# Presentation: 796966

## June 12th 2006

**June 12****th**** 2006**
**Renewable Fuels Summit**
**Maurice Hladik, Director of Marketing, **
**Iogen Corporation**

##   Who is Iogen?

- Headquartered in Ottawa, Canada, Iogen Corporation is a leading industrial biotechnology company specializing in  cellulose-based enzyme technology
- Iogen operates the world’s largest pre-commercial cellulose ethanol facility
- Production of cellulose ethanol commenced in April 2004

## The leading firm in cellulose ethanol 

- A pioneer in making ethanol from “biomass”
- Active since the late 1970’s
- $110+ million spent in development
- A world leader in the field
- Two $7 million cellulose ethanol pilot operations
- World’s largest cellulose ethanol ($30 million) demonstration plant
- Leading-edge commercial enzyme manufacturing
- Private and Public Partnerships
- $20+ million from Petro-Canada
- $15 million from the Government of Canada
- January 2006 announcement with Volkswagen for cooperation in Germany
- April 2006, $26 million investment by Goldman Sachs
- Major strategic partnership with Shell

## Shell investment in Iogen

- Iogen identified as world leader in cellulose ethanol
- $60 million investment in Iogen announced since May, 2002
- Intended to speed development  of world’s first commercial plant
- Offers potential commercial plant investor and ethanol off-take customer

## Slide 5

## Demo plant: Cellulose ethanol production

- Cellulose ethanol production currently using wheat straw (also designed for corn stover and other agricultural residues/dedicated crops)
- Continuous operation
- April 21, 2004: First commercial shipment to Petro-Canada’s Montreal refinery
- Customers to include:
- Oil companies
- Government vehicle fleets

## Iogen enzyme and cellulose ethanol facility

## Front end hammermilling of wheat straw 

## One of two 52,000 gallon enzyme fermenters

## Overlooking array of 33,000 gallon storage tanks

## Lignin separation filter presses

## Iogen cellulose ethanol fuels G8 leaders’ vehicles Gleneagles, Scotland, July 2005

## States capable of supporting a cellulose ethanol industry 

**States capable of supporting a cellulose ethanol industry **

## DOE & USDA – Biomass availability

**DOE & USDA – Biomass availability**

## DOE & USDA - Resolving energy security

- From the DOE/USDA April 2005 Billion Ton Study

- “The purpose of this report is to determine whether the land resources of the United States are capable of producing  a sustainable supply of biomass sufficient to displace 30% of the country’s present petroleum consumption (*i.e.* *60 billion gallons per year*) ... 1 billion dry tons of biomass feedstock per year
- The short answer to the question ... is yes.”

## Switchgrass Today

- Field yield = 5 tons of dry matter per acre
- Cellulose ethanol yield = 80 gallons per ton
- Value of switchgrass in the windrow = $15 per ton (based on straw price)
- Yield to farmer = $75 per acre in the windrow

## Switchgrass Future

- Field yield = 10 tons of dry matter per acre
- Cellulose ethanol yield = 100 gallons per ton
- Value of switchgrass in the windrow = $25 per ton
- Extra 20 gallon yield returns $0.50 per gallon to the farmer
- Yield to farmer = $250 per acre in the windrow

## Resolving energy security

- “Keeping America competitive requires affordable energy. Here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world.
- We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips, stalks, or switch grass.
- Our goal is to make this new kind of ethanol practical and competitive within six years. Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025.”
- President Bush, Jan. 31 State of the Union Address

## Benefits to agriculture

-  A billion tons of feedstock would supply one thousand – 80 million gallon plants.
- Anticipated agriculture revenue per plant is $40 million for a total of $40 billion additional farm income.
- By comparison, both corn and soybean have a total annual crop value of $20 billion each.
- Makes agriculture a major energy player.

**Benefits to agriculture**

## Benefits to rural communities

- Each plant creates 180 direct jobs from skilled labour through technicians to scientists and engineers.
- Each plant also creates 1,000 construction jobs over two years, and an estimated 450 permanent spin-off jobs.
- Total increased rural employment is approximately 600,000 permanent jobs, plus one million construction jobs over the next few decades.

**Benefits to rural communities**

## Benefits to the environment -   cellulose ethanol is unique  

**Sources:  *** Oak Ridge National Laboratory.  USDOE.  1997.  Scenarios of U.S. Carbon Reductions – Potential Impacts of Energy Efficient and Low-Carbon Technologies by 2010 and Beyond.         ** Source: Agriculture and Agri-Food Canada.  1999.  Assessment of Net Emissions of Greenhouse Gases from Ethanol-Blended Gasolines in Canada: Lignocellulosic Feedstocks.  Estimate computed assuming a 39% reduction in GHG emissions compared  to petrol.

## This private sector driven initiative could place the US ahead of Kyoto signatories on CO2 reduction.

**Benefits to the environment – ****The global picture**

## The US Energy Bill has aggressive targets for cellulose ethanol

- A 7.5 billion gallon “renewable fuels standard” with a 2.5:1 trading ratio for cellulose ethanol
- A 250 million gallon minimum annual required volume of cellulose ethanol beginning in 2013
- A one billion gallon per year target for cellulose ethanol production in 2015, backed by:
- A $1 billion loan guarantee program.
- 80% non-recourse loan guarantee for first four plants
- Maximum $250 million per plant
**GOAL:  To move the EP Act/05 authorization forward quickly by partnering with the US government.**