Biorenewable Insights. Alpha Olefins and LAO

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1 Table of Contents A Report by NexantThinking Published August Section Page 1 Executive Summary OVERVIEW BIO-BASED TECHNOLOGIES ECONOMICS CAPACITY ANALYSIS Types of Developments Considered Existing Capacity Announced Capacity IMPLICATIONS OF CONVENTIONAL TECHNOLOGY Scale and Market Penetration Prices and Margins Strategic Implications PATENT ANALYSIS Introduction OVERVIEW BIO-BASED ROUTES Butene Hexene Octene Decene Full Range LAOs C 16 -C 18 LAOs INDUSTRY DRIVERS AND END-USES

2 2.4 CONVENTIONAL ROUTES Full Range Technology On-Purpose Technology Upgrading of Byproduct Streams Technology OVERVIEW BIO-ETHANOL DEHYDRATION Braskem BIO-BUTANOL DEHYDRATION Overview OLIGOMERIZATION Dimerization Trimerization Tetramerization FISCHER-TROPSCH LAOS Overview Gasification Fischer-Tropsch Synthesis Sasol LAO extraction (FT Derived) ELEVANCE Overview Chemistry Process Description Company Profile GODREJ-LURGI PROCESS Overview Process Description DECARBOXYLATION OF FATTY ACIDS AND LACTONES Overview University of Wisconsin: Decarboxylation of Lactones and Unsaturated- Carboxylic Acids California Institute of Technology: Decarbonylative Dehydration of Fatty Acids CONVENTIONAL TECHNOLOGY Process Description Typical Product Distribution

3 4 Economics ECONOMIC METHODOLOGY Sources Capital Cost Elements Operating Cost Elements COST OF PRODUCTION (COP) ESTIMATES COMPARATIVE ECONOMICS Comparative Economics by Process and Product Comparison by Region Bio-1-Butene Bio-1-Hexene Bio-1-Octene Bio-1-Decene C 16 -C 18 Bio-Based LAOs Bio-Based Full Range LAOs SENSITIVITIES Bio-1-Butene Bio-1-Hexene Bio-1-Octene Bio-1-Decene C 16 -C 18 Bio-Based LAOs Bio-Based Full Range LAOs Capacity Analysis REVIEW Types of Developments Considered METHODOLOGY EXISTING CAPACITY ANNOUNCED PROJECTS PROJECT ANALYSIS Elevance Natchez Biorefinery Elevance and GIB Malaysia Biorefinery Elevance & Versalis Biorefinery SUMMARY OF ANNOUNCED PROJECTS AND ADJUSTED CAPACITIES Announced Projects Risk Adjusted Projects

4 5.7 CONCLUSIONS Implications for the Conventional Industry SCALE and MARKET PENETRATION Scales Market Penetration PRICES and MARGINS Prices Margins STRATEGIC IMPLICATIONS Commercial Implications Technical Implications Patent Analysis TYPES OF PATENTS CONSIDERED OVERALL PATENT ACTIVITY BY REGION GRANTED PATENTS Global North America Asia Pacific PATENT APPLICATIONS Global North America Asia Pacific Europe ROW References Appendix Page A Cost of Production Models for Other Regions... A-1 4

5 Figure Page 1.1 Structure of Linear Alpha Olefins 1-Butene through 1-Decene Main Technologies Modeled in this Report Overall Comparative Economics by Process and Product Announced s Capacity Risk Adjusted s Capacity Estimated Bio-based Linear Alpha Olefins Penetration Overall Patent Activity by Region Structure of Linear Alpha Olefins 1-Butene through 1-Decene Process Economics Modeled in this Report Unsaturated Fatty Acids and Lactones to LAOs Linear Alpha Olefin End-use by Carbon Number Schematic of the Alpha Olefins Business Process Economics Modeled in this Report Bio-ethanol to Green Ethylene: Conceptual Process Flow Braskem Ethanol Dehydration Process Ethylene from Ethanol Butenes via Ethylene Dimerization (U.S. Patent 4,242,531) Chevron Phillips Trimerization Catalysis Chevron Phillips Hexene-1 Process, Trimerization, and Separation Sections Sasol s Proposed Mechanisms for Ethylene Tetramerization Sasol Ethylene Tetramerization Process for Octene Fischer Tropsch LAOs Process Steps General Biomass Gasification Reaction Anderson-Schulz-Flory Distribution Block Flow Diagram Schematic of Octene Train I Block Flow Diagram Schematic of Octene Train II Elevance Metathesis Process Godrej-Lurgi Process Block Flow Diagram Production of Fatty Acids and Glycerine from Hydrolysis Direct Hydrogenation of Fatty Acids to Fatty Alcohol Reaction Chemistry Direct Hydrogenation of Fatty Acids to Fatty Alcohol Block Flow Diagram Dehydration of Fatty Alcohols to LAOs Reaction Chemistry Godrej-Lurgi Process Unsaturated Fatty Acids and Lactones to LAOs

6 3.23 Decarboxylation Reaction Process Chemistry of Lactones to LAOs California Institute of Technology Reaction Chemistry Chevron Phillips Full-Range LAO Distributions Process Economics Modeled in this Report Overall Comparative Economics by Process and Product Cost of Production for Bio-1-Butene Cost of Production for Bio-1-Hexene Cost of Production for Bio-1-Octene Cost of Production for Bio-1-Decene Cost of Production for C 16 -C 18 Bio-Based LAOs Cost of Production for Full Range LAOs Overall Comparative Economics by Region and Product USGC Cost of Production Comparison Brazil Cost of Production Comparison China Cost of Production Comparison Western Europe Cost of Production Comparison Bio-1-Butene Primary Feedstock Sensitivity Bio-1-Butene Byproduct Sensitivity Bio-1-Butene Utility Sensitivity Bio-1-Butene CAPEX Sensitivity Bio-1-Butene Operating Rate Sensitivity Bio-1-Butene Economy of Scale Sensitivity Bio-1-Hexene Primary Feedstock Sensitivity Bio-1-Hexene Byproduct Sensitivity Bio-1-Hexene Utility Sensitivity Bio-1-Hexene CAPEX Sensitivity Bio-1-Hexene Operating Rate Sensitivity Bio-1-Hexene Economy of Scale Sensitivity Bio-1-Octene Primary Feedstock Sensitivity Bio-1-Octene Byproduct Sensitivity Bio-1-Octene Utility Sensitivity Bio-1-Octene CAPEX Sensitivity Bio-1-Octene Operating Rate Sensitivity Bio-1-Octene Economy of Scale Sensitivity

7 4.32 Bio-1-Decene Primary Feedstock Sensitivity Bio-1-Decene Byproduct Sensitivity Bio-1-Decene Utility Sensitivity Bio-1-Decene CAPEX Sensitivity Bio-1-Decene Operating Rate Sensitivity Bio-1-Decene Economy of Scale Sensitivity C 16 -C 18 Bio-Based LAOs Primary Feedstock Sensitivity C 16 -C 18 Bio-Based LAOs Byproduct Sensitivity C 16 -C 18 Bio-Based LAOs Utility Sensitivity C 16 -C 18 Bio-Based LAOs CAPEX Sensitivity C 16 -C 18 Bio-Based LAOs Operating Rate Sensitivity C 16 -C 18 Bio-Based LAOs Economy of Scale Sensitivity Bio-Based Full Range LAOs Primary Feedstock Sensitivity Bio-Based Full Range LAOs Byproduct Sensitivity Bio-Based Full Range LAOs Utility Sensitivity Bio-Based Full Range LAOs CAPEX Sensitivity Bio-Based Full Range LAOs Operating Rate Sensitivity Bio-Based Full Range LAOs Economy of Scale Sensitivity Elevance Product Distribution Announced s Capacity Risk Adjusted s Capacity Estimated Bio-based Linear Alpha Olefins Penetration Estimated Penetration of Bio-based LAOs in Detergent and Personal Care Products Estimated Penetration of Bio-based LAOs in Lubricants Historical Prices of 1-Butene, 1-Decene and Ethylene in the United States ( ) Overall Patent Activity by Region Granted Patents by Region Granted Patents by Assignee Breakdown of North American Granted Patents by Assignee Asia Pacific Granted Patents by Assignee Global Patent Applications by Region Global Patent Applications by Assignee North American Patent Applications by Assignee Asia Pacific Patent Applications by Assignee European Patent Applications by Assignee

8 Table Page 1.1 Margins and Returns for Bio-based LAO Processes Results from Sasol s Ethylene Tetramerization Patent Fischer-Tropsch Catalyst Comparison Godrej-Lurgi Process Hydrocarbon Product Distribution Carbon Chain Distribution of LAO Product Butene Selectivity Based on Reaction Catalyst Catalyst, Ligand and Additive Effects on Yield and Selectivity Fatty Acid Chain Length Effect on Yield and Selectivity Palladium Catalyst Process Comparison USGC Cost of Production for Bio-butanol Dehydration to 1-Butene USGC Cost of Production for Bio-ethanol Dehydration and Dimerization to 1-Butene USGC Cost of Production for Dimerization for Bio-ethylene and Bio-1-Butene to 1-Hexene USGC Cost of Production for Bio-butanol Dehydration and Dimerization to 1-Octene USGC Cost of Production for Dimerization of Bio-1-Butene to 1-Octene USGC Cost of Production for Biomass Gasification to 1-Octene USGC Cost of Production for Elevance Soy Fatty Acid Metathesis to 1-Decene USGC Cost of Production for Elevance Palm Fatty Acid Metathesis to 1-Decene USGC Cost of Production for Gorej-Lurgi Process to C 16 -C 18 Alpha Olefins USGC Cost of Production for Bio-ethanol to LAOs Project Scoring Methodology Elevance Natchez Biorefinery Project Scoring Elevance & GIB Malaysia Biorefinery Project Scoring Elevance & Versalis Italy Biorefinery Project Scoring Announced s Capacity Risk Adjusted s Capacity Estimated Bio-based Linear Alpha Olefins Penetration (thousand tons per year) Estimated Penetration of Bio-based LAOs in Detergent and Personal Care Products Estimated Penetration of Bio-based LAOs in Lubricants Margin Analysis of Bio-1-Butene Margin Analysis of Bio-1-Hexene Margin Analysis of Bio-1-Octene from Renewable Feedstocks Margin Analysis of Bio-1-Decene from Elevance s Process Margin Analysis of Bio C 16 -C 18 LAOS from Godrej-Luigi Process

9 6.9 Margin Analysis of Full Range LAOs Key Global Granted Patents Key North American Granted Patents Canadian Granted Patents United States Granted Patents Asia Pacific Granted Patents Key Global Patent Applications Key North American Patent Applications United States Patent Applications Key Asia Pacific Patent Applications Chinese Patent Applications Japanese Patent Applications South Korea Patent Applications Other Asia Pacific Patent Applications Key European Patent Applications European Patent Office Patent Applications Other European Patent Applications All ROW Patent Applications

10 NexantThinking Nexant, Inc. ( is a leading management consultancy to the global energy, chemical, and related industries. For over 38 years, Nexant has helped clients increase business value through assistance in all aspects of business strategy, including business intelligence, project feasibility and implementation, operational improvement, portfolio planning, and growth through M&A activities. Nexant has its main offices in San Francisco (California), White Plains (New York), and London (UK), and satellite offices worldwide. Contact Details: New York: Steven Slome Phone: , sslome@nexant.com New York: Heidi Junker Coleman, Global Programs Support Manager Phone: , hcoleman@nexant.com Nexant, Inc. ( is a leading management consultancy to the global energy, chemical, and related industries. For over 38 years, Nexant has helped clients increase business value through assistance in all aspects of business strategy, including business intelligence, project feasibility and implementation, operational improvement, portfolio planning, and growth through M&A activities. Nexant has its main offices in San Francisco (California), White Plains (New York), and London (UK), and satellite offices worldwide. Copyright by Nexant Inc All Rights Reserved. 10