coal
The coal industry is a critical, global solid energy source worth approximately $400 billion per
year. Over 7 billion tonnes of coal were mined in 2010. Annual growth is approximately 350
million tonnes a year.

Because of the massive use of coal, its growth and concerns over global warming and other
environmental issues, two major issues have arisen: (i) a need to find alternative sources of

2
Independent testing by Power Tech Labs (BC Hydro)

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fuel with comparable energy densities; and (ii) the desire to reduce the high carbon dioxide
and other emissions and pollutions from burning coal.

The Patented Biofuel is carbon neutral, has the energy density of high quality coal and burns
cleanly. From a replacement standpoint, the Patented Biofuel is ideal. However, the reality is
that coal demand far outstrips the potential biofuel production due to feedstock limitations. For
example, 175 million tonnes of Patented Biofuel would be produced from 1,000 plants with 500
tonne per day capacity, working 350 days per year. That level of production only represents
50% of the global increase in coal consumption for one year.

Production per
% of 7 billion coal % of 1 Year’s
year of the # 500 tonne per market Growth
Patented Biofuel day plants

8,750,000 50 0.13% 2.5%

17,500,000 100 0.25% 5.0%

175,000,000 1,000 2.5% 50%

Our the Patented Biofuel is thus a key albeit partial solution to the environmental issues
associated with burning of coal by either burning it in place of coal, or in conjunction with
coal.

The Patented Biofuel can be produced in a wide variety of locations. Coupled with the ability
to have smaller cogeneration facilities integrated with biofuel plants, the potential also exists to
reduce overall costs and emissions associated with transportation of solid fuels.

Further, as outlined previously, the Patented Biofuel enables it to be blended with coal fines to
create a hybrid fuel. The environmental issues associated with coal fines can thus also be
addressed in part through usage with our Patented Biofuel.

Overall, the Patented Biofuel as a very key piece of all the initiatives to be taken to reduce the
emissions associated with coal.

Wood Pellets - Generation 1 of Solid Biofuels
The global wood pellet market is approximately 12 million tonnes annually, and growing
approximately 1-2 million tonnes per year. Europe is the leading consumer of wood pellets, a
growing market largely fueled through subsidies. Wood pellets face various challenges that

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have and will limit its growth. Three key limiting factors include its limited feedstock choices
(white fibre), inability to be handled in bulk and low energy density.

The Patented Biofuel is superior to wood pellets. The Patented Biofuel can be made from a
much wider variety of feedstocks which provides for lower feedstock costs and greater
production volumes. The energy density of the Patented Biofuel is 1.4 times that of wood
pellets. Accordingly, an end user must buy, transport and handle 40% more wood pellets to
get the same energy from the Patented Biofuel. The Patented Biofuel is water resistant and
suitable for bulk handling, unlike wood pellets which require bagging, thereby providing
additional transport cost advantages., Burning the Patented Biofuel has environmental
advantages as well as it produces less smoke and ash content, and does not leave heavy
metals, sulphur, creosol or tar deposits when burned.

Torrification / char – Generation 2 of Solid Biofuels
Torrification includes a variety of alternative processes where feedstock is dried and then
heated to very high temperatures in the absence of oxygen in order to improve the energy
density. Torrification produces a char which, in household terms, is a powdery product (char,
biochar, biocoal) that is bonded together to form barbecue briquettes. During the
manufacturing process, various emissions are generated including carbon dioxide, carbon
monoxide, hydrogen, water, acids, and polycyclic aromatic hydrocarbons..

In addition to these toxins, a major drawback for torrification is the very low yield of 15% -
40% (dry weight char / dry weight of feedstock = yield). In comparison, the Patented Biofuel
yields of approximately 65 - 70%. Torrification has been around for a long time, but continues
to struggle in its deployment due to the above issues.

Nuclear Power
Nuclear power is a unique fuel. A major contributor to electricity generation, it has significant
safety issues and high capital costs. Future growth in nuclear power was limited prior to the
tragedy in Japan. After this tragedy, future growth will be limited even more.

Summary
In summary, the Patented Biofuel’s diverse feedstock supply, high energy
density, suitability for bulk handling and clean burning makes it a very attractive
fuel, and part of the global, green energy solution going forward.

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EXAMPLE USES OF THE PATENTED PROCESS AND BIOFUEL
The Patented Process can be used to convert most organic wastes into a solid, stable biofuel
which has comparable energy density of metallurgical coal but burns much more cleanly. The
technology converts almost all organic waste into a profitable biofuel that can be sold to
industrial markets (electrical power plants, industrial thermal plants, etc) or to the retail
market. At the same time, by converting the organic waste to a commercial product, the
process removes the need to dispose of the waste thereby eliminating the costs and logistics
involved with disposal.

Some potential applications of the Patented Process are briefly described below.

Animal manure
The disposal of animal waste is a significant issue. Without proper disposal, animal waste can
contaminate land and water resources. For example, in The Netherlands, the dairy and
poultry industries have inadequate land over which to spread the waste, and face limitations
to growth, and in some cases, face the risk of being shut down. The same is happening with
swine, cattle, and chicken operations in China, Canada, USA and other parts of the world.

In North America, cattle produce manure at a rate of approximately 15 pounds of dry manure
per day. For feedlots containing 30,000 cattle, that amounts to ~ 75,000 tonnes of dry manure
every year, enough to support a 100+ tonne/day plant. Converting the manure to biofuel
creates a profitable business in itself, in addition to which it eliminates environmental issues
surrounding storage and disposal of manure.

A further benefit of the Patented Process is that the biofuel produced is sterile, and contains no
pathogens or prions that could spread disease. This is an improvement over current methane
generation systems that do not sterilize the material. The solids and liquids remaining from
the fermentation process may still contain prions and diseases that could further infect the
herds, the workers and the environment.

Municipal waste
Many cities are running out of places to dump their garbage. For example, the waste from the
Lower Mainland of British Columbia is trucked 2 hours to remote landfills. Waste from parts
of Europe is transported to Africa. Waste from some states is being shipped to other states in
the USA.

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It is estimated that up to 40% of a North American city’s waste is cellulosic. By converting the
waste into biofuel, the life of any landfill can be extended and costs associated with waste
disposal are reduced. With cogeneration on site, the municipality or city can generate green
power, and thus convert a waste problem to a profitable, green energy solution.

Rural applications
Many communities around the world are surrounded by cellulose fiber but are unable to
effectively exploit its value. Rural biofuel plants integrated with cogen can convert these
resources into biofuel which can be used locally to generate heat and / or power for the
biofuel plant itself, as well as nearby industrial and /or residential users. Alternatively, the
fuel can be used to generate power to the grid, or sold to domestic or export markets. The
combination of heat, power, jobs and profits will help these communities become more
independent, access more resources and generate wealth for current and future generations.

COMPETITIVE ADVANTAGES
The Patented Process has many advantages, a partial recap of which is provided in the
remainder of this Overview:

 Non specificity of the Patented Process: Almost anything that contains cellulose can
be converted to the Patented Biofuel using the Patented Process. Compare this with
other biofuel products such as ethanol production which only utilizes the cellulose and
some hemicellulose in organic waste. In contrast, the Patented Process utilizes the
cellulose, hemicellulose and lignin from organic waste.

 Moisture content in Patented Process: The moisture of feedstock is insignificant.
Production of wood pellets and char requires boiling and vaporizing the moisture in
feedstock before their transformation of the feedstock really begins; the higher the
moisture content, the more energy is required. In our Patented Process which
effectively involves cooking the feedstock in a water solution, feedstock with higher
moisture content simply results in less water being added to the feedstock after its
loading in the bioreactors.

 Ease of operation and consistency of the Patented Process: The process is completed
when the reactions go to completion and the stable solid Patented Biofuel is then
extracted. The Patented Process can be performed under a wide variety of conditions
(within, of course, a given set of parameters) and still produce a quality Patented



Biofuel. The process can even be stopped halfway through, then re-started at a future
time, and still produce the same quality Patented Biofuel that would have been
produced had no interruption occurred. This has many advantages including ease of
operation, reduced chance of failure, product consistency, high efficiency etc. A
technical expert is not required to operate the process, another example of how the
Patented Process reduces operating costs.

 Plant scalability and flexibility: The Patented Process utilizes a batch process that is
virtually continuous. Plant capacity can be increased simply by adding additional
bioreactors and support equipment. Plant capacity can also be temporarily or
permanently reduced simply by shutting down one or more bioreactors.

 The reaction conditions of the Patented Process are not demanding: The catalyst used
in the Patented Process reduces the required water temperature to the 200 – 250oC
range, and at required pressures of 400 – 500 pounds per square inch (“PSI”). In
contrast, the uncatalyzed reaction requires temperatures of 330 - 350°C and pressures in
the range of 1,800 - 2,400 PSI.

 Tolerance: The Patented Process is tolerant to foreign materials such as grease and
plastic in municipal solid waste and clay in animal manure. This waste material does
not need to be separated or treated prior to utilization in the process. This further
reduces time and costs compared to other more sensitive processes.

 Sterilization: The Patented Process destroys biological contaminants and other
infectious matter such as pathogens and prions. Organic waste that is infected (mad
cow disease, blue tongue, mountain beetle, etc) can be sterilized and converted to a safe
product which can be burned with the energy density of coal.

 Zero physical waste: The Patented Process produces only water and the Patented
Biofuel. There are no waste products such as sludge requiring disposal.

 Patented Biofuel is solid and stable: The Patented Biofuel is hydrophobic and remains
stable on contact with water. Compare this with wood pellets that disintegrate quickly
on contact with water. The Patented Biofuel is easier to store, transport and handle
compared to wood pellets.

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 Patented Biofuel burns cleanly: The Patented Biofuel does not contain heavy metals,
sulphur, tar or creosol in comparison to coal that contains all three elements. Expensive
pollution abatement procedures and technology do not need to be used.

 Carbon neutral: Burning one tonne of Patented Biofuel produces 2.4 tonnes of carbon
dioxide. The carbon dioxide is carbon neutral and carbon tax credits may be available
for users who burn the Patented Biofuel instead of fossil fuels. Credits for methane
abatement may also be available.

 Hybrid: The Patented Biofuel can be combined with other waste products (such as coal
fines) to recapture them for use when otherwise they would need to be disposed of.
This maximizes the amount of coal that can be used in metallurgical operations.

Eve Innovation’s Patented Process Converts Waste Problems into Profitable Green Energy Solutions

CONTACT INFORMATION

Eve Innovations Inc.
8086 Alexander Road, Delta, BC. V4G 1G7

Peter Dodge, Director of Business Development

Alexis Mackintosh, Director of Research

Victor Tsao, Corporate Counsel

Contact: PeterBDodge@Gmail.com (604) 649-1111


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