2005 OBP Biennial Peer Review

Chemicals and Materials

Valerie Sarisky-ReedMelissa Klembara

Mark DecotNovember 14,2006

Introduction

• Major Elements in the Chemicals and Materials Platform

• Chemicals and materials are co-produced with ethanol or other liquid transportation fuels

• The liquid transportation fuels drive the economy of scale while the chemicals and materials can improve overall plant economics

• Products can cross a broad array of pathways including the corn wet mill, corn dry mill, lignocellulosic and oils pathways

Baseline for Chemicals and Materials from Renewables

Super CommoditiesMulti Billion Pounds

CommoditiesHundreds of Million Pounds

SpecialtiesMillions of Pounds

Nutra

Pharma

Ethylene, Propylene, BTXAcetic Acid

Acrylic Acid, 1,4-BDO, THF1,3-PDO, PLA, EG, PG, PO

Isosorbide, AminesPHA’s, Acrylamides

Sterols, TocopherolsVitamin E

Pharmaceuticals

$0.15-0.40

Hundreds of Dollars

$0.80-2.50

$0.40-0.80

Tens of Dollars

All prices have been escalating becauseof increased oil and natural gas costs

Reference Baseline Systems

Figure 1: Internal Rate of Return of the Scenarios ($1.20/gallon ethanol selling price)

16%

12%

21%

24%

28%

16%

23%

26%

20%

14%

0%

5%

10%

15%

20%

25%

30%

0% 12.5% 25% 37.5% 50%

Glucose to Polyols Production

IRR

Dry Mill with no WDG Conversion

Dry Mill with WDG Conversion

Major Technical Hurdles

• In order to be economically viable several key technical/economic barriers need to be addressed

Cost of ChemicalsAnd Materials

Product YieldProduct Purity

Final ConcentrationProduct Recovery

Capital Costs

Organism DevelopmentFermentation DevelopmentEnzyme DevelopmentSeparations

Catalyst DevelopmentSeparations

1st Tier

2nd Tier

3rd Tier

Biological Chemical

Cost of ChemicalsAnd Materials

Cost of ChemicalsAnd Materials

Product YieldProduct Purity

Final ConcentrationProduct Recovery

Capital Costs

Product YieldProduct Purity

Final ConcentrationProduct Recovery

Capital Costs

Organism DevelopmentFermentation DevelopmentEnzyme DevelopmentSeparations

Catalyst DevelopmentSeparations

1st Tier

2nd Tier

3rd Tier

Biological Chemical

Technical Approach

• The current program is focused on three basic technical approaches

• Direct fermentation to products

• Direct fermentation of glucose to produce PHA’s

• Direct chemical/catalytic conversion to products

• Production of propylene glycol from glycerol; production of polyurethanes from vegetable oils

• Combination of fermentation followed by chemical/catalytic conversion

• Production of acrylic acid and other derivatives from 3-HP

Specific Economic Targets

• Develop technologies that enable aerobic fermentations for the production of chemical building blocks identified in the “Top Ten” report for less than $0.35/pound from $0.10/pound sugars.

• Develop technologies that enable anaerobic fermentations for the production of chemical building blocks identified in the “Top Ten” report for less than $0.25/pound from $0.10/pound sugars.

• Develop selective aqueous phase catalytic and bio-catalytic transformations of carbohydrates for the production of building blocks at less than $0.25/pound.

• Develop chemical or biological transformations for the conversion of platform building blocks to secondary products, including hydrogenation, oxidation, dehydration, hydrogenolysis, and dehydroxylation at a transformation cost of between $0.03 and $0.07/pound.

• Develop separation technologies for recovering products from dilute (less than 25% product) aqueous solutions for less than $0.05/pound

Example of Economics

Butane

1,4-Butanediol

MaleicAnhydride 1,4-BDO 1,4-BDO

Current Petrochemical Route

Potential Biochemical Route

GlucoseSuccinic

Acid 1,4-BDO 1,4-BDO

Oxidation Hydrogenation Purification

Hydrogenation PurificationFermentation

$0.08/lb $0.25-0.30/lb $0.45-0.55/lb

$0.08/lb $0.25-0.30/lb $0.45-0.55/lb

Title Organization FY04 FY05 FY06

Development of Yeast for the Fermentation of Agricultural Feedstocks to Chemicals

NatureWorks, LLC

$399,434 $55,000 0 (project completed)

Fungal Genomics PNL NA $1,200,000 $1,500,000

Advanced Catalysis Development for Polyolsl Production

PNL/ADM/UOP $350,000 $900,000 $800,000

Pyrolysis Oil Upgrading Project PNL/UOP/NREL $675,000 $360,000 TBD

New Sustainable Chemicstry for Adhesives, Elastomers, and Foams

Rohm & Haas Company

$750,000 $450,000 $1,000,000

Separative Bioreactor ANL/ADM $450,000 $250,000 $250,000

Development of Improved Chemicals and Plastics from Oilseeds

Dow Chemical Company

$2,418,698 $1,000,000 $437,000

Platform Chemicals for an Oilseed Biorefinery

Cargill $873,000 $406,000 TBD

Biomass Biorefinery for the Production of Polymers and Fuels

Matabolix, Inc $1,600,000 $800,000 $1,800,000

TOTAL C&M Projects (does not include 04 earmarks) $7,516,132 $5,221,000 $5,786,698

% of Total FY Budget for Products 27% 32% 36%

Project Overview

Earmarked Projects

Title Recipient FY04

Biobased Products by the New Uses Information and Entrepreneur Development Center, Belvidere, IL

City of Belviedere, Illinois

$981,000

Development of Sustainable Biobased Products and Bioenergy at Purdue University in Cooperaiton with the Midwest Consortium for Sustainable Biobased Products and Bioenergy*

Purdue University $1,963,000

Reactive distillation for esterification of bio-based organic acids*

NCGA $1,000,000

Maine Forest Bioproducts R&D* Maine Technology Institute

$981,000

TOTAL Chemical and Material related Earmarks $4,925,000

C&M earmarks as % of Total Products Funding for FY04 18%

C&M projects (including earmarks) as % of Total Products Funding for FY04 45%

Earmarked projects related to Chemicals and Materials R&D (*participated in the Aug 05 Interim Stage Gate Review)

(All are included in poster session)

Project Overview

• Project• Development of Yeast for the Fermentation of Agricultural Feedstocks

to Chemicals (Lactic Acid and Ethanol)• Project Team

• Nature Works, Abengoa Energy• Major Technical Objective

• Develop a yeast strain capable of fermenting xylose to lactic acid and ethanol

• Lactic acid: 80 % yield, 1g/L*h productivity• Major Economic Target

• Reduce the production cost of PLA by 30%• Barriers Addressed

• Improve fermentation productivity• Utilization of five carbon sugars• Reduction in capital costs• Organism development

Project Overview

• Pathways Addressed

• Corn wet mill, corn dry mill and lignocellulosic • Project Budget

• 2005 $55,000

• 2006 $0• Significant Comments from Interim Stage Gate Review (review held on

August 9, 2005)

• Excellent strategic fit with program goals

• Reduced cost affords clear competitive advantage

• Success could be undermined by issues with hydrolysate (organism robustness to impurities)

• Path Forward

• Project is complete and not requesting additional funding

Project Overview• Project

• Fungal genomics: to develop tools to enable application of fungal fermentation technology to produce Top Ten products in the biorefinery

• Project Team• PNNL and an external Partners Review Board (Cargill, Tate &Lyle,

GPC,,Genencor, Novozymes, Dyadic, ICPB, Diversa )• Major Technical Objective

• Demonstrate in model a system(s) that genome-based tools improve product yield and productivity (e.g. Organic acid: 80 % yield, 1g/L*h productivity)

• Major Economic Target• Reduce the production cost of Top Ten products

• Barriers Addressed• Improve fungal fermentation productivity

• Control Morphology• Define and control Hyper-producivity• Develop genome-based tools to shorten process development time• Transfer genome-based tools to bioprocess improvement

• Organism development

Project Overview

• Pathways Addressed

• Corn wet mill, corn dry mill and lignocellulosic

• Project Budget

• 2005 $ 1,200,000

• 2006 $ 1,500,000

• Significant Comments from Interim Stage Gate Review (review held on August 9, 2005)

• Fungal systems could prove to be a valuable system.

• The linkages to the goals and objectives of the MYTP were clearly presented.

• Project has great potential for this relatively unexplored area.

• Path Forward

• The project milestones are being adjusted to meet budget

Project Overview

• Project• Advanced Catalyst Development for Converting Glycerol to Propylene

Glycol• Project Team

• ADM, UOP, PNNL• Major Technical Objective

• Develop a highly selective catalyst for conversion of glycerol to PG• Conversion 90%, Selectivity 90%, 1 Year catalyst lifetime

• Major Economic Target• PG production at a cost of 80-90% of current technology from

propylene• Barriers Addressed

• Catalyst development in aqueous phase• Improve catalyst selectivity and robustness• Cost reduction for chemical conversion

Project Overview

• Pathways Addressed

• Oil biorefinery (creates value from glycerol produced with biodiesel) • Project Budget

• 2005 $700,000

• 2006 $800,000• Significant Comments from Interim Stage Gate Review (review held on

August 9, 2005)

• Excellent strategic fit with program goals

• Ensures financials/metrics are on target

• Milestones well established

• Feedstock and scale up critical to making this a desirable commercial project

• Path Forward

• Project is moving forward on schedule to meet milestones

Project Overview

• Project

• Pyrolysis Oil Upgrading• Project Team

• UOP, PNNL, NREL• Major Technical Objective

• Development of enabling technology for pyrolysis-based methods to introduce biomass into a petroleum refinery

• Major Economic Target

• Product costs need to be competitive with petroleum feedstocks

• 4 year plant payback at $50/barrel crude oil• Barriers Addressed

• Catalyst development

• Improve catalyst selectivity and robustness

• Cost reduction for chemical conversion

Project Overview

• Pathways Addressed• Lignocellulosic biorefinery

• Project Budget• 2005 $360,000• 2006 TBD

• Significant Comments from Interim Stage Gate Review (review held on August 9, 2005)

• Customers and markets identified• UOP involvement critical step• The alignment of project activities with MYTP objectives was clearly

pointed out• Industry partnerships will help clarify targets

• Path Forward• Project is moving forward on schedule to meet milestones within

budget

Project Overview

• Project• New Sustainable Chemistry for Adhesives, Elastomers and Foams

• Project Team• Rohm and Haas, Virginia Tech

• Major Technical Objective• Develop new, commercially-viable biobased, non-isocyanate based

chemistries to replace existing 2-part polyurethane adhesives for various uses

• Major Economic Target• Broad application at $1.20-$2.00/pound• Required costs and performance appear achievable for adhesives for

initial target markets• Barriers Addressed

• Catalyst development • Improved “chemistry”/catalysts for polymers• Cost reduction for chemical conversion

Project Overview

• Pathways Addressed

• Oils biorefinery and corn wet milling • Project Budget

• 2005 $450,000

• 2006 $1,000,000• Significant Comments from Interim Stage Gate Review (review held on

August 9, 2005)

• Excellent project from the MYTP perspective.

• Technical barriers well identified and discussed thoroughly

• The competitive advantages of the adhesives and foams are not entirely (or perhaps even significantly) based on cost-question about widespread adoption of commodity materials like these bases.

• Path Forward

• Project is moving forward on schedule to meet milestones within budget

Project Overview

• Project

• Separative Bioreactor• Project Team

• ADM, ANL• Major Technical Objective

• Develoment of a membrane ED process for the direct capture of organic acids from fermentation broths

• Major Economic Target

• Reduce fermentation/recovery costs of organic acids by 20-30%• Barriers Addressed

• Improve fermentation productivity

• Lower cost of recovery

• Eliminate waste streams associated with fermentation (cost reduction)

• Separation technology development

Project Overview

• Pathways Addressed

• Corn wet mill, corn dry mill and lignocellulosic • Project Budget

• 2005 $250,000

• 2006 $250,000• Significant Comments from Interim Stage Gate Review (review held on

August 9, 2005)

• Excellent strategic fit with program goals

• Reduced cost affords clear competitive advantage

• Ability to integrate into current plants; incremental capital and manpower costs relative to benefit may not be realized with commodities versus value added (being addressed by ADM)

• Path Forward

• Working within current budget to meet commercial targets and project milestones

Project Overview

• Project

• Development of Improved Chemicals and Plastics from Oilseeds • Project Team

• DOW, USDA, Castor Oil Inc.• Major Technical Objective

• Develop new, commercially viable chemical processes and enabling catalyst technologies to convert seed oils to novel materials and polymers. Comparable properties to existing products.

• Major Economic Target

• Overall economics must be competitive with existing petrochemical based targets

• Barriers Addressed

• Improve catalyst performance

• Lower cost of recovery

• Product yield

• Catalyst development

Project Overview

• Pathways Addressed• Oil biorefinery

• Project Budget• 2005 $1,000,000• 2006 $437,000

• Significant Comments from Interim Stage Gate Review (review held on August 9, 2005)

• An area of potential interest but little developed so it was worth the investment

• LCA work was of good value and was a strong outcome• Technical and market knowledge• Seems very internal to DOW with little technology transfer to the

outside world except through IP protection. • Path Forward

• Working within current budget to meet commercial targets and project milestones

Project Overview

• Project• Development of Improved Chemicals and Plastics from Oilseeds

• Project Team• Cargill

• Major Technical Objective• Identify and optimize metathesis catalysts and associated processes as

applied to unsaturated fatty acids and products derived there from• Major Economic Target

• Overall economics must be competitive with existing petrochemical based targets

• Barriers Addressed• Improve catalyst performance• Lower cost of recovery• Product yield• Catalyst development

Project Overview

• Pathways Addressed

• Oil biorefinery • Project Budget

• 2005 $406,000

• 2006 TBD• Significant Comments from Interim Stage Gate Review (review held on August

9, 2005)

• Internal knowledge, capabilities and commitment.

• Clear industrial focus and commercialization drive

• DOE’s work catalyzed some commercial products although not specifically in the product lines they anticipated

• Performance indicators were not clearly/quantitatively defined, but it is understood that these are internal

• Path Forward

• Working within current budget to meet commercial targets and project milestones

Project Overview

• Project• Biomass Biorefinery for Production of Polymers and Fuels

• Project Team• Metabolix, Inc.

• Major Technical Objective• Identify and optimize fermentation organism for the production of PHA’s

to achieve commercially viable polymers; 90% polymer recovery and 99% polymer purity

• Major Economic Target• Overall economics must be competitive with existing petrochemical

based targets• Barriers Addressed

• Organism development• Lower cost of recovery• Product yield• Feedstock utilization

Project Overview

• Pathways Addressed

• Corn wet mill, corn dry mill, lignocellulosic • Project Budget

• 2005 $800,000

• 2006 $1,800,000• Significant Comments from Interim Stage Gate Review (review held on August 9,

2005)

• Linking with ADM and British Petroleum is a good sign that the work has commercial potential

• Clear focus on what they can do with limited resources

• Nice staggering of commercial introductions based on demonstrated success

• Price points may not be attractive enough for large markets with large energy impacts.

• Path Forward

• Working within current budget to meet commercial targets and project milestones

Program Summary

• Program has several specific projects that are addressing the barriers identified in the multi-year technical plan

• Barriers are identified within each project and progress is monitored project by project to ensure progress towards overall program goals

• Project portfolio is well suited to support the biorefinery concept-several projects are poised for commercial success

• In the future:

• Product specific projects will be rolled up into the integrated biorefinery platform

• Core research directed at overcoming major barriers will continue• Continuation of projects will be based on likelihood of success,

commercial potential and availability of funding