Changing the Equation:

Transformative Feedstock
Technologies
Advanced Biofuels Marketplace
November 9, 2010
Some Key Drivers…

F l Supply
Fuel S l Fuel Demand

Fuels Emissions Fuel Security

 …Lead To Some Key Questions

 Can we decarbonize the world’s energy

gy
supply without bioenergy?
 Can bioenergy feed AND fuel the world?
 What will the dominant feedstocks be?
 Can they scale?
 What will they cost?
 What will their GHG footprint be?
 Feedstock Costs Dominate

Installed Cost (%) Operating Cost (%)

Utilities Ave Income Tax

Ave.
Boiler/ Depreciation
Turbogenerator
Storage Fixed Costs

Wastewater Waste Disposal

Distillation Other Raw Materials

Saccharification
and Fermentation Cellulase

Pretreatment CSL
Feedstock
F d t k
Feedstock
Handling
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

Capital (%) Operating Cost (%)

Feedstock costs at the refinery gate are the single largest cost component in
bioenergy…and
gy most forms of fossil energygy as well

Source: NREL Analysis. Enzyme cost of $0.69/gal.

 Upstream In The Bioenergy Value Chain

Feedstock Refinery End Molecule

Exxon, Saudi-Aramco Exxon, Valero Exxon, many others

Halliburton Gasoline, diesel, petrochemicals

Growers, Land owners Range, DDCE, Poet Amyris, LS9, Gevo

Ceres Verenium, Novozymes Ethanol, butanol, diesel,
chemicals
 Feedstock Is The Common Denominator

Fermentation Ethanol,
Butanol,
Renewable Petroleum
FermDiesel
Chemicals
Biogasoline

Catalysis & Aqueous Phase Reforming Gasoline, Diesel

Hydrocarbons

Sweet Sorghum
Sugars

Hydrolysis / Ethanol, Butanol,

Biochemical Saccharification
Sugars Fermentation Isoprene, Diesel

Mixalco Mixed Higher

Alcohol

Catalytic Biocrude
Cracking

Syngas Ethanol/Butanol
Gasification Fermentation
Switchgrass
Miscanthus Catalytic Ethanol
High Biomass
High-Biomass Conversion
Sorghum
Sweet Sorghum Fischer-Tropsch BTL Diesel
Bagasse
 Electric Vehicles Will Need Biomass Too

EV’s will require low carbon, baseload power.

High yielding energy crops will be required to fuel a
l
low carbon
b ffuture,
t regardless
dl off d
drive
i ttrain
i
 In the EU, biomass is forecasted to be as
large as all other forms of renewable power
combined by 2020
2020…

European Commission
Agriculture & Rural Development

Source: European Commission, Agriculture & Rural Development

 Yield Density Matters

2 tons
Crop & Forestry 
Crop & Forestry
Residues

5 tons
Woody

10 t
10 tons
Energy Grasses
(Current )

68% Fewer Miles * 20 tons

Energy Grasses
Energy Grasses
(Projected)

20 ton energy crops 
20‐ton energy crops
reduce the footprint
by 90%

Yields in per/acre per year

 Ceres Energy Crop Portfolio

Hint: Not Photoshop

High-Biomass & Sweet

Switchgrass Miscanthus
Sorghums
 Some Food for Thought…

 Is the world running out of food?

 Is food too expensive?

 Is agriculture uniform or static?

 Is there such a thing as a non-food acre?

 Do biofuels drive food costs?

 Not Enough Food in the World?

 Clinically obese (>30%)

outnumber malnourished by 2:1
margin (1.6B to 0.8B)*

 Only 60% of global corn acres

are hybrid varieties

 Less than 50% of global rice

acres are hybrid varieties

 Increased yield is the answer

for both food and fuel crops

Hunger is driven by poverty, not by global food production levels

* Scientific American – September 2007

 Is Food Too Expensive?

U.S. Food Expenses

Percent of Personal Disposable Income

Total

Home

Away

Source: USDA Economic Research Service

 Agriculture is Not Static

Average U.S. Corn Yields

Biotechnology
Hybrid genetics
& biotechnology
have driven a
Single-Cross
els/Acre

Hybrids five-fold
increase in
Bushe

average U.S.
Open Pollinated
Open-Pollinated
corn yyields
Double Cross
since 1940.

Data Source: USDA

 Agriculture is Not Uniform

Corn Yield Trends

(B h l per A
(Bushels Acre))

1990 2000 2009

World Average 59 70 81

USA 113 137 154

Argentina 60 93 96
China 74 78 89
Brazil 33 47 58
India 23 29 38
Sub-Saharan Africa 22 24 30

Low yields are man made and reversible

Source: Monsanto/Doane Forecast
Such A Thing As A Non-Food Acre?

Competing
C ti ffor
land for growing
of feed crop
(alfalfa) Hint:
80% off US corn
is for FEED not
FOOD use
 It’s the Oil, Not The Ethanol

Crude Oil Price (NYMEX) Corn Price (CBOT)

January 2007 to October 2008 January 2007 to October 2008

Starch Ethanol Gasoline Oil

Biofuel feedstocks are fungible into transportation fuels

Traders recognize this and in a free market system will
price the feedstock accordingly
 There IS Enough Land

Total Acreage 26B acres

Forest Crops Pasture Other

8B acres 3.2B acres 6.8B acres 4B acres

10% = .68B

0.68B acres X 20tons/acre X 2.38barrels/ton = 88M barrels per day

Source: FAO Stat database

 Large-scale “Biomass” Crops Exist Today
e.g. Brazilian sugarcane

• High-yielding
g y g C4 g
grass

• Enables short-radius
harvest collection,
harvest, collection
transportation

•P
Produces
d electricity
l t i it and
d
biofuels

• But, cold sensitive,

vegetative propagated,
very difficult to breed
 Imagine the future
…and work backwards

C4 Grasses High Yields

M k A i t d
Marker-Assisted ~20 Tons/
Breeding
Acre

Marginal
Low Fertilizer “low rent”
Drought Tolerance land
Salt Tolerance
Reduced
refining
costs
Improved
Conversion Low capital
costs
 Ceres Approach

 Plug
g into existing
g “steel in the g
ground”
– Sweet sorghum in Brazil

– Biopower in coal-fired
coal fired power plants

 Drive yield per acre up and inputs down

– Marker assisted breeding

– Biotechnology enhanced traits

 Reduce conversion costs

– Improve feedstock composition
Why sweet sorghum?

 Fits existing sugarcane-to-

biofuel infrastructure
 Season extender
 Range extender
 Short growth cycle:
90-120 days y
 Hardy; low inputs
 Rapid breeding cycle
 Seed propagated
 Lower cost sugars
 Not priced by commodity
markets
Ceres Sementes do Brasil

 435 existing
g mills

 Positive fermentation
results

 Current large-scale
commercial trials with
multiple mills

 Excellent p
prospects
p for
south-eastern US as
well
Ceres Sweet Sorghum Hybrids
 Biopower “Steel in the ground”

• Baseload

• Coal substitute

• Low-risk
technology

• Reduce CO2,
SOx and Nox

• European market
• Permanent job demand • Future caps on CO2

creation
• Limits of other renewables • Co
Co-fire
fire opportunity in coal belt
 Have Feedstock Solutions Ready as
Cellulosics Get “Steel in the ground”
g
Otoka Energy

Lignol KL Energy

Iogen
g
Raven

Enerkem
Pacific Ethanol Flambeau River RSE Pulp
Zeachem AE Biofuels Biofuels Mascoma Dynamotive
Energy
Poet Qteros
KL Energy Poet Mascoma
Iogen Newpage
Green Fuel
Association
Coskata
Abengoa
Lignol
g ICM
EdenIQ Ecofin
Abengoa
Genera
CA Ethanol INEOS Bio Operational
Enerkem
A
Amyris
i
In Construction
Louisiana Range
Green Fuels
Planned
Cello Fuels
HBE Terrabon Verenium
Coskata
R
Renergie
i
US Envirofuels Verenium
 Driving Yield Increase Through Technology

Energy Crops
Switchgrass,
Gene-Trait
Gene Trait Miscanthus etc
Miscanthus, etc.
DNA Transform into Evaluate
E al ate in
Sequencing Model Plant Associations Model Crop
Various Plant Species Arabidopsis Rice

Food Crops
Rice, Corn, Soybean, etc.
Hundreds of candidate trait genes and
markers identified
 Biomass yield  Plant architecture
 Tolerance to environmental stresses
 Nitrogen
g use efficiencyy
 Disease resistance
High-biomass sorghum with Skyscraper™

Forage
Sorghum
 Nitrogen Use Efficiency In Energy Crops
Increasing yields and reducing fertilizer needs

High-Yield, Low-Input Trait Control

 Drought Tolerance and Recovery
Making greater use of drought-prone land

Prolonged Drought Stress 4 hours after water

Control Ceres Trait Control Ceres Trait

 SALT TOLERANCE
Energy crops growing on marginal acres

Decaying Roots Healthy Roots

Control Salt Tolerant

 Biomass: Composition Matters

Impact of Different SWG Cultivars on Composition for Biofuels and Biopower

Soil and genetics combine to create different

ash and slag profiles.

Predictably and reproducibly

controlling biomass composition
Some cultivars require much less enzyme for
digestion and subsequent biorefining, via genetics
dramatically lowering costs
 Switchgrass Roots

Above-ground biomass is
carbon
b neutral
t l

Photo courtesy of The Land Institute

 We Have Made Significant
Improvements
p Over Public Varieties

Cave-in-Rock EG 1101 Trailblazer EG 1102

Higher biomass yields and better stand

establishment
t bli h t

Photos courtesy of Emily Heaton (9-1-08)

 Technology is Game Changing

Average U.S. Corn Yields

Biotechnology
Hybrid genetics
& biotechnology
are being
Single-Cross
applied to
els/Acre

Hybrids

dedicated
Energy crops today
Bushe

energy crops
and will drive
Open Pollinated
Open-Pollinated
Double Cross yield
i ld iincreases
and improved
conversion
Source: USDA

35
 Imagine the future
…and work backwards

C4 Grasses High Yields

M k A i t d
Marker-Assisted ~20 Tons/
Breeding Acre

Marginal
M i l
Low Fertilizer “low rent”
Drought Tolerance land
Salt Tolerance
Reduced
refining
costs
Improved
Conversion L
Low capital
it l
costs
 Why Be In The Seed Business?

 Capital
p light
g
 Intellectual property protection
 High barriers to entry
 Upstream in the value chain
 The common denominator, regardless of end
molecule or drive train
 High margins/profitability
 The Future Is Now

• Premium
P i Seeds
S d &
Traits

• Biofuels & Biopower

• Robust pipeline
Thank You

Ceres, Inc
805.376.6500
www.ceres.net
 The Perfect Energy Crop

High biomass yields per Rapid and

acre: yield
i ld d
density
it iimpacts
t cost-effective seed-based
harvest and transport costs propagation

Improved composition & Low to no capital

p costs for
structure:
t t hi h ffuell
higher stand establishment:
yield per ton grows its own scaffold

Utilizes atmospheric,
p ,
not industrial CO2 Perennial: multi-year crop,
efficient nutrient use, high
fossil energy ratio
Optimized architecture:
dense p
planting,
g, no lodging,
g g,
easier harvest
Deep roots: drought
tolerance, nutrient uptake,
Able to thrive on marginal carbon sequestration
land: salt
salt, drought and
aluminum tolerance
A carbon-negative opportunity

CO2

Above-ground
harvested biomass is
“carbon neutral”

CO2

Below-ground un-harvested root biomass, which creates

organic carbon in the soil, may be considered carbon
negative
 The Ceres Imperative

•Grow
Grow up through
increased yields in all
crops.
“We
We cannot
•Grow up through de-carbonize the
increased conversion
world’s
world s energy
efficiency.
ffi i
supply without
•Grow sustainably through biomass.”
lower inputs and higher
sequestration.