AGROBIOCLUSTER: Application mechanism of Bioeconomy in the 21 century

1. AGROBIOCLUSTER:Application mechanism of Bioeconomy in the 21 century

2. Introduction: Needs Analysis and Global Trends • 1. BioEconomy is a strategic development goal of the XXIcentury because of the following moving factors: • Growing demand of the power generation system and industry in cheap raw materials for energy security • Need for more efficient agricultural and regional development models • Growing environmental challenges • Contemporary technological advances make “impossible” things possible (especially in biotechnology, green chemistry and nanotechnology) • Need to ensure competitiveness in the conditions of globalizations

3. Introduction ctd. • Bioeconomy: is based on biotechnology and uses renewable bioresources for production of valuable products and energy, because: • Industrial biotechnology can help make a biobased economy possible - renewable carbon from plants replace fossil carbon from dinosaurs; thus biology will replace geology and we will till instead of drill for our raw materials. • Biotechnologies such as biocatalysts and bioprocesses can convert agricultural raw materials, namely, fiber, lipids (oils), and proteins into the products of advanced economies - fuels, chemicals, solvents, monomers and polymers, adhesives and other materials.

4. Conversion Biotechnologies: Biocatalysis (ferments) Fermentation(microorganisms) • Industrial bioproducts: • Bioenergy / Biofuel • Bioproducts: • biochemicals • biodetergents • biopolymers • bionanomaterials • biolubricants • biological BAS • bioadhesives • biocatalysts • biosensors • Renewable • bioresources: • Plants • grains • wood • weed • Animals, fish • Microorganisms • Organic waste: • household • industrial • agricultural • forestry • water Physical-Chemical Technologies: Extraction Pirolis Gas formation

5. Application: industries/products “green chemistry” has developed • Second Wave: • Agriculture and food industry • Draught and disease stable grains • Functional feeding • Biofertilisers • Nutriceuticals • Third Wave: • Bio-industry • Biofuel and bioenergy • Bioproducts: • -Biochemicals • -Biopolimers • -Biolubricants • -Biocatalysts • - Biosensors • First Wave: • Health System and Medicine • Biomedicines • Vaccines • Diagnosticums • Artificial organs • Gene therapy • Other sectors • Informatics • Genomics • Nanotechnology

6. Application: based on microbiology Grain Starch Industrial ferments - α-amylase - glucoamylase - protease - lipase - cellulase - Pectinase etc. Energy of water Glucose syrup Fructose syrup Sugar substitute Bio fertilizers Biopesticides - bioinsecticides - biofungicides - Nitrogen fixer - biostimulators Microbiologicalindustry Fuel ethanol Vitamins - riboflavin (B2) - Ascorbic acid (C) - nicotiamide (PP) - kobolamine (B12) • Chemicals • - Milk acid • - Lemon acid • - 1,3 - propanediol • Thin products for • pharmaceutical industry. Antibiotics Amino Acids - L-lysine - L-threonine - L-tryptophane Carotinoids - β-carotene - astacsantene - lycopene • Biomass of live cells • - Biocatalysis in chemistry • Cleaning of soil, water • and air Polisacharides - for technical needs - for food industry

7. Application: example of a bioderived product Sorona 3GT: polymer by DuPont and Tate&Lyle Markets: Fabrics, Fibers, Construction plastics Surpasses polyester and nylon: softer, easier dyed, stretch recovery, low prime cost, stable to dirt

8. OECD : 21 situational analysis of the advantages of using bioprocesses and production of bioproducts Organization of Economic Cooperation and Development Implementation of biotechnology provides both economic and environmental advantages: • 10-50% lower prime cost in many industries • 10-80% lower energy consumption and emission of CO2e.g.: • Green House Gas free biofuel - bioethanol, biodiesel, biogas; or • microbe leaching instead of high temperature roasting of ores in mining industry). • Saving water consumption by 20-50% e.g.: • organic detergents in food industry; • excluding of chemical dyes in textile industry. • Considerable decrease of industrial pollution and emission of toxic substances and Green House Gases, e.g.: • “green chemistry”; • biodegradable polymers; • lower use of chloral whitewashing of pulp in pulp and paper industry www.oecd.org/biotechnology

9. Application: forecasts Strategic Goals of USA in the area of biotechnologies • Biofuel: • Increase use of biofuels to 35 billion gal/year in ethanol equivalent by 2017 • (from ~ 5 today) Source: James D. McMillan, Ph.D. National Renewable Energy • Switch 1/3 of total consumption of fuels to bio by 2030 • Biorefineries: • Integrated production and processing of pulp biomass into biofuel, energy and chemical products • Scientific and technological research aimed at creation of commercial technologies of biorefinery by 2012. • Unlimited possibilities of bioeconomy: bioproducts and bioprocesses are aimed at changing of the traditional areas of industry, using chemical raw materials and chemical technologies • 1) World marketof biochemical products by 2020:$280 billion • 20% ($280 bill/year) of the world market of chemical products ($1,4 trillion/year) will be substituted by bioproducts and biotechnologies of them $160 bill/year would be new products (Estimation of McKinsey Group) • 2) World market of bioenergy industryin 2050:$150 billion • 30% of the world’s demand of energy would be provided by renewable sources • The market of biomass needed for this demand will be $150 billion. (Estimation of Royal Dutch Shell) • Compare: the World market of biopharmaceutical products forecast $50 billion in 2010.

10. How does it work? The Biorefinery Concept is one of the ways to operate Bioeconomy

11. Are there any issues or barriers?

12. Major problem for BioEconomy Unstable supply of raw materials needed for biotechnological production of new products/energy with the help of microorganisms!!! Example: Biofuel Why raw material is an issue 1st Generation of Biofuel Bioethanol (substitute of gas) is made of cereal crops: corn, wheat etc. Biodiesel is made of oil-bearing crops Increase in production of such Biofuels uses up arable land, eatable crops, increases prices on food and creates a dilemma: FOOD or FUEL? • Dried plant cells develop lignine (xylogen) coat to defend from microorganisms. Further disintegration of cells into monosacharides (material for biotechnologies) requires acid influence: TOO EXPENSIVE! • No cost-effective infrastructure for harvesting, transporting and storing of biomass: TOO COMPLICATED! 2nd Generation of Biofuel Fuel is made of cellulose:dried waste products of agriculture, forestry, wood processing industry, household waste etc. Can help Food or Fuel dilemma `

13. Influence of Technologies on cost-effectiveness of making bioproducts Type of Raw Material Storage Technology Transportation Technology Processing Technology Yield Cost of Processing Cost of Raw Material Profitability

14. Share of Raw Materials in the Structure of Prime Cost of Final Products • BioFuels – 50%-80% • Organic Chemicals – 45%-90% • Animal Feeds/Forages – over 60% • Cost of Raw Material consists of the costs of growing, harvesting, transportation and storage. • Total Costs grow in logarithmic progression depending on the distance between the field and the processing site

15. What is required? Green Energy from Green Mass: shredded overground part of plants, collected during blossoming or budding phase: perfect raw material for Bioeconomy “Green Mass” as Raw Material Still another issue • In green mass conditionplant cells contain easy fermentable sugars and little lignine, which makes them good raw material for biotechnologies and easy to digest feed for animals The advantage of the “green mass” condition of plants is at the same time a drawback: plants preserve their useful qualities in this condition for only a short period of time: up to 2 hours, which is enough for small scale summer time production of biogas and cattle feeding: EFFICIENT TRANSPORTATION AND LONG TERM STORAGE TECHNOLOGY is needed

16. What we propose: Business Project: Integrated Technology of Cost-Effective and Scale Production of Organic Food, Bio-Detergents, Bio-Fuels and Organic Chemicals Based on two expediencies • 1) Technological • Green Mass is not shipped long distance: equipment for its processing is installed at the place of its accumulation: the Energy Farm and the Biorefinery concepts are bridged into one concept Agro-Industrial Enterprise (AIE): • Transportation and long-term storage know-how’s and reduced cycle of spirits production know-how are creating the bridge • Energy of the Sun accumulated in plants is used efficiently for mass production of biofuels and bioproducts • 70% of land - perennial forage crops. • 2) Economic • The prime cost green mass of perennial forage crops is the lowest of any other raw material • Higher yield and full utilization of green mass gives 4-8 times more energy and products per acre compared to cereal crops and traditional technology • Diversification of products with low prime cost minimizes risks and ensure quick payback • High cost efficiency and feasibility of creation of a multi-industrial “AGROBIOCLUSTER” allows to involve resources of companies of oil, chemical, food and other industries

17. Three know-how’s allow to connect this whole mechanism which is powered by the green mass and liquid organic fertilizers Green Biomass Grain/Straw Honey Technology of Transportation and Long Term Storage Textile, paper, construction materials Organic Chemicals Fibres $0.19/gal Liquid Organic Fertilizers Organic Food Products Spirits Forage BioFuel Waste Forage Chlorella Biogas Vermiculture BioHumus BioDetergents, BioCosmetics, BioPharmaceuticals Biologically Active Substances BioDiesel Heat & Electricity

18. Which Perennial Forage Crops? 1. ASTERACEAE Family - Helianthus tuberosus L. (artichoke) - Helianthus tuberosus L. XH. annus L. - Silphium perfoliathum L. (pilotweed) 2. BRASSICACEAE Family (cabbage) - Bunias orientalis L. 3. FABACEAE Family (legumes) - Galega orientalis Lam. (goat's rue) - Lathyrus silvestries x L. Latifolius (peevine) 4. MALVACEAE Family - Lavatera thurigiaca L. - Sida hermaphrodita Rusby 5. POACEAE Family - Sorghum almum Parodi (Columbus grass) 6. POLYGONACEAE Family (buckweat) - Rumex patientia L.x. R. tianschanicus A. Los. (sorrel) E.g. see reference on advantages of the perennial forage crops: "Perennial Forages as Second Generation Bioenergy Crops“ www.mdpi.org/ijms/papers/i9050768.pdf

19. Business Project Vision Transportation and Long Term Storage Technology Semi Finished Products Electric Energy Biohumus Biofuel (biodiesel) BAS (biologically active substances) Fibres, Spirits Milk, Meat, Fish Honey, Sugar VermicultureChlorella Biogas Plant Organic Chemicals Biofuels Organic Food Industrial Organic Farming Waste Market distribution and customer Biopharmaceuticals Spirits Forage Other Bioproducts Bridge Integrated Mini Biorefinery Energy Farm Various Industries Biorefineries Finished Products The Agro-Industrial Enterprise Concept The AGROBIOCLUSTER Concept

20. The long term business project is complicated and should be implemented in stages At the 1st stage a Corporation is created in US/Canada with 55% contributed by Ukrainian founders in the form of nonmaterial assets: know-how’s; and 45% contributed by US/Canadian founders in the form of start up capital. At this stage know-how’s are patented in US/Canada and capitalized as the Corporation’s property. A subsidiary operation in Ukraine designs models for patenting At the 2nd stage the new property of the corporation, i.e. licenses to use patents are invested into a development and logistics company At the 3rd stage the Corporation invests its licenses to Inter Sectorial Holding (transnational company)

21. At the 4th or ground stage, the Inter Sectorial Holding controls 100% of the subholding of Agro-Industrial Enterprises (AIE) and 50% of each derivate subholding in different industries who buy semi-finished products from the AIEs. AIEs, existing or newly formed industrial biorefineries and marketing network companies merge into an AGROBIOCLUSTER. Subholdings in different countries The primary producers, the farmers, invest farm land against ownership of 20%, which is 4-8 times higher income than what they make today with existing technologies

22. Your feedback will be much appreciated!We will be happy to provide details and become reliable partners. • Contact person: Mr. Anatoliy Furda, • Ukraine-Canada SBEDIF Business Center, NSCI. • 26 Dnistrovska Str. • Ivano-Frankivsk, Ukraine • Email: furda@sbedif.if.ua • Tel.: +38 (0342) 55-20-22 • Fax: +38 (0342) 55-91-56