Presentation by Tim Welle of the BioBusiness Alliance of Minnesota at the July 20, 2011 meeting of the MN Chemical Regulation and Policy Project Work Group.

1. BioIndustrial Partnership of
Minnesota
Environmental Initiative Chemicals Regulation Working
Group
July 20, 2011

2. Project Sponsors
Enriching Minnesota’s Future through the Biosciences

3. Agenda
• Introduction
• Project Overview
• Biorefinery Development
• Agriculture-based opportunities
• Downstream market Development
Enriching Minnesota’s Future through the Biosciences

4. The BioBusiness Alliance of Minnesota
• Industry led, non-profit organization
• Partners with industry, academia and economic
development groups to stimulate growth in Minnesota
• Supports growth in six targeted industries
Medical Devices Food
Biologics/Biopharma Renewable Energy
Animal Health Renewable Materials
Enriching Minnesota’s Future through the Biosciences

5. Project Partners
• Great Plains Institute • LifeScience Alley
Non-partisan, non- Largest state-based
profit corporation based trade association
in Minneapolis focused on serving the
life sciences industry.
Mission: to accelerate the
transition to a sustainable,
prosperous, low-carbon
economy.
Enriching Minnesota’s Future through the Biosciences

6. Renewable Materials Value Chain Overview
Biorefinery
Farmers/Foresters
Development
Chemicals Industry- End Product Retail, End Uses
Formulators Manufacturing
Enriching Minnesota’s Future through the Biosciences

7. D2025 Recommendations
Renewable Materials
• Support market development efforts for the renewable
materials value chain
» Renewable Materials Summit: Emerging Markets in the
Upper Midwest
• Position Minnesota as a world leader in biorefinery
operations
Liquid Fuels
Markets
Farmers/Foresters Biorefinery
Chemical Industry- End Product
Retail, End Uses
Formulators Manufacturing
Enriching Minnesota’s Future through the Biosciences

8. Project Description

9. The BioIndustrial Partnership of MN
• Hypothesis: The industry is commercializing
technologies, and there are enough companies forming that
any MN biorefinery could find a partner to enter the
industry.
• Expected Implementation Actions:
» Education of business and community leaders.
» Identify assets and market MN to external partners.
» Policy development.
• Regulatory issues.
• Financial assistance.
Enriching Minnesota’s Future through the Biosciences

10. Project Methodology
• Q2 2011: Project Definition
» Assemble Core Team and develop clear understanding
of industry
• Q3 2011: Community Dialogue
» Share global trends and gather information
• Q4 2011: Publication
» Minnesota Roadmap for BioIndustrial Development
• 2012: Education and Implementation
» Act on strategic direction
Enriching Minnesota’s Future through the Biosciences

11. Core Team
• ~21 Members across value chain
» Biochemical companies
» Ethanol General Managers
» Engineering/Design Firms
» Legal and Financial Service Providers
» Government
• Industry Dominated
Enriching Minnesota’s Future through the Biosciences

12. Building an industry…
$ $
Feedstock Technology Off-take
Policy
Enriching Minnesota’s Future through the Biosciences

13. Roadmap Preview

14. Roadmap Outline
• Biorefinery Development
• Trends
• Opportunities Biorefinery
• Strategic Direction
• Downstream Market Development
» Chemicals
» Fuels
Chemicals Industry- End Product
• Trends Retail, End Uses
Formulators Manufacturing
• Opportunities
• Strategic Direction
• Agricultural-based Supply Chain Partnerships
• Trends
• Opportunities Farmers/Foresters Biorefinery
• Strategic Direction
• Forest-based Supply Chain Partnerships
• Trends
• Opportunities Farmers/Foresters Biorefinery
• Strategic Direction
• Policy Analysis and Recommendations

15. Biorefinery
Development
Liquid Fuels
Markets
Farmers/Foresters Biorefinery
Chemical Industry- End Product
Retail, End Uses
Formulators Manufacturing
Enriching Minnesota’s Future through the Biosciences

16. Integrated Biorefinery
• DDGs
Food/Feed • Nutraceuticals
• Food grade oil
• Ethanol
Fuels • Butanol
• Drop-in fuels
Chemicals • Materials
and • Additives
Plastics • Solvents

17. Example: Bio Iso-butanol
• Iso-butanol
Drop-in • Jet Fuel
Fuels • Diesel
• Gasoline
Chemicals
and • C4 Platform
Plastics
Enriching Minnesota’s Future through the Biosciences

18. Volatile and increasing fossil fuel prices
Source: ICIS;
http://www.icis.com/Articles/2011/06/27/9471601/Bio-based-intermediates-will-reduce-price-
volatility.html

19. The signals of momentum?
• 8 IPO’s in the last year2
» Financial markets are supporting the industry
• Green chemistry sector lead MN in VC investments for
Q2 2011
• Global biochemicals industry: $585 billion by 20301
» Up to 17% of global chemicals market
» 5-10% average annual growth
• 5 billion pounds of chemicals by ~20153
• RFS2: 22 billion gallons of advanced biofuels by 2022
1 http://www.icis.com/Articles/2010/06/21/9368973/biochemical-market-forecasts-suggest-strong-growth.html
2 http://biofuelsdigest.com/bdigest/2011/06/03/myriants-125m-ipo-the-complete-digest-analysis/
3 PiperJaffray Analysis

20. New targets for bio-based chemicals
• Innovation is enabling new commodity chemicals
» New to the world chemicals
• Segetis’ Javelin Technology
• Reluceo’s XLK Polymer
» Improved access to existing chemicals
• Succinic Acid
• Glucaric Acid
• “New” chemicals can depend on other innovations in
the final products
» Risk for slower growth
» Without significant improvement in functionality, they
may not have the critical mass to survive

21. Minnesota Biobased Materials Family Tree
Rivertop BioAmber Reluceo XL Terra
2009 - 2011 Renewables Est. 2009 Est. 2009 Est. 2009
Est. 2010 Plymouth Golden Valley Golden Valley
Green Harvest
Draths Segetis Pine River Gevo
Technologies
2005 - 2009 Est. 2005, 20 emp. Est. 2006, 30 emp. Petrochemicals Est. 2009, 50 emp.
Est. 2007, 1 emp.
Okemos, Michigan Golden Valley Est. ~2009. Luverne, MN and CO
Bloomington
Cargill BioH Natureworks Elevance Cargill
1997 - 2004 Est. 2003, 35 emp. est. 1997, ~100 emp. Est. 2004, 45 emp. Industrial Oils
Plymouth Minnetonka Chicago, IL Minnetonka
Cargill Resins
1980s - 1990s
Minnetonka
Currently not located in Minnesota

22. Opportunities and Concerns
• Opportunities
» Intermediate chemicals the key targets
» MN Strengths to build on:
• Cluster of companies has developed in the state
• Use the medical device industry as a proxy
• Strong suite of service providers that understand and support the industry
• Concerns
» MN lacks experienced chemical industry executives
» Scale-up capital and speed
» Cost of regulatory compliance and toxicity testing can
squelch innovation

23. Strategic Needs- BioIndustrial Manufacturing
• Assistance in financing through “valley of death”
» Government grants are difficult
» Lack of focused venture capital
» Other states are moving more aggressively to support the
industry
• Regulatory issues
• University policies to encourage faculty start-ups
• More clean-tech incubators in the state

24. Agriculture
Opportunities
Liquid Fuels
Markets
Farmers/Foresters Biorefinery
Chemical Industry- End Product
Retail, End Uses
Formulators Manufacturing
Enriching Minnesota’s Future through the Biosciences

25. Agricultural-based Supply Chain
• Biorefinery Development
• Trends
• Opportunities
• Strategic Direction
• Downstream Market Development
» Chemicals
» Fuels
• Trends
• Opportunities
• Strategic Direction
• Agricultural-based Supply Chain Partnerships
• Trends
• Opportunities Farmers/Foresters Biorefinery
• Strategic Direction
• Forest-based Supply Chain Partnerships
• Trends
• Opportunities
• Strategic Direction
Enriching Minnesota’s Future through the Biosciences
• Policy Analysis and Recommendations

26. Agriculture Biorefineries

27. End Market
Development
Liquid Fuels
Markets
Farmers/Foresters Biorefinery
Chemical Industry- End Product
Retail, End Uses
Formulators Manufacturing
Enriching Minnesota’s Future through the Biosciences

28. Downstream Market Development
• Biorefinery Development
• Trends
• Opportunities
• Strategic Direction
• Downstream Market Development
» Chemicals Liquid Fuels
» Fuels Markets
• Trends
• Opportunities Chemicals Industry- End Product
Strategic Direction Retail, End Uses
• Formulators Manufacturing
• Agricultural-based Supply Chain Partnerships
• Trends
• Opportunities
• Strategic Direction
• Forest-based Supply Chain Partnerships
• Trends
• Opportunities
• Strategic Direction
Enriching Minnesota’s Future through the Biosciences
• Policy Analysis and Recommendations

29. Proposal for coordination
• Targeted discussions on regulatory impacts
• Perspectives and ideas to grow the industry
• Participate in implementation efforts
Enriching Minnesota’s Future through the Biosciences

30. Thank You!
Tim Welle
twelle@biobusinessalliance.org
952-746-3845

31. Biofuels becoming biochemicals companies.
• Replace the
entire barrel
of oil
Source: Peter Keeling. Center For Biorenewable Chemicals