Overview of the Office of the Biomass Program and the Products Platform DOE OBP Products RD Interim Stage Gate Review

1. Overview of the Office of the Biomass Program and the Products PlatformDOE OBP Products R&DInterim Stage Gate Review Meeting August 9-10, 2005 Valerie Sarisky-Reed - DOE OBP Technical Leader

2. OBP Recent Review History and Plans

3. Financial incentives were found on the OBP webpage www.eere.energy.gov/biomass and in the DSIRE website www.dsireusa.org Financial incentives were found on the OBP webpage www.eere.energy.gov/biomass and in the DSIRE website www.dsireusa.org

6. Federal Biomass Agency Collaborations Healthy Forest Restoration Act of 2003, Title II Memorandum of Understanding (MOU) for Woody Biomass Utilization (DOE/USDA/DOI) Biomass Research and Development Act of 2000 Biomass R&D Technical Advisory Committee Vision for Bioenergy & Biobased Products in the US Roadmap for Bioenergy & Biobased Products in the US Biomass R&D Board Farm Bill 2002, Title IX Federal Procurement of Biobased Products (Section 9002) Renewable Energy Systems and Energy Efficiency Improvements (Section 9006) Biomass Research and Development (Section 9008) Joint DOE/USDA Solicitation for FY 02, FY 03, & FY04 Continuation of the Bioenergy Program (Section 9010) Joint Projects Joint USDA/DOE Feedstock Stage Gate Review Billion Ton Feedstock Study (USDA/DOE) The Healthy Forest Restoration Act of 2003 and the Secretarial-level MOU signed by USDA, Department of Interior, and DOE focuses Federal efforts around trying to find options to help prevent catastrophic forest fires, help protect lives and property, and help protect our forests from needless destruction. DOE biomass is involved in this because the surplus “fuel wood” under certain situations can be utilized for biomass energy, bioproduct, and forest biorefinery development. Biomass R&D Act of 2000 created Federal Advisory Technical Advisory Committee (currently has 30 member representatives from biomass stakeholder community that are chartered to provide advice to DOE and USDA), a Biomass R&D Federal Board (DOE and USDA, Interior, National Science Foundation, Environmental Protection Agency, Office of Science Technology and Policy, and Office of Federal Environmental Executive). I co-chair the Biomass R&D Board along with USDA Undersecretary Mark Rey. The Board and Technical Advisory Committee actions have led to a better biomass R&D effort at USDA and DOE with an unprecedented level of cooperation. Our respective biomass programs are directed, in part, by Vision and Roadmap documents developed under Secretarial direction from DOE and USDA to the Technical Advisory Committee. The Energy Title to the Farm Bill (first time ever) provided additional support and direction to DOE and to a lesser degree DOE. Under thing that USDA can do better than us is really deployment, which is carried out by the vast network of State and local offices. Specific Sections include: Section 9002: A new program is established for the purchase of biobased products by Federal agencies, modeled on the existing program for purchase of recycled materials. Also included is a voluntary biobased labeling program. $1 million mandatory funding annually for FYs 2002 – 2007. Section 9006: A loan guarantee and grant program is established to assist eligible farmers, ranchers and rural small businesses in purchasing renewable energy systems and making energy efficiency improvements. Provides 23 million mandatory funding annually for FYs 2003 – 2007. DES MOINES, Iowa, August 25, 2003---The U.S. Department of Agriculture announced the selection of 113 applications for renewable energy systems and energy efficiency improvement grants in 24 states totaling $21,207,233, including over $1.2 million for nine recipients from Iowa. The grant program is part of the Bush Administration’s overall effort to increase America’s energy independence through the development of renewable energy resources as well as improving efficiency of existing systems. Section 9008: The termination date of the Biomass Research and Development Act (BRADA) of 2000 is extended to September 30, 2007. Provides for mandatory funding of 45 million for FY2002 and $14 million annually for FYs 2003 – 2007 to carry out the BRADA of 2000. Section 9010: Continuation of the Commodity Credit Corporation (CCC) Bioenergy Program is authorized and the eligible feedstocks are broadened to include animal by products and fat, oils and greases (including recycled fats, oils and greases). Not more than $150 million in mandatory funding for each of FYs 2003 – 2006. The Healthy Forest Restoration Act of 2003 and the Secretarial-level MOU signed by USDA, Department of Interior, and DOE focuses Federal efforts around trying to find options to help prevent catastrophic forest fires, help protect lives and property, and help protect our forests from needless destruction. DOE biomass is involved in this because the surplus “fuel wood” under certain situations can be utilized for biomass energy, bioproduct, and forest biorefinery development. Biomass R&D Act of 2000 created Federal Advisory Technical Advisory Committee (currently has 30 member representatives from biomass stakeholder community that are chartered to provide advice to DOE and USDA), a Biomass R&D Federal Board (DOE and USDA, Interior, National Science Foundation, Environmental Protection Agency, Office of Science Technology and Policy, and Office of Federal Environmental Executive). I co-chair the Biomass R&D Board along with USDA Undersecretary Mark Rey. The Board and Technical Advisory Committee actions have led to a better biomass R&D effort at USDA and DOE with an unprecedented level of cooperation. Our respective biomass programs are directed, in part, by Vision and Roadmap documents developed under Secretarial direction from DOE and USDA to the Technical Advisory Committee. The Energy Title to the Farm Bill (first time ever) provided additional support and direction to DOE and to a lesser degree DOE. Under thing that USDA can do better than us is really deployment, which is carried out by the vast network of State and local offices. Specific Sections include: Section 9002: A new program is established for the purchase of biobased products by Federal agencies, modeled on the existing program for purchase of recycled materials. Also included is a voluntary biobased labeling program. $1 million mandatory funding annually for FYs 2002 – 2007. Section 9006: A loan guarantee and grant program is established to assist eligible farmers, ranchers and rural small businesses in purchasing renewable energy systems and making energy efficiency improvements. Provides 23 million mandatory funding annually for FYs 2003 – 2007. DES MOINES, Iowa, August 25, 2003---The U.S. Department of Agriculture announced the selection of 113 applications for renewable energy systems and energy efficiency improvement grants in 24 states totaling $21,207,233, including over $1.2 million for nine recipients from Iowa. The grant program is part of the Bush Administration’s overall effort to increase America’s energy independence through the development of renewable energy resources as well as improving efficiency of existing systems. Section 9008: The termination date of the Biomass Research and Development Act (BRADA) of 2000 is extended to September 30, 2007. Provides for mandatory funding of 45 million for FY2002 and $14 million annually for FYs 2003 – 2007 to carry out the BRADA of 2000. Section 9010: Continuation of the Commodity Credit Corporation (CCC) Bioenergy Program is authorized and the eligible feedstocks are broadened to include animal by products and fat, oils and greases (including recycled fats, oils and greases). Not more than $150 million in mandatory funding for each of FYs 2003 – 2006.

7. Three-fold increase in earmarks since 2000 Earmarks have grown from 18% to over 40% of the total funding Real decline in the available funds used in support planned R&D and biorefinery support Objectives can not be achieved if trends continue to FY06 and beyond

8. Key Activities

9. Products Platform - History Evolved from three Biomass related programs R&D on transportation fuels in the Office of Transportation Technologies (OTT), R&D on products and chemicals in the Office of Industrial Technologies (OIT), and R&D on producing electric power from biomass in the Office of Power Technologies (OPT). Separate programs combined into OBP Focus now on core technologies that would support the growth of an integrated biorefinery industry that can process upstream outputs of heat, power, fuels, and products.

10. Products Platform - Direction Program uses strategic analyses and solicitation responses to focus R&D portfolio. Two recent strategic analysis: Top Value Added Chemicals from Biomass Volume I—Results of Screening for Potential Candidates from Sugars and Synthesis Gas (T. Werpy and G. Petersen http://www.eere.energy.gov/biomass/pdfs/35523.pdf.) Published in 2004. Contains recommendations for the top 12 and top 24 candidates for building block organic chemicals derived from sugars and the research needs associated with these candidates. Top Value Added Chemicals from Biomass Volume II. Results of Screening for Potential Candidates from Biorefinery Lignin (Bozell, Holladay, Johnson, and White) Will be completed in 2005. An additional analysis focusing on oils is planned in the near future. The top twelve sugar-based building blocks are 1,4-diacids (succinic, fumaric and malic), 2,5-furan dicarboxylic acid, 3-hydroxy propionic acid, aspartic acid, glucaric acid, glutamic acid, itaconic acid, levulinic acid, 3-hydroxybutyrolactone, glycerol, sorbitol, and xylitol/arabinitol. The top twelve sugar-based building blocks are 1,4-diacids (succinic, fumaric and malic), 2,5-furan dicarboxylic acid, 3-hydroxy propionic acid, aspartic acid, glucaric acid, glutamic acid, itaconic acid, levulinic acid, 3-hydroxybutyrolactone, glycerol, sorbitol, and xylitol/arabinitol.

11. Products Platform – Economic Targets Economic targets - only viable way to ensure if met, commercial success likely. Economic targets established based on 3 criteria: Economically competitive with existing petrochemical based chemicals and materials Using an average production cost for commodity chemicals of $0.40- $0.50/pound. Represents the production cost of many of the chemicals identified in the “Top Ten Analysis”. The cost targets represent a scenario in which various combinations of fermentation, catalysis and separations could meet the overall $0.40-$0.50/pound cost goal of existing petrochemical products. The economic targets can be technically achieved. Each cost target established from examples in commercial production or preliminary economic models that indicate these targets are achievable. For example, citric acid is the “best” commercially practiced aerobic fermentation technology and production cost is estimated to be on the order of $0.40/lb including recovery. The achievement of each goal will impact multiple products in the “Top Ten” analysis not just a single product. Criterion basis for core technology development and not product specific technologies. Super commodity chemicals were eliminated based on the assumption that they would not be able to compete with petroleum derivatives.

12. Value of Products in a Biorefinery First bar is baseline, no polyols products in dry mill. Total original plant capacity 50 million gallons of ethanol production per year. That plant would produce 700 million lbs of starch. Scenario one – 12.5% diversion represents 43 million gallons of ethanol plus about 70 million lbs of polyols per plant per year. Scenario two – 25% diversion represents 37 million gallons of ethanol plus about140 million of polyols per plant. Scenario three – 37.5% diversion represents First bar is baseline, no polyols products in dry mill. Total original plant capacity 50 million gallons of ethanol production per year. That plant would produce 700 million lbs of starch. Scenario one – 12.5% diversion represents 43 million gallons of ethanol plus about 70 million lbs of polyols per plant per year. Scenario two – 25% diversion represents 37 million gallons of ethanol plus about140 million of polyols per plant. Scenario three – 37.5% diversion represents

13. illustrates how the Products Platform Element will develop technology to support growth of biorefinery industries. The biorefinery of the future would use outputs from the Sugars and Thermochemical Platforms, as well as products from currently existing biomass industry. Activities supporting the Products Platform Element are organized into the work breakdown elements of fuels (transportation), chemicals and materials, and heat and power. Within the Products Platform Element, about 80% of the investment is allocated to chemicals and materials distributed across sugars, thermochemical, and oils. The remaining 20% of the portfolio investment is dedicated to fuels, with the largest part of that R&D devoted to producing fuels from sugars. No core R&D is currently devoted to developing heat and power technologies; however, it is anticipated that the energy efficiency and cost savings to be gained from producing electric power and heat that can be used in the biorefinery of the future will become obvious. illustrates how the Products Platform Element will develop technology to support growth of biorefinery industries. The biorefinery of the future would use outputs from the Sugars and Thermochemical Platforms, as well as products from currently existing biomass industry. Activities supporting the Products Platform Element are organized into the work breakdown elements of fuels (transportation), chemicals and materials, and heat and power. Within the Products Platform Element, about 80% of the investment is allocated to chemicals and materials distributed across sugars, thermochemical, and oils. The remaining 20% of the portfolio investment is dedicated to fuels, with the largest part of that R&D devoted to producing fuels from sugars. No core R&D is currently devoted to developing heat and power technologies; however, it is anticipated that the energy efficiency and cost savings to be gained from producing electric power and heat that can be used in the biorefinery of the future will become obvious.

14. Technical Barriers Addressed:Liquid Transportation Fuels The fuels goal based on reducing the cost of ethanol production from existing facilities and future lignocellulosic facilities. Ethanol cost reduction from existing facilities focus on using the “recalcitrant” starch and all 5C sugars with target reduction of $0.13/gallon (based on $0.90-$1.00/gallon). Ethanol cost reduction from lignocellulosics from $2.50/gallon in 2004 to $1.75/gallon by 2012. One way: develop new strains to utilize 5C sugar with target reduction of $0.18/gallon.

15. Technical Barriers Addressed:Chemicals and Materials Specific Goals: Develop technologies that enable: aerobic fermentations for the production of chemical building blocks identified in “Top Ten” for < $0.35/lbs from $0.10/lbs sugars. anaerobic fermentations for the production of chemical building blocks identified in“ Top Ten” for < $0.25/lbs from $0.10/lbs sugars. Develop selective aqueous phase catalytic and bio-catalytic transformations of carbohydrates to building blocks at < $0.25/lbs. Develop chemical or biological transformations for the conversion of platform building blocks to secondary products at a transformation cost between $0.03 and $0.07/lbs. Develop separation technologies for recovering products from dilute (less than 25% product) aqueous solutions for less than $0.05/pound.

16. Technical Barriers Addressed:Combined Heat & Power The heat and power goals developed based on modeling of an integrated biorefinery and offer an economically competitive situation with current production of heat and power. The specific goal – to demonstrate the ability to obtain commercial CHP costs of $0.051/kWh ($5.10/1000lb steam) from biomass and biomass intermediates.

17. Future Direction: New OBP Pathways Realization of biorefineries is the indicator of success for OBP! These biorefineries will meet industry’s economic return targets while providing the sustainable use of domestic renewable feedstocks for the production of fuels - which will directly offset our dependency on imported oil and petroleum products. As technology gets closer to commercialization need to know the specific biomass/biorefinery context. However the current WBS: Reflects a more functional organization with 4 of 5 technical areas working on a part of a biorefinery. Does not sufficiently differentiate among existing and future Bioindustry market segments. So: OBP recently developed generic biorefinery pathways linked to: Specific portions of the biomass resource base, Existing segments of the current bioindustry where possible, and Future market segments where envisioned.

18. Strategy & Pathways Near Term Pathways Develop technologies that can be integrated into existing infrastructures to: Add efficiency by more effective feedstock utilization and product diversification Attract investment and spur industry growth Enable the growth of biofuels and bioproducts within the existing industries Intermediate Term Pathways Develop technologies that can be integrated to further expand existing infrastructures to: Add efficiency and effectiveness by further feedstock and product diversification Attract investment and spur industry growth, and develop an infrastructure for cellulosic feedstocks Enable the further growth of biofuels and bioproducts building on near term accomplishments (risk mitigation) Long Term Pathways Develop technologies that can support stand alone cellulosic biological and thermochemical conversion facilities to: Establish a bio industry building on developed grain and forest infrastructures Develop, maintain, and sustain a feedstock infrastructure for the future Enable the further growth of biofuels and bioproducts building on accomplishments within existing infrastructures and mitigate technological risk Develop and establish pioneer projects such that commercialization can occur Near Term Pathways Develop technologies that can be integrated into existing infrastructures to: Add efficiency by more effective feedstock utilization and product diversification Attract investment and spur industry growth Enable the growth of biofuels and bioproducts within the existing industries Intermediate Term Pathways Develop technologies that can be integrated to further expand existing infrastructures to: Add efficiency and effectiveness by further feedstock and product diversification Attract investment and spur industry growth, and develop an infrastructure for cellulosic feedstocks Enable the further growth of biofuels and bioproducts building on near term accomplishments (risk mitigation) Long Term Pathways Develop technologies that can support stand alone cellulosic biological and thermochemical conversion facilities to: Establish a bio industry building on developed grain and forest infrastructures Develop, maintain, and sustain a feedstock infrastructure for the future Enable the further growth of biofuels and bioproducts building on accomplishments within existing infrastructures and mitigate technological risk Develop and establish pioneer projects such that commercialization can occur

19. This is our rationale for using the pathways and how the milestones for those pathways fit into the original WBS structure.This is our rationale for using the pathways and how the milestones for those pathways fit into the original WBS structure.