Welle - Bioindustrial Partnership of Minnesota

BioIndustrial Partnership of Minnesota

Environmental Initiative Chemicals Regulation Working

Group July 20, 2011

Project Sponsors

Enriching Minnesota’s Future through the Biosciences

Agenda •  Introduction

•  Project Overview

•  Biorefinery Development

•  Agriculture-based opportunities

•  Downstream market Development


Food

Renewable Energy

Renewable Materials

Medical Devices

Biologics/Biopharma

Animal Health

The BioBusiness Alliance of Minnesota •  Industry led, non-profit organization

•  Partners with industry, academia and economic development groups to stimulate growth in Minnesota

•  Supports growth in six targeted industries


•  LifeScience Alley

Largest state-based trade association focused on serving the life sciences industry.

Project Partners •  Great Plains Institute


Non-partisan, non-profit corporation based in Minneapolis Mission: to accelerate the transition to a sustainable, prosperous, low-carbon economy.


Renewable Materials Value Chain Overview

Farmers/Foresters Biorefinery Development

Chemicals Industry- Formulators

End Product Manufacturing

Retail, End Uses

D2025 Recommendations

Renewable Materials

•  Support market development efforts for the renewable materials value chain

» Renewable Materials Summit: Emerging Markets in the Upper Midwest

•  Position Minnesota as a world leader in biorefinery operations


Farmers/Foresters Biorefinery Chemical Industry-

Formulators End Product

Manufacturing Retail, End Uses

Liquid Fuels Markets

Project Description

The BioIndustrial Partnership of MN •  Hypothesis: The industry is commercializing

technologies, and there are enough companies forming that any MN biorefinery could find a partner to enter the industry.

•  Expected Implementation Actions:

» Education of business and community leaders.

» Identify assets and market MN to external partners.

» Policy development. •  Regulatory issues.

•  Financial assistance.


Project Methodology •  Q2 2011: Project Definition

» Assemble Core Team and develop clear understanding of industry

•  Q3 2011: Community Dialogue

» Share global trends and gather information

•  Q4 2011: Publication

» Minnesota Roadmap for BioIndustrial Development

•  2012: Education and Implementation

» Act on strategic direction


Core Team •  ~21 Members across value chain

» Biochemical companies

» Ethanol General Managers

» Engineering/Design Firms

» Legal and Financial Service Providers

» Government

•  Industry Dominated


Building an industry…


Technology

$ $

Policy

Feedstock Off-take

Roadmap Preview

Roadmap Outline •  Biorefinery Development

•  Trends •  Opportunities •  Strategic Direction

•  Downstream Market Development » Chemicals »  Fuels


•  Agricultural-based Supply Chain Partnerships •  Trends •  Opportunities •  Strategic Direction

•  Forest-based Supply Chain Partnerships •  Trends •  Opportunities •  Strategic Direction

•  Policy Analysis and Recommendations

End Product Manufacturing Retail, End Uses Chemicals Industry-

Formulators

Biorefinery

Farmers/Foresters

Farmers/Foresters

Biorefinery

Biorefinery


Biorefinery Development





Integrated Biorefinery

Food/Feed •  DDGs •  Nutraceuticals •  Food grade oil

Fuels •  Ethanol •  Butanol •  Drop-in fuels

Chemicals and

Plastics

•  Materials •  Additives •  Solvents

Example: Bio Iso-butanol


Drop-in Fuels

•  Iso-butanol •  Jet Fuel • Diesel • Gasoline

Chemicals and

Plastics •  C4 Platform

Volatile and increasing fossil fuel prices

Source: ICIS; http://www.icis.com/Articles/2011/06/27/9471601/Bio-based-intermediates-will-reduce-price-volatility.html

The signals of momentum? •  8 IPO’s in the last year2

» Financial markets are supporting the industry

•  Green chemistry sector lead MN in VC investments for Q2 2011

•  Global biochemicals industry: $585 billion by 20301

» Up to 17% of global chemicals market

» 5-10% average annual growth

•  5 billion pounds of chemicals by ~20153

•  RFS2: 22 billion gallons of advanced biofuels by 2022

1 http://www.icis.com/Articles/2010/06/21/9368973/biochemical-market-forecasts-suggest-strong-growth.html 2 http://biofuelsdigest.com/bdigest/2011/06/03/myriants-125m-ipo-the-complete-digest-analysis/ 3 PiperJaffray Analysis

New targets for bio-based chemicals •  Innovation is enabling new commodity chemicals

» New to the world chemicals •  Segetis’ Javelin Technology

•  Reluceo’s XLK Polymer

» Improved access to existing chemicals •  Succinic Acid

•  Glucaric Acid

•  “New” chemicals can depend on other innovations in the final products

» Risk for slower growth

» Without significant improvement in functionality, they may not have the critical mass to survive

Cargill Resins Minnetonka

Natureworks est. 1997, ~100 emp.

Minnetonka

Segetis Est. 2006, 30 emp.

Golden Valley

Reluceo Est. 2009

Golden Valley

XL Terra Est. 2009

Golden Valley

Draths Est. 2005, 20 emp. Okemos, Michigan

Pine River Petrochemicals

Est. ~2009.

Gevo Est. 2009, 50 emp.

Luverne, MN and CO

Green Harvest Technologies Est. 2007, 1 emp.

Bloomington

Elevance Est. 2004, 45 emp.

Chicago, IL

Cargill BioH Est. 2003, 35 emp.

Plymouth

Cargill Industrial Oils

Minnetonka

Currently not located in Minnesota

1980s - 1990s

1997 - 2004

2005 - 2009

2009 - 2011 BioAmber

Est. 2009 Plymouth

Rivertop Renewables

Est. 2010

Minnesota Biobased Materials Family Tree

Opportunities and Concerns •  Opportunities

» Intermediate chemicals the key targets

» MN Strengths to build on: •  Cluster of companies has developed in the state •  Use the medical device industry as a proxy •  Strong suite of service providers that understand and support the industry

•  Concerns

» MN lacks experienced chemical industry executives

» Scale-up capital and speed

» Cost of regulatory compliance and toxicity testing can squelch innovation

Strategic Needs- BioIndustrial Manufacturing

•  Assistance in financing through “valley of death”

» Government grants are difficult

» Lack of focused venture capital

» Other states are moving more aggressively to support the industry

•  Regulatory issues

•  University policies to encourage faculty start-ups

•  More clean-tech incubators in the state


Agriculture Opportunities





Agricultural-based Supply Chain


•  Biorefinery Development •  Trends •  Opportunities •  Strategic Direction






Farmers/Foresters Biorefinery

Agriculture Biorefineries


End Market Development





Downstream Market Development


•  Biorefinery Development •  Trends •  Opportunities •  Strategic Direction






End Product Manufacturing Retail, End Uses Chemicals Industry-

Formulators


Proposal for coordination

•  Targeted discussions on regulatory impacts

•  Perspectives and ideas to grow the industry

•  Participate in implementation efforts


Thank You!

Tim Welle [email protected]

952-746-3845

Biofuels becoming biochemicals companies.

•  Replace the entire barrel of oil

Source: Peter Keeling. Center For Biorenewable Chemicals

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