Annual Report 2011Algal Biomass Organization

About the ABO

Founded in 2008, the Algal Biomass Organization (ABO) is a non-profit trade organization whose mission is to promote the development of viable commercial markets for renewable and sustainable products derived from algae. Our membership is comprised of people, com-panies, and organizations across the value chain. On behalf of nearly 200 members, we work to:

• Facilitate commercialization and market development of microalgae biomass specifically for biofuels production and greenhouse gas abatement• Deliver information to the public on initiatives, funding opportunities, and industry development• Provide networking and collaboration opportunities• Establish cutting edge research and commercialization summits and other meeting op-portunities• Develop a high quality interactive repository of information on algal biomass technol-ogy, science, products, processes, patents, and economics• Facilitate IP aggregation, licensing, and royalty management• Develop quality and measurement best practices for algal biomass, products, systems technology, and econometrics• Afford career advancement and consultant opportunities

More information about the ABO, including membership, costs, benefits, members and their affiliations, is available at our website: www.algalbiomass.org.

The Algal Biomass Organization is a 501(c)6 not-for-profit organization.

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Letter from the Executive Director

The past year has been one of growth for the Algal Biomass Organization, and progress for the algae industry.

From just a few algae producers and scientists in 2008 to almost 200 members today that hail from across the value chain, the organization has quickly established itself as the largest and most influential algae trade organization.

We had a busy year in 2011. At our annual legislative fly-in, we made the rounds in Washing-ton DC on Capitol Hill, ensuring that our industry’s key messages and latest news were in front of policymakers. After our meetings, we presented the first Algae Industry Leadership Awards to honor those that have helped advance the technology and open markets for algae-derived products. We hosted the largest algae industry conference with the 5th Annual Algae Biomass Summit in Minneapolis, Minnesota. More than 800 people from 29 countries attended.

We engaged, for the first time, professional representation in Washington, DC with the hiring of K&L Gates. This respected firm with deep experience in renewable energy policy will help lead our efforts in educating elected officials and agency staff about the economic, environ-mental and security benefits of algae-based commodites.

Throughout the year, we were heavily engaged with promoting the industry’s progress. Several new commercial demonstration projects broke ground, and algal biofuels were successfully tested in a range of vehicles, from trucks to aircraft to Navy vessels and container ships. Algae biofuels for aircraft were certified by the fuel standards body ASTM, and just a few months later the first U.S. commercial flight to use the fuel travelled from Houston to Chicago. These are just hints of the impact algae will have in a few short years to come.

We are on an upward trend, and we expect more progress in 2012. Some of ABO’s big priori-ties moving forward will be on the legislative front. We must all work to ensure that algae gets a fair shake in the Renewable Fuel Standard, the 2012 Farm Bill, and from several agencies that may have authority over algae research and development, cultivation, harvesting and production.

We will also keep telling the story of algae’s potential to solve problems around energy secu-rity, food production and economic development. A broad base of support can only help our efforts to commercialize algae production.

All of what we have accomplished in a few years, and all that we will, would be impossible without the efforts of ABO’s membership. I want to personally thank ABO’s members, partners and allies for their dedicated support—it is accelerating the impact our technologies will have on so many markets.

Very sincerely,Mary RosenthalExecutive DirectorAlgal Biomass Organization

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2011 Milestones and Highlights

April: ABO’s 2011 Legislative Fly in was conducted to spread the word about algae on Capitol Hill. We also presented our first industry leadership awards to United States Representative Brian Bilbray (CA), Representative Jay Inslee (WA), Senator Bill Nelson (FL) and Rear Admiral Philip Cullom, Director, Energy and Environmental Readiness Division of the United States Navy.

June: The US Navy successfully demonstrated a 50-50 blend of traditional and algal jet fuel, produced by Solazyme, in a MH-60S Seahawk helicopter. This event marked the first time in history that a military aircraft had flown on algal jet fuel.

July: ASTM International, the world’s standards body, announced it had approved airlines to fly passenger jets using derivatives of up to 50 percent biofuel made from feedstocks such as algae—meaning that renewable aviation biofuels were cleared for take-off.

October: The largest Algae Biomass Summit yet was held in Minneapolis, Minnesota. More than 800 attendees and 60 exhibitors were on hand to share the latest innovations, network, and make plans.

November: The first commercial flight using algal fuel took off from Houston and landed in Chicago.

December: The U.S. Navy announced it would purchase 450,000 gallons of drop-in biofuels, with 100,000 of those made from algal oils.

December: ABO announced the hiring of DC council K&L Gates for the organization’s profes-sional representation on Capitol Hill.

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Government Relations report

A significant part of ABO’s responsibility includes advocating for federal, state and local poli-cies that accelerate the commercialization and expanded use of algal products. ABO’s legisla-tive priorities include achieving parity with respect to financial and regulatory support for clean energy, especially in the Renewable Fuel Standard. Since algae is agriculture, we also believe that algae should be accounted for in agricultural incentives, particularly those that will be included in the 2012 Farm Bill. In 2011 we were able to see significant progress toward these priorities.

Early in the year we conducted a legislative fly-in to Washington, DC. for two days of outreach and education to policy makers by ABO staff and dozens of its members. Our efforts included more than 50 one-on-one meetings with members of Congress and their staff, and a policy briefing to Congressional staff and industry stakeholders.

During the fly-in we showed our appreciation for the support that algae already has by pre-senting the first annual Algae Industry Leadership Awards to United States Representative Brian Bilbray (CA), Representative Jay Inslee (WA), Senator Bill Nelson (FL) and Rear Admiral Philip Cullom, Director, Energy and Environmental Readiness Division of the United States Navy. The recipients’ support of algae has been critical to accelerating the industry’s growth, facilitating private investment and reducing major barriers to the commercialization of algae-based biofuels.

Later in the year we were happy to support the Renewable Fuel Parity Act of 2011, formally introduced by US Senators Tom Udall (D-NM) and Mike Crapo (R-ID). The bill would give algae-based biofuels tax parity while leveling the playing field for all advanced biofuels by expanding the Clean Air Act’s definition of an advanced biofuel.

Developing markets for algae-based fuels was supported at the agency level as well. In addi-tion to support from the USDA and Department of Energy, the U.S. Navy announced a large purchase of 450,000 gallons of biofuels, including 100,000 gallons of algae-based fuel. As part of the Navy’s effort to build a ‘Great Green Fleet,’ this purchase is an important vote of confi-dence for an industry that can provide drop-in biofuels at a national scale to supply our mili-tary with a more secure source of fuel, create jobs across the country, and provide consumers with an alternative to imported oil.

Finally, late in 2011 ABO took a major step in its evolution as the trade association for the U.S. algae industry by engaging the Washington, D.C. office of the global law firm, K&L Gates LLP. The firm will help ABO in its efforts to educate federal policy makers about the growing potential for algal biofuels and the role they will play in U.S. energy production, national se-curity and economic development, and to advocate for legislation that helps create parity for algae-derived fuels among the various regulatory and tax incentives available to other types of biofuels.

We look forward to educating and advocating for algae’s legislative priorities in 2012.

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Executive Policy Council

Throughout the course of the year, it became increasingly apparent to the ABO board that the current political environment was becoming more challenging. Increasing concerns about deficit spending in general and on clean energy in particular, combined with a presidential campaign that saw energy as a wedge issue made it clear that ABO needed to increase its vis-ibility on the Hill. At the same time, with more companies beginning large scale demonstration projects and moving closer to commercial production, ABO knew policymakers needed more and better information about algae to best accelerate the industry.

For this reason we established a new committee, known as the Executive Policy Council (EPC). The EPC is tasked with framing and executing policy and legislative strategy for the organi-zation. Members of the committee include representatives from member companies that contribute funding for the EPC’s efforts, specifically lobbying and communications activities designed to help advance the ABO agenda, as well as three ABO directors—the Chairperson, Vice-Chairperson and one at-large director appointed by the Board.

The EPC’s goals include working to modify existing incentives, policies and regulations that fail to include algae or that impose barriers to commercialization of the algae industry; accel-erating R&D funding that can lead to commercial algae production; and increasing the overall awareness about algae among policymakers and agency staff.

The EPC represents the next step in ABO’s evolution. ABO began as an all-volunteer effort among dedicated members of the industry, often requiring them to work to meet ABO’s re-quirements while also meeting the responsibilities of their own businesses. But as the indus-try has grown, so too has the need for a single, well-coordinated voice on matters of policy. Moving forward, the EPC will be able to coordinate this voice and guide the execution of ABO’s policy goals with the help of K&L Gates, LLC, the firm retained by ABO following a lengthy RFP process and a vote of the Board.

Creating the EPC was a hallmark event for ABO and we look forward to reporting the group’s successes in 2012. Any member of the ABO is invited and encouraged to participate in the EPC. The EPC’s charter is set forth in Section 4.19(e) of ABO’s Bylaws which may be found on the ABO website.

Current membership of the Executive Policy Council:• Sapphire Energy• BioProcess Algae• Heliae • Algenol Biofuels• Accelergy• Boeing• Duke Energy• General Atomics • Phycal

2011 Algae Biomass Summit

The 5th Annual Algae Biomass Summit was held October 24-27, 2011 in Minneapolis, MN. One word describes the difference between this year’s Summit and last year’s: More.

There were more attendees - 800 compared to about 625. More exhibitors - about 60 com-pared to 30. More abstracts and applications for speaking slots and poster sessions. More buzz in the hallways. More companies looking for new employees. More companies making announcements. More attendees from consumer products companies. And more laughter courtesy of U.S. Senator Al Franken (D-MN) who found a way to inject levity into a very serious topic – the need for sustainable domestic sources of fuel, food and feed from algae.

This year’s event represented a bit of a coming of age for the algae industry. While still deliver-ing on its legacy of showcasing the most innovative developments in algae science and re-search, this year saw more presentations and discussions about commercialization and new ways to use algae and algae derivatives, whether it was as an ingredient in cookies or feed for fish. It also provided a platform for algae companies to offer updates on progress toward commercialization. And it showed us how much closer we are to creating a vibrant, national algae industry.

The exhibit hall was “Exhibit A” for this transition with nearly the entire supply chain of algae industry represented, from bioscience companies to pump manufacturers, testing and measur-ing equipment, and industrial and consumer products - they were all there.

We are already looking forward to the 6th Annual Algae Biomass Summit, which will take place September 24-27, 2012, in Denver, Colorado.

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Financial summary

ABO derives its revenue through memberships, sponsorships, and special events, including the Algae Biomass Summit, which takes place every year in the fall.

Financial information for 2011 represents audited data. Comprehensive expense reporting is provided to the ABO Board of Directors on a quarterly basis. Details of all ABO expenses are available upon request.

Income Statement   

Year Ending December  2011 

Revenue   $   881,370.49  

Expenses   $(910,348.89) 

Net Income   $   (28,978.40) 

   

Cash Flow Summary   

Year Ending December  2011 

Cash Balance Beginning of year   $   117,315.39  

Revenues   $   881,370.49  

Expenses   $(910,348.89) 

Changes in Receivables   $   (18,937.50) 

Changes in Accruals   $   205,468.86  

2011 Pre‐Paid Memberships   $   (78,875.00) 

2010 Pre‐Paid Memberships   $                    ‐    

2012 Pre‐Paid Memberships   $     91,350.00  

   

Cash Balance End of year   $   287,343.35  

   

Balance Sheet   

Year Ending December  2011 

Assets   

Operating Checking Accounts   $   115,906.84  

Savings Account   $     17,190.56  

EPC Checking Account   $   154,245.95  

Total Cash    $   287,343.35  

Accounts Receivable   $     18,937.50  

Total Assets   $   306,280.85  

   

Liabilities and Capital   

Payables and Accruals   $     23,795.88  

Unearned Revenue and Deposits   $   285,505.00  

Total Liabilities   $   309,300.88  

Capital   $     (3,020.03) 

Total Liabilities and Capital   $   306,280.85  

 

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2011 Board of Directors

Mr. Mark Allen, P.E., Chairperson – Accelergy Corporation

Mr. John Pierce, Vice Chairperson – DLA Piper LLP (US)

Mr. Thomas Byrne, Secretary – Byrne & Company, Ltd.

Dr. John Benemann – Benemann Associate

Mr. Harrison Dillon – Solazyme, Inc.

Mr. Billy Glover – Boeing Commercial Airplanes

Dr. Qiang Hu – Laboratory for Algae Research, Arizona State University

Dr. Keith Cooksey – Montana State University

Dr. Ira “Ike” Levine – University of Southern Maine

Dr. Margaret McCormick – Targeted Growth, Inc.

Dr. Greg Mitchell – Scripps Institution of Oceanography

Mr. Joel Murdock – FedEx Express

Dr. Herminia Rodríguez – University of Seville, Spain

Mr. Paul Woods – Algenol Biofuels

Mr. Tim Zenk – Sapphire Energy

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Committees

By-Laws & Government CommitteeThe purpose of the Bylaw Review and Governance Committee is to ensure that the ABO’s bylaws are functioning efficiently and in the best interests of the organization. The Commit-tee consults with the chairperson of each Committee and the ABO Directors from time to time to determine whether amendments to these Bylaws are necessary or desirable.

2011 Chair: Mark Allen

Director Recruitment CommitteeThe Director Recruitment Committee recommends to the Board appropriate candidates for election as Directors. It consults with other Directors and Members to seek recommenda-tions of Members that are fit to serve and submits a report to the Board on an annual basis containing recommendations regarding which Members should be nominated by the Board for election as Directors. 2011 Chair: Margaret McCormick

Events CommitteeThe purpose of the Events Committee is to organize and oversee events hosted by the Algal Biomass Organization, whether such events are open to Members only or the general pub-lic. The goal of the Committee is to create events that increase and retain membership in the ABO by offering educational and trade opportunities to the ABO membership that will advance the purpose and mission of the ABO.

2011 Chair: Philip Pienkos

Government & Public RelationsThe purpose of the Government & Public Relations Committee is to increase public and governmental awareness of the algal biomass industry, its domestic and international ben-efits, barriers to growth, contribute to the development of policies that could accelerate and enhance the realization of such benefits and mitigate or eliminate barriers, and to generally encourage the growth of the algal biomass industry.

The Government & Public Relations Committee is currently made up of the following mem-bers from the Board of Directors:Tom ByrneGreg MitchellTim Zenk

Membership DevelopmentThe purpose of the Membership Development Committee is to develop membership inter-est across a broad spectrum of companies, institutions, and individuals that are engaged in creating this new algal biomass industry.

2011 Chair: Herminia Rodriguez

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Peer ReviewThe purpose of the Peer Review Committee shall be to ensure that publications, articles, or other documents endorsed or promoted by the Corporation as “peer reviewed” are scruti-nized by experts in the relevant fields. The Committee reviews and comments upon any and all submissions of articles to the ABO for publication on the its website as “peer reviewed” literature or position papers, policy reviews, or other documents commissioned by the ABO; develops a submission process and guidelines for approving such submissions; works to encourage Members and the general public pursuing scientific research or other activities related to the algal biomass industry or the purpose of the Corporation to submit articles for peer review; and recruits and approves third parties to act as peer reviewers.

2011 Chair: Keith Cooksey

Technical StandardsThe purpose of the Technical Standards Committee is to develop, review and comment upon, and advocate for the industry standards and best practices for the general benefit of the algal biomass industry. The Technical Standards Committee develops standards relevant to the algal biomass industry for proposal to standard setting organizations or governmental entities; organizes industry comments and work to influence the creation of standards affect-ing the algal biomass industry, whether those standards are being created by private organi-zations or governmental entities; liaises with Members, standard setting organizations and government entities to facilitate the flow of information between stakeholders; and drafts documents explaining new or proposed standards for consumption by Members, govern-ment officials, and the general public.

2011 Chair: Jim Sears

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Members

Platinum

Accelergy Corporation • Algenol Biofuels, Inc. • Boeing •General Atomics • Heliae Development, LLC • National Alliance for Advanced Biofuels and Bio-Products • Sapphire Energy, Inc. • UOP / Honeywell • Wilson Sonsini Goodrich & RosatiGold

Bioprocess Algae LLC • Byrne & Company Limited • Cellana LLC • Fredrikson & Byron, P.A. • Phycal LLC • Solazyme, Inc. • Targeted Growth, Inc.

Corporate

Algae Farm (USA) • Algaedyne Corporation • Algaeventure Systems • AMEC • Applied Chemi-cal Technology • Aquatic Energy, LLC • Arizona State University • Aurora Algae • Australian Trade Commission • Battelle Pacific Northwest Division • CBO Financial, Inc. • Church & Dwight • Colorado Lining International • Combined Power Cooperative • Donald Danforth Plant Science Center • Earthrise Nutritionals LLC • ECO2Capture / Ohio University • Edison Materials Technology Center (EMTEC) • Endicott Biofuels II, LLC • EPRI • Evodos B.V. • FedEx Express • Green Water Global, LLC • Harris Group Inc. • HDS International Corp • IATA (Inter-national Air Transport Association) • IGV Institut fuer Getreideverarbeitung GmbH • Incitor Incorporated • Independence Bio-Products • Kent BioEnergy Corporation • Kimberly-Clark • Kuehnle AgroSystems, Inc. • Kuraray Co. Ltd • Life Technologies • Mars Inc. • Mortenson Construction • MTU Aero Engines GmbH • Neste Oil Corporation • Ohio Industry Develop-ment Committee • OpenAlgae • OriginOil Inc • Phyco Biosciences, Inc. • SFN BioSystems Inc. • Siemens Industry, Inc. • Solix BioFuels • Spokane Industries • SRS (Solution Recovery Services) • Stoel Rives, LLP • Synthetic Genomics • The Linde Group • The Mitchell Family Corp. • Uni-versity of Minnesota - Initiative for Renewable Energy and the Environment • Verno Systems • Waste Management Inc. • World Water Works, Inc.

Sponsoring Organizations

Phycological Society of America • Biotechnology Industry Organization • European Algae Biomass Organization • National Biodiesel Board

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