Regional Strategy for Biobased Products in the Mississippi Delta

1. Regional Strategy for Biobased Products in the Mississippi Delta Study Overview and Implementation September 23, 2009 Governor’s Executive Task Force on BioFuels and Biomass Frankfort, KY

2. The “Bioeconomy”: An economy in which the feedstocks for energy and the building blocks for industry are derived from renewable plant/crop resources (“biomass”). The Bioeconomy holds potential for “substantial transformation of the rural economic landscape.” Jack Huttner VP DuPont Danisco Cellulosic Ethanol

3. “Regional Strategy for Biobased Products in the Mississippi Delta” Biomass is the primary renewable resource of the Region

4. “Regional Strategy for Biobased Products in the Mississippi Delta” 98 Counties in 5 States; Common Agricultural & Woody Biomass Western Kentucky Missouri Bootheel 11 8 Eastern Arkansas Western Tennessee 21 30 28 Northwestern Mississippi

5. Funding & Implementation Partners from 5 States Regional Strategy for Biobased Products in the Mississippi Delta Bootheel Regional Planning & Economic Development Commission

7. Project Team of National & Regional Experts Battelle The Business of Innovation Project Steering Team The only known regional study in the U.S. per Battelle

8. Key Conclusions • Sustainably grown and harvested crops in the region can supply at least an $8 billion local green industry without affecting the food and feed supply chain. • This will support the formation of 25,000 green and related jobs in the Delta states within a decade and 50,000 by 2030. • The bioeconomy will open up markets for new crops which will increase biodiversity in the region, leading to reduced use of synthetic fertilizers, agricultural chemicals and water, while increasing options for local farmers. • The bioconomy will contribute to reducing greenhouse gas emissions, increased air quality, providing sustainable raw materials for local industries, and bolstering national security.

9. Why Focus on Biobased Products?

10. The Mid-South has abundant biomass and this biomass is a highly flexible resource Crop Residues Energy Fuels Chemicals Materials Crops Dedicated Energy Crops Industrial Bioproducts and Fuels Biomass Production Pathways to new value-added biobased products Forest biomass Algae Nutrition and Health Products Organic Waste Streams Food and feed products Nutraceuticals, biopharming and specialty health products

11. Diverse Feedstocks to Biobased Products

12. Seventeen Key Observations & Conclusions • Opportunity • The Bioeconomy represents a revolutionary opportunity for rural economic development and job creation in the region • Lignocellulosic biomass represents the largest volume and job creation opportunity, with potential for solid (combustion) and liquid (transportation fuel) products • Timing • Biobased products are emerging now, but must compete with fossil-based products for years • Technology/projects • Technologies advancing rapidly, but many are still developmental • The region will “import” most advanced bioprocessing technologies • Supply Chain • Farm-to-factory requires completely new alliances and partnerships

13. Eight Strategic Recommendations Pursue Selective Near-Term Opportunities Expand Bioprocessing Workforce Development Establish a Regional Agricultural R & D Network Establish a Regional Bioprocessing Technology Consortium Establish a Regional Business Development Office Expand Farmer Network Harmonize State Policies and Incentives Develop a Regional Policy Statement

14. Strategic Recommendation #1: Pursue selective near-term Opportunities Solid fuels for co-firing New oilseeds & crushers Four recommended near-term bioprocessing opportunities for the region Sweet sorghum ethanol Lignocellulose demo plants Step #1 – Build a local supply chain with products we can make now. Step #2 – Attract technology to make advanced products in the future.

15. Solid Fuels for Co-firing with Coal Potential for 20 x 150,000 tpy pellet/briquet plants to co-fire biomass with coal in regional utility plants

16. Ranked Oilseed Opportunities • Have existing markets • Rotate with existing crops • Leads to further crop introduction • Takes advantage of higher value product potential • Potential for five facilities in the region.

17. Sweet Sorghum EthanolPotential for >100 Biorefineries Each Facility: -Produces 10MM gpy ethanol -Uses juice sugars and bagasse -Requires 9000 acres -Uses 12% of acres in a 6-mile radius -Displaces 10% of corn+soybeans+cotton -Creates min. 25 direct & 25 indirect jobs

18. Lignocellulosic Biomass: Liquid Fuel & Chemicals Potential -59 million tons of lignocellulosic biomass could produce 4.7 billion gallons/yr of ethanol or other liquid transportation fuel (assuming 80 gallons/dry ton) -Lignocellulosic biomass also provides sugars and lignin for specialty chemicals production

19. New Crop Opportunities • Introduction Pathways • Partnering with leading companies • Commercial demonstration trials with leading farmers. • Variety and demonstration trials at regional research farmers. • Oilseed Crops - sunflower, winter canola, high erucic rapeseed • Sugar Crops - sweet sorghum • Biomass Crops - switchgrass, biomass sorghum, miscanthus

20. Overview of Delta Biorefineries • Biorefineries will process diverse biomass feedstocks into fuels, chemicals, materials, and energy • Biorefineries will be decentralized – in rural locations – to minimize biomass feedstock transportation costs • Biorefineries represent “heavy industry” • Liquid fuel biorefineries will resemble chemical factories • Biorefineries may ultimately practice technologies from more than one platform • Multiple products will be pursued to effectively utilize all of the biomass for the highest value end products • The biorefinery workforce requires specialized technical skill sets which differ from agricultural production

21. Biorefineries Will Create Rural Technical Jobs • Operations jobs will pay $33,000+ and require post-secondary education. • Technical and Business jobs will command regional-comparable salaries. A plant manager will likely earn $125,000. • Careers will provide family-supporting wages and opportunities for advancement.

22. Employment Potential Per Facility Regional

23. Strategic Recommendation #1: Pursue selective near-term Opportunities Solid fuels for co-firing New oilseeds & crushers Four recommended near-term bioprocessing opportunities for the region Sweet sorghum ethanol Lignocellulose demo plants Step #1 – Build a local supply chain with products we can make now. Step #2 – Attract technology to make advanced products in the future.

24. Strategic Recommendation #2 Expand Bioprocessing Workforce Development: The DOL-supported Arkansas ADWIRED/ADTEC and Missouri WIRED programs represent a national best practice for renewable energy workforce development and should be expanded to other institutions in the study region to ensure that skilled local workers will be available to staff the technically demanding bioprocessing industry of the future. Strategic Recommendation # 3 Establish a Regional Agricultural R&D Network:A “region-focused” network of public and private research farms should be established to: leverage capabilities; improve program efficiency; develop consistent protocols and processes; and enhance information exchange. A vital role of this network will be coordination of regional testing and addressing institutional barriers to new crop introduction.

25. Strategic Recommendation #4 Establish a Regional Bioprocessing Technology Consortium: Much of the bioprocessing industry will be developed in rural locations in proximity to biomass feedstocks, but with limited access to the advanced technical competencies necessary to support local biorefineries. A consortium of region-based public and private entities should be established to provide ready access to process technology support Services. Strategic Recommendation #5 Establish a Regional Business Development Office:A centralized Business Development Office is recommended, to support the efforts of the implementation partners across the five-state, 98-county region by serving as an information clearinghouse, entry point for imported technologies, focal point for funding collaboration, and resource for coordination and integration of support services.

26. Strategic Recommendation # 6 Expand Farmer Networks: Farmer Networks canmitigate risk, manage expectations, and facilitate communication and knowledge sharing on the production of new crops and opportunities. Networks could include publicly-funded training, demonstrations and crop production, and a focus on creating and strengthening linkages between farmers and downstream bioprocessing companies. The 25Farmer Network pilot program in West Tennessee, supported by funds from the Tennessee Department of Agriculture, Memphis Bioworks Foundation and BioDimensions, Inc. may serve as a useful model for the region.

27. Strategic Recommendation #7 Harmonize State Policies and Incentives: The five states represented in the strategy share common biomass resources within the Delta region and will therefore share a similar opportunity to develop the bioprocessing industry within their boundaries. Leaders and key agencies within the states should adopt supportive and consistent policies to encourage value-added biobased products, which are technology and feedstock neutral. Strategic Recommendation #8 Develop a Regional Policy Statement: The region can leverage an influential base of U.S. senators and congresspersons in shaping legislation and federal policies to favor biobased resource development. A shared position statement on federal policies and incentives should be prepared for the region’s congressional delegation.

28. Collaborative Opportunities with Purchase Area, KY • Development of a pilot program to generate heat from biomass at Equine Center at Murray State University that can demonstrate the viability of this process for deployment across the region (Strategy 1). • Development of a commercial biomass supply cooperative & densification/pellet business that can be a farmer-owned business can be replicated across the region (Strategy 1). • Study potential niche crops that are small in volume and high in value that capitalize on Kentucky’s unique capabilities for growing and handling Tobacco (Strategy 1). • Work with ADTEC to introduce training and workforce development programs for renewable energy (Strategy 2).

29. Collaborative Opportunities with Purchase Area, KY • Partner in the formation of regional collaboration structure including regional research farm networks, bioprocessing technology consortium, and a regional business development office (Strategy 3, 4, & 5). • Development of a farmer network using the Tennessee model (25Farmer Network) that was funded by Tennessee Department of Agriculture (Strategy 6). • Work with collaborators to develop a regional policy statement to suggest policy that would offer similar benefits for bioprocessing development across the region (Strategy 7&8).