société de chimie industrielle
SOCIÉTÉ DE CHIMIE INDUSTRIELLE Joseph Skurla President and CEO DuPont Danisco Cellulosic Ethanol (DDCE) New York, NY May 19, 2010
Presentation ►DDCE Delivers Value As industry leader As solutions provider
►Technology Progression ►Deployment of Cellulosic Ethanol ►Competitive Advantage ►Conclusions www.ddce.com
2
DuPont Danisco Cellulosic Ethanol ► 50/50 joint venture, est. May 2008 ► $140 million investment over 3 years + legacy IP ► Comprehensive CE solutions ► Engage in commercial plant projects, incl. feedstock management ► Headquarters Itasca, IL ► Demo plant Vonore, TN ► 30+ direct employees ► ~80 Member Researchers funded by DDCE
www.ddce.com
3
DuPont Danisco Cellulosic Ethanol DDCE delivers flexible, cost-effective, comprehensive solutions for cellulosic ethanol production. We are committed to providing clients with: ► High-performance technology for cellulosic ethanol production ► Integrated engineering packages that set the industry standard ► Safe and environmentally sustainable production systems. ► Collaborative solutions for addressing the entire cellulosic ethanol value chain ► Technical support across the project lifecycle ► Investment-grade solutions www.ddce.com
4
DDCE’s Integrated Conversion Process Milling
• High bulk density • Minimize dirt, rocks
www.ddce.com
Pretreatment
• Minimal capital • Facilitate enzymes • Minimize inhibitors • Mild process
Saccharification
• High solids • High sugar yield • High sugar titers • Low enzyme loading • Minimize inhibitors
5
Fermentation
• C5/C6 utilization • High Ethanol yield • High ethanol titer
Separation
• Recover product • Recover lignin • Recycle water
The Global Renewable Fuel Market Imperative ►Biofuels are an increasingly important source of liquid fuel worldwide 5.9m barrels biofuels per day in 2030 (EIA)
www.ddce.com
6
Policy Drives Demand Energy Independence
► In U.S., need 16 bgy cellulosic ethanol in fuel supply by 2022
Advanced biofuel Unspecified Advanced Biofuel Biomass-based Diesel Advanced Biofuel Cellulosic Biofuel Conventional Biofuel
www.ddce.com
7
Environmental Drivers GHG Reductions ► Ethanol is currently the only way to significantly reduce transportation CO2 emissions ► Low carbon fuel standards (LCFS) to drive CE market CA Northeast States (NESCAUM)
Source: EPA
cellulosic
www.ddce.com
8
Rural Revitalization ► Advanced biofuels industry to create thousands of jobs ~800,000 by 2022 ► Each biorefinery creates 50+ jobs Plus opportunities in R&D, farms, logistics, etc. Source: Bio-Era
www.ddce.com
9
Product Cost
Technology Progression •Integrated process established •Scale-up work in progress •Cell software >80% complete
DDCE Formation • Cell software optimization • Process optimization
• Demo Plant Operational Commercial Goal: <EtIH non-subsidized value for oil at ~$80-75/bbl
Today
November ‘07
2006
2007
2008
2009
2010
2011
2012
10
Cellulosic Ethanol Will Be Competitive With Gasoline $135 Crude Oil
$3.70
$125 $115
Gasoline
$3.20
$105
$/gal
$95
$2.70
50MM gal
$85 $75
$2.20
100MM
$65 $55
$1.70
Competitive
$45
$1.20
www.ddce.com
11
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
$35
Profitability Across Value Chain Supports Investment GROW
HARVEST
FARMER
TRANSPORT & STORE
DISTRIBUTOR/ TOLLER
CONVERSION TO FUEL
DISTRIBUTION & CONSUMPTION
ENERGY COPRODUCTS
LICENSOR & PRODUCER
ETHANOL SALES
(lignin) BIOMASS POWER
Business models outline profitability in all of the segments
www.ddce.com
12
Investment Grade Opportunities ►today with subsidies
RFS2 (RINS trading) VEETC (blender’s credit) - .45/gallon Small Ethanol Producer Credit (.10/gal) Cellulosic Biofuel Producer Tax Credit (up to $1.01/gal)
►Future without subsidies Cost competitive with gasoline on energy parity at $~80/bbl www.ddce.com
13
Deployment Feedstock
Collection
Preparation
Conversion
Cost
Capital
Distribution
Blending
Refining
Two Feedstock types • Agricultural Waste –accessible now: e.g. Corn Cob – Midwest • Development in harvest, storage and transport, densification, moisture issues • Next: Grower Programs • Energy Crop – Growth to full capacity: e.g. Switch Grass • State of TN program - $30M for upstream development • Total program expanding to ~6,000 acres in 2010
Current corn acres Potential Energy Grass Source: DDCE, Univ. Tenn., USDA
Multiple feedstocks needed to satisfy growth and goals
14
Feedstock Availability & Process Compatibility Corn Cob Switchgrass Sorghum Sorghum or Switchgrass
Feedstock
Tons/acre
BGY Under RFS
#50 MGY Plants
Cobs Switchgras s Sorghum
.65 10
2 6 (20*)
40 120
Sq. miles required for feedstock 60,000 12,000
15
5 (30*)
100
6,250
* Market potential with increased CE demand
Commercializing Cellulosic Ethanol Feedstock
Collection
Preparation
Conversion
Cost
Capital
Distribution
Blending
Refining
Two Feedstock types • Agricultural Waste –accessible now: e.g. Corn Cob – Midwest • Development in harvest, storage and transport, densification, moisture issues • Next: Grower Programs • Energy Crop – Growth to full capacity: e.g. Switch Grass • State of TN program - $30M for upstream development • Total program expanding to ~6,000 acres in 2010
Current corn acres Potential Energy Grass Source: DDCE, Univ. Tenn., USDA
Multiple feedstocks needed to satisfy growth and goals
16
Demonstration-scale Biorefinery
►Vonore, TN – processing started up December 2009 ►$54MM Project Cost ►Nominal capacity 250kgal/yr - 40-100X scale up
►Corncob & switchgrass ►Demonstrate Integrated Unit Operation; Basic Data Package for Corncob by Year-end 2010
www.ddce.com
17 17
Commercialization Plan 700
DDCE to start licensing in 2011 600
Number of Cellulosic Ethanol Plants (at 25MMgal/yr/plant)
• Near term: First Mover for Market Penetration and Location Advantage
500
• Focus on Corn Cob and Stover: Negotiations underway for multiple plant roll-out
400
• Focus on first mover outside US: negotiate multiple plant licenses • Extend to Switchgrass and Sorghum
300
Participation in Production
200
• Licensing gives insight to choose best assets 100
• Secure advantaged locations in USA to ensure best economical plants
www.ddce.com
• Augment with margins from Financing and Engineering alliances, Operating and Support Services
2020
2019
2018
2017
2016
2015
2014
2013
2012
0
18 18
DDCE Competitive Advantage
► Status Ahead in conversion, capital, cost Developing supply chain for commercialization
Major Competitors
DDCE
A
B
C
Procured stable supply
Feedstock
Low-cost, low capital technology Scalable, sustainable Low carbon intensity, high GHG reduciton, low water consumption Applicable to soft feedstocks, which will be plentiful
Competitive Elements
Feedstock flexibility Low manufacturing cost Low capital
Technology
► Many companies in the race ► DDCE well positioned
GHG reduction
IP protected
19
Commercial Performance Initial 5/09
Current Status 11/09
Commercial Target
SELECT INPUT VARIABLES Enzyme Cost; Normalized CAPEX; ($ / Gal) (2008 Dollars)
100
50
22
$8+
$5 to $7
~$3 to $5
PROCESS RESULTS Total process yield; (Gal/T)
67
85
90
Ethanol Titer;(g/L)
63
82
90
~ $3.00
Presentation ►DDCE Delivers Value As industry leader As solutions provider
►Technology Progression ►Deployment of Cellulosic Ethanol ►Competitive Advantage ►Conclusions www.ddce.com
2
DuPont Danisco Cellulosic Ethanol ► 50/50 joint venture, est. May 2008 ► $140 million investment over 3 years + legacy IP ► Comprehensive CE solutions ► Engage in commercial plant projects, incl. feedstock management ► Headquarters Itasca, IL ► Demo plant Vonore, TN ► 30+ direct employees ► ~80 Member Researchers funded by DDCE
www.ddce.com
3
DuPont Danisco Cellulosic Ethanol DDCE delivers flexible, cost-effective, comprehensive solutions for cellulosic ethanol production. We are committed to providing clients with: ► High-performance technology for cellulosic ethanol production ► Integrated engineering packages that set the industry standard ► Safe and environmentally sustainable production systems. ► Collaborative solutions for addressing the entire cellulosic ethanol value chain ► Technical support across the project lifecycle ► Investment-grade solutions www.ddce.com
4
DDCE’s Integrated Conversion Process Milling
• High bulk density • Minimize dirt, rocks
www.ddce.com
Pretreatment
• Minimal capital • Facilitate enzymes • Minimize inhibitors • Mild process
Saccharification
• High solids • High sugar yield • High sugar titers • Low enzyme loading • Minimize inhibitors
5
Fermentation
• C5/C6 utilization • High Ethanol yield • High ethanol titer
Separation
• Recover product • Recover lignin • Recycle water
The Global Renewable Fuel Market Imperative ►Biofuels are an increasingly important source of liquid fuel worldwide 5.9m barrels biofuels per day in 2030 (EIA)
www.ddce.com
6
Policy Drives Demand Energy Independence
► In U.S., need 16 bgy cellulosic ethanol in fuel supply by 2022
Advanced biofuel Unspecified Advanced Biofuel Biomass-based Diesel Advanced Biofuel Cellulosic Biofuel Conventional Biofuel
www.ddce.com
7
Environmental Drivers GHG Reductions ► Ethanol is currently the only way to significantly reduce transportation CO2 emissions ► Low carbon fuel standards (LCFS) to drive CE market CA Northeast States (NESCAUM)
Source: EPA
cellulosic
www.ddce.com
8
Rural Revitalization ► Advanced biofuels industry to create thousands of jobs ~800,000 by 2022 ► Each biorefinery creates 50+ jobs Plus opportunities in R&D, farms, logistics, etc. Source: Bio-Era
www.ddce.com
9
Product Cost
Technology Progression •Integrated process established •Scale-up work in progress •Cell software >80% complete
DDCE Formation • Cell software optimization • Process optimization
• Demo Plant Operational Commercial Goal: <EtIH non-subsidized value for oil at ~$80-75/bbl
Today
November ‘07
2006
2007
2008
2009
2010
2011
2012
10
Cellulosic Ethanol Will Be Competitive With Gasoline $135 Crude Oil
$3.70
$125 $115
Gasoline
$3.20
$105
$/gal
$95
$2.70
50MM gal
$85 $75
$2.20
100MM
$65 $55
$1.70
Competitive
$45
$1.20
www.ddce.com
11
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
$35
Profitability Across Value Chain Supports Investment GROW
HARVEST
FARMER
TRANSPORT & STORE
DISTRIBUTOR/ TOLLER
CONVERSION TO FUEL
DISTRIBUTION & CONSUMPTION
ENERGY COPRODUCTS
LICENSOR & PRODUCER
ETHANOL SALES
(lignin) BIOMASS POWER
Business models outline profitability in all of the segments
www.ddce.com
12
Investment Grade Opportunities ►today with subsidies
RFS2 (RINS trading) VEETC (blender’s credit) - .45/gallon Small Ethanol Producer Credit (.10/gal) Cellulosic Biofuel Producer Tax Credit (up to $1.01/gal)
►Future without subsidies Cost competitive with gasoline on energy parity at $~80/bbl www.ddce.com
13
Deployment Feedstock
Collection
Preparation
Conversion
Cost
Capital
Distribution
Blending
Refining
Two Feedstock types • Agricultural Waste –accessible now: e.g. Corn Cob – Midwest • Development in harvest, storage and transport, densification, moisture issues • Next: Grower Programs • Energy Crop – Growth to full capacity: e.g. Switch Grass • State of TN program - $30M for upstream development • Total program expanding to ~6,000 acres in 2010
Current corn acres Potential Energy Grass Source: DDCE, Univ. Tenn., USDA
Multiple feedstocks needed to satisfy growth and goals
14
Feedstock Availability & Process Compatibility Corn Cob Switchgrass Sorghum Sorghum or Switchgrass
Feedstock
Tons/acre
BGY Under RFS
#50 MGY Plants
Cobs Switchgras s Sorghum
.65 10
2 6 (20*)
40 120
Sq. miles required for feedstock 60,000 12,000
15
5 (30*)
100
6,250
* Market potential with increased CE demand
Commercializing Cellulosic Ethanol Feedstock
Collection
Preparation
Conversion
Cost
Capital
Distribution
Blending
Refining
Two Feedstock types • Agricultural Waste –accessible now: e.g. Corn Cob – Midwest • Development in harvest, storage and transport, densification, moisture issues • Next: Grower Programs • Energy Crop – Growth to full capacity: e.g. Switch Grass • State of TN program - $30M for upstream development • Total program expanding to ~6,000 acres in 2010
Current corn acres Potential Energy Grass Source: DDCE, Univ. Tenn., USDA
Multiple feedstocks needed to satisfy growth and goals
16
Demonstration-scale Biorefinery
►Vonore, TN – processing started up December 2009 ►$54MM Project Cost ►Nominal capacity 250kgal/yr - 40-100X scale up
►Corncob & switchgrass ►Demonstrate Integrated Unit Operation; Basic Data Package for Corncob by Year-end 2010
www.ddce.com
17 17
Commercialization Plan 700
DDCE to start licensing in 2011 600
Number of Cellulosic Ethanol Plants (at 25MMgal/yr/plant)
• Near term: First Mover for Market Penetration and Location Advantage
500
• Focus on Corn Cob and Stover: Negotiations underway for multiple plant roll-out
400
• Focus on first mover outside US: negotiate multiple plant licenses • Extend to Switchgrass and Sorghum
300
Participation in Production
200
• Licensing gives insight to choose best assets 100
• Secure advantaged locations in USA to ensure best economical plants
www.ddce.com
• Augment with margins from Financing and Engineering alliances, Operating and Support Services
2020
2019
2018
2017
2016
2015
2014
2013
2012
0
18 18
DDCE Competitive Advantage
► Status Ahead in conversion, capital, cost Developing supply chain for commercialization
Major Competitors
DDCE
A
B
C
Procured stable supply
Feedstock
Low-cost, low capital technology Scalable, sustainable Low carbon intensity, high GHG reduciton, low water consumption Applicable to soft feedstocks, which will be plentiful
Competitive Elements
Feedstock flexibility Low manufacturing cost Low capital
Technology
► Many companies in the race ► DDCE well positioned
GHG reduction
IP protected
19
Commercial Performance Initial 5/09
Current Status 11/09
Commercial Target
SELECT INPUT VARIABLES Enzyme Cost; Normalized CAPEX; ($ / Gal) (2008 Dollars)
100
50
22
$8+
$5 to $7
~$3 to $5
PROCESS RESULTS Total process yield; (Gal/T)
67
85
90
Ethanol Titer;(g/L)
63
82
90
~ $3.00
