MEMORANDUM

TO: EPA Air and Radiation Docket EPA

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- 0 111 FROM: Dallas Burkholder, Office of Transportation and Air Quality, US EPA DATE: April 15 , 201 5 SUBJECT: Cellulosic Biofuel Producer Company Descriptions

The following contains a brief description of each of the companies that EPA believes may produce commercial scale volumes of RIN generating cellulosic biofuel by the end of 2016. These descriptions are based on a review of the publicly available information and information provided t o EPA in conversations with company representatives.

Abengoa

Abengoa, a large international biofuels company, has developed an enzymatic hydrolysis technology to convert corn stover and other agricultural waste feedstocks into ethanol. After successful ly testing and refining their technology at a pilot

- scale facility in York, Nebraska as well as in a demonstration

- scale facility in Salamanca, Spain, Abengoa successfully constructed their first commercial

- scale cellulosic ethanol facility in Hugoton, Kan sas. This facility was partially funded by a $132 million Department of Energy (DOE) loan guarantee . Abengoa held a grand opening for this facility in October 2014 1 , and conducted commissioning and start

- up operations throughout the winter of 2014/2015. Abengoa currently has contracts in place for the majority of feedstocks necessary for the Hugoton facility for the next 10 years and successfully completed their first biomass harvest in the fall of 2011. The Hugoton plant is capable of processing up to 1,0 00 dry tons of corn stover per day, with an expected annual ethanol production capacity of approximately 25 million gallons. Abengoa plans to beg i n producing salable volumes of fuel at the facility in the spring of 201 5

.

Compressed Natural Gas (CNG) and Liqu e fied Natural Gas (LNG) Producers

In July 2014 EPA approved, as part of the “Pathways II ” rule, 2 a new cellulosic biofuel pathway for CNG and LNG from biogas produced at landfills, separated MSW digesters, municipal wastewater treatment facilitie s, agricultural digester s, and biogas from the cellulosic components of biomass processed in other waste digesters . The production potential for this type of cellulosic biofuel is large and is expected to increase at a rapid pace due to the fact that many U.S.

- based entities currently capture or produce biogas. This means that in many cases the construction of new facilities will not be required for facilities to begin generating cellulosic biofuel (D3) RINs. Instead, both new and existing facilities must register with the EPA under the RFS program and provide sufficient documentation to demonstrate that the CNG or LNG for which the RINs are being generated will be used exclusively as transportation fuel in the United States. This can be accomplished by f ueling vehicles with CNG/LNG at the biogas production site or through the use of contractual mechanisms or appropriate affidavits, as pre scribed in the

1 Abengoa. Abengoa Celebrates Grand Opening of Its First Commercial

- S cale N ext Generation Biofuels Plant

. N.p., 17 Oct. 2014. Web. 26 Mar. 2015.

2 79 FR 42128, July 18, 2014

.RFS regulations. Additionally, t o generate RINs for the CNG or LNG derived from biogas

companies must d emonstrate that the biogas feedstock used was derived from a landfill, separated MSW digester, municipal wastewater treatment facility, agricultural digester or the cellulosic components of biomass processed in a waste digester.

.

The use of CNG and LN G as a transportation fuel in 201 6 is expected to be approximately 500 million ethanol

- equivalent gallons. 3 In projecting likely production volumes of RIN generating cellulosic CNG/LNG used in 2015 and 2016

, EPA has reviewed the current rate of RIN
genera tion for cellulosic CNG/LNG , the capacity and historic production rates of all facilities registered to produce renewable fuel from CNG/LNG 4 , and company specific production projections provided to EPA by the industry. 5

Cool Planet Energy Systems

Cool Planet Energy Systems has developed a process to convert a variety of forms of cellulosic biomass into gasoline , diesel, or jet fuel blendstock as well as a bio

- carbon soil amendment co

- product . Their proprietary process uses pressure and heat in a modifi ed pyrolysis system to convert the cellulosic biomass to a hydrocarbon stream by passing the pyrolysis vapors across chemical catalysts. Cool Planet Energy Systems plans to deploy relatively small

- scale production units capable of producing between 5 and 10 million gallons of fuel and 25,000

- 50,000 metric tons of bio

- carbon per year that can be located near readily available sources of cellulosic biomass. Cool Planet Energy Systems ’ first commercial

- scale facility will be built at the Port of Alexandria, Louisiana. The facility will be designed to produce at least 5 million gallons of cellulosic hydrocarbon blendstocks per year from wood residues. Cool Planet Energy Systems anticipates beginning construction on the first module of this facility in 2015 an d producing a small volume of fuel at the facility in the second half of 2016.

DuPont

DuPont has developed an enzymatic process to convert corn stover into cellulosic ethanol. DuPont has invested hundreds of millions of dollars to develop this technology and since 2009 has operated a demonstration

- scale facility in Vonore, Tennessee. In addition to developing technology for converting cellulosic biomass to ethanol, DuPont has been working with corn producers, equipment manufacturers, the U.S. D epartment of Agriculture, and Iowa State University to develop expertise in the collection, transportation, and storage of the biomass

3 EIA Short Term Energy Outlook (STEO) April 2015

. Natural Gas Vehicle Use from the Custom Table B uilder (0.10 billion cubic feet/day in 2016) . This projection includes all CNG/LNG used as transportation fuel from both renewable and non

- renewable sources. EIA does not project the amount of CNG/LNG from biogas used as transportation fuel.

4 For a list of all facilities registered to generate cellulosic biofuel RINs using biogas as a feedstock see “List of Registered Cellulosic Biofuel Producers in March 2015” , memorandum from Dallas Burkholder to EPA Air Docket EPA

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5 Further detail on our projection of cellulosic biogas in 2015 and 2016 can be found in “Assessment of Cellulosic Biofuel Production from Biogas (2015

- 2016)”, memorandum from Dallas Burkholder to EPA Air Docket EPA

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- 0 111.feedstock for their cellulosic ethanol facility

. On November 30, 2012

, DuPont began the

construction of their first comm ercial

- scale cellulosic ethanol facility in Nevada, Iowa. This facility is designed with a production capacity of 30 million gallons of cellulosic ethanol per year. Mechanical completion of the facility is expected to be achieved in the spring of 2015

, followed by a period of commissioning

. Based on conversations with DuPont representatives, EPA expects commercial

- scale production to commence sometime in the third quarter of 2015.

Edeniq

Edeniq has developed a proprietary process that would allow co rn ethanol producers to generate cellulosic ethanol from corn kernel fiber at the corn ethanol producers’ existing production facilities. Their process involves the addition of the CellunatorTM, a proprietary milling technology designed to increase the uni formity of the feedstock particles, along with a combination of enzymes to convert the cellulosic material in the corn kernel into sugars and ultimately cellulosic ethanol. Several commercial plants are currently using the Cellunator technology to increas e their yields of ethanol from starch. Edeniq has been testing their technology, including both the Cellunator and the additional enzymes, at a demonstration

- scale facility in Visalia, California since June 2012 and announced in May 2013 that they had

suc cessfully completed a trial run at this facility with a continuous run time of greater than 1

, 000 hours. Edeniq has also run successful short term trials at commercial corn ethanol production facilities. In the July 2014 “Pathways II” rule EPA clarified that processes, such as the one developed by Edeniq, that convert corn kernel fiber into transportation fuel are approved to generate cellulosic RINs. 6 Edeniq anticipates their technology will be used to produce commercial scale volumes of cellulosic eth anol at existing corn ethanol facilities beginning in the second half of 2015 and at an increasing number of facilities through the end of 2016. 7

Ensyn

Ensyn owns and operates a technology known as Rapid Thermal Processing that involves the non

- catalytic thermal conversion of carbon

- based solid feedstocks to liquid products. Ensyn’s technology has successfully operated commercially for over 25 years. It is currently deployed in five commercial facilities in Wisconsin for the production of speci alty chemicals and heating fuels, and Ensyn recently expanded their production capacity with the opening of a new facility in Ontario, Canada. Ensyn’s primary fuel product, renewable fuel oil ( RFO ) , is sold commercially in the US as a replacement for heat ing oil. Ensyn registered its Ontario facility under the RFS program in 2014 and has generated cellulosic diesel (D7) RINs related to sales of RFO as a replacement for heating oil to clients in the United States

. Ensyn is currently acquiring additional c ustomers for RFO and plans to increase the volume of RFO exported to the United States. For the purposes of projecting a volume of cellulosic biofuel produced by Ensyn in 2015

6 79 FR 42128, July 18, 2014

7 More inf

ormation on Edeniq’s commercialization plans has been placed in the docket at “Email from Edeniq containing projected cellulosic biofuel production for 2015 and 2016 (CBI)”, memorandum from Dallas Burkholder to EPA Air Docket EPA

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- 0 111.and 2016 EPA is only considering the volume of RFO from Ensyn’s Ontario facilit y that is

eligible to generate RINs , not the full expected production volume of Ensyn’s facilities

.

INEOS Bio

INEOS Bio has developed a process for producing cellulosic ethanol by first gasifying cellulosic feedstocks into a synthesis gas (syngas) and then using naturally occurring bacteria to ferment the syngas into ethanol. On February 9, 2011, INEOS Bio broke ground on their first commercial

- scale facility in Vero Beach, Florida. The facility is designed to produce 8 million gallons of cellulosic e thanol per year. INEOS Bio announced that they had completed construction on this facility in June 2012 and began full commissioning of the facility. On July 31, 2013, INEOS Bio announced they had begun producing cellulosic ethanol at commercial scale fr om their Vero Beach facility. In September 2014 it was reported that INEOS Bio was producing very little ethanol at their facility and planned to undertake efforts to increase the quality of the syngas in order to increase the plant productivity. 8 INEOS Bio has completed construction on the required syngas clean

- up modules and expects to begin producing commercial

- scale volumes of ethanol in the second quarter of 2015

.

P OET

- DSM Advanced Biofuels

P OET

- DSM Advanced Biofuels uses an enzymatic hydrolysis process to convert cellulosic biomass into ethanol. P OET, one of the largest ethanol producers in the U.S., has invest ed in the development of cellulosic ethanol technology for more than a decade and began producing small volumes of cellulosic ethanol at pilot scale at their plant in Scotland, South Dakota in late 2008. In January 2012, a joint venture was formed between POET and the international biotech company Royal DSM of the Netherlands, called P OET

- DSM Advanced Biofuels, to commercialize and license their cellulosic ethanol technology. T he joint venture’s first commercial

- scale facility, called Project LIBERTY, is located in Emmetsburg, Iowa. This facility is designed to process 770 dry tons of corn cobs, leaves, husks, and stalk s per day into cell ulosic ethanol. The facility is projected to have an annual production of approximately 20 million gallons per year, later ramping up to 25 million gallons per year. 9 Construction of the facility began in March 2012. On September 3, 2014

, POET

- DSM held a grand opening for Project Liberty to mark the commencement of the start

- up of the facility

. Based on conversations with representatives of P OET

- DSM , EPA expect s produc tion of commercial scale quantities of cellulosic ethanol from Project LIBERTY to begi n in the third quarter of 2015.

Quad County Corn Process o rs

8 INEOS Bio Making Little Cellulosic Ethanol at US Plant. ICIC News. September 5, 2014. Accessed online

< http://www.icis.com/resources/news/2014/09/05/9818462/ineos

- bio

- making

- little

- cellulosic

- ethanol

- at

- us

- plant/ > 9 “Construction remains on schedule for Poet

- D SM’s first commercial cellulosic bio

- ethanol plant.” December 23, 2013. Article available online at http://www.poet.com/pr/construction

- remains

- on

- schedule

- for

- pro ject

- liberty

. Accessed May 1, 2014.Quad Count y Corn Process o rs (QCCP) have developed a bolt

- on technology called

Adding Cellulosic Ethanol or ACE for existing dry grind corn ethanol plants to enable them to produce cellulosic ethanol from corn kernel fiber. QCCP claim s that their technology can increase ethanol yields by 6% through the conversion of the cellulose, hemicellulose, and lignin present in the corn kernel fiber. They also expect that their process will result in si gnificantly increased corn oil yields and increase the protein content of the distillers grains coproduct. The ACE technology uses a post

- processing approach, first fermenting the starch present in the corn kernel, and then using their proprietary technol ogy to process and ferment the remaining cellulosic portions. QCCP broke ground on the bolt

- on ACE process in the summer of 2013. On July 2, 2014

, QCCP announced that they had completed construction and begun producing cellulosic ethanol from their Galva , Iowa facility using the ACE technology. 10 The facility is designed to be capable of producing approximately 2 million gallons of cellulosic ethanol per
year. 11

10 “Quad County begins cellulosic ethanol production” Ethanol Producer Magazine, July 2, 2014. Accessed online on August 5, 2014. Available at <http://www.ethanolproducer.com/articles/11212/quad

- county

- begins

- cellulosi c

ethanol

- production>

11 Ibid

.