Commercializing Miscanthus as a

Feedstock

www.REPREVERenewables.comwww.FreedomGiantMiscanthus.com

Freedom Field DayJan 13, 2011

Demand for Biomass

The Future Requires Biomass

• Government mandates– 36 billion gal by 2022, with 15 billion cap on

corn ethanol– Electricity from renewables mandated

• Billion Ton Supply: grown in various areas using best-suited crops

• Put this problem to the farmers & landowners, we’ll solve it

Electricity from Biomass Demand is MANDATED

State renewable portfolio standard

State renewable portfolio goal

Electricity Generation Mandates• 29 States + DC have RPS• Proposed Waxman Bill (June 09)

• Federal mandate• 20% RPS by 2020• Would require 370 million tons

per year of biomass• Federal Mandates for entire US are

thought to be coming in some form

Liquid Biofuels Demand is MANDATED

• Energy Independence Act of 2007

• RFS2 (Renewable Fuel Standard 2)

- 36 billion gallons biofuel by 2022

- 15 billion corn-based ethanol cap- 21 billion advanced biofuels

- Will require 1 Billion Tons of Biomass

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100

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200

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Current Early '20s Early '30s

15% cagr

Million tons per annum (mtpa)

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7% cagr

Million acres @ 25 tons/acre

BioPower-US BioFuels Cellulosic Ethanol

BioPower-EU Million Acres Total Tons

U.S. demand expected to grow from 33 mtpa to 157 mtpa by early 20’s

Forecasted US Biomass Demand

CAGR = compounded annual growth rate MTPA = million tons per year

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Current Renewable Sources are Limited

Electricity Generation• Wind and solar were 1st generation, but limited and/or expensive alternatives for future

Biomass (wood, grasses, sugarcane, waste and residue)

• Natural resource, with potential for abundant supply and cost advantages

• Low impact and environmentally friendly alternatives

Biomass expected to capture lion-share of market growth

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Land Cost Drives Biomass Economics

Land cost and suitability drastically impact price per ton

($/mm btu = dollars per million btu’s)

Confidential Information

Billion Ton Supply

“Significant parts of the needed supply chain have received little attention, including varieties of dedicated biomass crops suited to different growing environments across the country.”

-- Growing America’s Fuel: An Innovation Approach to Achieving the President’s Biofuels Target

Giant Miscanthus 101

Miscanthus x giganteusPerennial Energy Grass,Yielding 20+ Tons/Acre

Giant Miscanthus

• The best crop in the SE for growth of cellulosic material

• Many benefits:– Environmental– High Yield & Profit Potential– Government Benefits & Cost Sharing (BCAP)– Low Inputs & Production Costs– Care-free Growth

• Giant miscanthus identified as a C4 perennial crop Giant miscanthus identified as a C4 perennial crop with huge biomass potential: with huge biomass potential: up to 25 tons/acre/yr, up to 25 tons/acre/yr, dependent upon:dependent upon:

– VarietyVariety– Culture practicesCulture practices– Geographical locationGeographical location– Soil ClassSoil Class

• Height up to 15 ftHeight up to 15 ft• Dormant harvest: nutrients & moisture senesce back Dormant harvest: nutrients & moisture senesce back

to rootsto roots– 10-15% Moisture Content at harvest10-15% Moisture Content at harvest– Sequesters CarbonSequesters Carbon– Returns minerals back to rootsReturns minerals back to roots

Giant Miscanthus:

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Miscanthus is not switchgrass.

•Developed by Dr. Brian Baldwin at MSU, through 12 years of biomass crop study and selection for superior traits.

•The only variety MEANT FOR the Southeast.

•Freedom is the only University-released, named, certified strain of giant miscanthus.

“We see a lot of potential in Freedom giant miscanthus --it’s the most promising of the hundreds of miscanthus cultivars we’ve evaluated over the years, and it’s light years ahead of any of the other grasses.”

--Dr. Brian Baldwin, MSU

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The Brief Story:

• Began with small amount of rhizomes• Decided on certified “Foundation Stock”

because of importance of purity• Began propagating commercially• Now licensing growers throughout SE• Began talks with end-users on contracted

biomass• Now, in 2010:

– 500 acres of Foundation -- and over 5,000,000 rhizomes planted to date

Yield Model: Year 1-5

2-3Tons/Acre

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8Tons/Acre

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13-15Tons/Acre

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18-22Tons/Acre

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22-25 Tons/Acre

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• Establishment• Fertilizer• Herbicides

• Little Fertilizer• Little Herbicides

• Full Yield• 20+ Year Life

Stem Crown Size at Ground

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At Planting Time, Marginal Soil

Example

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1st Year Plot, August & October

Same plot, 2nd year

June, 2010

July, 2010

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6th Year Plot.Growing at MSU.No fertilizer.

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• Little to no fertilizer needsLittle to no fertilizer needs• Highly drought tolerantHighly drought tolerant• No known pestsNo known pests• Dense growth crowds out weedsDense growth crowds out weeds• Nutrients returned to soil each yearNutrients returned to soil each year• Can grow on Marginal SoilsCan grow on Marginal Soils• COCO22 neutral, or negative energy source: neutral, or negative energy source:

Carbon creditsCarbon credits• ~ 12% Moisture Content at Harvest• Up to 25 tons per acre yield

Attributes & Benefits Driving Growth

• New growth from rhizomes

• Plant is sterile– Triploid = seed sterile

• Multiplication is by plant division

• 5,000 rhizomes per acre

Giant Miscanthus Growth

Rhizomes

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Freedom Material CharacteristicsMoisture Content

At Harvest ~ 12%

BTU Values:

As Harvested ~ 7,250/lb

Dry Basis ~ 8,200/lb

Wood as harvested: ~ 4,600/lb

Ash Content:

~ 3%

Yield Comparisons

Biomass Yields for SE

3-5X the yield of timber & switchgrass

Almost double the yield of other giant miscanthus

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Tons/acre

Pine

Switchgrass

Miscanthus

FreedomGiantMiscanthus

1 Acre of Freedom

28 tons total over first three years20-25 tons/yr each year thereafter288 tons after 16-years of harvest18+ tons/year cumulative yield12-15% Moisture Content

Grower Economics

Grower Economics

Grower Economics

Grower Economics

Scaling-Up: Our Growth Model

The Innovator’s Dilemma:

You can always tell who the pioneers are…

They’re the ones with the arrows in their backs.

Efforts Going Forward:

• 500+ acres of Foundation planted• Demo plots in 10 states

– Monitor, research growth & yields– Learn best approach for each region

• Ongoing Research with MSU

• 2011: We can plant 20-30,000 acres from rhizomes

• 2012+: Exponential growth in acreage

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Greenhouse for Trials/Research

Also utilized greenhouses and fields to accelerate propagation

500 Acres of Foundation Stock

Southeast Demo Plots

Supply Chain Logistics

The Supply Chain Doesn’t Exist

• Must create a supply chain, not just acreage• Harvest, propagation equipment• Storage and transportation• Intermediary forms: pellets, briquettes,

torrefied• We’re participating and innovating at each of

these steps

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Harvesting

• In-field bailing – varies by equipment

• Up to 4’x4’x8’

• 650 to 1,400 lbs per bale

• Modified existing equipment and specialized equipment under development

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Storage Requirements & Options

• Ease of storage allows for year-around supply

• Annual storage in-field with cover

• Covered bales increase longevity

• Minimal risk of internal combustion or rot/loss (low moisture content)

• Bale handled with traditional tractors and forklifts

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Handling and Conveyance

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Transportation Efficiencies

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Densification

• Shreds and Briquettes

• Pellets

Shredding, Hammer-milling and pelletizing

EU Pellet Standards

• Torrefied

Hydrophobic / Inert = outside storage

~20% yield loss; ~30% boost in btu value

Field of Freedom Giant Miscanthus

Thank you for your time.

Contact:Phillip Jennings

pjennings@repreverenewables.com