MAXIMISING REVENUES AND MINIMISING WASTE IN FUEL

AND FEED BIOREFINERIES

Processes for Biomaterials and Nutritional Product, Wednesday, July22

Peter Milic

Business Development & IP

MBG background

Founded in 2001 by Dr Philip Bell & Dr Paul Attfield

• Based in Lane Cove Sydney; 16 staff

• Macquarie University spin-out

• Series A, B & C: capital raising secured

Spent over A$10M on 2nd generation biofuels

MBG is a yeast development company

Saccharomyces cerevisiae used for global baking, extracts, brewing, fuel ethanol, distilling, animal feed applications etc. Yeast extracts provide flavor, neutraceuticals (glutathione, glucans, MOS, etc).

Our core technology uses evolution and breeding to produce improved non-GM yeast strains

Our core project is to develop yeast to enable ethanol to be produced from lignocellulosics (2nd Gen biofuels)

MBG

Xylose utilisation is only one of the unique features required to operate under 2nd Gen conditions

XyloseHydrolysate

resistance

Improved ethanol

yield & productivity

Growth at

~ 2-3 hrs/gen

Growth on

non-detoxified

hydrolysate with

>1 % acetic acid

Ethanol titres

of >20% in 48

hours at 30C

Aerobic carbon

scavenger

Efficient

aerobic growth

on a variety of

carbon sources

MBG 2nd Generation Yeast strains

MBG has several active yeast non-GM development programs

Improved yeast for converting waste plant material to feed and fuel (2nd Generation Biofuel)

Improved yeast for the corn ethanol industry(1st Generation Biofuel)

Improved yeast for the bread baking industry

Improved glutathione (antioxidant) levels for pharmaceutical and food applications

Chassis yeast• high level expression and secretion of foreign proteins• Suitable for the production of bio-chemicals

Corn ethanol highlights real world importance of by-productsBiofuels based on new technology and non-food biomass must compete with

biofuels from food (corn)

Margins are high but primarily due to high value by-product sales

• Without a DDGS co-product, corn ethanol facilities make little or no profit

• As industry has matured more high value co-products have been developed such as corn oil

• Emergence of hybrid technologies e.g. ICM “Gen 1.5”

Corn to ethanol experience highlights the benefits of a bio-refinery concept multi, high value products

2nd Gen biorefinery needs to move beyond standard “fuel (and biogas) only” model

• Higher value co-products

• Better utilize low or negative value waste streams

• Increase overall conversion efficiency

• Develop synergistic processes

100

200

300

400

0

Corn Ethanol

Cap

ital

Co

st –

US$

M

100

200

300

400

0

Lignocellulosic Ethanol

Cap

ital

Co

st –

US$

M

100M gallons of Ethanol

40M gallons of Ethanol

Corn ethanol:

• More than double the production of

ethanol

• Less than half the capital cost

4

Capex: Corn to ethanol is capital efficient

7

BiomassConventional

2nd Generation

Fermentation

Fuel EthanolPre-treatment

and hydrolysis

to sugars

Impact on

yield and

costs

Residual

ethanol

Residual

sugars

Organism

growth

By-products (glycerol,

acetate and xylitol)

Incomplete

breakdown

> 30% lossLess than 70% of contained sugars

in biomass converted to

fuel

30%+ of carbon to low value biogas

Lignocellulosic ethanol today…..

8

Fuel Ethanol

High value feed

Pre-treatment

and

hydrolysis to

sugarsBiomass “Fuel and

Food” Process

MBG

“Fuel and Feed”

bio-refinery

fermentation

High value

co-productLow value

biogas

Residual C6+C5 sugarsGlycerolAcetate

Organic acidsXylitol

Fermentation yeast

MBG biorefinery maximizes value and efficiency – multi use yeast

> 15% loss

e.g. Aquaculture feed

MBG Fuel & Feed Biorefinery

pretreatment

& hydrolysis

wastewater Process Water

Pitch yeast

ETOH

fermentationdistillation

Lower COD

YEAST

propagation

Lignin

residueEthanol

Yeast BiomassAnimal Feed

Human Food

biogas

C5 sugars

C6

sugars

80%

20%

stillage

(‘waste’)

sugar

syrups

Collaboration with NREL demonstrates economics

The “fuel and feed” bio-refinery project has been in development for over 10 years

Completed a 2 year pilot program with the US DOE where:

• MBG demonstrated process and generated detailed data inputs for engineering model

• DOE developed detailed engineering models based on inputs

• All calculations based on “real world” demonstrated productivity, yields and efficiency

Feedstock Preparation Corn Stover & Sugarcane Bagasse were pretreated by NREL in Aug-Oct 2011 and shipped to Microbiogen P/L, Sydney, Australia

400 kg of wet bagasse being dried out prior to pretreatment at NREL’s pilot plant in

Golden, Colorado

11

Pretreated corn stover upon arrival in Sydney pH 1-2 and 28-31%TS

MBG

Solid/Liquid separation

% w/v Pressate

Glucose 3%

Xylose 9%

Acetate 2%

HMF 0.4%

Furfural 0.2%

% w/w dry Solids

Cellulose 60%

Xylan 5%

Lignin 25%

Ash 4%

Pretreated

Corn Stover

30%TS

Pressed

Solids

50%TS

Filter Press

to 3 ton

Pressate

C5 liquor

Cellulosic fibre

Fermentation of the cellulosic syrup

0

30

60

90

120

150

0 4 8 12 16 20

Co

nce

ntr

atio

ns

(g/L

)

Fermentation Time (hr)

Glu g/L Gly g/L Acet g/L EtOH g/L MBG3248 inoculated at 10 g/L and 34oC

%w/v 0 h 19 h

Glucose 14.47% 0

Xylose 3.9% 3.4%

Glycerol 0.01% 1.1%

Acetate 0.4% 0.5%

Ethanol 0 6.01% wt./vol

Ethanol Titre 7.62% vol/vol

Ethanol Yield 0.42 gEtOH/gGlu

Productivity 3.16 g/L/h

Two stream process

% w/v Pressate

Glucose 3%

Xylose 9%

Acetate 2%

HMF 0.4%

Furfural 0.2%

% w/v Stillage

Glucose 0%

Xylose 6%

Glycerol 1%

Acetate 0.7%

Ethanol 0.4%

Pretreated

Corn Stover

30%TS

Separate Hydrolysis &

Fermentation of C6s Distillation

Ethanol

Stillage

Pressed

Solids

50%TS

Filter Press to

3 ton

Lignin Rich

Residue

“Green Coal”

Pressate

Propagation on stillage & pressate blend

o Aerobic & stirred vessel at 32oC

MAP/Urea Added

o 80% of available carbon was consumed

o 0.42 grams yeast biomass made per gram carbon used

o 55% COD Reduction

0

10

20

30

40

50

60

0 2 4 6 8 10 12 14 16 18 20 22 24

Co

nce

ntr

atio

ns

(g/L

)

Propagation Time (hrs)

Glu g/L Gly g/L Acet g/L EtOH g/L Xyl g/L Yeast g/L Arab g/L

Fed-batch Batch (5-24hrs)

12

Key assumptions:

- Life of facility = 30 years.

- 2,000 dry tonnes/day of bagasse

- Dilute sulphuric acid continuous process (NREL process)

- Purchased enzymes

- Natural gas for heating

- Ethanol yield at 0.44g/gram of sugar

- Yeast yield of 0.35g/gram of carbon

- Production of 131M liters of fuel ethanol per year

- 117,000 tonnes of dried yeast per year

Key inputs for the NREL model

17

In the MBG Feed and Fuel process selling high-value co-products such as yeast can negate the impact of dropping fuel price

MBG

Impact of Yeast price on MESP (@10%IRR)

Ethanol only 2nd Gen

Bio-refinery“Fuel and Feed”

Bio-refinery

1 tonne of sugar cane

including trash and

tops (dry basis)

1 tonne of sugar cane

including trash and

tops (dry basis)100

200

300

400

0

Ethanol

BioGas

Kg

of

pro

du

ct p

er t

on

ne

of

dry

mat

ter

100

200

300

400

0

Ethanol

Yeast

Kg

of

pro

du

ct p

er t

on

ne

of

dry

mat

ter

5% more product

13% less fuel

Conventional

2nd Gen

“Fuel and

Feed”

9

MBG biorefinery maximises product available for sale

Ethanol only 2nd Gen

Bio-refinery“Fuel and Feed”

Bio-refinery

1 tonne of sugar cane

including trash and

tops (dry basis)

1 tonne of sugar cane

including trash and

tops (dry basis)$100

$200

$300

$400

$0

Ethanol

BioGas

US$

val

ue

gen

erat

ed p

er t

on

ne

of

dry

mat

ter

Ethanol

Yeast

15% higher unit revenues

US$

val

ue

gen

erat

ed p

er t

on

ne

of

dry

mat

ter

$400

$300

$200

$100

$0

13% less fuel

Key assumptions:Ethanol Price: US$0.60/literYeast: US$1.00/kgBiogas: US$4.50/MMBtu

Conventional

2nd Gen

“Fuel and

Feed”

10

MBG biorefinery maximizes revenue

High quality, nutritional product - value >US$1/kg?

Yeast already proven as a feed supplementAlready widely sold as a feed additive Currently feed yeast costs between US$2.5 & $5/kg

High levels of crude proteinHigh levels of bio-available phosphorousRange of other key amino acidsDoes not contain anti-nutritionals

MBG3248 Soymeal *

Moisture (%) 5.3 5.4

Ash (%) 7.9 5.2

Crude Protein

(%)

58.0 43.6

Energy

(MJ/kg)

10.47 9.37

Phosphorous

(g/kg)

30.0 6.6

Amino Acids (mg/100mg)

Methionine 0.91 0.65

Isoleucine 2.66 2.39

Histidine 1.58 1.10

Lysine 3.45 2.93

Tryptophan 0.71 0.67

Arginine 2.90 3.28

(*) http://www.fao.org/ag/aga/agap/frg/feedback/war/v0600b/v0600b0s.htm0

500

1000

1500

2000

2500

Fishmeal Monthly Prices - US$/metric tonne

Yeast price?

13

Cost to Produce Ethanol - US$/liter

0.50 0.55 0.600.35 0.65 0.70 0.75 0.800.40 0.45

Co

st t

o p

rod

uce

ye

ast –

US$

/kg

(dry

)

Base Fishmeal Price

Cost to Produce Yeast versus Price of Fishmeal – Fuel Bio-Refinery

Marginal price benefit over fishmeal

0.30

1.20

0.90

0.60

1.80

1.50

0.00

Note: Operating costs are estimated after crediting green coal at US$90/t

Break even curveMBG Biorefinery = low production cost

yeast=$0.47/kg & ethanol=$0.50/l

MBG bio refinery is viable today (without credits)

Feed yeast price

Implications are clear –High value Bio-refineries are the future

Relying on ethanol as the only product is a challenge

• Need to make better use of waste streams

• Need to add higher value by-products

Utilizing NREL engineering models and assumptions plus:

• An ethanol sale price of US$0.53/liter

• A yeast sale price of US$1.00/kg

Then an MBG based bio-refinery can:

• Generate bio-refinery cash margins of 39%

• Produce 131M liters of fuel ethanol/yr

• Produce 117,000 tonnes of high grade yeast/yr

• Generate a high volume feed source that ranks between soy meal and fish meal

14

Questions…

Peter Milic

Microbiogen Pty Ltd

peter.milic@microbiogen.com

Ph: +61 2 9418 3182