CORN STOVER

APPROACHING ITS REAL WORTH

CTIC MeetingDavid Glassner

National Renewable Energy Lab

Jim Hettenhausc.e.a.Chief Executive Assistance

October 27, 1999

2

WHY CORN STOVER?

Corn Stover is the largest U.S. single biomass source and is densely located-conversion of all available corn stover will only provide 7 to 20% of transportation fuel use in the U.S.

Biomass accumulation by photosynthesis stores more than 10 times the world’s energy use

The challenge is to collect and convert the biomass efficiently!

Biomass conversion technology has advanced substantially and continues to advance on the back of biotechnology tool development

3

BIOTECHNOLOGY IMPACTS ETHANOL COST

0

10

20

30

40

50

60

70

80

Cos

t Sa

ving

s ($

/gal

lon)

ConventionalYeast

NREL Zymomonas ConsolidatedBiorocessing

Research resultsfrom the 1990s

Research Goals in the next decade

Current IndustrialPractice

4

BIOTECHNOLOGY IMPACTSPROCESSING COST

Technology Description Ethanol cost ($ per gallon)

Key technology attribute or improvement

Yeast conversion technology

1.57 Conventional yeast fermentation technology

NREL Zymomonas technology

1.15 Conversion of all pentose and hexose sugars utilizing metabolically engineered Zymomonas

Consolidated bioprocessing technology

0.82 10 fold improvement in cellulase enzyme specific activity, thermo-tolerant, high efficiency fermentation

High density corn stover collection

0.59 large scale operation in high density agricultural areas

Future hydrolysis technology

Less than .47 Engineered feedstock integrated to reduce hydrolysis cost

Base operation 2000 tons feedstock ($25/ton) per day, large scale

operation at 10,000 tons per day, corresponding corn mills 80,000 and 400,000 bushels per day

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BIOMASS CONVERSION TECHNOLOGY IS THE DRIVER

Department of Energy investment in biomass conversion technology is paying off• Pentose and hexose fermenting technology

developed• Consolidated bioprocessing is next key target

offering 33 cent per gallon cost reduction Coproducts such as agricultural fiber for pulp

and paper add to the business opportunity and utility

6

CORN STOVER CHALLENGE

“Is corn stover collection part of an improved agricultural practice for corn?”

We believe the evidence points to the following:

Improved income for the farmer and rural economy

Substantial environmental benefits

7

OVERVIEWREALIZING THE VALUE

OLD BARRIERS• “The way it has always been done”• Erosion and Nutrient Concerns• Harvest, Storage and Process Costs

THE DIFFERENCES TODAY THE IMPACT

• For Producers• Products from Cellulose, HC & Lignin• Economic and Environmental

9

Processing Just 30% of Corn Stover has the following impact:

Adds 5 to 8 billion gallons of ethanol for Fuels with no more land use

Improves Soil Quality by Reducing Need to Till Increases direct farm income $2.3 billion from

Feedstock Sale of 30% of total Offers 30 MM Tons of De-Pithed Fiber for Agri-

Pulp to Replace Hardwood Fiber Lowers the cost of sugars processed to

sweeteners and ethanol to less than $4/cwt Mitigates GHGs by more than 60- 97 MM metric

tons C/year, 12% - 20% US Kyoto Commitment

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CORN STOVER USAGEFive Major Differences Today

More stover

More knowledge

• Plowing effect

• Nutrient value More Infrastructure

Biotech advances Environmental drivers

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CORN STOVER Is Largest Source of

Low Cost Biomass Available

Estimated Corn Stover available

is 153 MM dry tons, 60% of

255 MM dry tons produced,

43% of Total Biomass

All less than $50/ton Corn Stover . . . . . . 153 MM dry tons Other Ag Stover . . 58 Corn Fiber . . . . . . . . 4 Energy Crops . . . . . 70 Wood Co-Products. 72

TOTAL dry tons . . 357MM

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More Stover ! !

YIELDS INCREASING

200 BU/AC COMMON

1:1 RATIO CORN/STOVER

MORE TO COME

• PRECISION FARMING

• BIOTECHNOLOGY

• GENETIC POTENTIAL

IS 400 TO 600 BU/AC

WHAT TO DO WITH IT?

80

90

100

110120

130

140

150

160

1972

-76

1997

1998

1999

US

IA

IL

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SUSTAINABLE COLLECTIONCorn Stover Surface Effect

PRO• Erosion Protection • Retains Soil Moisture• Diurnal Temperature Cycle Reduced• Nutrients Recycled • Some SOM Added If No-till

CON• In The Way• Harbors Weed Seeds and Disease• Retains Soil Moisture• Low Spring Soil Temperatures• Additional N Fertilizer May Be Required• More Pesticide and Herbicide Needed

16

Corn Conventional Till Area as % of Total Full Season Crop

Year 1992 1993 1994 1995 1996 1997 1998 Avg

US 61 57 60 59 60 59 61 60

IL 55 51 73 73 72 NA NA 65

IN 69 71 66 63 71 NA NA 68

IA 65 60 59 59 60 NA NA 61

MN 75 73 78 80 79 NA NA 77

WI 68 60 65 61 63 NA NA 63

Source:CTIC National Crop Survey

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Corn No-Till Area as % of Total Full Season Crop

Year 1992 1993 1994 1995 1996 1997 1998 Avg

US 14 17 18 18 17 17 16 17

IL 18 20 19 18 15 NA NA 18

IN 17 20 24 25 20 NA NA 21

IA 12 15 19 17 14 NA NA 15

MN 2 3 4 3 3 NA NA 3

WI 6 9 10 11 11 NA NA 9Source:CTIC National Crop Survey

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WHERE THE STOVER GOES NOW

Most surface residue lost as CO2. • The National Soil Tilth Lab reports just 11 to 19% of the

carbon in the surface stover contributes to the formation of SOM.

• Roots contribute 32 to 44 % of their carbon to the soil matter.

If plowed below the surface, a carbon deficit can occur in the soil. • The plowing activity exposes soil carbon to oxidation,

increasing organic carbon loss with the release of CO2.

• The degree of soil disruption determines the carbon loss.

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SHORT TERMTillage Induced

Soil Organic Carbon Loss

Five Hour Loss

0102030405060708090

MoldPlow

Tand Disc ChiselPlow

No Tilling

Cum CO2

Loss,

gm/Sq

MeterSource:

Reicosky, 1997

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MID-TERMTillage Induced

Soil Organic Carbon Loss

19 Day Loss

0

100

200

300

400

500

MoldPlow

TandDisc

ChiselPlow

No Tilling

Cum CO2

Loss,

gm/Sq

MeterSource:

Reicosky, 1997

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CALENDAR DAY - 1991

250 255 260 265

CU

MU

LA

TIV

E C

O2 F

LU

X (

g C

O2 m

-2)

0

200

400

600

800

1000

Plow Only Plow and Disk TwiceDisk OnlyChisel OnlyNo Tillage

1991 FALL TILLAGE CUMULATIVE CO2 FLUX

Silage removed(grain and stover removed)

Grain removed(stover returned)

low high

744848

148 96 96

Fertility

NP2O5

K2O(lb/ac/yr)

30 Years Continuous Corn + Plow

low high

744848

148 96 96

Silage removed(grain and stover removed)

Grain removed(stover returned)

low high highlow

- 163 - 177 + 90 + 97

TotalBiomass(ton/ac)

Fertility

30 Years Continuous Corn + Plow

Silage removed(grain and stover removed)

Grain removed(stover returned)

low high highlowFertility

30 Years Continuous Corn + Plow

2.13 2.14 2.13 2.17

- 67 - 72 + 37 + 40

Total Carbon(ton/ac)

(0-6 in)Soil

Carbon (%)

Silage removed(grain and stover removed)

Grain removed(stover returned)

low high highlowFertility

30 Years Continuous Corn + Plow

- 67 - 72 + 37 + 40

Total Carbon(ton/ac)

Results suggest intensive tillage(moldboard plow) common to all treatments overshadowed stover carbon removal or addition.

2.13 2.14 2.13 2.17

(0-6 in)Soil

Carbon (%)

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SUCCESSFUL STOVER COLLECTION, $32/dry Ton Delivered

Harlan, IA Industrial Application• In ‘97 Contracted with for 50,000 acres• Used more than 30 custom operators• Waiting list after signing up 440 producers• Collected over a 50 mile radius

Expanded to WI and IL in ‘98• More than 100,000 acres contracted• All custom operators for harvest• Long Waiting list for producers and custom

operators

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Square Bales & High Speed Tractor

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“Load on the Go”

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“Loaded to Go”

33

Bale Storage

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‘97-’98 Corn Stover Pricing Summary

Payments, Dollars per Dry Ton

Radius, miles 1-15 16-30 31-50Producers Pay,Case 1,2

15.00, 10.90

12.33, 8.23

9.66, 5.56

Baler's Pay 14.60 14.60 14.60Hauler's Pay 6.10 8.77 11.44

Total,Case 1,2

35.70, 31.60

35.70, 31.60

35.70, 31.60

Case 1: 1.5 Dry Tons/acreCase 2: >2.5 Dry Tons/acre

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More KnowledgeCORN STOVER AS A RESOURCE

BIOTECH ADVANCES HAVE MADE STOVER CONVERSION TO VALUED ADDED CO-PRODUCTS POSSIBLE AND ECONOMIC

HARVESTED STOVER COMPOSITION, Dry Basis

• Product related• 38% CELLULOSE, • 32% HEMICELLULOSE• 20% LIGNIN

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Processing Just 30% of Corn Stover FOR CELLULOSE FRACTION:

Adds 30 M MT Fiber De-pithed fiber can replace hardwood fiber

• Total NA paper market is ~ 100 M MT, growing 2% annually Source: Jaakko Poyry

• Continue with 40% recycle, 30--40% softwood

Cellulase enzymes convert cellulose to glucose sugars, at projected $4/cwt Source: NREL

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Processing Just 30% of Corn Stover FOR HEMICELLULOSE FRACTION:

Provides 28 M MT low cost pentose fermentation sugars for production of value added products

Can produce 7.5 billion gallons fuel ethanol

Supplies 5% of fuel transportation needs

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Greenhouse Gas Mitigation Potential from Corn Stover (30% of total, 70MM dry MT)

is 12% to 20% of US Kyoto Reduction

US Projected Emissions, MM TCE, 2008-12 . . . 1,740 Kyoto Required Reduction . . . . . . . . . . . . . . 496 Corns stover Potential, MM TCE . . . . . . . . . 62- 97

• Fossil Fuel replacement,

5.6 to 8 Bil Gal EtOH . . . . . . 45 to 64• N Fertilizer reduction

1.6 M MT N Fertilizer . . . . . . 1 to 17• Reduced Till and No-Till,

50% of 32 MM ha Corn

0.5 M TC/ha/yr . . . . . . . . . . . . 16

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PERCEIVED NEEDS

EDUCATION SUPPORT FROM CORN GROWERS MARKET DEVELOPMENT FOR EXISTING

PRODUCTS

• PAPER

• PARTICLE BOARD ADDITIONAL RESEARCH AND DEVELOPMENT

• LOCAL SOIL IMPACT

• NEW, HIGHER VALUE PRODUCTS

• PROCESS IMPROVEMENT

Funded by DOE Office of Biofuels 46

Conclusion

CORN STOVER PROCESSING HAS A MAJOR POSITIVE IMPACT• Rural Farm Economy• Related Industries• Energy Independence • The Environment and GHG Mitigation

Recent Advances in Research Supported by the DOE, EPA and USDA are RAPIDLY Moving the Process Closer to Commercialization

Many Envision This to Become Reality in the Next 3 to 4 Years