Biofuels House Select Committee on Energy Independence and Alternative Fuel November 2, 2011

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1 Mark Conlon Vice President Sector Development Biofuels House Select Committee on Energy Independence and Alternative Fuel November 2, 2011 Corn ethanol is currently the only bank financeable, proven turnkey technology for biofuels in the US Corn is not a viable option for biofuels in NC Limited acreage suitable for corn in NC Must import corn to supply our swine and poultry industries By policy, NC is pursuing 2 nd generation cellulosic biofuels

2 Biofuels Value Chain Creating Economic Viability 2nd Generation Biofuels Biofuels development requires economic sustainability across each link of the value chain Energy crops must provide greater value to the farm than existing crop practices Feedstock Transportation Processing and Conversion Distribution End User

3 Biofuels Value Chain Creating Economic Viability 2nd Generation Biofuels Biofuels development requires economic sustainability across each link of the value chain Production facilities are capital intensive and must generate ample ROI to justify equity investment Feedstock Transportation Processing and Conversion Distribution End User

4 Biofuels Value Chain Creating Economic Viability 2nd Generation Biofuels Biofuels development requires economic sustainability across each link of the value chain Additions and changes to distribution infrastructure must provide ample ROI to justify investment i.e. flex fuel pumps, surface pipelines, truck/rail fleets Feedstock Transportation Processing and Conversion Distribution End User

5 Biofuels, Total Production Costs Biomass is Key to Economic Viability All Other 20% Delivered Feedstock Costs Biomass Biofuels projects develop where feedstocks are abundant and most cost effective

6 North Carolina Swine Lagoon Map Sprayfields conversion to Energy Grasses 3343 swine waste lagoons 200,886 sprayfield acres

7 NC Swine Industry Higher Value from Sprayfields with Energy Grasses

8 2nd Generation Biofuels Economics Enhanced by Higher Yielding Crops BIOFUELSCENTER.ORG Site: North Carolina s Biofuels Campus, Oxford

9 The Connection of Swine Industry Sprayfields to Cellulosic Biofuels Production in North Carolina

10 Chemtex International PROESA Renewable Platform Biofuels and Bioproducts breakthrough technology displaces petroleum with energy grasses commercial ready First plant under construction 14 MGY cellulosic ethanol Crescentino Italy - 100% equity, zero debt Second plant under development - 20 MGY cellulosic ethanol Near Clinton in Sampson County NC Feedstock advantaged - energy grasses on swine sprayfields Equity secured, including 25% equity stake from Toyota Closing project finance requires USDA 9003 loan guarantee

11 Chemtex International Chemtex production facility and project schedule Site selection, Sampson County Completed July 2011 USDA decision on Loan Guarantee Mid November 2011 Environmental Impact Assessment November 2011 Multi-year feedstock contracts (100%) December 2011 Financial Closing March 2012 Complete land acquisition March 2012 Initiate equipment purchases March 2012 Construction starts July 2012 Construction completed December 2013 Plant Start-up January 2014

12 Chemtex International an overview A multi-national engineering design and construction company delivering turn-key projects USD $300 million plus in annual turnover U.S. administrative and engineering HQ Wilmington NC Part of a privately held Italian polyethylene terephthalate (PET) manufacturing concern Groupo Mossi & Ghisolfi (M&G Group) Worlds largest PET producer, resin used in high grade packaging Annual turnover is excess of USD $4 Billion

13 Chemtex International, M&G Group Crescentino, Italy Arundo donax feedstock Cellulosic Ethanol Plant Construction

14 Next Opportunity for NC agriculture Energy Grasses ,000 plus acres of swine industry sprayfields Can support ~350 MGY cellulosic biofuels production Clear economic advantage for NC farmer Developing: DuPont as DDCE, Amyris, Gevo ,000 hay acres in the Piedmont & Coastal Plain Can support ~1.04 BGY cellulosic biofuels equivalents including the swine industry sprayfields ,000 plus acres of row crops under heat and drought stress in the Coastal Plain Next 2 nd Generation Biofuels Economics Enhanced by Higher Yielding Crops Can support an additional ~680 MGY cellulosic biofuels equivalents

15 Existing Infrastructure Feedstock & Biofuels Opportunity The Connection of Biomass, Military Markets & Logistics Infrastructure Colonial and Patriot Pipelines BIOFUELSCENTER.ORG