Alpena Biorefinery Update

Vesa Pylkkanen API Mission

• Produce inexpensive low cost fermentable cellulosic sugars from a variety of feedstocks

AND

• Leverage the power of co-production of cellulosic sugars with other value added products

2 Cellulosic Sugars Sugars are an intermediate feedstock The production of low-cost, high-purity sugars is a critical step in producing many bio-fuels, bio-chemicals Iso butanol, N-butanol

Agricultural Fatty acids C5 and C6 Fatty esters Residues Sugars Biochemical/ Terpenoids chemical Fermentation Farnecene

Squalane Forest Resources Gasificatio Syngas Succinic acid n

Acrylic acid Catalysis Ethanol Pyrolysis • Aqueous phase reforming Biogasoline Bio-oil • Hydro-treating Energy • Alcohol synthesis Crops/ • Fischer-Tropsch Biodiesel Grasses Biojet 3 Project Summary

• The Alpena Biorefinery will convert a biomass steam hydrolyzate to ~894,240 USG/y of cellulosic ethanol and 695,500 USG/y of potassium acetate deicer

• The hydrolyzate is an existing byproduct stream from the adjacent hardboard plant. Presently it is being sent to the WWTP

• This project is a pilot/commercial demonstration of the production of fermentable sugars / cellulosic ethanol and biochemicals from biomass extracted hemicelluloses

• Other feedstocks and biofuel/bio-products will be trialed

• After the demonstration period the biorefinery will remain a viable commercial, on-going operation.

4 Alpena Biorefinery •Construction has started •Commissioning 11 / 2011

•7200 T/y of hemicellulose sugars •760,000 gal/yr EtOH •860,000 gal/y Kacetate

•Grants $22 MM

5 Project Timeline

• 2007 Conceptual Development

• 1/2008 Initial Agreements

• 8/2008 Feasibility Study – Grant Applications

• 2009 Basic Engineering

• 2010 Detail Engineering

• 2011 Construction

• 11/2011 Commissioning and Start-up

6 Project Participants

• Partners • Decorative Panels International • Michigan Technological University • Purdue-Ho Yeast licensed by GTA

•Project Sponsors • State of Michigan – MEDC - $4MM grant • DOE – IBR Grant - $18MM

• Project Management • Engineering: API • Construction: DeVere • Start-up & Commissioning: API • Operations: APER (subsidiary of API)

7 Process Modeling apiMAX™ Biorefinery Simulation Model

CADSIM Dynamic model

Design model with inputs from laboratory, pilot, and equipment design and supplier data

Used to size tanks, operational controls and for operator training

8 Equipment Models

9 Success Factors & Challenges

• Successful process integration • Continuous dilute acid hydrolysis with sugar yield > 95%. • Continuous co-fermentation of C5 and C6 sugars with ethanol yield > 80% of theoretical • Effective removal of inhibitors - sugar platform for other biofuels / biochemicals • Plant uptime > 95% • Reverse Osmosis membrane maintenance cost • Cellulosic ethanol production at ~$1/USG • Co-production of sugars/ethanol with other products and process integration • Lignin removal - proprietary technique • Lime mixing – Gypsum removal – dewatering – proprietary technique • Other acetate co-products

10 Benefits-Expected Outcomes

• Environmental sustainability: • The Alpena Biorefinery will make Cellulosic Ethanol and Potassium Acetate deicer from an industrial waste currently converted to CO2 and sludge via costly waste treatment • Commercial projects will co-produce ethanol with biomass electricity, at near theoretical highest feedstock yield with low energy and water usage and high investor return

• Rapid replication • Ethanol production cost commercially at <$1.0/USG 1 • Profitable at <10 million GPY • Low entry barrier • Specific CAPEX competitive in commercial replication • Co-production leading to feedstock yield of 135 USG/BDT

1($40/BDT Biomass)

11 Green Power+™ Process

Biomass Steam Extraction

Washing Extraction Module To Host Pressing Facility Hydrolyzate Biomass Boiler Evaporation Sugar Conversion Acetic Acid Hydrolysis Derivatives Lignin Removal

Sugar to final product Value Added Sugars Product Cellulosic ethanol, Conversion butanol, polymers, drop in fuels 12 Before/After Comparison Conventional biomass power generation 1 BDT = $35 1 MWh (1) = $85 Biomass Powe r TG Electricity Boiler

CND

Green Power Plus™ Pre-extraction of hemicelluloses prior to biomass combustion

1.16 BDT = 1 MWh = $85 $40.60 Biomass Power Extraction Boiler TG Electricity Module

Information CND developed from patent‐applied for Ethanol technology and Module configuration 25.5 USG (2) Green Power Plus™ Generates Ethanol = $75 - 85 10% Additional Carbon Credits

13 GP+ Advantages

• Inexpensive source of sugars • Effective theoretical yield to end products • Energy integration with host biomass power plant • Proprietary configuration: • maximizes sugar yield, • minimizes inhibitor formation • easy lignin removal and return to boiler • Financially viable at 6 – 10 million GPY ethanol • Minimal technology risk • Low specific and total CAPEX

14 GP+ IRR at $60/BDT

50%

45%

40%

% 35%

IRR

30% SWD 5 MM USG/y $60/BDT 25% at

Mixed 8 MM USG/y

20% HWD 11 MMUSG/y Biomass Power 15% Unleveraged Biomass 10%

0% First Plant First Plant with Nth Plant with Acetate Acetate

15 Market Potential

Non‐renewable

90.96% 1.36% Biomass

0.36% Geothermal

9.04% 6.04% Hydroelectric Conventional

0.02% Solar/PV

1.27% Wind

Ethanol potential U.S. Biomass electricity 2008 6.7 GW 1.36% EIA 2008 1,120 million GPY U.S. Biomass electricity 2020 18 GW 3.60% EIA 2020 2,964 million GPY Increase 11 GW 1,844 million GPY

Global biomass electricity 47 GW 1.30% IEA 2007 7,909 million GPY Global biomass electricity 2050 145 GW 4% IEA 2050 24,336 million GPY Increase 98 GW 16,426 million GPY

16 Commercialization Route

•2006 – 2009 Lab Tests

•2007 – 2009 Pilot Tests Alpena Michigan

•2011 Commercial Demonstration ~ 1MM USG/y

•2012 Demonstration Plant Expansion / Equity Raise

•2011 - 2012 Develop Commercial Plants

•2013 - 2014 First Commercial Plant Operations