One Year Later: Regional Strategy for Biobased Products in the Mississippi Delta. 2 nd Annual Mississippi Renewable Energy Conference

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1 One Year Later: Regional Strategy for Biobased Products in the Mississippi Delta 2 nd Annual Mississippi Renewable Energy Conference November 18, 2010

2 AgBioworks Regional Initiative 501c3, non profit regional initiative based at Memphis Bioworks Foundation, with partnering offices in Murray, KY and Sikeston, MO. MBF: Workforce, Infrastructure, Entrepreneurialism Focused on creating new opportunities for farmers and local businesses by introducing alternative crops to the region. Coordinated regional strategy for biobased products (with Battelle) included 50 organizations, and 98 counties in 5 states.

3 Funding & Implementation Partners from 5 States Regional Strategy for Biobased Products in the Mississippi Delta

4 Special Thanks CNH America, LLC Kengro Corporation Monsanto Company Delta Council Development Department Delta Economic Development Center Mississippi Biomass & Renewable Energy Council Mississippi Delta Developers Association

5 Biomass: The Renewable Resource for Tennessee

6 Mid South Region Agriculture Crop Qty Acre Price Value Soybean 196 M Bu. 6 M Acres $8.5 Bu. $1.7 Billion Rice 119 M Cwt. 1.7 M Acres $10 Cwt. $1.2 Billion Corn 393 M Bu. 2.6 M Acres $3.5 Bu. $1.4 Billion Cotton 1 M tons 2.3 M Acres $.60 Lb. $1.2 Billion TOTAL 12.6 M Acres $5.5 Billion

7 U.S. Agriculture Value Chain 1,000,000s consumers Buying decisions 1000s of consumer goods processors 10s primary processors The ABCD Pinch Point Point of Influence 5 grain merchants 100s local elevators Production Requirements 100,000s growers Source: Entira / BioDimensions

8 Changing Trends in the Region Agriculture Declining Cotton Acreage in AR, MO, MS & TN ( ) Chemical Manufacturing Declining Manufacturing Employment in the Memphis MSA Projected 1. Decline in the cotton industry is not just acreage, but an entire integrated supply chain. 2. Replacing cotton with corn and soybeans does not create value added jobs. 3. Global trade, labor, and volatile energy markets have driven chemical industry overseas, leaving underutilized assets in U.S., including TN % of export dollars are for chemicals. 5. The core regional assets of diverse acreage, farmers, logistics and industrial manufacturing, remain intact.

9 Biopower / Bioenergy Potential for sixty 50,000 ton per year pellet/briquet plants to co fire biomass with coal Could replace 15% of coal in regional utility plants

10 1 st Gen and Advanced Biofuels Enough sugar and cellulosic biomass crops can be grown sustainably to produce 4.7 billion gallons of ethanol without affecting the output of food and fiber in the region.

11 Biobased Products / Green Chemicals $1 trillion global sales for chemicals, 2/3 can be replaced by plant based materials, representing 50,000 different products. - Cargill/McKinsey.

12 The Farmer s Role in Ethanol U.S. Ethanol Production (mgy) Total Capacity Farmer Owned Source: Renewable Fuels Association

13 Strategy for Mississippi Supply Chain Development Oleochemicals: Oilseed Platform NEW CROPS Food & Health Sugar Crops: Sweet Sorghum & Energy Beets 1 st Gen Biofuels Biobased Products Chemicals Advanced Biofuels Natural Chemicals Biochemical: Cellulose to Sugar

14 Adaptive Reuse Company Current Products Opportunity Buckman Laboratories Int. Buckeye Technologies Specialty chemicals for water treatment, leather and pulp processing Biobased products from cotton linters Collaborations on new applications and new biobased products Partner to introduce new technology Cargill Corn wet milling Waste products Drexel Chemical Agricultural chemicals Potential for ag-based raw materials Hardy Bottling Custom bottling & fermentation Excess manufacturing capacity for biobased products Helena Chemical Agricultural chemicals Soy-based adjuvants Kellogg Food products from grain Waste products Memphis Biofuels PMC Biogenix Southern Cotton Oil Mill (ADM) Biodiesel and green chemistry capabilities Green chemistry from plant oils Crushing cottonseed Seeking purchaser or strategic partner Seeking local supply chain for specialty oilseeds Storage and crush capacity

15 Oilseed Development in Mid South Calgene scale up (1980s/90s). Various canola and sunflower trials underway in the region since High value potential, benefits as rotation crop (for yield and field). Multiple processing ventures and plans underway in the region. Increased interest from growers, seed companies, and end users.

16 Sweet Sorghum and Energy Beets High yields, easy ethanol Crop trial sites across region (w/ 3 seed companies) Harvesting trials with CNH Corp. Pilot plant in former cotton gin. 2 nd year processing trials Fermentation program underway Small scale lab for testing

17 Biomass / Dedicated Energy Crops

18 Biomass Crops for the Future Plant Made Proteins High Amylopectin Potato Specialty Oilseeds Energy Beets Biofibers Barley & Specialty Grains

19 Long term Regional Opportunity Rural Commercial Sweet Sorghum Ethanol Potential: >100 Biorefineries Each Facility: Produces 10MM gpy ethanol Uses juice sugars and bagasse Requires ~10,000 acres Uses 12% of acres in a 6 mile radius Displaces 10% of corn+soybeans+cotton Creates min. 25 direct & 25 indirect jobs Source: Regional Strategy for Biobased Products in the Mississippi Delta, Battelle Technology Partnership Practice, August 2009.

20 MBF/BD Concept for Hub & Spoke Sweet Sorghum Biorefineries Rural Bioprocessing Centers: 0.5M gpy; sugar; 1300 acres Harvest, crush Concentrate juice to syrup or Ferment/distill hydrous alcohol Bagasse for feed or fuel pellets Use idle cotton gin sites GOAL: Demonstrate and share replicable agricultural and processing systems that develop sweet sorghum as a new domestic bioprocessing feedstock Hub Biorefinery (Industrial Incubator): 5 10M gpy or larger ethanol Sugar & cellulose Fermentation & dehydration Fermentation chemicals QC and market Distribution to Petroleum Refinery/Blenders and other customers

21 It Starts with the Farmer

22 25Farmer Network: Model Program Funded by TNDA grants and private companies. 22 leading farmers in West Tennessee. 58,500 acres and agricultural assets. Interested in new business development opportunities. Expanding network in Kentucky and Missouri.

23 25Farmer Network: Key Accomplishments 1 farmer owned processing business started and more in the pipeline. Leveraged State Grant to over $1 million invested from private companies through 2010 including CNH Corporation, KBH, and seed companies. Crop trials of new bioenergy crops underway throughout region.

24 25Farmer Network: New Crops in the Region Crops 2009 (TNDA Grant) 2010 (leveraged private investment) 2011 (projected) 2015 Target Sunflower Sweet sorghum Energy beets Strip trials: switchgrass & canola Total Acres , ,000 Incremental acreage increase for key target crops. Additional crops in the pipeline : high erucic acid rapeseed, winter barley, biomass sorghum

25 AgBioworks Accomplishments Coordinated Regional Strategy for Biobased Products in the Mississippi Delta with Battelle. 23 steering team members and 50 organizations. $880K project with funding from AR, KY, MO, MS and TN Implementation of TNDA grant to develop model farmer network and support structures for agbio businesses. Including crop trials and training Completed regional strategy and conducted 21 launch meetings across all 5 states. 900 individuals attended these meetings, w/ over 300 downloading study online.

26 AgBioworks Accomplishments 2010 Launched AgBioworks state partnerships in Kentucky and Missouri. Invested in first successful rural pilot processing facility for sweet sorghum with farmer partners. Battelle study demonstrates opportunity to replicate 90+ facilities across the MS Delta producing $1 billion gallons of biofuels and 2,500 direct jobs. Leveraged public investment into 3X acreage for alternative crops in the region including energy beets, switchgrass, biomass sorghum, canola, and sunflowers for food, feed, biomaterials, and bioenergy, including $1 million investment by seed and equipment companies. Coordinated crop trials and field days across the region.

27 AgBioworks Accomplishments Continuing to receive funding support from MemphisED, with new funding through United Sorghum Checkoff Program. Received $120K funding led by Kentucky Ag Development Board to replicate farmer network and business development activities in West Kentucky. Submitted $45 million grant with University of Missouri to develop sustainable bioenergy system along Mississippi River corridor. Leading discussions with multiple technology providers about developing businesses in the region including EcoSynthetix, PolyOne, Chevron, and Vertichem.

28 Final Thoughts Plants (crops and trees) and the people who grow them are the most significant bioenergy asset for our region. Bioenergy markets must benefit the farmer, open up rural processing opportunities, and lead to diverse new markets. An active farmer network leads to great results before it is time to form a business or contract for large amounts of crops. Partners, partners, partners.