“Commercializing Advanced (Second and Third Generation)

Biofuels Technologies”

E. Kendall PyeChief Scientific Officer,

Lignol Energy CorporationBurnaby, BC

Commercial Progression of the Biofuels IndustryCommercial Progression of the Biofuels Industry

• 1st Generation Biofuels – primarily made from food and feed crops

– Brazil; ethanol from cane sugar since 1970’s, now ~ 7 billion gallons/yr

– USA; ethanol from corn starch since the early 1980’s, now ~12 billion gallons/yr

– EU; primarily biodiesel from vegetable oils and animal fats, some ethanol ~ 1 billion

• food versus fuel controversy

• impacts on land use, more crop land

• annual production dependant on climate and disease, volatile feedstock prices

• 2nd Generation Biofuels – primarily from lignocellulosic biomass

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• 2nd Generation Biofuels – primarily from lignocellulosic biomass

– Only now nearing commercialization in many parts of the world

– Various technologies under development;

• pyrolysis or gasification with chemical or biological synthesis from syngas

• pretreatment of feedstock with acid, steam, ammonia, etc.

• high cost of enzymatic saccharification

• 3rd Generation Biofuels - lignocellulosic biorefineries and algae

– multiple product streams created from biomass, improved economics

– preserves the higher values of the products

Conventional

Oil Refinery

Gasoline

Cellulosic ethanol

Biorefinery

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Petrochemicals

Bio-based

chemicals

Diesel fuel Lignin

Maximizing Value from Biomass Fractions; Maximizing Value from Biomass Fractions;

retaining important chemical structuresretaining important chemical structures

Cellulose

40%-45%

C6 Sugars

Ethanol

Enzymes

Yeast

HP-L™ Lignin

Extractives

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C5 &C6 Sugars

Biofuels & Bio-Based Chemicals

This approach accelerates commercialization:1. Diversification of revenue streams lowers risks2. Smaller size biorefineries are profitable (lower plant capex)3. Substantial GHG emissions reduction (carbon credits)

• Emerging cellulosic ethanol company deploying the Biochemical Biorefinery Concept

• Operations in Western Canada & Eastern US (Philadelphia)

• ~40+ employees

• Well-funded in the past 4 years (has gained access to ~$79M including

Introduction to LignolIntroduction to Lignol

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• Well-funded in the past 4 years (has gained access to ~$79M including a $30M US DOE grant to build a demo scale facility)

• Much of its technology is already proven on a semi-commercial scale

• Goal: Commercialize a biorefinery process for low cost cellulosic ethanol production with the greatest environmental benefits

Lignol’s

Pretreatment

Process

Solven

t

Rec

ove

ry HP-L™ Lignin

Recovered Solvent

Industrial Sugars

Furfural

Hardwood, Softwood, Agricultural Residues

Lignol’s Process OverviewLignol’s Process Overview

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Enzymatic

Saccharification

&

Fermentation

“Clean”

cellulose-

rich

substrate

Enzymes &Yeast

Spent Solvent

Distillation

Distillation

Industrial Sugars

Ethanol

Stillage

Lignol acquired technology developed byLignol acquired technology developed byGeneral Electric and Repap (Alcell)General Electric and Repap (Alcell)

GE

• Wood-to-ethanol pilot plant; gas turbine fuel

Alcell

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• Wood pulp production on industrial scale

• Proved markets for novel “High Purity Lignin” (HP-L™ lignin)

• Over $100 million spent on development

Proven 1Proven 1stst Gen. Biomass Pretreatment TechnologyGen. Biomass Pretreatment Technology

New Brunswick, Canada (1988 – 1996)60 tpd feed capacity (hardwoods)

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“Clean” Cellulose“Clean” Cellulose--Rich SubstrateRich Substrate

Lignol’s Pretreated Wood

Dilute-Acid-Pretreated Corn Stover

Steam-ExplodedWood

Other leading pretreatment technologies:

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Only ~60% Fermentable Components

~95% Fermentable Components

Woody Biomass Contains Valuable ChemicalsWoody Biomass Contains Valuable Chemicals

•Lignin is a matrix aromatic

polymer composed of phenolic

structures; the only major

natural source of benzene rings

Lignin

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Possible HPPossible HP--L™ Lignin StructureL™ Lignin Structure

OH

OCH3

O

HOCH2

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H3CO

O

CH2OH

HCOH

OH

H3CO

HO

CH2

OCH3

HOCH2

O HCOH

HCOH

CH2OH

H3CO

Current World Output110 MM Tons/yr

Current Petrochemical Industry Uses Oil and Gas to Produce Primary Olefins and Aromatics

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110 MM Tons/yr

65 MM Tons/yr

70 MM Tons/yr

HP-LTM Lignin Markets

• Legislation, innovation and consumer demand is driving adoption of “green” products – formaldehyde is restricted in California, France, Finland and Japan

– fuel efficiency, vehicle weight reduction (LCCF) - US DOE

FreedomCAR program

• Applications in resin systems are significant: – PF resins and their products

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– PF resins and their products

– Epoxy resins and their derivatives

– Polyurethane resins and derivatives

– Furan resins and their derivatives

• Animal Feed Additives; non-antibiotic growth promoters, antioxidants

• Carbon fiber development with Oak Ridge National Labs and companies like BAE Systems (British Aerospace) � potential markets to support a large number of biorefineries

Engineering HPEngineering HP--LLTMTM Lignins (Substitution)Lignins (Substitution)

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Customized HPCustomized HP--LLTMTM Lignin Chemistry for Specific NeedsLignin Chemistry for Specific Needs

Making Lignol’s Lignins Work for the Wood Adhesive Industry

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PB & MDF Wood Panels Containing Lignol’s HP-LTM Lignins

Products Made with Products Made with Lignol’sLignol’s HPHP--LLTM TM LigninsLignins

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HP-LTM Lignins For Automotive Carbon Fiber (LCCF)

CARBON FIBER MERCEDES AMG SLS CF is 4x lighter than steel

CF is 5-6x stronger than steel

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Tokyo Auto Salon 2008- Honda Civic Mugen Type-RR

ORNL13,000,000 cars & light trucks produce annually in the USA

~220 lbs LCCF /vehicle (on average)~440 lbs HP-LTM Lignin/vehicle (on average)

~$3.0B/year potential US HP-LTM Lignin market for automotive LCCF

HP-LTM Lignins For Automotive Carbon Fiber (LCCF)

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Application LCCF

Time-to-Market

Lignol’s Commercial Plants

(2,000 tpd feed)

Ethanol (gal/year)

Vehicles ~5-10 years 27 commercial plants 1.5B (at <$2.00/gal)~10% 2011 RFS2

Wind Turbines <5 years Unknown Unknown

Insulating Materials Now Unknown Unknown

Source: Compere A.L. et al. Low Cost Carbon Fiber From Renewable Resources, Oak Ridge National Laboratory & Lignol Innovations Ltd.

Development Partners for HP-LTM Lignin

• Foundry Resins:

– HA International

• Coatings:

– PPG Industries (NYSE:PPG)

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• Adhesives:

– Huntsman Corporation (NYSE:HUN)

• Construction Materials:

– Kingspan Corporation (KSP:L)

Technology Deployment PathTechnology Deployment Path

Stage Capacity (biomass feed)

Capacity (ethanol)

Status

Pre-Pilot Grams/hour �Complete

Industrial Pilot 1 tonne/day

100,000 L/yr

�Complete

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100,000 L/yr

Demonstration 100 tonnes/day

10–30 million liters/yr

�Developing

Commercial 400-2000 tonnes/day

40-200 million liters/yr

�Planning

Lignol’s Integrated Biorefinery Pilot PlantLignol’s Integrated Biorefinery Pilot Plant

• Capacity: 1 tonne per day (dry basis)

– Fully integrated mini-biorefinery

– Fully instrumented

– Industrial equipment

– Rated at 100,000 l/yr CE ethanol

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– Rated at 100,000 l/yr CE ethanol

• Feedstocks: Hardwood & softwood, agricultural residues, energy crops

• Products: Ethanol, HP-LTM lignin, furfural, other chemicals

• Operation: past few weeks 24/7 in campaigns (before 24/5)

Conclusions

• Versatile biorefinery technology with multiple products such as

Cellulosic Ethanol, Pulp, Chemicals and HP-LTM Lignins

Process economics enhanced by multiple revenue streams – process

can be economic at smaller scale

• Multi-objective optimization is needed in a biorefinery to maximize

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• Multi-objective optimization is needed in a biorefinery to maximize

revenue – this is possible in Lignol’s process.

• Bio-based chemicals can displace and enhance petrochemical-

based products and materials

Significant GHG emissions reductions; isolate from price volatility of oil

• Lignol’s biorefinery technology is “demo ready”

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Conclusions

• Environmentally-benign

�no harsh chemicals used

�very little process water use

• Flexible and relatively simple production of multiple co-products

from biomass using mostly standard chemical processing equipment

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from biomass using mostly standard chemical processing equipment

• May be used to revive closed manufacturing sites, such as pulp

mills, and use their infrastructure, services, biomass resource and

skilled labor pool

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Thank you!Thank you!

For general information visit For general information visit

www.lignol.ca

E. Kendall Pye, CSO, E. Kendall Pye, CSO,

kpye@lignol.ca