DEVELOPING A BIOPRODUCTS SECTOR IN THE FINGER LAKES REGION · Developing a Bioproducts Sector in the Finger Lakes Region 5 Preface This report has been prepared to provide a roadmap

Developing a Bioproducts Sector in the Finger Lakes Region

DEVELOPING A BIOPRODUCTS SECTOR IN THE FINGER LAKES REGION

Report funded in part by a grant from the Federal Economic Development Agency (EDA)

Contents

Preface .................................................................................................................... 5

Executive Summary ................................................................................................. 7

1 Introduction ............................................................................................................ 11

What are Bioproducts? ........................................................................................... 12

2 Regional Overview ................................................................................................. 13

3 Existing Economic Development Initiatives and Policies ......................................... 15

3.1 Optics, Photonics & Imaging (OPI) .................................................................. 183.2 Agriculture & Food Production (Ag & Food) ..................................................... 183.3 Next Generation Manufacturing & Technology (NGMT) ..................................... 193.4 EDA Sector Summary Linkage ....................................................................... 19

4 Bio-based Products Policy and Regulatory Environment ......................................... 20

4.1 Biofuels Incentives and the Renewable Fuels Standard (RFS) ........................... 204.2 Renewing the Energy Vision (REV) .................................................................. 224.3 Regional Greenhouse Gas Initiative (RGGI), Offset Markets and the Governor’s Methane Reduction Plan ............................................................... 224.4 Food Waste Disposal Bans ............................................................................ 234.5 USDA BioPreferred Program .......................................................................... 23

5 Global Trends: Factors Influencing Bioproducts Sector Development ....................... 24

5.1 Biorefineries - Innovation, Diversification and Optimization .............................. 245.1.1 Innovative Valorization of Wastes....................................................................245.1.2 Diversification of Products, Convergence of Industries .....................................255.1.3 Optimization Through Centralized or Decentralized Models ..............................26

5.2 Bioproducts Ecosystem: Integration Along and Across the Value Chain ............. 27

6 Biomass Resources and Feedstock Logistics .......................................................... 28

6.1 Food Waste, Manure, and Fats, Oils and Grease (FOG) .................................... 296.2 Unique Resources of the Food Production Industry .......................................... 296.3 Diverse Potential of the Region: Forest, Agriculture and Algae ......................... 30

7 Bioproduct Sector Opportunities ............................................................................. 32

7.1 Bioenergy: Near-term Opportunities ............................................................... 337.1.1 Biogas Production and Food Waste Recycling .................................................337.1.2 Biodiesel and Bioethanol ...............................................................................34

7.2 Bio-chemicals and Bio-based Materials .......................................................... 357.2.1 Bio-chemicals: Feedstock and Intermediates .................................................357.2.2 Bio-based Materials: Specialty Chemicals and End Markets ............................40

3

4

8 Competitive Position ............................................................................................... 42

8.1 Incentives ..................................................................................................... 438.2 Sector Development, Innovation and Acceleration ........................................... 44

9 Support Resources ................................................................................................. 45

9.1 Industry Groups and Agencies ...................................................................... 459.2 Support Resources for Business Attraction & Growth ....................................... 459.3 Academic and Research Organizations ........................................................... 46

10 Opportunities and Challenges ................................................................................. 47

11 Recommendations and Implementation Timeline .................................................... 49

11.1 Immediate (2017-2018) ................................................................................ 5111.1.1 Implementation Plan .....................................................................................51

11.2 Short term (2018-2020) ............................................................................... 5211.2.1 Implementation Plan .....................................................................................52

11.3 Long Term (Beyond 2020) ............................................................................. 5311.3.1 Implementation Plan ....................................................................................53

Appendix 1 / Economic Development ........................................................................... 54

Appendix 2 / Biomass Resources and Feedstock Logistics ........................................... 55

A2.1 Agricultural and Forest Resources .................................................................55A2.2 Food Production Resources ...........................................................................57A2.3 Commercial and Municipal Wastes ................................................................58A2.4 Fats, Oils and Greases ..................................................................................59

Endnotes ..................................................................................................................... 60

5Developing a Bioproducts Sector in the Finger Lakes Region

Preface

This report has been prepared to provide a roadmap for the future of the Bioproducts Sector in the Finger Lakes Region of New York. This sector includes bioenergy, such as biogas or liquid biofuels, like ethanol, as well as biochemicals and bio-based materials. The roadmap is based upon a comprehensive assessment of the strengths and opportunities for the Region in the context of global and national industry trends and market factors.

The Finger Lakes Region has significant physical, intellectual and natural assets, but a long-term, focused strategy is required to seize its market potential. The roadmap described herein recommends developing the existing activity in the bioproducts sector, while building the infrastructure and ecosystem to foster future growth and attract new businesses. This includes building a consortium to drive innova-tion and technology application that is focused on providing solutions which leverage the Region’s unique assets (such as those related to the food production industry), and capitalize on local and regional trends (such as organic waste bans). The roadmap also includes develop-ment of some of the Region’s unique physical infrastructure and capabilities to support and accelerate technology commercialization.

This report has been prepared by Matt Fronk & Associates, LLC, with its subcontractor, Dr. Jacqueline Ebner, as the principal author.

The roadmap was developed with a diverse set of inputs from the technical, business, and economic development stakeholders within the Region and across the State. Their contributions and insights are very much appreciated.

This report was funded in part with support from the U.S. Economic Development Administration (EDA). The opinions expressed in this report reflect those of the authors and do not necessarily reflect those of the EDA, the U.S. Department of Commerce, or the Eastman Kodak Company. Content from this report may be quoted with proper attribution.

Mike Alt – SiGNa ChemistryBob Bechtold – Harbec PlasticsMonica Becker – Green Chemistry AllianceGeorge Bevington – Wastewater Treatment ConsultantWayne Bishop – CH4 EnergyBob Blythe – CH4 BiogasDr. Nagraj Bokinkere – Eastman Kodak CompanyTim Brown – RenmatixJim Bruno – Rochester Midland CorporationHarry Cohen – Natural Upcycling Mike Coia – Formerly Seneca Bio EnergyJim Demay – AES Ingredients Kathleen Draper – Finger Lakes BiocharGary Feinland – New York DEC, Organics ManagementFisher Yates CommunicationsTom Fleissinger – New York State Energy Research

and Development Authority Jason Fox – ClearCove Systems Inc.John Gibbs – DEC Region 8 Natural Resources SupervisorSteve Healey – HawkStar Vistas, IncEd Heslop – OSM EnvironmentalJerry Horton – Cedarcreek P&T, Inc.Joel Howard – Advanced Biorefinery SciencesSteve Hoyt – New York State Energy Research

and Development Authority Matt Hurlbutt – Greater Rochester EnterpriseJack Huttner – New York Biogas Study GroupJudy Jarenfeld – New York State Energy Research

and Development Authority

Dan Johnson – Rochester Institute of Technology, School of Packaging Science

Rami Katz – Excell Partners, Inc.Ava Labuzetta – New York State Pollution Prevention InstituteJeff LeBlanc – We Care OrganicsDr. Jeffrey Lodge – Rochester Institute of Technology, School of Life SciencesKelly Mandarano – Eastman Kodak CompanyJim McMurtie – Formerly with Epiphergy, LLCChris Noble – Noblehurst FarmsJohn Noble – Noblehurst Farms/ Lynwood IndustriesBob Obrock – Agrex Kathleen O’Connor – New York State Energy Research and Development Authority Mark Peterson – Greater Rochester Enterprise Robert Putney – Impact EarthNiel Rejman – Sunnyside FarmsDr. Sally Rowland – New York DEC, Organics ManagementCongresswoman Louise Slaughter – NY District 25Dr. Thomas Trabold – Rochester Institute of Technology, Golisano Institute for SustainabilityDr. Timothy Volk – State University of New York College of Environmental Science and ForestryKeith Wilson – Sweetwater Energy, LLCTim Winters – Western NY Energy LLCDr. Peter Woodbury – Cornell University

6 Developing a Bioproducts Sector in the Finger Lakes Region

List of Acronyms

AD Anaerobic digestion

Ag and Food Agriculture and Food Production

C5 sugars Five chain carbon sugars (pentose)

C6 sugars Six chain carbon sugars (hexose)

CNG Compressed Natural Gas

EBP Eastman Business Park

EDA Economic Development Administration

FLR Finger Lakes Region

FLBIC Finger Lakes Bioproducts Innovation Consortium

FLX Finger Lakes Forward

FLREDC Finger Lakes Regional Economic Development Council

KSC Kodak Specialty Chemicals group

LNG Liquid Natural Gas

MSA Metropolitan statistical area

NYSERDA New York State Energy Research and Development Authority

NYS New York State

DEC Department of Environmental Conservation

NGMT Next Generation Manufacturing and Technology

REDC Regional Economic Development Council

REC Renewable Energy Credit

REV Reforming the Energy Vision

RFS Renewable Fuel Standard

RIT Rochester Institute of Technology

URI Upstate Revitalization Initiative

SUNY ESF State University of New York College of Environmental Science and Forestry

WWTF Wastewater Treatment Facility


Executive Summary

EXECUTIVE SUMMARY


The market for bioproducts, such as biofuels, bio-power and bio-based chemicals, is poised for rapid growth. The transition to replace fossil-based products with renewable biomass based prod-ucts addresses long-term societal challenges related to fossil fuel dependence, resource efficiency and climate change. It also has been linked to the creation of jobs in both rural and urban areas. The Finger Lakes Region (FLR) of New York State has significant physical, intellectual and infrastructure assets within this segment, due to a history of leadership in agriculture, food production and chemical processing. Federal and State policies related to energy and waste management are driving additional interest in bio-based products in the Region. Thus, the FLR is faced with a unique opportunity to build on its current assets and refocus its legacy into this emerging, high potential, industrial sector.

This report provides a roadmap for the development of the bioproducts sector in the Finger Lakes Region of New York State. The report begins with an an overview of the FLR and the current revitalization targeted to build on its strengths and address poverty and job loss concerns. This is followed by a discussion of the factors and trends relevant to the development of the bioproducts sector. The key assets and opportunities for the FLR, as well as weaknesses and threats, are presented and strategic recommen-dations proposed.

The FLR is located in west-central New York and is composed of nine counties. It encompasses 4,680 square miles and is bor-dered on the north by Lake Ontario. Rochester, located in Monroe County, is the Region’s largest urban center and has a population of approximately 210,000 people. It is a city of sharp contrasts: vibrant neighborhoods and business districts are juxtaposed with high concentrations of poverty, unemployment, and substandard housing. The counties of Genesee, Livingston, Ontario, Orleans, Seneca, Wayne, Wyoming and Yates surround Monroe County to the east, west and south and have large rural populations. Over 1.5M acres of farmland in the FLR deliver the highest agricultural output of any upstate region.

In early 2016, the Finger Lakes Regional Economic Council (FLREDC) was awarded, through a state-wide Upstate Regional Initiative (URI) competition, one of three $500M awards, to be dispersed over a five-year period. The plans to drive economic de-velopment in the Region identified three key “pillar” industries due to their perceived importance to the community. The development of the bioproducts sector strongly aligns two of these three pillars: 1. Agriculture and Food Production2. Advanced Manufacturing and Technology.

Agriculture and food production can be viewed as conventional bio-based industries, as they are well established enterprises that utilize biomass resources to produce food, feed and fiber products. While this report focuses on the emerging bioproducts sector, which converts biomass resources into biofuels, bio-power and bio-based materials that displace fossil-based products, there is significant synergy between the development of the bioproducts sector and the existing agriculture and food processing industries. Crops, wastes or by-products from agriculture and food process-ing can be used as feedstock for bioproducts. In addition, the agriculture and food processing industries often provide markets for bioproducts or co-products such as energy, power, food, feed and soil products. Thus, the development of the bioproducts sector has the potential to increase efficiency, provide additional revenue and support the growth of the agriculture and food processing industries. Similarly, the bioproducts sector can leverage the skill base and infrastructure of the agriculture and food processing industries, as well as the Region’s strong chemical and manufac-turing legacy.

As a high growth sector, bioproducts also offer the opportunity to provide jobs and economic growth in the Advanced Manufac-turing pillar sector. As the local economy has transitioned from one dominated by “big” companies to a diverse economy spanning many sectors, the downsizing in companies like Kodak, Xerox and GM has in many cases left behind valuable assets and talented human capital. Kodak’s 1200 acre Eastman Business Park (EBP),

9

Bioproduct development takes time and requires significant capital. This can be particularly challenging in an environment of volatile oil prices and policy uncertainty. Therefore, the Region must reach out to key industry stakeholders, major corporations and federal and state agencies to build winning partnerships and secure funding. Although developing a vibrant bioproducts sector requires long-term strategic thinking, the Region has experience in fostering an energy generation and storage ecosystem that is just beginning to bear fruit.1 Focused bioproduct sector development is occurring in other parts of the country, and there is growing recognition at a national level that bioproducts are not only a huge potential economic engine, but are indeed essential to the security and future sustainability of the U.S.

located in Rochester with a manufacturing capability developed over more than 100 years, is now being made available to companies that can use the various tools and expertise in thin film coating and applied chemistry. This site, along with others in the Region, has significant infrastructure capabilities, including a rail spur, access to low cost electricity, fresh water, and waste man-agement. Valuable physical and intellectual resources can also be found at the Region’s academic institutions, including Rochester Institute of Technology, which is home to the Golisano Institute for Sustainability, the Center for Sustainable Packaging, the New York State Pollution Prevention Institute, Cornell University’s New York State Agricultural Experiment Station (NYSAES), and Agriculture and Food Technology Park (part of the STARTUP-NY program), as well as institutions in neighboring regions such as the main Cornell University campus in Ithaca and SUNY College of Environmental Science and Forestry in Syracuse, NY. Leveraging these technical and intellectual assets is an important component of the Region’s bioproducts roadmap.

The Region has been active in the development of first genera-tion bioproducts. It is home to one of the state’s two corn ethanol plants and houses about 1/3 of the state’s on-farm biogas plants. The FLR has also given rise to promising start-up companies re-lated to cellulosic ethanol production and industrial biochemicals. This activity has spurred additional innovation in bioproducts that utilize biorefinery co-products, such as lignin platform products. A multiplier effect has also been observed, resulting in the emer-gence of support industries such as separation technology and feedstock logistics companies, which form the seeds for potential growth of a bioproducts cluster. In addition, the unique capabilities at EBP, along with state-of-the art academic facilities, provide key resources to successful scale-up and product commercialization. Finally, the presence of a variety of end-markets for bioproducts is also a strength to enable cluster development.

Many of the pieces are in place to create a thriving bioproducts ecosystem. However, development of this potential requires a focused and coordinated effort that responds to current industry trends. This requires support in the form of information, network-ing, marketing and advocacy to develop a bioproducts cluster. It is essential to enable robust communication across all stages of the bioproducts ecosystem, including feedstock supply and logistics, bio-based intermediate and end-product markets, academia and technology development, and deployment resources. Addition-al needs exist to connect bioproduct developers with unique or abundant regional biomass resources and customer-driven end-markets, in an environment that fosters innovation. Further-more, facilities and expertise to focus on process development and acceleration can help bridge the so-called “valley of death” between start-up and commercialization.

New York State Agricultural Experiment Station (NYSAES), Geneva, NY

Golisano Institute for Sustainability at Rochester Institute of Technology, Rochester, NY

SUNY College of Environmental Science and Forestry, Syracuse, NY


To focus the next steps in developing this roadmap into executable plans, it is recommended to fund and engage a local economic development agency to lead this. Greater Rochester Enterprise (GRE)2 is one example of such an organization, and is a not-for-profit supported by private and public sector leaders dedicated to improving economic performance in the Region. Their purpose is to position the Greater Rochester, NY region as one of the most innovative regions in the world, and to attract new investment and economic growth. GRE collaborates with local businesses, universities, not-for-profit organizations and government leaders to support entrepreneurship, innovation, business attraction and expansion. They connect business executives with local resources, including real estate, research and development assets, supply chain, business partners, potential incentives, workforce recruitment and training and entrepreneurial support.

The strategy outlined in this document provides a roadmap to guide the Finger Lakes Region in realizing its full potential and becoming a leader in the bio-based economy. The authors recommend identifying an economic development organization, such as GRE, to act as the lead agency to coordinate and implement the key economic development enablers listed below. Additional funding will be required to fully develop and execute these plans. Funding sources have not yet been identified, but are expected to include State, Federal and corporate entities. Key recommendations of the strategy are as follows:

1. Develop a comprehensive regional execution plan and promote the roadmap’s vision. a. Identify a sector champion or champion team to begin cluster development and implementation planning. b. Communicate the vision. This includes actively promoting the FLR’s key underutilized assets and competitive advantages,

communicating locally, at the state level (especially relating to developing energy policy), nationally, globally and broadly across the entire bioproducts industry value chain.

2. Lay the foundation for future bioproducts sector growth and maturation by supporting existing bioproducts activities and local industrial, academic and workforce assets. a. Seize current opportunities to establish a seed for growth and agglomeration. Identify and promote projects within the

Region that will support and grow the current biogas industry, feedstock logistics, platform and chemical bioproducts, and co-product upcycling activities.

b. Provide education and workshops to connect key stakeholders along and across the value chain, to strategically link feedstock producers and conversion technologies, conversion technologies and end-markets, conversion technologies and food/feed/fiber value chains, bio-intermediates and secondary producers, academia and industry.

c. Provide resources and incentives to spur expert-driven innovation focused to address specific market needs. Create a Finger Lakes Bioproducts Innovation Consortium (FLBIC) as a technology hub that leverages and coordinates existing academic, industrial and government assets and resources, to drive near-term solutions and longer-term R&D, spanning the full range of activities from feedstock development to end-product commercialization.

3. Promote development of a commercial-scale manufacturing base that is ready to capitalize on new innovations that emerge from regional bioenergy and bio-material leaders. a. Provide commercialization support. As a “pipeline” of innovations emerges from the Finger Lakes Bioproducts Innovation

Consortium’s academic and entrepreneurial leaders, develop a technical and financial support system to enable successful commercialization of bioproducts.

b. Build strategic partnerships. Become involved in the industry and attract major companies active in the bioproducts sector. c. Grow the cluster by promoting key partnerships, attracting top executives to the Region with bioproduct and chemical

industry experience, leveraging research and development in biotechnology, and building world-class commercialization support and investment capital.


1 Introduction

The strategic significance of transitioning to a sustainable bio-based economy (or bio-economy) has been well documented. 3, 4, 5 In the bio-economy, renewable biomass resources are used to generate bio-based energy and bio-based materials such as bio-chemicals or bio-plastics. The movement to a bio-economy responds to current social and environmental issues, including climate change, natural resource shortages and food security, and has also been linked to economic development in both urban and rural settings.6 Industry group BIO recently reported that “McKinsey and Co. estimated that there were $252 billion in sales of bio-based products in 2012, with biofuels and plant extracts comprising more than half. By 2020, McKinsey expects bioproducts to make up 11 percent of the $3,401 billion global chemical market …reaching $375-$441 billion by 2020, with a compound annual growth rate of 8 percent over the preceding decade.”7 Expected societal benefits from the bio-economy include creation of millions of jobs, greenhouse gas mitigation and avoidance of fossil-based resources (Figure 1). The Finger Lakes Region (FLR) is uniquely positioned to take a leadership role in the high potential bioproducts sector, due to its significant natural, industrial and human assets.

Figure 1 - Economic projections in the 2016 Billion Ton Study Report,8 which concluded that the United States has the potential to sustainably produce at least 1 billion dry tons of nonfood biomass resources annually by 2040.

Projections based on:• 2016 Billion Ton Study Report (forthcoming)• EIA 2015 AEO• 2015 USDA Long-term Forecast• Various data sources

* includes 27 billion kWh and 90 TBtu from livestock anaerobic digestion

1 Introduction


What are Bioproducts?

An economy that utilizes biomass resources to generate products is not a new concept. In fact, conventional bioproducts such as food, feed and fiber are a central component of the Finger Lakes Region (FLR) economy. Bioproducts, as defined in this report, provide renewable substitutes for fossil-based products, along with industries involved in their production, marketing and distribution. However, because of the close relationship among bio-based industries, the development of the emerging bioproducts sector may also lead to new or expanded conventional products in the food, fiber or agriculture sectors.


2 Regional Overview

The 62 counties of New York State are divided into 10 economic development regions. The Finger Lakes Region (FLR) is located in west-central New York and is comprised of nine counties: Genesee, Livingston, Monroe, Ontario, Orleans, Seneca, Wayne, Wyoming and Yates (Figure 2). The FLR encompasses 4,680 square miles and has a population of over 1.2 million.9 Over 60% of the population resides in Monroe County and 17% in the City of Rochester – the third largest city in New York State with a population of about 210,000. The Rochester metropolitan area offers lower cost of living and higher quality of life compared to many of its larger neighbors, and is the epicenter of the Finger Lakes regional economy. Other major cities in the FLR include Batavia (population 15,500), Geneva (13,300), and Canandaigua (10,500).10

490

390 90

Rochester, NY Region

Lake Ontario

Orleans

Genesee

Wyoming

Livingston

MonroeWayne

Ontario

Yates

Seneca

Rochester

Batavia

Canandaigua

Geneva

Figure 2 - Nine County Finger Lakes Region

2 REGIONAL OVERVIEW


The Region also encompasses 1.5 million acres of farmland, 21% of the total in New York State (NYS), and is blessed with abundant natural resources. Located near 7% of the world’s fresh water supply, the Region has millions of gallons per day in excess water capacity. Coupled with rich, fertile land, the FLR is #1 in NYS in sales of all food crops, milk and other animal products.11

Interstate I-90 (NYS Thruway) runs East-West through the Region, and the Erie Canal passes through the northern portion, having served as the original transportation route for goods man-ufactured in the area. The FLR is located within 500 miles of 1/3 of the U.S. and Canadian populations, and within driving distance of major northeast markets such as New York, Boston, Detroit, Cleveland, Toronto, and Washington, D.C. A well-established transportation infrastructure is capable of reaching 120 million people in the northeast in less than one day. Commercial rail routes handle up to 60 trains per day with service available through three Class 1 carriers.12

The Rochester metropolitan area has received several recog-nitions and awards in areas that are key attractors for advanced technology development companies. These accolades are very important to companies looking to locate or expand, as they know the right workforce can be hired quickly and locally to support their development programs. This intellectual horsepower is something the Region is very proud of. Some key recent recognition includes:

• A TOP 5 INNOVATION-INTENSIVE CITY The Brookings Institution (2010)

• ONE OF 10 UNDERRATED HOTBEDS OF AMERICAN INNOVATION Fast Company (2012)

• ONE OF 35 U.S. INNOVATION HUBS The Atlantic (2011)

• #18 AMONG THE WORLD’S LEADING SCIENCE CITIES Scientific Reports (2013)

• 7th BRAINIEST LARGE METRO AREA IN THE NATION Luminosity (2013)

• 13h BRAINIEST CITY IN AMERICA The Atlantic (2012)

The human capital element is supported by the area’s 19 higher education institutions, including campuses of the State University of New York (SUNY), private universities (including nationally ranked University of Rochester and Rochester Institute of Technology), and various community colleges. These local institutions have a total student population of approximately 86,000, and award 19,000

degrees annually. Rochester ranks among the top locations in the nation for degrees awarded in mathematics and physical sciences, biology and life sciences, and engineering.13

Historically, the Region’s economy has been viewed as being dominated by “big” companies, due to the presence of corpora-tions such as Eastman Kodak Company, Bausch & Lomb, General Motors, and Xerox. However, since the 1990s, these companies have experienced major shifts in their businesses, resulting in significant workforce reductions or relocation of operations outside of the Region. When the big companies downsized, much of the highly skilled workforce remained in the area. This is a testament to the very high quality of life in the Finger Lakes Region. Many of these innovators formed businesses of their own, resulting in a much more diversified economy spanning the healthcare, photon-ics, optics, precision manufacturing, and developing bioproducts sectors. The greater Rochester area remains an important manu-facturing center, with over 1,500 manufacturers employing nearly 66,000 people. It is also among the top 30 major metropolitan exporting regions in the country, on a per capita basis.14

In some cases, downsizing has left significant assets vacant or under-utilized. For example, the 1,200-acre campus of the East-man Business Park (EBP) houses 2.5 million ft2 of industrial space. Originally built by Eastman Kodak Company to support research and production of still and motion picture film, the facility has a variety of amenities to facilitate advanced manufacturing, including a 120-MW power plant, water processing and supply infrastruc-ture, waste treatment, and on-site fire, safety and rail services. The decline of the big companies also left many laborers unable to find suitable work, causing a major shift in the manufacturing landscape. In 1990 manufacturing accounted for one out of every four jobs in the Rochester area, or over 120,000 jobs, but today accounts for only one in ten, or less than 57,000 jobs.15 While the Region is not alone in seeing a decline in manufacturing jobs, the pain has been particularly severe in Rochester due to the Region’s historically strong manufacturing base. While Rochester was once viewed as a thriving metropolitan area, full of opportunities and with high paying jobs for all skill levels, it is now one of the poorest cities with among the highest poverty levels in the country. The city of Rochester has a population near 210,000, with 66,000 residents living below the federal poverty line.16 The current poverty situation in Rochester is in stark contrast to the booming manufac-turing town it once was.

Developing bioproducts and other core industries that enable job growth in the city of Rochester is a key component of the recovery and rebuilding plan for the Region. The bioproducts sector also provides economic opportunities and diversification to farmers. Green jobs can help these communities struggling with aging populations and out-migration, by providing exciting opportu-nities to skilled workers, youth and recent college graduates.


3 Existing Economic Development Initiatives and Policies

3 EXISTING ECONOMIC

DEVELOPMENT INITIATIVES

AND POLICIES

16

In 2011, New York State Governor Andrew Cuomo established a new, regionally-driven model for economic development and job growth in the State. As mentioned earlier, the 62 counties in New York are divided into ten multi-county regions, each with its own Regional Economic Development Council (REDC) as shown in Figure 3.

The Finger Lakes Regional Economic Development Council (FLREDC) is the REDC for the Finger Lakes Region. The REDCs are responsible for developing regionally-driven economic growth plans, and identifying the key assets and opportunities for the local communities. Each region develops a strategic vision and implementation plan on an annual basis, and submits locally- developed project plans to compete for state funding. This process allows the diverse regions of New York State to properly prioritize spending and resources according to local needs, and is intended to stimulate local job growth by capitalizing on the natural resources, workforce capabilities and industrial strengths germane to each region.

The Regional Council award process requires companies and organizations seeking funding to complete a Consolidated Funding Application (CFA) through their local REDC. These applications are received as part of an annual cycle in late summer, with awards typically in the late fall or early winter. Each REDC developed a process to review, screen and down-select project applications to provide a prioritized list to the state for funding. In 2015, an additional $1.5 billion was allocated for the Upstate Revitalization Initiative (URI), in addition to the typical CFA process. The URI allowed 7 of the 10 REDCS (Western NY, NYC and Long Island were not eligible) to compete for an additional $500 million each for local projects over the following 5 years. Each region was required to develop a much more detailed strategic plan, including key industry clusters, global exports, and investment opportunities.

Figure 3 - NYS divided into ten Regional Economic Development Councils (REDCs)17

Regional Councils

Western New York

Finger Lakes

Southern Tier

Central New York

North Country

Capital Region

Mid-Hudson

New York City

Long Island

Mohawk Valley


For the 2015 RECD competition, the FLREDC branded a comprehensive regional plan to compete for URI funding. The plan, entitled “Finger Lakes Forward (FLX): United for Success” is available on the NYS website.18 This plan identifies and leverages the key assets in the Finger Lakes Region, and establishes a clear plan toward meeting the economic, societal and environmental goals. Three key Growth Pillars were identified: Optics, Photonics and Imaging (OPI); Agriculture and Food Production (Ag and Food); and Next Generation Manufacturing and Technology (NGMT),

encompassing the key sectors for economic and job growth across the Region (Figure 4). Each of these pillars relies on three key enablers – Pathways to Prosperity: Workforce Development; Entrepreneurship and Development; and Higher Education and Research. These enabler areas are targeted for additional eco-nomic investment and training to ensure the Region can adapt to the current industry and economic landscape, and fully implement the FLX plan.

Strategic Framework for FLX

Figure 4 - Strategic framework for the FLX 18


3.1 Optics, Photonics & Imaging (OPI)The OPI pillar draws on Rochester’s history of innovation and development in this sector. Based on a survey by the REDC OPI workgroup, there are over 100 small and medium sized businesses in the Region, driving growth in this sector. The Region’s expertise in the fields of OPI has been recognized federally with the announcement that the American Institute for Manufacturing Integrated Photonics (AIM Photonics) was the winning consortium of the Department of Defense National Network for Manufacturing Innovation (NNMI) in Integrated Photonics, and will be headquartered in Rochester.

3.2 Agriculture & Food Production (Ag & Food)

The Region is home to many established food and beverage production companies. The FLR produces the highest output in the Eastern US in several specialized food production domains, including wine and yogurt. Top companies include LiDestri Foods (1,000 employees; 700 in FLR); Wegmans Food Markets (46,000 employees; 50% in NYS and 600 food production employees in FLR); Constellation Brands (6,000 employees; 700 in FLR); North American Breweries (600 employees in FLR); O-AT-KA (380 employees in FLR); Bonduelle (300 employees in FLR) and Upstate Milk (165 employees in FLR).18These companies support agricul-ture, create employment, attract investment and are key private investors in the Upstate Revitalization Initiative (URI) and Consoli-dated Funding Application (CFA) projects in the Region.

Farming and food production are major economic drivers for NYS, with nearly 25% of the state’s total agriculture output coming from the Finger Lakes Region.19 The Ag & Food pillar includes all aspects of the ecosystem, from farm to table to landfill. Specific focus areas of this pillar include agricultural research, diverse farms and crops, healthy food production and sustainable waste

management. The diverse agricultural outputs, including high production of vegetables, apples, wheat and corn, and the highest state outputs of wine, yogurt and canned and frozen goods,18 are spread across the Finger Lakes Region. Growth in the Ag & Food sector is a key enabler in reducing rural poverty, by creating jobs for all skill levels across the Region.

Investments in Agriculture and Food Production have driven economic impact. These investments include funding for expan-sions (Motts, Once Again Nut Butter, Quaker Muller, LiDestri, and Love Beets), as well as enablers of Ag and Food Processor growth, such as GAIN (Growing the Ag Industry Now) revolving loan fund, and the NY Wine Association green wastewater treatment system. Funding has also gone to support three Agro-Industrial parks in the Region: Genesee Valley Agri-Business Park, LeRoy Food and Tech-nology Park, and Cornell Agriculture and Food Technology Park.

A goal of the FLX effort is to increase the connectivity of the food sector within the Region, linking the Finger Lakes Region’s food production and manufacturing, growers and retailers. The benefits of maintaining a local value chain, working together to align production, decrease costs, and mitigate risk, are beginning to bear fruit.

3.3 Next Generation Manufacturing & Technology (NGMT)

While OPI and Ag & Food represent historically significant industry sectors for the Region, NGMT is poised to support future growth sectors. There are three key innovation hubs in the FLR, and each is focused on developing different technology clusters. Eastman Business Park (EBP) in the Town of Greece (Monroe County) is targeting energy innovation, biomaterials development and large-scale food processing. The Downtown Innovation Zone (DIZ) in the City of Rochester is focused on job creation within IT, photonics, software and new media sectors, as well as attracting compa-


nies to occupy several existing downtown buildings. The Western New York Science and Technology Advanced Manufacturing Park (STAMP) in the City of Batavia (Genesee County) is a 1,250-acre shovel-ready site, ideally suited for multiple large manufacturing facilities for nanoscale, semiconductor, displays/imaging and photovoltaic applications.

3.4 EDA Sector Summary Linkage

Development of the interconnected ecosystem of the Ag and Food sectors has been identified as an enabler for growth in the FLREDC Finger Lakes Forward strategy. Expansion of the bioproducts eco-system in parallel provides incremental benefit. Ag and Food pro-duction wastes or by-products can be used as biomass resources for bioproduct development, making regional food processors more competitive, enabling growth and mitigating regulatory concerns. The agriculture and food supply chains can also serve as markets for bioproducts such as biopower (heating, cooling, electricity), agrochemicals, feed, flavorings or bioplastics. The Region’s invest-ment in the development of Agro-Industrial parks offers a particular opportunity for synergistic exchanges. The close access to such a large amount of agriculture and food production markets is unique to this region and is a critical asset for achieving economic viability and development of high value bioproducts.

As the target for future growth, NGMT holds significant potential for development of the bioproducts sector. Along with bioenergy and bio-based materials (including biochemicals industries), which are clearly within the bioproducts sector, separation technologies or industrial biotechnologies also play a role in advancing the bioproducts sector. Development of the bioproducts sector has the potential to leverage existing assets, to revitalize manufacturing and provide opportunities in both rural and urban areas.

The development of EBP is the #1 economic development prior-ity for the Finger Lakes Region. EBP is currently home to

67 companies, including a bioproducts cluster. One of the start-ups located in Rochester, NY, a cellulosic sugar company, Sweet-water Energy LLC, is discussing plans to co-invest in a manufac-turing facility at EBP. The facility would manufacture concentrated industrial bio-chemicals and pure lignin (i.e., structural material in plants that is generally difficult to decompose). Also planned for deployment at EBP is nanomaterials developer Cerion, and Delaware-based startup AquaTerRen, with a business concept to create hydroponic salmon fishery systems. While these companies are not directly, along with bioenergy and bio-based materials, focused on bioproducts, they join other companies at the nexus of food, energy, chemicals and agriculture to provide a center of innovation based on biomass resources. These include food processor Love Beets, Kodak Specialty Chemical (KSC) scale-up and toll manufacturing facility, Dupont Nutrition and Health (for-merly Danisco), which supplies products to the food, animal feed and pharmaceutical industries; Columbia Care medical marijuana dispensary; renewable polymer and chemical company, Novomer; and specialty chemical company SiGNa Chemistry. The significant opportunity for industrial symbiosis20 at EBP has been identified and an industrial eco-park, including a toll fermentation facility, has been explored. However, top-down planning of such facilities can be challenging, and has often resulted in failure.21 While the potential for industrial symbiosis and the competitive advantages and resiliency gained through it certainly exists at EBP, success is likely to require a bottom-up, business-driven approach, supported by a dedicated facilitator with a long-term commitment to work with businesses to establish and grow winning relationships.22 Similarly, other investments in bioproduct eco-parks (see Appendi-ces 1) have met with challenges, due to the scope of the projects and the resulting capital investments and coordination required. This points to the role of a dedicated champion to educate inves-tors and facilitate business-led realization of complex projects.


4 Bio-based Products Policy and Regulatory Environment

Several global societal goals are providing the impetus for a long-term transition to a bio-based economy. These include the need to: 1. efficiently manage resources and reduce waste 2. reduce dependence on fossil fuels3. mitigate climate change impacts

Additional benefits related to a bio-economy transition include: 4. increased productivity of the food supply chain, and 5. revitalization of the manufacturing sector and rural development.

While there is growing world consensus that the present fossil- based economy is unsustainable, the pace and shape of the transition to a bio-based economy is influenced by current and near-term regulations and policies (Figure 5). These include policies at the federal, state and local levels, which target individ-ual aspects of the bio-based economy (i.e., feedstock production, waste management, transportation fuels, renewable power, etc.) and utilize a variety of policy instruments (i.e., mandates, grants, tax credits, etc.). A discussion of several of the most significant policies impacting sector development follows.

These policies and regulations may create opportunity for development of the FLR bioproducts sector, however in some cases they also create uncertainty or unintended consequences. Thus, it is important to consider ways to capitalize on opportunities, as well as ways to provide stability and remove barriers for long-term growth.

4.1 Biofuels Incentives and the Renewable Fuels Standard (RFS)A significant driver of the biofuels market is the nation’s renewable fuel standard that originated with the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007. The RFS mandated that importers and producers meet certain production volumes of renewable fuels with a target of 36 billion gallons per year by 2022. By setting mandatory volumes, the policy intended to reduce risk and spur investment in renewable fuels. The updated Renewable Fuels Standard (RFS2), issued in 2010, further defined four nonexclusive categories, each with their own volume requirement. Aggressive growth was planned for advanced biofuels that are required to achieve at least 50% reduction in

Figure 5 - Illustration of the transition to a bio-economy where the dark line represents the overall transition and the faded lines indicate perturbations due to policy and market influences (Adapted from Bosman and Rotmans, 2016) 23

Stabilization

Acceleration

Take-off

Predevelopment

4 BIO-BASED PRODUCTS POLICY AND REGULATORY

ENVIRONMENT


The primary instrument for monitoring biofuel production rela-tive to the RFS is Renewable Identification Numbers (RINs). RINs are assigned whenever biofuel is produced or imported. New feed-stocks or pathways must be approved by the U.S. Environmental Protection Agency (EPA), which issues and tracks RINs. Producers and importers can meet their RVO either through actual production or through purchasing RINs from other obligated parties. RINs were designed to bridge the gap between supply and demand caused by the mandate, however the system has been distorted and volatile (sometimes referred to as “RINsanity”) due to a variety of causes related to real or imposed market limits for renewable fuels, gaming of the system and speculative RIN trading. Issues with RIN fraud have also been uncovered, in particular related to biodiesel RINs.

As the RFS continues to mature, the EPA is taking encouraging steps to return to mandated volumes, address RIN transparency issues and approve new pathways. Proposed changes to the RFS, announced in November 2016, include the addition of short rotation crop feedstock (i.e., poplar and willow) and cellulosic pathways that process renewable feedstocks into bio-intermedi-ates at one facility and further process them into renewable fuels at another facility, as well as rules and regulations to support higher ethanol blends. How the policy and EPA staffing levels will be affected under a new Federal administration is unclear, but

lifecycle greenhouse gas (GHG) emissions. The remaining volume of non-advanced renewable biofuels (or conventional biofuels) was essentially capped at 15 billion gallons per year by 2015. Nested within advanced biofuels were the categories of cellulosic biofuels (requiring 60% reduction in lifecycle GHG emissions) and biomass-based biodiesel (50% reduction).

Concerns over a “blend wall,” limiting the amount of ethanol that could be sold based upon E10 market penetration (i.e. 10% ethanol blended with 90% gasoline), and delays in producing and commercializing new advanced biofuels resulted in Congress curtailing the original volumes outlined in the RFS2. However, the most recent proposal from Congress for renewable volume obligations (RVOs) covering 2014-2017, released in May 2015, set the RVO for conventional biofuels at 14.5 billion gallons for 2017, essentially satisfying the original 15 billion gallon target. The proposed RVO for advanced renewable fuels for 2017 was set at 4 billion gallons. Within this category, biomass-based biodiesel was set at equal to or greater than 2 billion gallons and cellulosic biofuels at 312 million gallons for 2017. Beyond a firm 2018 bio-mass based biodiesel target (proposed at 2.1 billion gallons), the requirements for 2018-2022 remain uncertain. While the RFS has and continues to spur growth in biofuel production, many criticize that it has artificially constrained the industry and has created barriers to more significant investment.


assuming the system remains intact, the RFS will continue to pro-vide a market for renewable fuels and incentive for renewable fuel development, particularly associated with pathways to advanced biofuels. Commitment to a regional bioproducts vison and long term strategy can provide stability and create a favorable environ-ment for biobproduct sector development.

Beyond the federal program, a few state tax credits and regional mandates provide minor incentives. Biofuel producers in New York State may qualify for a state tax credit of $0.15 per gallon of bio-diesel (B100) or denatured ethanol produced after the production facility has produced, and made available for sale, 40,000 gallons of biofuel per year. The maximum annual credit available is $2.5 million per taxpayer for no more than four consecutive taxable years per production facility.

Monroe County’s Fleet Division, which oversees 1,100 vehicles, has implemented ethanol-based E85 in all of its flex-fuel vehicles, and ethanol-based E20 in remaining traditional gas vehicles. Monroe County also utilizes biodiesel (B5 and B20) in its diesel vehicles.

4.2 Renewing the Energy Vision (REV)

The NYS electric power industry is currently undergoing a major transformation under Governor Cuomo’s “Reforming the Energy Visions (REV)” strategy. The goal of this strategy is to build a clean, resilient and affordable energy system. This groundbreaking initia-tive has been a lengthy process with many stakeholders involved to get to a consensus approach. REV lays out three major objectives:

• 40% reduction in GHG emissions, from 1990 levels

• 50% of all New York’s energy generated from renewable sources by 2030

• 23% decrease in energy consumption in buildings, from 2012 levels

Under REV, the regulatory system will shift to a market-based approach where clean energy goals are achieved through incen-tives and price signals. In the past, the New York State Energy Research and Development Authority (NYSERDA) had provided capital and operational incentives for renewable energy projects through grants. Incentives for biogas power produced by anaerobic digesters have historically been focused on farm-based implemen-tations with electricity generation. NYSERDA continued supporting its existing programs at a lower level until they expired in 2016. The Clean Energy Fund (CEF) will replace these programs. CEF will focus primarily on market development, but will continue to provide

incentive-based programs for certain technologies to fill in market gaps, the specifics of which have yet to be announced.

Rate design reforms are also evolving. In the past, net metering (i.e., allowing surplus power from distributed generators to be transferred onto the grid, thus offsetting the cost of power drawn from the utility) was limited. NYSERDA set the limit initially to 1MW, but later increased to 2MW, and for farm-based applications only, and valued the renewable electricity at the utility’s avoided cost rate. This provided a very low incentive for exported electricity generation and required biogas producers to depend on additional revenue streams such as tipping fees, bedding co-product value or local power purchase agreements. As REV continues to evolve, the industry is calling for the tariff structure that replaces net metering to increase to at least $0.12/kWh, reflecting the additional attri-butes of waste-based biogas, including climate change mitigation, nutrient management and baseload power generation. The industry is also advocating support of biogas production in non-farm appli-cations. Interest in opportunities for bioenergy projects in New York State remains high, but development is essentially stalled as the details of the REV unfold.

4.3 Regional Greenhouse Gas Initiative (RGGI), Offset Markets and the Governor’s Methane Reduction Plan

Public Policy instruments to limit or offset GHG emissions also help to drive bioenergy and bioproduct development. The Regional Greenhouse Gas Initiative (RGGI), the first active GHG cap-and-trade program in the U.S., is a cooperative effort among nine Northeastern states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Ver-mont) to reduce greenhouse gas emissions using a market-based cap-and-trade approach.24 RGGI obligations apply to fossil-fueled power plants 25MW and larger within the 9-state region. RGGI establishes a regional cap on CO

2 by issuing a limited number

of tradable CO2 allowances. Most of the CO

2 allowances issued

by each RGGI state are distributed through quarterly, regional CO

2 allowance auctions. Proceeds from the auctions are returned

to states and invested in consumer benefit programs, including energy efficiency, renewable energy, direct energy bill assistance and other greenhouse gas reduction programs.

RGGI States currently allow regulated power plants to use a carefully chosen group of qualifying offsets to meet up to 3.3 percent of their compliance obligations. Included among these are landfill methane capture and destruction projects and the capture and destruction of methane from animal manure and organic food waste using anaerobic digesters. In addition to the RGGI, several voluntary non-profit and for-profit markets also exist to connect buyers of carbon offsets with registered carbon offset projects, such as the Carbon Trust and Native Energy, and California’s Low Carbon Fuel Standard (LCFS), which has an accompanying cap-and-trade program.


In May, 2017 Governor Cuomo released a plan to curb methane emissions through initiatives from several state agencies, including the New York State Department of Environmental Conservation (NYSDEC), Department of Agriculture and Markets, and NYSERDA.26 The initiatives will target three sectors: oil and gas, landfills and agriculture. Several bioproduct sectors are synergistic with the program’s goals. Anaerobic digestion in agricultural, as well as food waste implementations, is clearly targeted at the effective capture and utilization of methane. In addition, biochar (a highly porous bioproduct resulting from a thermochemical process) has been suggested to promote methane (as well carbon dioxide) sequestration in filter or soil amendment applications. As implementation of the Governor’s plan continues to evolve, it should include promotion of these and other innovative bioproduct solutions.27

4.4 Food Waste Disposal Bans

Several northeastern states, including Massachusetts, Vermont, Connecticut and Rhode Island have legislated restrictions on the landfilling of organic waste, and New Jersey has legislation in process. Also, in July 2015, the New York City Commercial Organics Recycling Mandate (Local Law 146) took effect. This law initially targets large generators such as stadiums, manufacturers, wholesalers and institutional food service providers, requiring them to provide alternative pathways for handling organic waste. The city currently has an organics pilot project underway, serving 300,000 households and 720 public schools.25 Some of the waste collected is prepared at a Waste Management processing facility and sent to a biogas production plant at the Newtown Creek Wastewater Treatment Plant. Several other vendors, including WeCare Organics, also provide compost services to support the pilot. The goal is to make curbside and drop-off organics recycling programs available to all City residents by 2018.

New York State is expected to follow a similar path and issue restrictions on organics landfilling in the near future. The potential for such legislation, along with the existing legislation in the Region, has caused many commercial generators to explore biogas production along with other treatment alternatives for their organic waste. It has also drawn the attention of many biogas project developers to the State.

4.5 USDA BioPreferred Program

One of the few policies specifically targeting bio-based products (not including food, feed or bio-fuel) is the USDA BioPreferred program, created by the 2002 Farm Bill and reauthorized and expanded as part of the Agricultural Act of the 2014 Farm Bill. The program’s goal is to increase the purchase and use of bio-based products. It contains two major parts: mandatory purchasing requirements for federal agencies and their contractors; and a voluntary labeling initiative for bioproducts.

Federal law and executive orders specify that all federal agencies must meet mandatory purchasing requirements for bioproducts in specified categories (i.e., cleaners, carpets, lubricants, paints). Each mandatory purchasing category specifies the minimum bio-based content for products within that category and the program provides a catalog, tools and training to enable compliance. To date, more than 97 categories have been identi-fied, representing more than 10,000 products.

Voluntary labeling provides information to assist consumers in identifying bioproducts. The main users currently are institutions and large corporations seeking to achieve sustainable purchasing targets. Companies may apply for certification to display the USDA Certified Bio-based Product label on a product that states its bio-based content as verified by an independent party. A product must meet or exceed the minimum bio-based content percentage in its given category in order to qualify for this certification. The program has seen steady growth across many industry sectors, including approximately 2,500 products in more than 100 different product categories.28


5 Global Trends: Factors Influencing Bioproducts Sector Development

The bio-economy, by definition, produces products using renew-able resources to displace or supplement fossil fuel-based prod-ucts. As a paradigm shift, this emerging sector requires visionary leadership committed to the development of new value chains and processes. Furthermore, it competes directly with a global oil industry that has evolved for over a century and holds significant economic and political power. These challenges are manifested in several industry trends that will shape the future development of the bio-economy on a global scale. Promotion of the local bio-economy space requires a plan that integrates these trends with an assessment of the specific assets, gaps and opportunities in the FLR (detailed in Sections 6 through 8).

5.1 Biorefineries - Innovation, Diversification and Optimization The concept of a biorefinery is analogous to that of an oil refinery where the goal is to use the “whole barrel” of oil entering the plant efficiently to make multiple fuels, power and chemical products. As defined by an International Energy Agency (IEA) task force, a biore-finery is “the sustainable processing of biomass into a spectrum of marketable bio-based products and bioenergy.”29

5.1.1 Innovative Valorization of Wastes

The term valorization is sometimes used to describe the trans-formation of biomass or wastes into valued materials.30 Thus, a biorefinery seeks the complete valorization of biomass entering the biorefinery into valued co-products. For example, in the produc-tion of conventional corn-based ethanol, approximately 2.9 kg of animal feed in the form of distiller’s grains with solubles (DGS) is marketed for each gallon of ethanol produced. A similar amount of carbon dioxide is also generated during the fermentation process, which can be captured, compressed, and sold to gas markets such as beverage or dry ice manufacturers. In fact, ethanol plants account for about 1/3 of the CO

2 market,31 and now CO

2 is being

considered for use in “dry fracking” instead of water.32 The sale of non-fermentable co-products is critical to the fuel ethanol in-dustry as a source of revenue; these materials have also become important feed ingredients to the livestock industry. Over the past decade, another co-product has become ubiquitous, as nearly all corn ethanol biorefineries have also begun removing oil from the corn prior to or after fermentation. Distillers Corn Oil (DCO) can be converted into biodiesel or marketed as an animal feed ingredient.

5 GLOBAL TRENDS: FACTORS INFLUENCING BIOPRODUCTS SECTOR

DEVELOPMENT


Figure 6 - Breakdown of a barrel of crude oil into products and associated revenue contribution (2016). 33, 34

The biorefinery model is common to other bioenergy products, including biogas and biodiesel, where revenue generation from waste heat recovery, animal bedding, fertilizer and glycerin products are critical to economic viability. Thus, the promotion of innovative ways to achieve higher value out of waste streams, or the biomass entering a biorefinery, is an important aspect of effective bioproducts sector development.

5.1.2 Diversification of Products, Convergence of Industries

As the example above illustrates, co-product valorization can sometimes cause a biorefinery to operate in several markets (e.g., animal feed, food grade CO

2, bioethanol and biodiesel production).

Borrowing again from the analogy of the oil industry, approximately 75% of the volume of a barrel of crude oil goes toward making fuels, while 16% of the barrel goes toward making petrochemicals. Yet, despite the much smaller volume, these chemicals produce almost as much revenue as the fuels (Figure 6).

Dried Distillers Grains with Solubles

7 Gallons – CHEMICALS

4 Gallons – OTHER

4 Gallons – JET FUEL

11 Gallons – DIESEL

19 Gallons – GASOLINE

Chemicals make up 16% of the volume of U.S. oil products, and are worth $812 billion.

Fuel makes up 76% of the volume of U.S. oil products, and is worth $935 billion.


Combining lower volumes of higher value products such as bio-chemicals with high volumes of lower value products such as fuels enables efficiency and diversification. High-cost processes such as energy intensive pretreatment or fractionation that are common elements of production can be spread across multiple products enabling economies of scale. Diversifying into additional markets can provide access to higher value markets (including access to different policy incentives) and thus increased resiliency to market volatility.

Not only are biochemical products a key component of integrated biorefineries, but also the close alignment of produc-tion processes has resulted in several companies shifting focus between bioenergy production and biochemical production in response to market conditions. Biochemicals and bio-based ma-terials may offer a premium over commodity-based fuel products, providing a pathway for companies as they struggle with achieving the scale-up efficiency required for commodity energy products. Also there is increasing corporate interest and investment in bio-chemicals. One example is Verdezyne, CA, which had devel-oped a successful fermentation platform for biofuels development but has since shifted towards chemicals, selling its fuel-based intellectual property to DuPont. Thus, we see a convergence of the biofuels and biochemicals industries, as well as integration of these industries with food and feed production, and even petrochemical industries. As it is difficult to understand all of these markets well, an important implication of this trend is that development of the bioproducts sector must encourage the formation of partnerships and collaboration with a variety of parallel industry sectors.

5.1.3 Optimization Through Centralized or Decentralized ModelsAs biorefineries strive for optimal use of resources, different models have evolved. Understanding the different models for optimization can be important in considering which are best suited for development of the FLR bioproducts sector. One model is to take in a single feedstock and extract as many different high value products as possible. This can be accomplished by designing a large, highly integrated facility to take advantage of economies of scale, or by adding additional products to an existing facility, sometimes called “bolt-on” technologies. This includes the example above, where DCO is used as a feedstock for bioethanol or renewable diesel production. Bolt-on approaches are also being used to ferment corn kernel fibers, bridging the gap to cellulosic ethanol and increasing overall yield. Other bolt-on technologies are being used to extract and produce biochemicals.

An alternative pathway for optimization is through a distributed model. As shown in Figure 7, biomass conversion can essentially be broken down into two steps: Deconstruction and Fractionation, and Synthesis and Upgrading. A distributed model takes into account that biomass resources are distributed geographically and are often wet and bulky, making transportation over large distances challenging. Rather than a centralized model of a large biorefin-ery that collects biomass over a 40 to 50 mile radius, in order to create economies of scale in processing, a network of smaller facilities would collect biomass resources from within smaller areas. These facilities would pretreat and fractionate the biomass, creating a concentrated feedstock to meet biorefinery require-ments. The advantage of the distributed model is that lower capital

Separations, Integration, and Enabling Technologies

Figure 7 - The primary steps of biomass conversion 35

Deconstruction & Fractionation Synthesis & Upgrading

Feedstock Supply & Logistics (including

algae)

Fuel and Product

Distribution, Infrastructure, and End Use

Hydrolysis

Pyrolysis

Gasification

Hydrothermal Liquefaction

Pretreatment

Preprocessing

Biological Processing

Catalytic Processing and Stabilizatiuon

Intermediate Upgrading

Fuel/Product Finishing

Intermediate Processing

at Petroleum Refineries


investment feedstock can be located to produce higher density intermediate feedstock. This intermediate feedstock can then be sold to hub biofuel biorefineries or can be used as feedstock for industrial biochemical production. Hub biofuel biorefineries have increased resiliency due to a diverse network of feedstock facilities that can use multiple biomass sources to create their intermediate feedstock. Feedstock facilities can also supply to biochemical markets. Venture investors and companies favor platforms where multiple markets can be addressed.

5.2 Bioproducts Ecosystem: Integration Along and Across the Value Chain

The development of bioproducts is in its infancy and thus requires development of complete value chains to get from primary biomass feedstock to final bioproducts that are ready for the market (Figure 8).

While the importance of biomass feedstock and bioconversion technologies are usually well understood, other important compo-nents are often overlooked. In particular, many biomass resources

require new or modified feedstock logistics infrastructure to deliver biomass resources that meet the requirements of biorefineries. Similarly, bioproducts must meet the requirements of intermediate markets and end consumers.

Achieving this requires integrating the bioproducts value chain with parallel value chains such as agriculture, forestry, food production or waste management industries to secure biomass resources. Downstream integration with chemical, food production and consumer product industries are important to get valued bio-products to market. By-products or wastes that leave one process can become feedstock for another. These resources can also be valorized into products in the agricultural, food or feed value chains. Just as in the case of the biorefinery, optimization along the value chain through increased integration and networking across value chains and with parallel industries, enables increased competitiveness and financial viability of the bioproducts sector. Networking, stakeholder groups and strategies that build tighter integration, and establish successful partnerships to end markets is important for sector growth.

Figure 8 - Bioproducts value chain and parallel industries (adapted from OBIC, Powering Prosperity 36

Feedstocks

Agriculture/Forestry

• Crops/residue

• Wood residue

• Livestock manure

Industrial/Municipal

• Municipal solid waste

• CO2 emissions

• Food/industrial by-products

Technologies

Extraction/Separation• Mechanical, chemical

Bioconversion• Microbes, algae

Hydrolysis• Acids, enzymes

Gasification• High heat, low oxygen

Pyrolysis• Catalysis, heat, pressure

Markets

Food• Oil• Proteins• Carbohydrtaes• Additives

Fuels/Energy• Ethanol/butanol• Biodiesel• Heat• Electricity

Materials• Plastics• Fibers• Adhesives• Rubber • Paints/coatings • Dyes/pigments/ink • Detergents/solvents

AGRICULTURE

FOOD PRODUCTION

CHEMICALS


6 Biomass Resources and Feedstock Logistics

6 BIOMASS RESOURCES AND FEEDSTOCK

LOGISTICS


This section provides a summary of the biomass resources and existing feedstock supply infrastructure in the FLR. Additional detail is provided in Appendix 2.

The FLR is fortunate to have a variety of biomass resources spanning the forestry, agricultural, food production and municipal sectors. In many cases, some infrastructure exists to provide feedstock logistics but additional development or capabilities may be required to support bioproduct development. Feedstock logistics include a variety of functions such as collection, separation, storage, moisture reduction and blending to achieve consistent properties.

6.1 Food Waste, Manure, and Fats, Oils and Grease (FOG)

Waste materials provide a great opportunity as biomass feed-stocks. Many wastes are in abundant supply and incur a cost of disposal and/or generate environmental burdens, which can be mitigated by turning these wastes into biomass resources. Food waste, manure, and fats, oils and greases represent a near-term opportunity for the FLR.

The possibility of impending landfill ban legislation (Section 4.4) and expanding industry sustainability goals has driven increasing activity around food waste logistics. Commercial establishments that generate significant amounts of food waste and may be affected by potential organic waste recycling legislation include larger universities, hospitals, museums, amusement venues, country clubs and federal prisons (see Appendix 2). Rochester is also the home of Wegmans, one of the country’s top rated retail grocery chains, as well as numerous other food retail stores and distributors which could be affected by this potential legislation.

Several companies have recently entered the regional food waste logistics market. For example, Natural Upcycling provides infrastructure and technology to collect, de-pack and deliver food waste to anaerobic digestion and compost facilities in and beyond the FLR. Primary customers are commercial retailers, wholesalers and institutions. Rochester Community Compost provides organics collection services to residents and restaurants in Rochester and the eastern suburbs and other start-ups are considering entering the food waste collection, de-pack and logistics space. Impact Earth has a different business model, providing consultation and implementation services to commercial establishments, restaurants, farmer’s markets and festivals interested in organics diversion and zero-waste goals. Headquartered to the east of the FLR in Onondaga County, WeCare Organics provides organics collection services and operates several organics treatment facil-ities throughout the Northeast, including a bio-solids composting facility in LeRoy. These feedstock logistics firms utilize a variety of conversion technologies, including development of feedstock logis-tics, to respond to the legislation, which allows the Region to build bioconversion technologies based on these materials, and develop infrastructure that can eventually support the entire municipal organic waste stream.

Fats, oils and greases (FOG), such as cooking grease or grease trap residue, can cause problems when discharged into sewers. A number of companies collect FOG, including septic system, plumbing and environmental companies. Baker Commodities, one of the nation’s leading providers of rendering and grease removal services, has a location in Rochester serving the Northeastern region. Some of the material they collect is routed to biorefineries along with conventional beneficial uses, including soap or animal feed. However, approximately 1.2 million gallons of FOG are currently routed through Van Lare WWTF (located in Irondequoit, north central Monroe County) and eventually landfilled. FOG can be used in a variety of bioconversion processes, including transester-ification to make bio-diesel, hydrogenation to produce renewable diesel and anaerobic digestion to generate biogas.

Manure and bio-waste are also high potential resources. Manure is abundant due to the Region’s strong dairy industry, as is bio-waste, which must be treated at the Region’s WWTFs. Both work very well as anaerobic digestion (AD) feedstocks, and when combined with food waste resources provide needed alkalinity and stability to the AD process. Anaerobic digestion of manure has the added benefit of reducing odor and greenhouse gas (GHG) emissions relative to untreated manure.

6.2 Unique Resources of the Food Production Industry

One of the unique features of the FLR Region is the large presence (approximately 164 companies) of food and beverage produc-ers.37 The Region’s largest industries and major companies include dairy (e.g., O-At-ka, Upstate Milk), wine production (e.g., Constellation Brands), brewing (e.g., North American Breweries) and fruit and vegetable processing (e.g., LiDestri Foods, Motts, Bonduelle, Seneca Foods); see Table A2.2 in Appendix 2. Each of these industries generate significant by-products as part of their production processes. For example, whey is a by-product of yogurt or soft cheese production, skins and seeds (also called pomace) remain after crushing apples, grapes or tomatoes, and brewers’ spent grains are a by-product of beer or spirit production. These by-products can be used as biomass feedstocks for bioproducts. Other potential food processing resources are bulk or packaged goods that do not meet specification, and wastewater resulting from cleaning operations. Optimal use of these and other food pro-duction wastes increases the competitiveness of the Region’s food production industries. While most food processors see potential for extracting value from their waste streams, shifting from existing waste disposal (direct feeding to animals or land application, which are of lower value) toward higher value bioproducts requires strategic thinking, education and development of partnerships.

In other cases, treatment of food waste or by-products poses a barrier to growth, and economic or environmental burdens that companies are eager to overcome. High-growth companies may find that they have not been able to keep pace with waste


farmers must be educated and motivated to grow them. Work to develop these crops for the Northeastern region is currently being led by the Willow/Woody Biomass Program at SUNY ESF, located in Syracuse, to the east of the Region.

The Region also has a variety of sources of solid agricultural and forest residues that provide adequate levels to support small biorefineries or distributed feedstock facilities. Figure 9 shows the potential of agricultural and forest crop residues, forest and mill residues and urban wood waste in each county across NYS. While the combined potential of these biomass resources for the Region is moderate, the Region is one of the few in the nation to possess an adequate or better level of resources in each of the category areas. Several sections of Monroe, Ontario and Wayne Counties have high potential for urban wood waste. This resource includes utility and private tree trimmings, construction site and municipal wood waste (i.e., pallets etc.). Monroe and Livingston Counties have mid-sized lumber mills (with a total of 18 primary lumber and paper mills in the Region) that generate wood residues. Even greater residue potential can be found at the 46 secondary mills producing furniture or wood products that are located throughout the Region. The Region has moderate potential for crop residues throughout the Region, and some forest residues, particularly in Monroe and Ontario Counties. However, these biomass resources are dispersed and additional infrastructure will need to be developed to efficiently collect and process them. Also, re-moval of residues must be done in a way that ensures the existing ecological and agricultural functions are not negatively impacted.

Another area that has received much recent attention and may be relevant for future consideration is aquatic biomass resources, perhaps the most notable being algae. Algae are fast growing and can thrive in a variety of conditions with ample CO

2 and light.

Mature algae are high in oils, proteins, carbohydrates and vitamins, and are thus being considered for a variety of fuel conversion path-ways, as well as human and animal feed products. Algae can also be integrated into biorefineries to recycle nutrients as a bio-treat-ment of wastewater. Environmental Energy Technologies (EET), a small company run by an RIT professor, has done several algae projects, including pilot wastewater treatment projects at Webster WWTF, Ontario County Landfill and the Synergy Biogas facility in Wyoming County. A Canandaigua-based company, National Pond Services, has installed algae bio-filters in ponds at homes or businesses to remove nutrients and decrease invasive species growth. Commercialized integration of these processes could include utilizing waste heat or CO

2 from other

onsite operations to grow the algae which would remove excess nutrients or toxins from the wastewater and then could act as feedstock for biodiesel or biogas production.

generation. Small to medium sized companies find it challenging to invest limited resources in on-site waste treatment or in finding alternate uses for their by-products. There are many existing food waste streams that illustrate these issues. For example, a regional manufacturer of soy products generates a large volume of organic wastewater as a by-product of tofu production. As a natural food producer with sustainability goals, they are eager to find a productive use for this waste stream which is currently discharged to the municipal wastewater treatment plant where it presents a high load and incurs a significant surcharge. Another example comes from a large regional grain mill. Over the years the company has found several productive uses for the grain hulls, however, due to the recent demand in ancient and alternative grains and healthy, nutritional products, demand has risen, and they are anticipating having approximately 1-1.5 million pounds of excess hulls requiring disposal or alternative conversion. Finally, bulk or packaged goods can also be a challenge to dispose of and are often landfilled. A regional biogas plant works with an organics management company to process pallets of energy drinks or hamburger buns from a regional distributor that has out-of-date or overstocked inventory.

The Region does have several companies that trade in food processing wastes or by-products, such as Assured Edge Solutions (AES) in Webster, Marshall Ingredients in Wolcott, and Baskin Livestock in Batavia. These companies primarily utilize pomace or bakery waste to manufacture and distribute dried food ingredients for human and animal markets. Expanding their reach to more food processors and establishing connections to bioproduct developers will enable higher value uses of food production residues.

Separation technology can also play a role. Victor, NY-based ClearCove markets to food and beverage producers, as well as municipal WWTFs, a patented wastewater technology to support resource recovery for bioenergy generation and other bioproducts. Other innovative technologies can enable nutrient recovery, concentration or preparation of biomass resources for the bioproducts sector.

6.3 Diverse Potential of the Region: Forest, Agriculture and Algae

The FLR is one of the most productive agricultural regions in New York State. It generates 40% of the state’s corn and soybean crops, which can be sources of starch or oil for bioproducts. The potential for energy crops such as short-rotation willow or perennial grasses grown on 345,000 acres of excess productive or marginal use land has been estimated at 1.7 million dry tons/year38 (Appendix 2). While the potential to grow these crops in the FLR is encouraging, they require development of unique harvest, storage, transportation and preparation infrastructure. Additionally,

Developing a Bioproducts Sector in the Finger Lakes Region 31

Figure 9 - Agricultural and Forest biomass residue resources in the United States by county and per square kilometer. This includes the following feedstock categories (and the year used to generate the estimate): crop residues (2012), forest and primary mill residues (2012), secondary mill residues (2012), and urban wood waste (2012)39

Solid Biomass Resources by County

Crop Residues

Thousand Dry Tonnes/Year

Forest Residues


Secondary Mill Residues


Urban Wood Residues


Above 5025 to 5015 to 2510 to 155 to 10< 5


7 Bioproduct Sector Opportunities

7 BIOPRODUCT SECTOR OPPORTUNITIES


Bioproducts fall into two main categories: bio-energy and bio-based materials. A full assessment of the status of development of bio-energy in the FLR was conducted. The highest potential areas are discussed in the sections that follow.

7.1 Bioenergy: Near-term Opportunities

Global energy demand is expected to increase by nearly 50% from 2012 to 2040 due to growing world populations and increasing industrialization.40 Despite an increase in near-term reserves, a finite supply of fossil fuel requires that new sources of energy be developed to satisfy global energy demands long-term. Biofuels (largely for transportation) and biopower (stationary power generation) are sources of renewable energy that support energy independence and GHG emission reduction goals.

7.1.1 Biogas Production and Food Waste Recycling

The potential contribution of biogas to the New York electric grid was estimated in the REV proceedings to be 80MW of farm-based potential, 51MW potential from the WWTF sector and 40 to 80MW from the organic waste management sector.41 The FLR currently has several biogas facilities in the Region, and sustain-ability concerns and potential food waste landfilling restrictions are fueling their growth. As more biogas projects are developed, the companies that provide the logistics infrastructure for food waste feedstock as well as companies that convert biogas biorefinery wastes and by-products into higher value bioproducts, multiply the economic potential associated with this sector.

Biogas biorefineries convert biomass to biogas via the process of anaerobic digestion (AD). Currently there are three common deployment platforms in the U.S.—farm-based AD, where manure is the main feedstock; AD at wastewater treatment facilities (WWTFs), where sewage wastewater is the main feedstock; and merchant applications that process a variety of organic wastes, including food waste.

There are currently 32 operational biogas plants in New York, all but four of which are located on farms, including 9 in the FLR.37 On-farm anaerobic digestion of manure has several benefits to the farmer, including reducing odor and manure-based pathogens, lowering GHG emissions and enabling better nutrient control through manure management. However, operation of a digester is tangential to a farmer’s primary business, and the burden of maintaining the power generation equipment is often not offset by low electricity tariffs. The most successful farm-based biorefineries rely upon multiple revenue streams to create value. This is pri-marily done through importing food waste or fats, oils and grease (FOG) as feedstock for additional revenue in the form of “tipping fees,” using solids reclaimed from biorefinery effluent as farm bedding, and in some cases carbon offsets. Leading on-farm biogas biorefineries in the FLR are Synergy Biogas, LLC in Covington, NY, operated by CH

4 Biogas, and Noblehurst Green

Energy at Noblehurst Farms in Lynwood, NY. While many of the state’s WWTFs use an anaerobic process,

including 23 WWTFs in the FLR,42 most lack equipment to generate power and flare the biogas or use it to generate process heat. While biogas production at WWTFs could support the state’s renewable power generation goals in REV and help to achieve municipal net zero goals, there is currently little incentive to invest in these outcomes. At least two WWTFs in New York import food waste and are creating and storing biogas to fuel their operations. These are Brooklyn’s Newtown Creek, and Gloversville Johnstown wastewater treatment plants.

Merchant applications are centralized digesters that process a variety of organic feedstocks. These biorefineries are often able to achieve synergistic integration with co-located or nearby businesses to maximize co-product use and increase profitability. The Region’s first merchant digester is under development by CH

4 Biogas at the Genesee Valley Agri-Business Park in Batavia,

which operates the Synergy Biogas facility in Wyoming County. The plant will provide tenants with a source of renewable energy by converting organic waste streams produced by agricultural and food processors at the Park. The facility also plans to have de-packaging capability to support processing of imported food waste. To help finance the $6.9M project, CH

4 Biogas has received

a $2 million Cleaner, Greener Communities grant from NYSERDA and a $1.5 million grant from Empire State Development, New York State’s economic development agency.43

Merchant applications have greater ability to utilize heat or power and extract value from co-products and waste streams, providing mutual benefits to partnering companies. However, these projects often require more capital expense and greater coordination. Several innovative merchant facilities have recently been implemented in surrounding areas, including two facilities being operated by Quasar Energy in the Buffalo area, and a project for the Cayuga County Soil and Water Conservation District, operated by California based CH

4 Energy. These projects

can be a valuable source of best practices and lessons learned. Development of NY biogas projects has been heavily driven by

state incentives administered by NYSERDA, which have focused on manure-based implementations that generate electric power with capacities ranging from 200kW to 1.4MW. Low rates for exported electricity, limitations on incentives for development of certain biogas applications (i.e., manure-based and electricity generation) and uncertainty hamper future growth. These issues have the potential to be addressed through changes being advocated by the industry in the REV process. Advocating for progressive policies to support biogas development should have the full support of the Region.44 The FLR has significant potential for growth in AD across all sectors. Growing the number of AD plants that accept food waste provides greater options for organic waste recycling and supports indirect job growth in the food waste logistics sector.


Another growth sector consists of innovative companies that are working on bioproducts using AD co-products, such as lignin. Beyond economic growth, expansion of AD can support the State’s REV targets and methane reduction by providing renewable energy and GHG emissions reductions.

As an approved pathway for advanced biofuel and cellulosic RINs, conversion of biogas into compressed natural gas (CNG) and liquefied natural gas (LNG) is gaining increasing interest.45 Low natural gas prices have increased market interest in clean burning CNG, especially in larger trucks. Regional trash haulers, including the City of Rochester, Monroe County, Waste Management, Sub-urban Disposal and Casella Waste Systems, all have natural gas trucks. Tops Markets recently replaced its 55-truck fleet with natu-ral gas trucks, and Wegmans plans to add 15 natural gas trucks to its Rochester fleet.46 Saratoga County, NY-based American Natural Gas (ANG) recently opened the first public CNG fueling station,47 and there are three private CNG stations in the FLR, including those operated by Monroe County and Waste Management. Currently none are using renewable natural gas (RNG), although use of biogas captured at regional landfills is being pursued at other locations outside the Region. Cornerstone Environmental Group LLC, headquartered in Middletown, NY, but with a significant presence in Rochester, has developed BioCNG,™ an alternative vehicle fuel system that uses a patent-pending biogas conditioning system, to economically produce biogas-based fuel to power com-pressed natural gas (CNG) vehicles. Beyond use as a bio-power or transportation fuel, RNG also has great potential for contributing to the Region’s natural gas infrastructure. With appropriate clean-up, biogas from anaerobic digesters or even landfills can be injected into the natural gas grid and has the potential to displace a signifi-cant fraction of existing fossil gas demand.48

7.1.2 Biodiesel and Bioethanol

Biofuels are a vital tool in support of US energy independence and security, and renewable fuel standards enable a pathway to quickly and seamlessly displace fossil-based transportation fuels. While the RFS2 has enabled growth with an emphasis on advanced bio-fuels such as cellulosic ethanol and biodiesel, it also has created uncertainty and regulatory constraints that can be challenging. The FLR has an opportunity to establish a foothold in advanced cellulosic ethanol production and perhaps build upon existing assets and experience in biodiesel and bio-ethanol.

With the recent RFS2 blending mandates through 2017 (2 billion gal/year), and biodiesel’s status as an advanced biofuel, allowing it to utilize valuable advanced biofuel RINs, the biodiesel market appears to be poised for growth. Interest in biodiesel has been strong among companies with large truck fleets that see it as an easy and cost-effective way to cut carbon emissions, improve air quality and meet sustainability goals. The State’s biofuel production tax credit, along with NYC’s recently passed legislation

mandating heating oil sold within the city to contain 5% biodiesel (growing to 20% by 2034), provide some regional incentives.49. 50

There is currently no significant biodiesel production in NY State.51 The idea of biodiesel production in the FLR has been explored in the past due to access to oil-bearing crops (such as soybeans), waste oil and potentially distiller’s corn oil (DCO). While previous attempts have not been successful, these assets remain an opportunity for interested and experienced developers.

High export demand, ethanol’s octane boosting value and low gasoline prices support higher demand for ethanol. However, significantly increasing ethanol into the domestic market would require higher blends, such as E15, or flex-fuel vehicles, which although having received attention in the EPA’s latest announce-ment,52 are subject to the priorities and funding of a new adminis-tration in Washington.

New York State has two corn ethanol plants, Western New York Energy LLC located in Medina, and Sunoco just to the east of the FLR in Fulton. Western New York Energy currently produces over 55M gallons of ethanol per year, 150,000 tons of distillers grains with solubles (DGS) feed, 1.8M gallons of crude corn oil and 100,000 tons of food grade carbon dioxide. The facility recently expanded, adding a new silo. These measures are planned to increase capacity 8-10M gal/year and increase plant efficiency. As with other corn ethanol facilities, the potential exists for “bolt-on” expansion into advanced biofuels or bio-chemicals, although Western NY LLC has not made any announcements of plans to do so. However, this facility remains an important biofuel asset for the Region and a potential hub for future development.

A groundbreaking event recently occurred with the start-up of the first U.S. commercial-scale cellulosic ethanol plants by Dupont and POET-DSM, using biochemical conversion processes and corn stover feedstock. Both plants, which have a combined capacity of 55M gallons/year, are located in Iowa, where they are able to draw from a high concentration of corn growers within a 40-45 mile radius to overcome issues with the low bulk density and suscepti-bility to degradation of corn stover.

Pioneering the distributed model (described in section 5.1.3), Victor, NY-based Sweetwater LLC has a patented technology for producing fermentable sugars and clean lignin fiber from multiple non-food biomass sources. The sugars are platform intermediates that can be fermented at a hub facility or in bolt-on processes at existing corn ethanol plants. The company has signed several agreements with corn ethanol producers in Wisconsin (Ace Etha-nol) and Colorado (Front Range Energy and Pacific Ethanol). The intermediates can also be catalyzed into value-added chemicals (see section below).

To the east of the FLR, Syracuse-based Applied Biorefinery Sciences (ABS) plans to develop a commercialization facility at Alfred State’s Wellsville campus. ABS uses technology based upon a hot water extraction process developed at SUNY College


of Environmental Science and Forestry (ESF) to extract and separate fermentable sugars and recover several other industrial chemicals. The planned Biorefinery Development and Commer-cialization Center (BDCC) has received $3M in committed State funding towards the project. Students and faculty will be involved in the development of the building as well as the process.

7.2 Bio-chemicals and Bio-based Materials

According to a recent USDA report, the total impact of the bioprod-ucts industry to the U.S. economy in 2014, not including energy, livestock, food, feed and pharmaceuticals, was $393 billion in value added sales—direct, indirect and induced—and 4.2 million jobs—indirect and induced (Figure 10). The steady growth in bioproducts is particularly impressive given that the price of oil dropped by roughly half in 2014. Bio-based chemicals and mate-rials allow producers to respond to consumer sustainability goals, meet the increasing demand from emerging markets and growing populations, and respond to volatile oil prices and limited supply of fossil resources. Value-added bio-chemicals increase the viability of biorefineries that integrate bioenergy and bio-material produc-tion, which has also contributed to industry growth. Today many bio-chemicals can compete with petroleum-based chemicals as “drop-in” replacements, with performance equal to that of petroleum based chemicals, although cost is often a challenge. Furthermore, it is also often possible to achieve unique qualities, superior performance or reduce process steps in some bioproducts.

However, the petrochemical industry has matured over the past 80 years with established value chains, manufacturing technolo-gies and infrastructure such that the industry is primarily driven

by feedstock costs.54 In contrast, the biochemical value chain will need to be developed and bioproducts will need to find their way into consumer products. Collaboration with investors is critical to achieving efficient scale facilities and finding a functional fit in the marketplace.

7.2.1 Bio-chemicals: Feedstock and Intermediates

The global chemical market is estimated to be worth $3,401 billion, and annual growth is expected to continue at 4%. Bio- chemicals (sometimes referred to as renewable chemicals) repre-sented about 9% of the market in 2012 and are expected to make up 11% by 2020, reaching a total value of $375-$441 billion.55 According to a recent report released by Research and Markets, C-3 (3-hydroxypropionic acid–3-HP, and glycerol), and C-5 (glutamic acid) chemicals together accounted for more than 89% of total bio-based chemicals consumption in 2015.56

As in biofuels, initial progress in bio-based materials development (first generation) has been based upon sugars and starches.

Bio-based materials are part of a long value chain. Biochem-icals can be sold as intermediates that can be converted to higher value or larger market derivatives, or into end-products. In traditional petroleum manufacturing, a small number of key building blocks are used to create the majority of intermediate and end-products. These chemical precursors are referred to as “platform” chemicals (or sometimes “building block” chemicals). An analogous model for bio-based products has been proposed whereby biomass feedstocks are converted into platform chem-icals from various bioconversion platform intermediates, such as syngas, biogas, sugars, lignin or oils. (Figure 11, next pg.)

Figure 10 - Key findings of U.S. Bio-based Products Industry in 2014. (Does not include energy, livestock, food, feed and pharmaceutical industries.) 53


Figure 11 - Analogous model of a bio-based value chain for bioproducts (Werpy and Petersen, 2004) 57

STARCH

HEMICELLULOSE

CELLULOSE

LIGNIN

OIL

PROTEIN

BIO-BASED SYN GAS

SUGARSGlucoseFructoseXylose

ArabinoseLactoseSucroseStarch

BIOMASS FEEDSTOCKS

INTERMEDIATE PLATFORMS

BUILDING BLOCKS

SECONDARY CHEMICALS


SECONDARY CHEMICALS INTERMEDIATES PRODUCTS / USES


Developments in cellulosic ethanol have led to the advancement of several sugar platform intermediates, which can provide industrial chemicals. Investigation into using C5 (e.g. pentose) or C6 (hexose)sugars as the starting material for the production of succinic and adipic acid is progressing toward commercial applications. Also being explored is the fermentation of C5 and C6 sugars to butanol which can be used as a diesel fuel additive and has been certified for use in jet fuels and converting ethanol to olefins and diesel. Prominent players globally include: BASF-Purac (Succinity) GmbH (Germany), Bio-Amber Inc. (Ontario, Canada), Myriant Corporation (U.S.), Reverdia (DSM-Roquette) (Italy), Metabolix Inc. (U.S.), Avantium (The Netherlands), Cargill (U.S.), Novozymes (Denmark) and Rivertop Renewables (U.S.).

Rochester NY-based Sweetwater LLC is a sugar platform company that announced plans to build its first commercial facility, a $53M plant in Minnesota, where it received $26M in long-term loans from the state. The facility will use local timber to produce its cellulosic sugars (C5 and C6) and a lignin-based activated carbon product. The company is also evaluating locating a simi-lar integrated biochemical facility at EBP. This type of plant could produce sugars for industrial bio-based alcohol products, including cosmetics and detergents, as well as Clean Water Carbon,TM a high performance activated carbon product for use in wastewater treatment and remediation. The EBP small refinery has distillation columns capable of refining up to 50Mgal/year of primary or advanced biofuels such as ethanol or butanol.

Other work is underway to make higher value products from lignin which, due to its limited biodegradability, is separated from fermentation or anaerobic digestion processes. Rochester-based start-up Cedar Creek Products and Technology is developing a variety of value-added products based upon ArboMassTM their non-sulfonated lignin product.58 Newark, NY based start-up, OSM Environmental (formerly affiliated with Terrenew) has a lignin-based absorbent for use in industrial and horticultural applications.59 Other lignin platform applications being developed globally include emulsions, dispersants, binders, adhesives, polymers, and resins.

Scale-up is an essential phase in achieving a path to com-mercialization. This can be one of the main hurdles of platform intermediate and building block chemical companies. Infrastructure to provide consistent and efficient supply of feedstock can be critical to achieving overall targets, yet is often lacking. Further-more, many start-up companies have no experience in working with feedstock supply sectors (i.e., agriculture, waste management, forestry). Establishing a demonstration facility can enable develop-ment of the supply infrastructure to deliver feedstock to biorefinery requirements. They typically employ around 100 employees and are physical assets for future growth. For example, Mascoma had de-veloped a feedstock demonstration plant in nearby Rome, NY, to the east of the FLR. The plant became available after Mascoma sold its yeast business in 2014. Seeking a facility to quickly enable demon-

stration of its proprietary Plantrose® conversion process, Renmatix purchased the plant in 2015.60 The facility will be dedicated to demonstrating the first step in Renmatix’ process, which generates cellulosic sugars (C5 and C6) and lignin from different types of biomass materials. Thus, establishing a platform intermediate or intermediate chemical facility can be a valuable foothold for growing a larger and more diverse network of bioproduct manufacturers.

A demonstration plant also has the potential to bring important partners and investors to the Region. Investors often require demon-stration at commercial scale and efficiency. This leads to what is sometimes called the “scale-up conundrum,” in which scale-up requires significant capital but, in order to raise that capital, inves-tors want demonstrated scale and efficiency. It may be difficult for small start-ups to interest investors, especially when projects often have 5-year commercialization timeframes. A variety of financing models have been pursued, including public markets and obtaining strategic investors.

Many large companies have taken a long-term view of their industries and invested in the bioproduct sector, including a Dow Chemical-DuPont merger to focus on bio-based technologies, as well as investment from BASF, Bayer, AG, Eastman Chemical and other leaders in the chemical industry. Many large petrochemi-cal companies are interested in the bioproducts sector. Recent mega-mergers (i.e., Bayer/Monsanto, National Chemicals/Syngenta, Dow/DuPont) have the potential to make additional resources avail-able to invest in longer capitalization timelines.53

One example of effective partnering is Anellotech, based in Rockland County in downstate NY. The company is developing a thermochemical catalytic fast pyrolysis (CFP) process for production of bio-based benzene, toluene and paraxylene for the chemical in-dustry. These bioproducts, chemically identical to petroleum-based aromatics, are used to make important plastics such as polyester (polyethylene terephthalate or “PET”), polystyrene, polycarbon-ate, nylon and polyurethane that ultimately are transformed into consumer goods such as beverage bottles, clothing, footwear, carpeting, automotive and electronic components, and more.61 Anellotech uses a minimal capital strategy by leveraging the know-how and infrastructure of experienced partners. It has development partnerships with IFP Energies nouvelles (IFPEN), its subsidiary Axens, and Johnson Matthey. Annellotech also has important down-stream partnerships, including with leading consumer beverage company Suntory.62 Examples of other major companies and their partnerships with bioproducts companies are shown in Figure 12. Similar to the point raised earlier regarding feedstock supply, many start-up bio-based companies have limited experience with the traditional petrochemical industry. A USDA study points out that simply knowing that there is a huge end market for a chemical may not comprehend that the majority of the market is already captive to downstream conversion processes.53 Partnering with chemical companies is one way to mitigate this situation, as is hiring people from both the chemical and biotechnology fields.


Figure 12 - Examples of major companies and their partnerships with bioproducts companies 63


Advances in biotechnology will also be important sources of value creation and innovation. Major areas of innovation include microbes, microorganisms, enzymes and their genetic modification, as well as chemical catalysts.

Although not directly operating in the bioproducts space, several companies represent important ecosystem potential in the areas of biochemistry and biotechnology. Headquartered in Waltham, MA, Novomer has development facilities in Rochester, NY. The emerging sustainable chemistry company uses a proprietary catalyst tech-nology to combine traditional feedstocks with carbon dioxide (CO

2)

or carbon monoxide (CO) to synthesize chemicals and materials for a wide variety of applications. With up to 50% by weight CO

2

or CO, the chemicals have significantly reduced carbon (actually sequestering carbon) and energy footprints, as well as economic advantage relative to replacement materials.64

DuPont Industrial Biosciences operates two facilities in the Rochester area. Its fermentation facility in Greece, NY produces probiotics which are sold as food ingredients or dietary supple-ments.65 The company also acquired the Genencor processing plant in Rochester, NY. Genencor is a leading producer of industrial enzymes and bulk protein.

Biotech company Lonza (Switzerland) has a specialty chemical manufacturing facility (Arch Chemicals Inc.) that employees 140 people in Rochester. The facility makes industrial biocides that destroy or selectively inhibit the growth of harmful microorganisms, as well as ingredients for cosmetic and personal care products, and an advanced wood preservative.

Continued expansion of such bioproduct innovations will require linkage to regional academic research programs to help “fill the R&D pipeline.”

7.2.2 Bio-based Materials: Specialty Chemicals and End Markets Due to lack of scale and experience, direct competition of bio-chemicals with commodity chemicals is challenging. In contrast, specialty chemicals that have unique performance characteristics can often command a higher average selling price and be produced in lower volumes. However, taking a molecule or laboratory process to scale-up is another common pitfall. A significant asset of the Region is the Kodak Specialty Chemical (KSC) group, which is located at the EBP. Specifically targeting complex, high-value products, KSC is a full service specialty and toll chemical manufacturer. The facility offers equipment and expertise to assist in the scale-up and batch production of specialty

chemicals from hundreds of kilograms to hundreds of tons. Their highly trained staff can assist with process refinement, including enzymatic or chemical synthesis for existing or new materials. The facility also offers world-class analytical capability and statistical process control. This asset is a major strength and competitive advantage to be leveraged in supporting local bio-based product development and attracting new companies to the Region.

Specialty chemicals are a consumer-driven sector and, as such, the industry depends upon innovation, and consumer differen-tiation. A USDA report interviewed several major executives in the bio-chemicals sector and concluded that a key competitive advantage of bio-based product developers is a deep understand-ing of their products, which allows them to be more adaptable than big commodity players.66 One executive argued “it is important to understand the performance of the molecules that make up a product and how they blend with other ingredients; it is important to be able to target the right application through innovation and understand the commercial impacts of a product.”

Thus, an important strategic linkage is to connect the deep knowledge of bio-based product developers with end market opportunities to facilitate expert driven solutions. Major companies that depend on petrochemical components for their products and see the advantages of diversification and unique value propositions (including sustainability) are partnering to develop and bring bio-based products to market. These include Coca-Cola (Virent, Gevo and Avantium), Suntory (Anellotech), Goodyear Tire and Rubber (Genencor) and Method (Segetis).

There is a wide array of bioproduct end market categories, including agrochemicals, food supplements, personal care ingre-dients, packaging and pharmaceuticals. The FLR is well positioned to deliver bio-based product solutions to a number of these segments. A unique strength of the Region is the strong industrial presence of dairy, beverage, food processors and private label re-tailers (such as O-AT-KA, Constellation, Seneca Foods, Wegmans, etc.). Product packaging is an important component to the value proposition of these products. Because of this, the Region is also home to several significant packaging companies, including Amer-ican Packaging Corporation (Rochester), PacTech (Fairport), Maco PKG (Newark), Pactiv (Canandaigua), and Diamond Packaging (East Rochester). There are also a number of plastic molders in the FLR, including Harbec (Ontario) and JC Plastics (East Rochester). At the Rochester Institute of Technology, the Department of Packaging Science within the College of Applied Science and Technology (CAST) enrolls approximately 195 students in graduate and under-


graduate programs and has extensive research and development capabilities. These include a state-of-the-art packaging dynamics lab, packaging attribute assessment lab, the American Packaging Corporation Packaging Innovation Center, and dynamic testing lab. The Center for Sustainable Packaging, established through a grant from the Wegman Family Charitable Foundation and American Packaging Corp., is also housed at RIT. Another unique asset that can be applied to plastic film development and production is the roll-to-roll film capability at EBP. The development tools at the Thin Film Facility are world class, and in a broad sense can be combined with other EBP assets, such as casting and testing bio-films produced from KSC bioplastics. The U.S. plastic film market is estimated to produce revenues valued at $17.8 billion/year, with about 200 firms in the industry.67 The major use of plastic films is packaging for snack foods, confections and produce. The plastic container market was valued at $12.2 billion in 2004, with the beverage sector (beer, soft drinks, milk, water, juices) accounting for a significant portion. One of the challenges of bio-based mate-rials and bio-based packaging, in particular, is comprehending the full value chain, including end-of-life. Understanding how plant-

based content will interact with the existing end-of-life strategy can be a significant barrier to market entry. The Golisano Institute for Sustainability at RIT has expertise in system-level analysis and life cycle assessment (LCA) and can be a valuable contributor, as can including multiple value chain stakeholders (such as waste management companies) in the development process.

Other regional opportunities for consumer end market collab-oration can also be found in the Region’s diverse industrial base, ranging from small local companies to large multinationals. For example, Zotos International, with a facility in Geneva, NY, is a maker of hair care products. With a commitment to sustainability, the company uses natural ingredients in several products and has begun to include bio-plastic resin content in their packaging. Rochester Midland Corporation (RMC) is a leading manufacturer of specialty chemicals based in Rochester, NY. RMC manufactures a broad line of bio-based cleaning products that has been awarded the BioPreferred label, as well as a host of other biodegradable and green products.68 Local firm Cohler Insulation (Webster, NY) sources and markets bio-based insulation products.


8 Competitive Position

8 COMPETITIVE POSITION


According to a recent analysis, New York is ranked 8th in the nation, with over 50,000 jobs directly related to the bioproducts industry, and over 100,000 total jobs.66 However, competition for a place in the future bio-economy is strong. Realizing the enormous potential of bioproducts, several states and regions have taken intentional steps to develop the sector. These include state incentives, as well as innovation and commercialization support. Aside from the potential for jobs in bio-based products and related industries, the states note that, as the bio-economy develops, it will form around established clusters, building upon existing assets and talent pools. Business clusters have the potential to drive innovation and stimulate new business in the field as well as increase productivity of the companies in the cluster.

8.1 Incentives

Some states have incentives in place, including production tax credits, exemptions, loans and other programs, as summarized below:

Based upon their success in the ethanol market, Iowa has the strongest incentive package, consisting of a production tax credit applied to the manufacturing of 40 key building block chemicals. The program is designed to attract national bio-based compa-nies and new businesses to establish a basis for agglomeration and development of the state as an epicenter for bioproducts. This commitment evolved from their experience with the ethanol industry, of which 32% is now located in Iowa. They argue that based upon income tax data alone and no other related economic activity, the payback on the $61M the state invested in the ethanol industry was only two years.

Competition is also global and, in order to achieve economies of scale required for commodity biofuels and bio-chemicals, many are looking overseas. For example, Verdezyne opened a pilot plant in California in 2011 to produce bio-based adipic acid, a drop-in replacement, meeting demand for nylon 6,6 and polyurethanes. In 2013 they announced a collaboration with Malaysian Biotech-nology Corporation (BiotechCorp) to potentially locate their first production facility in Malaysia.70

While it may be difficult for the Region to compete with highly efficient large plants, the Region is well positioned to compete in platform intermediates, specialty chemicals and biotech innova-tion. However, a committed focus to the sector and ecosystem development is required.

State Tax Credit(s)

Tax Exemption Loans Production

Payment Grant(s) Procurement Program

Iowa X

Massachusetts X

Michigan X

Minnesota X

Oregon X

Virginia X X X

Washington X

Wisconsin X

Figure 13 – State-level incentives available in the bioproducts sector 69


8.2 Sector Development, Innovation and AccelerationSeveral states also have dedicated staffs and centers that focus on cluster development. This generally includes pro-moting scientific innovation, engineering and process scale-up, business development and quality control (Figure 14). Implementation strategies can range from providing office space or information, to assisting with funding and strategic partnerships, to providing full research, commercialization or lab facilities. Examples include the Michigan Bio-economy Institute (MBI); Agricultural Utilization Research Institute (AURI) in Minnesota; Bioindustrial Canada (BIC) located at the Sarnia-Lambtion Campus of the Western University Research Park in Sarnia, Ontario; the Ohio Bioproducts Innovation Center (OBIC), located at Ohio State University; and the North Carolina Biotechnology Center.

Each of these Centers has taken a slightly different ap-proach to promoting bioproduct development, with variations in structure and capabilities, but all have in common a dedicated staff and statewide or regional focus. Further-more, benchmarking of these organizations can provide valuable insight into potential bioproduct sector development in the FLR. Another useful example is that of NY-BEST, which received a $25M, 5 year funding grant from NYSERDA for battery and energy storage development. NY-BEST currently has more than 150 members. The Consortium’s mem-bership is diverse and includes manufacturers, academic institutions, utilities, technology and materials developers, start-ups, government entities, engineering firms, systems integrators, and end-users.

Figure 14 - Activities required for cluster development. 71


9.1 Industry Groups and Agencies Working with stakeholder groups with shared interests in de-veloping the bioproducts ecosystem will be critically important. These include state agencies related to various feedstock and end markets, such as the New York State Department of Envi-ronmental Conservation (NYSDEC), Organics and Forestry man-agement groups, NY Agriculture and Markets and the New York State Energy Research and Development Authority (NYSERDA). Industry groups at the state, national and international levels are also important stakeholders, including NY Biogas Study Group, New York Cow Power, NY Bioenergy Association at the state level, and national and international groups such as American Cleaning Institute, American Chemical Society, Biotechnology Innovation Organization (BIO), and Green Chemistry Group.

9.2 Support Resources for Business Attraction & Growth

The Region offers a variety of resources to support both new and existing companies looking to establish, maintain or expand their workforce and footprint in the Region. Most of the funding support available is linked to net job creation. Early business at-traction occurs community-wide across the Region, starting with the Chamber of Commerce (or equivalent) in each town, village, city and county. From there, projects are referred to the relevant FLREDC/URI workgroups and Pillar Teams (primarily NGMT or Ag and Food for bioproducts), which provide focused support to address each company’s or project’s needs.

Greater Rochester Enterprise (GRE) represents the Region with site selectors and other organizations to support business development from outside of the Region and NYS. GRE is funded by area businesses which serve on the Board. GRE is an eco-nomic development organization committed to attracting new

capital investments and creating regional wealth and new jobs throughout the Region. They act as a no-cost intermediary, to con-nect businesses with the right people and find the right resources to expand in the Rochester region. GRE is a foundational part of the FLREDC process and provides information and resources on all aspects of life in the FLR, to enable the relocation of both business operations and established workforces. A full listing of services and support offered by GRE is available on their website, www.rochesterbiz.com.

The Greater Rochester Chamber of Commerce provides focused business support, including staffing, business-to-business (B2B) connections, small business assistance, training, employee benefits programs, and small business health insurance options. They are a key resource once a company has chosen to establish or grow operations in the Region, and work in concert with GRE. A full listing of services and support offered by the Greater Rochester Chamber of Commerce is available on their website, www.greaterrochesterchamber.com.

High Tech Rochester is a nonprofit organization whose mission is to be a catalyst for entrepreneurship and innovation-based economic development. They provide business expertise and network connections to aid in the formation and profitable growth of companies in the Rochester, NY and Finger Lakes Regions. HTR provides a suite of services, including technology commercial-ization for very-early-stage opportunities, business incubation for high-growth-potential startups, and growth services for existing manufacturing companies seeking to improve their top- and bot-tom-line performance. A full listing of services and support offered by HTR is available on their website, www.htr.org.

9 Support Resources

9 SUPPORT RESOURCES

http://www.rochesterbiz.com

http://www.greaterrochesterchamber.com

http://www.htr.org

46

9.3 Academic and Research OrganizationsCombining the synergistic capabilities of the Region’s colleges and universities to create opportunities for collaboration will enable sector growth. Notable research centers include the Rochester In-stitute of Technology (RIT), with work on renewable and biodegrad-able packaging in the Packaging Science Department; the Golisano Institute for Sustainability (GIS) which has significant research programs in food waste conversion technologies and biofuels, and research and development related to algae-based fuels and bioproducts in the Department of Life Sciences. Also housed at RIT, the NY State Pollution Prevention Institute (NYSP2I) currently has an initiative related to food waste and programs that support green chemistry and pollution prevention in industry. At the University of Rochester, work in biotechnology development includes research on bioconversion, fermentation, bio-catalysis and genomics. Cornell’s College of Agriculture and Life Sciences has a Food Research Facility at the New York State Agricultural Experiment Station in Geneva NY. This facility houses several research labora-tories along with 2 pilot plants focused on applying fundamental principles from chemistry, biology, microbiology, engineering, and the social sciences to the conversion of raw agricultural products

into foods and beverages for human consumption. They also study the safety, quality, nutritional, and environmental consequences of these conversions with the aim of providing an affordable, safe, and sustainable food supply of high nutritional quality.

Also nearby, but outside the Region, are the main Cornell University campus in Ithaca, which conducts related research in several departments, including the Food Science Department of the College of Agriculture and Life Sciences, and the Biological and Environmental Engineering and Energy Studies Program in the College of Engineering. Other resources include the Dairy Environmental Systems Center in Tompkins County, and the SUNY College of Environmental Science and Forestry (ESF), in Onondaga County, which has the Woody Biomass Program. The Morrisville State College (Madison County) Renewable Energy Training Center offers a Renewable Energy Technology A.A.S degree, a hands-on program to develop skilled technicians who are prepared to enter the job market as entry-level installers or maintenance technicians for renewable energy technologies, including bioenergy systems (biodiesel, bioenergy crops, methane, gasification and combustion).


10 Opportunities and Challenges

10 OPPORTUNITIES AND CHALLENGES

The opportunities and challenges of the Region have been assessed using a Strengths-Weaknesses-Opportunities-Threat (SWOT) analysis (Figure 15). While the FLR does not have the concentrated forestry resources of the northern plain states or Northwest U.S., or the infrastructure of the Midwest corn belt, the Region is fortunate to have moderate to strong availability of nearly all biomass resources. This makes the Region particularly well- suited for development and production of intermediate biomass feedstocks. The Region also possesses some unique biomass resources due to its leading dairy and food processing industries. Leveraging manure and food processing resources is a unique opportunity for the Region to create new bioproduct industries while supporting the broader agriculture and food production systems.

The FLR leads east coast biogas development with a large number of on-farm biogas facilities, and growing interest in merchant and WWTF applications that also provide productive and sustainable solutions to organic waste management. Several companies are also developing promising innovations

in the production of biochemicals and cellulosic ethanol. Creative and skilled entrepreneurs in the Region have responded to this opportunity by creating a burgeoning local organic waste man-agement industry and developing bioproduct solutions to optimize biogas biorefineries.

The legacy in the chemical industry and thriving food processing industry have developed a talented workforce pool and assets that have positioned the FLR to become a major player in the biochemicals industry. The world-class facilities at the EBP, including fine and specialty chemicals and process scale-up capability, biofuel refining capability, industrial WWTF and water rights and its own utility infrastructure, is a unique and significant opportunity. Regional food processors, specialty chemical and personal care product manufacturers can be key partners in driving development of bioproducts and bringing them to market. The assets and expertise at RIT’s Golisano Institute for Sustainability and Center for Sustainable Packaging are key enablers in this area.


Development of the bioproducts sector also has the potential to generate significant new jobs in urban and rural areas. It supports the priorities and vision for the FLR as put forward in FLX, through strong linkage with the NGM&T and Ag and Food Production pillars. However, development of a bio-economy will require education and development of the full bio-based ecosystem. This includes many stakeholders along the full value chain, from plant to product, and crossing several industries, including forest, agriculture, food processing, biotechnology, chemical and consumer products. Many bioproduct development projects are capital-intensive and complex. Alliances and partnerships across the value chain to food production, chemical production, fuel and plastics products, and even biotech value chains, create opportunities for optimization and intensification. With long-term commitment and a clear strategy, the Region has the potential to become the bioproducts hub of the northeast.

Figure 15 – SWOT analysis of bioprocess regional assets

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

• Region-specific biomass resources in the form of dairy manure and fod processing residues

• Emerging commercial food waste management and logistics industry

• Kodak Specialty Chemicals Group toll manufacturing and scale up facility

• Talented regional workforce with bioprocess, chemical, engineering and manufacturing skills

• Home of renewable biochemical start up ranked “16th Hottest Small Company in the Advanced Bio-economy”

• Experience in biogas, bioethanol and biodiesel production

• Regional Agro Industrial Parks, including world class Eastman Business Park

• No sector champion or focus

• Lack of capital, and investor inexperience with bio-based investment

• Not currently a significant player in the bioproducts industry

• Limited understanding of the potential of the bioproduct sector in the region

• Lack of strategic partnerships for development of bio-based products and process scale up

• Limited regional executive and entrepreneurial talent

• Linkage of bioproduct industries to URI objectives and urban/rural revitalization

• Variety of biomass resources

• Potential food waste disposal legislation

• Valorization of food processing or biorefinery outputs into value-added food chain products or bioproducts

• Waste water treatment and fats, oils, and grease biomass resources

• Academic and industry support organizations

• Reforming of the state’s energy vision (REV), including aggressive renewable energy, efficiency, and GHG reduction goals

• Potential to multiply job growth through synergies and efficiencies in agriculture, food processing, and chemical industries

• Continued uncertainty or poor treatment of biopower in REV

• Policy uncertainty concerning RFS

• Resistance to change, lack of commitment to long-term strategic vision

• Community resistance to importing waste or returning treated organics to the environment (NIMBY)

• Conflict over biomass resources with food or feed value chain


11 Recommendations and Implementation Timeline

11 RECOMMENDATIONS AND IMPLEMENTATION

TIMELINE


The recommendations consist of three main strategy focus areas. Within these focus areas, activities range from immediate actions to occur within the next 1-2 years, mid-term actions (3-5 year horizon) and long-term actions (5 years and beyond).

1. Develop a bioproducts cluster – Although the Region has many physical and intellectual assets and the development of a bioproducts sector is well-aligned with regional goals, bioproduct development to date has been ad hoc and uncoordinated. Achieving the Region’s potential requires a dedicated focus, and long-term commitment to a comprehensive strategy. Critical to enabling this is to identify a bioproducts champion team to lead implementation of the strategy. This team will work with key stakeholders, such as state policymakers, communities, industries, investors, academia and the bioproducts value chain to communicate the strategy and build a shared vision. Bioproduct developers will benefit from focused information on market trends, investor activity and policy progress. Through stakeholder groups, and sharing of information and best practices, the greater bioproducts ecosystem will be developed and integrated. This will enable opportunities for collaboration, development and efficiency. Development of the sector will focus on a strategy of agglomeration whereby effort is made to build and leverage current activity, establishing anchor or foundational companies that can grow into larger clusters of activity.

2. Build a pipeline of innovation to leverage regional feedstock resources – The Region is fortunate to have abundant biomass resources, including some unique Regional biomass assets from food production and biogas biorefinery development. Leveraging these resources not only provides a reliable source of feedstock for development efforts, but also increases the competitiveness of intersecting industries by providing waste management solutions and increasing efficiency. An enabler to optimal feedstock use and new product concept generation is the development of a Finger Lakes Bioproducts Innovation Consortium (FLBIC). The FLBIC will act as a hub to inventory, characterize and identify biomass “problems,” and provide mechanisms to encourage both near-term application-focused and longer-term research expert driven solutions, spanning the full range of activities from feedstock development to end-product commercialization. Such a Consortium would consist of a collection of physical assets, but primarily focus on leveraging strong connections to existing academic and industrial research centers that will foster collaboration among bioproduct innovators in the Region. The FLBIC will also work with the diverse set of biomass sources, including agricultural and forestry, industrial and municipal resources, to develop critical feedstock logistic infrastructure. The result will be a pipeline of innovation both drawn from this Region and attracted to it.

3. Enable downstream bioproduct development and commercialization – The Region has critical expertise and assets to support the pipeline of start-up bioproduct companies through commercialization. One asset to leverage is the unique scale-up and toll manufacturing capabilities of Kodak Specialty Chemicals, along with the refinery assets, which can form the nucleus of a bioproducts accelerator at the Eastman Business Park. The Region’s food processors, plastics R&D and packaging production capability are well suited for market driven bio-based packaging application development. Agricultural, chemical, personal care, food and feed ingredient industries, and eventually textile and biomaterials/life sciences, are also significant markets for regional and global partnering to enable high value expert-driven solutions to meet market needs.


11.1 Immediate (2017-2018)

11.1 Immediate (2017-2018)A small regional bioproducts team must be identified to champion and implement the roadmap strategy identified in this report. Initial activities also include supporting the development of current activ-ities and building a foundation for strategy implementation.

Food waste recycling and biogas development are important areas to foster, by supporting industries of food waste feedstock logistics and high-value utilization of integrated biogas biorefinery co-products. Particular challenges include raising capital for larger, longer-term projects, which to be successful must have a strong government-led component, much like Minnesota, Iowa and Ontario, Canada. Additionally, the champion team must find ways to overcome uncertainty and instability created by the current REV process. Efforts to address these issues should be an immediate focus. Retaining and further developing the activity in sugar-based bio-fuels and biochemicals is a significant opportunity, enabling development of cellulosic feedstock logistics and connections to the industry, markets and investors. An example is Sweetwater Energy LLC, who is currently located in the Region, and has ex-pressed interest in expanding their local capability. Such a facility can be a cornerstone of the emerging bioproducts sector, enabling the development of feedstock logistics, attracting investors and downstream markets to the FLR, building specialty biochemical experience with KSC and providing the Region with a physical fermentation asset.

11.1.1 Implementation Plan

• Provide an initial level of funding to build and develop a bioproducts champion team to bridge the gap to securing additional state, federal, foundation and private investment.

• Develop a cohesive advertising and information dissemination plan. This includes messaging to the industry concerning regional biomass assets, tools, skill sets and sites to be used regionally, state-wide and nationally for business attraction. Ensure the integration of bioproducts into the Ag & Food Production and NGMT pillar development strategies. Begin to communicate the value of this sector to local communities, stressing the potential of bio-based development along with accompanying social and environmental benefits.

• Communicate the value of this sector to state government and develop a voice with state policy makers supporting biogas growth in the state’s REV process. Also, educate investors and economic planners on the value and challenges of the Genesee Ag and Food Park digester project.

• Identify and develop a regional pilot facility to collect food waste through solicitations to the industry, based upon opportunities identified around key regional assets. This will support growth of the food waste logistics sector and position the Region to lead in organics management. It will send a clear signal to the biogas and other food waste bioconversion industries that the Region is committed to developing this sector and the business and community environment is favorable. Furthermore, this initiative supports REV community empowerment and may be able to take advantage of programs such as NYSERDA’s Clean Energy Communities program.

• Make every effort to achieve successful establishment of Sweetwater LLC in the Region. This facility will help build a presence in the industry, establish regional credibility, and grow feedstock logistics and downstream market connections.

• Leverage existing work in academic R&D, especially through RIT’s Golisano Institute for Sustainability and Packaging Science Department to develop bio-plastic packaging materials.

• Build an initial network of firms operating in the bioproducts ecosystem and begin sharing industry information.


11.2 Short term (2018-2020)

11.2 Short term (2018-2020)Begin to build the Finger Lakes Bioproducts Innovation Consortium (FLBIC) and assess the regional capabilities for bioproducts acceleration. Conduct benchmarking of similar efforts in other states and engage key industry firms. Investigate state, federal, foundational and private funding opportunities and models. Continue to establish a presence in the industry and strengthen the cluster. Expand to include more parts of the value chain and additional feedstocks. Focus the FLBIC on development of unique bio-based products that utilize food processing and bio-gas biorefinery resources. Begin to incorporate downstream stake-holder groups that connect experts intimately familiar with their biotechnology, with industry firms connected to customer needs. Identify capabilities and gaps to commercialization acceleration, leveraging KSC and other regional expertise and assets.


• Participate and host industry events, and broadly disseminate and advertise the outcomes.

• Develop formal partnerships with DOE Bioenergy Technologies Office and the National Renewable Energy Laboratory (NREL), and work with these agencies to pursue grant opportunities.

• Work with Ag and Forestry and companies like Sweetwater LLC to build a cellulosic feedstock supply infrastructure. Provide uniform commodities with predictable properties that meet the established criteria for efficient conversion.

• Focus initial Finger Lakes Bioproduct Innovation Consortium activity on developing a regional plan to utilize food processing and biogas waste streams. Conduct an initial “Biomass Utiliza-tion Challenge” based upon target biomass feedstock, engaging academia, biotech innovators and industry.

• Start regionally supported internship and co-op programs to support applied solutions based upon key regional biomass asset “problems.”

• Assess the Region’s commercialization capabilities and identify a plan to fill out a regional accelerator. This includes attracting out-of-Region companies to KSC and other regional assets and obtaining industry feedback.

• Continue stakeholder forums focusing across the value chain, such as developing robust food waste feedstock logistics that can expand reach, optimize routes and provide buffering for episodic food waste supply. Also begin to broaden along the value chain such as working with green chemistry groups to host firms from the Northeast and beyond, and conduct work-shops covering intermediate and consumer applications and to showcase our regional capabilities.

• Provide market and investor information to cluster participants.


11.3 Long Term (Beyond 2020)

11.3 Long Term (Beyond 2020)Begin to realize the vision of full productive utilization of the Region’s biomass resources and a thriving bioproducts ecosystem. Extend the reach and impact of the FLBIC and plan the roll out of Bioproducts Commercialization Accelerators. Continue to build stakeholder groups and intensify connections in bio-based materials value chains. Expand to intersect regional expertise in health science bio-technology develop-ment and lifecycle/sustainability assessment. Continue to build presence in the industry and attract global and regional investment.


• Expand the role of the FLBIC and launch the first bioproduct start-ups resulting from the Consortium’s innovation activities.

• Expand to the next tier of feedstock opportunities. As efficiency leads to excess productive land and a desire to exploit marginal land, work with farmers to pilot alternative or short rotation crops feedstock in the Region. Partner with Cornell and SUNY ESF to develop longer term feedstock opportunities

• Attain a significant role in the industry, attract start-ups and global investors to the Region.


Table A1.1 - New York State investments in agriculture and bio-based materials via REDC Process from 2011 - 2015

Appendix 1

Economic Development

Appendix 1 / Economic Development

Company Award Year Amount Description Status

Genesee Biogas plant at Genesee Valley Agri-Business Park

2013 $2M NYSERDA, CGC3

Project is on schedule

2014 $1.5M ESD Grants

FermCo toll fermentation facility at EBP

2014

$2M ESD Grants

Project is in planning phase

$3M ESD Grants

Seneca AgBio Green Energy Park, Seneca BioEnergy LLC

2011 $7M NYS Bonding Authority Not executed

2012 $125KDOL, ESD, renovation and training NYSERDA ADG grant

Completed

2013 $2M

2014 $250K Expansion of biodieselNot executed— declared bankruptcy in 2014


This section provides an initial assessment of the biomass resources of the FLR and the feedstock logistics infrastructure. The FLR is fortunate to have access to a variety of biomass resources from forest and agricultural, food processing and municipal sectors. Feedstock logistics are responsible for collection, storage and transportation of biomass to a bio-refinery. It also may include cleaning, separation, reducing moisture density, characterizing or blending various types of biomass into uniform formats with consistent properties.

A2.1 Agricultural and Forest Resources

Agricultural resources include crops that are sources of starch or oils, as well as lignocellulosic biomass, including crop residues, perennial grasses, short rotation woody crops and forestry residues. Manure from the Region’s livestock is also a significant biomass resource. Estimates of the potential agricultural biomass in the FLR are shown in Table A2.1.

Table A2.1 – Crop, crop residue and livestock resources in the FLR

New York Finger Lakes

Farmland (acres) 7,183,576 1,470,769

Cropland (acres) 4,217,041 1,102,124

Harvested cropland (acres) 3,783,661 1,024,467

Selected crops

Corn (harvested acres) 677,268 279,138

Corn (bushels) 87,677,512 37,858,516

Corn (dry tons)1 2,082,253 899,102

Soybeans (harvested acres) 310,104 111,999

Soybeans (bushels) 13,078,638 4,874,081

Crop residues2

Corn stover (dry tons)2 2,082,253 899,102

Available corn stover (dry tons)2 260,282 112,388

Livestock resources

Cattle and calves 1,419,365 362,755

Dairy CAFO cow equivalents3 NA 132,096

Estimated CAFO manure (metric tons) NA 3,530,315

Source unless otherwise noted: 2012 Ag Census

1 Based upon 1 bushel = 0.0279 short ton at 15% moisture content2 Based upon NYSERDA, Renewable Fuels Roadmap - Appendix E: Analysis of Sustainable Feedstock Production Potential in New York State, 2010

Assumes approximately equal amounts of dry matter in corn grain as in the remainder of the above-ground portion of the plant. Also assumes 25% can be removed to maintain ecological and agronomic properties, and only 50% of that can be harvested due to weather.

3 Calculated from data obtained from the Organic Resource Locator, https://www.rit.edu/affiliate/nysp2i/business-assistance/organic-resource-locator Includes all permitted CAFOS (i.e., swine, cattle, sheep, poultry, racetracks, etc.)

Appendix 2

Biomass Resources and Feedstock Logistics

Appendix 2 / Biomass Resources and Feedstock Logistics

https://www.rit.edu/affiliate/nysp2i/business-assistance/organic-resource-locator


As a leader in milk and dairy production, the FLR is estimated to have over 360,000 cattle and calves. About 36% are on farms with 300 or more cows, which fall under the category of Con-fined Animal Feeding Operations (CAFO). CAFOs are permitted by the New York State Department of Environmental Conserva-tion (NYSDEC). FLR CAFOs are estimated to generate about 3.5 million tons/year of manure. These farms typically have manure management systems to collect and store manure until condi-tions are favorable to apply it to nearby fields as organic fertilizer. The NYSDEC has regulations to limit the risk of excess nutrients (particularly phosphorous) making their way into local waters. Despite the tight regulation of large CAFOs, some watersheds, such as Owasca Lake in Cayuga County, to the south of the FLR, are experiencing challenges with algal growth. Another issue of concern to many CAFOs is odor related to manure storage or application reaching neighbors. While manure slurry has a high moisture content and transportation of manure over long distances is not feasible, there is an existing irrigation and manure spreading industry in the Region to transport manure over short distances for land application.

The potential for forest residues was also investigated. Although not a major center for forestry when compared to northeast and northwest US regions, a study by Dr. Timothy Volk of SUNY ESF estimated the Region to have a potential for 303,000 to 531,000 dry tons/year of forest residues. Similar to crop residues, sustain-able residue harvest practices must be applied to maintain nutrient and soil conditions. Much of the forest land in NYS is privately owned by many different land owners that manage the land for wood or pulp. While some infrastructure to harvest and transport these resources exists in the FLR, additional equipment, such as large chippers, would be required to meet bio-refinery require-ments. The Region also is home to 16 lumber mills and 2 paper and pulp mills, as well as 46 secondary wood-using industries producing furniture or wood products, that are also a source of residues. In addition, utility and private tree trimmings, construction sites, and pallets or wood in municipal solid waste, in urban areas of Monroe, Ontario and Wayne counties, are esti-mated to generate significant amounts of wood waste residues. These resources could be managed to generate a bio-refinery feedstock product.

With some of the State’s most fertile land, the FLR contains about ¼ of the State’s cropland acreage and generates approximately 40% of the state’s corn and soybeans. Harvest infrastructure and feedstock logistics for these commodity crops are well established. Local farmers participate in selling in global markets based upon market conditions, including to the state’s two ethanol plants. International trader, Agrex, purchases 20 million bushels of corn per year for the one ethanol plant located in the FLR, Western NY Energy LLC, making it the State’s largest corn purchaser.

Potential crop residues in New York State are corn stover and small-grain straw. Since small-grain straw is highly valued for horse bedding, it is not considered an available biomass resource. Corn stover, while of limited market value, provides vital functions when left in the field as land cover to prevent soil erosion, return nutrients and add soil organic matter. For every dry ton of corn produced, approximately the same dry mass is left behind in the form of crop residues (i.e. stalks, husks, cobs, straw, etc.) but it is estimated that only 25% can be removed sustainably.33 Climatic and operational considerations make it difficult to obtain all of the available biomass from the field after corn harvest, so estimates suggest that only 50% can be obtained.33 Based upon these assumptions, about 112,000 dry tons of corn stover are estimated to be available throughout the FLR.72 Single pass technologies, which are being trialed in other states, may increase the ability to harvest corn stover, but at a cost. Additional storage infrastructure to prevent mold or degradation must also be considered if corn stover is to be a significant biomass resource.

The potential for energy crops such as short-rotation willow or perennial grasses has been investigated using remote-sensing and agricultural survey data. For the FLR, it was estimated that 345,000 acres of excess productive or marginal use land could potentially grow 1.7M dry tons/year of energy crops.38 While the potential to grow these crops in the FLR is encouraging, they require development of unique harvest, storage, transportation and preparation infrastructure. Additionally, education and motivation will be required for farmers to invest in these crops. The Willow/Woody Biomass Program at SUNY ESF, located in Syracuse, to the east of the Region, is working to advance this sector though willow trials as part of the Federal Biomass Crop Assistance (BCAP) and The Northeast Woody/Warm-Season Biomass Consortium which has several related thrust activities.


A2.2 Food Production Resources

The Region is home to 164 food and beverage production companies, according to data obtained from the Organic Resource Locator, maintained by the NYS Pollution Prevention Institute.37 They range from small makers of artisan products to international companies, and span a variety of product classes and geographic locations. Some of the Region’s largest producers include Constellation Brands, LiDestri Foods, Motts, Bonduelle, Seneca Foods, North American Breweries, O-At-Ka and Upstate Milk.

Many of the Region’s top food production industries generate significant by-products. For example, whey, which is a by-product of yogurt or soft cheese production; pomaces, containing skins and seeds that remain after crushing apples, grapes or tomatoes; and brewers spent grains, which is a by-product of beer or spirit production. Food production also generates wastewater, resulting from cleaning operations, and bulk or packaged goods that do not meet specification.

Many food producers, especially larger ones, have found beneficial uses or low-cost treatment pathways for these resources. Some own land or have arrangements with local farmers to apply wastewater, or to use food production waste to feed animals. However, this is subject to geographic and seasonal limitations, and it can be a challenge, especially for companies that are experiencing high growth or are located in urban communities. Some food processors have on-site wastewater treatment, but this requires capital investment and physical space, which may be a barrier. Furthermore, those who do have on-site wastewater treatment often do not reclaim the full value of their organic resources in terms of bio-based energy or other bioproducts. Food producers with access to munici-pal wastewater treatment may discharge wastewater to municipal treatment plants, however, this places additional load on these facilities and thus often incurs a surcharge. Packaged goods and solid waste can be difficult to divert and often result in landfill disposal.

Table A2.2 - Finger Lakes Region Food Processing Industry

Industry Sector Establishments Revenue

Winery 66 $3,171,120,000

Fruit / Veg 25 $1,054,340,000

Bakery / Grains 13 $293,193,000

Dairy 11 $179,181,000

Sugars / Confectionaries 11 $52,105,000

Brewery 9 $53,163,000

Meat / Seafood 9 $72,856,000

Beverage 5 $52,105,000

Sauce / Dressing 5 $52,105,000

Coffee / Tea 4 $52,105,000

Distillery 1 $27,893,000

Misc 5 $27,893,000

Total 164 $5,088,059,000


A2.3 Commercial and Municipal Wastes

There are four major cities within the FLR: Rochester, which is the third largest in the state, as well as Geneva, Canandaigua and Batavia. Serving these urban centers and the surrounding regions are a range of commercial establishments that generate food waste and may be affected by potential organic waste recycling legislation. These include larger universities, hospitals, museums, amusement venues, country clubs and federal prisons located within the Region. Rochester is also headquarters to one of the country’s top retail grocery chains (Wegmans), as well as numerous other food retail stores and distributors which could be affected by potential legislation.

According to the NYSDEC, state residents generate, on average, approximately 0.94 tons/year or 5.15 lbs of municipal solid waste (MSW) per day, about 17.7% of which is food waste.73 Thus, the Region’s approximately 1.2 million residents are estimated to generate nearly 200,000 tons of food waste per year.

Additionally, a network of over 40 wastewater treatment facilities (WWTF) purify and discharge the Region’s municipal sewage and collected wastewater. The Van Lare WWTF, with a flow capacity of 135 million gallons per day (mgd), is the primary facility serving the city of Rochester, along with the Northwest Quadrant, located in the town of Hilton, with a permitted flow of 22mgd that handles largely residential wastewater. Other sizable WWTF include facilities in Webster, Canandaigua, Geneva and Batavia. The remaining plants are smaller and process less than 5 mgd. Some facilities currently employ anaerobic digestion to treat wastewater but none fully exploit or utilize the gas potential of the biomass treated (Table A2.3).

Wastewater treatment facility City County

Newark (V) WWTF Newark Wayne

Penn Yan (V) WWTF Penn Yan Yates

Geneseo (V) Stp Geneseo Livingston

Livonia (T) Lakeville Livingston

Seneca Falls (V) WWTF Seneca Falls Seneca

Warsaw (V) Stp Warsaw Wyoming

Central Sd #1-Phillips Rd Webster Monroe

Attica (V) Wastewater Treatment Attica Wyoming

Medina (V) WWTF Medina Orleans

Victor (V) Stp Victor Monroe

Dansville (V) Stp Dansville Livingston

Avon (V) Stp Avon Livingston

Palmyra (V) WWTF Palmyra Wayne

Dundee (V) Wastewater Treatment Dundee Yates

Marsh Creek Sd Geneva Ontario

Mount Morris (V) Wastewater Treatment Mount Morris Livingston

Greene (V) WWTF Greene Monroe

Sodus (V) WWTF Sodus Wayne

Lima (V) Stp Lima Livingston

Silver Lake Stp Perry Wyoming

Macedon (V) Stp Macedon Wayne

Lyndonville (V) Stp Lyndonville Orleans

Honeoye Falls WWTF Honeoye Falls Monroe

Table A2.3 - Finger Lakes wastewater treatment plants with anaerobic digestion capability


A2.4 Fats, Oils and Greases

Fats, oils and greases (FOG) are generated from meat processing or food preparation operations. Because disposal can often cause clogging of pipes or oxygen depletion, collection systems are often employed for certain types of FOG. Some common forms of FOG are lard, used cooking grease (sometimes called yellow grease) and grease collection from drain traps (brown grease) or other wastewater treatment operations (i.e., DAF, filtration, etc.). FOG can be used in a variety of bioconversion processes, including transesterification to make bio-diesel, hydrogenation to produce renewable diesel, and anaerobic digestion to generate biogas. Some of the FOG currently collected goes to anaerobic digestion plants within the Region or biodiesel refineries outside the Region, along with conventional beneficial uses such as tallow and meal. Approximately 1.2Mgal of FOG is routed through Van Lare WWTF and eventually landfilled.

Collection and beneficial use of waste fats, oils and greases is well established. Baker Commodities, one of the nation’s leading providers of rendering and grease removal services since 1937, has a location in Rochester serving the Northeastern region. A number of septic, plumbing and environmental services companies also provide FOG collection services.

Crops such as soybeans or canola are also sources of oil for bioconversion. The Region currently produces 4.8 million bushels of soybeans per year for global markets, which is about 37% of the State’s soybean production. Canola, which has a higher yield for oil production, is not currently grown in the Region. However, a 2005/2006 Wayne County study demonstrated canola’s viability as a rotational cash crop. Another potential source of oil is the DCO generated as a co-product of Western NY Energy LLCs ethanol production, although this is currently marketed as an animal feed ingredient.


Endnotes

1 Fronk, M., Reich, C. and Mandarano, K., “Advanced Energy Technology and OLED Ecosystem Development to Enable Domestic Manufacturing and Commercialization in NY,” March 2017

2 Greater Rochester, NY Regional Development Authority, http://www.rochesterbiz.com/

3 The White House. “National bio-economy blueprint, April 2012,” Industrial Biotechnology 8.3 97-102 (2012)

4 European Commission (EC). Innovating for Sustainable Growth: A Bio-economy for Europe; COM (2012) final; European Commission: Brussels, Belgium, 2012

5 Organisation for Economic Cooperation and Development (OECD). The Bio-economy to 2030: Designing a Policy Agenda, Scoping Document; Organisation for Economic Cooperation and Development: Paris, France (2006)

6 Langeveld, J.W.; Sanders, J.P.M. General Introduction. In The Bio-based Economy: Biofuels, Materials and Chemicals in the Post-oil Era; Langeveld, J.W., Sanders, J.P.M., Meeusen, M., Eds.; Earthscan: London, UK, pp. 3–17 (2010)

7 BIO, Bioechnology Innovation Organization, Advancing the Bio-based Economy: Renewable Chemical Biorefinery Commercialization, Progress, and Market Opportunities, 2016 and Beyond, (2016). https://www.bio.org/sites/default/files/BIO_Advancing_the_Bio-based_Economy_2016.pdf

8 DOE, U.S. Department of Energy. 2016 Billion-Ton Report – Advancing Domestic Resources for a Thriving Bio-economy. Volume 1, July 2016

9 Genesee Finger Lakes Regional Planning Council, http://www.gflrpc.org/the-region.html

10 U.S. Census Bureau, https://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml#

11 Empire State Development, Key Facts, https://esd.ny.gov/regions/finger-lakes

12 County of Monroe Industrial Development Agency (COMIDA), http://www.growmonroe.org/region

13 Greater Rochester, NY Regional Development Authority, http://www.rochesterbiz.com/

14 Greater Rochester, NY Regional Development Authority, http://www.rochesterbiz.com/KeyIndustries/AdvancedManufacturing.aspx

15 Bureau of Labor Statistics, Rochester, NY Manufacturing, https://www.bls.gov/eag/eag.ny_rochester_msa.htm

16 U.S. Census Bureau, Poverty Status in the Past 12 Months: Rochester City, Monroe County, New York: United States Census Bureau American Community Survey 5-Year Estimates 2009–2013

17 Regional Economic Development Council, Regional Councils, https://regionalcouncils.ny.gov

18 FLREDC, Finger Lakes Forward, https://www.ny.gov/sites/ny.gov/files/atoms/files/FLREDC_URI_FinalPlan.pdf

19 Economic Modeling Specialists, Inc., Input-Output Model (2014)

20 Industrial symbiosis is an association between two or more industrial facilities or companies in which the wastes or byproducts of one become the raw materials for another. www.wrap.org.uk/content/what-industrial-symbiosis

21 Chertow, M.R. ““Uncovering” industrial symbiosis.” Journal of Industrial Ecology 11.1 (2007): 11-30

22 Walls, J.L. and R. L. Paquin, “Organizational perspectives of industrial symbiosis: A review and synthesis.” Organization & Environment 28.1 (2015): 32-53

23 Bosman, R. and Rotmans, J., “Transition Governance toward a Bio-economy: A comparison of Finland and The Netherlands,” Sustainability, 8(10), 1017 (2016)

24 Regional Greenhouse Gas Initiative, https://www.rggi.org

25 Rosengren, C., “NYC organics program scales up with new $47M long-term processing contracts,” WasteDIVE, July 25, 2016 www.wastedive.com/news/nyc-organics-program-scales-up-with-new-47m-long-term-processing-contracts/423168/

26 Deitrich, M., “Cuomo Administration Releases Methane Reduction Plan”, NYLCV, 28 http://nylcv.org/news/cuomo-administration-releases-methane-reduction-plan/

27 Fingerlakes Biochar, “NYS Methane Reduction Plan & Biochar,” http://fingerlakesbiochar.com/nys-methane-reduction-plan-biochar/

28 USDA, Biopreferred, www.biopreferred.gov/BioPreferred/faces/news/FiveYears.xhtml

http://www.rochesterbiz.com/

https://www.bio.org/sites/default/files/BIO_Advancing_the_Biobased_Economy_2016.pdf

http://www.gflrpc.org/the-region.html

https://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml

https://esd.ny.gov/regions/finger-lakes

http://www.growmonroe.org/region

http://www.rochesterbiz.com/

http://www.rochesterbiz.com/KeyIndustries/AdvancedManufacturing.aspx

https://www.bls.gov/eag/eag.ny_rochester_msa.htm

https://regionalcouncils.ny.gov

https://www.ny.gov/sites/ny.gov/files/atoms/files/FLREDC_URI_FinalPlan.pdf

http://www.wrap.org.uk/content/what-industrial-symbiosis

https://www.rggi.org

http://www.wastedive.com/news/nyc-organics-program-scales-up-with-new-47m-long-term-processing-contracts/423168/

http://nylcv.org/news/cuomo-administration-releases-methane-reduction-plan/

http://fingerlakesbiochar.com/nys-methane-reduction-plan-biochar/


29 IEA Bioenergy, IEA Bioenergy Task 42 Biorefinery Brochure, www.iea-bioenergy.task42-biorefineries.com

30 Nzihou, A., “Editorial: Waste and Biomass Valorization,” Waste and Biomass Valorization, 1:1-2, (2010)

31 www.sunocoethanol.com/by-products/carbon-dioxide

32 Ethanol Producer Magazine, www.ethanolproducer.com/articles/13733/turning-co2-emissions-into-fuel

33 US Department of Energy, Integrating production of biofuels and bioproducts, https://energy.gov/eere/articles/integrating-production-biofuels-and-bioproducts, April 28, 2016

34 U.S. Energy Information Administration, Petroleum supply monthly, April, 2016, https://www.eia.gov/petroleum/data.cfm

35 U.S. Department of Energy, Biotechnology Office, Multiyear Program Plan (MYPP), 2016) http://energy.gov/eere/bioenergy/downloads/bioenergy-technologies-office-multi-year-program-plan-march-2016

36 The Ohio State Bioproducts Innovation Center (OBIC), Powering Prosperity: Bio-economy Policy, http://www.cfare.org/UserFiles/Hall-3-13-2015-Bioeconomy.pdf

37 New York State Pollution Prevention Institute (NYSP2I), Organic Resource Locator, https://www.rit.edu/affiliate/nysp2i/business-assistance/organic-resource-locator

38 Woodbury, Peter, “Bioenergy feedstock production potential in Finger Lakes Region,” unpublished, provided by Dr. Woodbury, Cornell University

39 NREL biomass maps, http://www.nrel.gov/gis/biomass.html

40 U.S. Energy Information Administration, Industrial Economics and Optimal Energy, Draft Generic Supplemental Environmental Impact Statement, February, 2016, https://www.eia.gov/outlooks/ieo/world.cfm

41 Industrial Economics and Optimal Energy, Draft Generic Supplemental Environmental Impact Statement, February, 2016, https://www.eia.gov/outlooks/ieo/world.cfm

42 American Biogas Council, Operational biogas systems in the US, https://www.americanbiogascouncil.org/biogas_maps.asp

43 Emerson, D., “Entrepreneur connect generators to AD,” Biocycle, 56(6), p. 34, July 2015, https://www.biocycle.net/2015/07/14/entrepreneur-connects-generators-to-ad/

44 Comments of the New York Biogas Study Group, Case 15-E-0751-In the Matter of the Value of Distributed Energy, April 18, 2016

45 Fletcher, K. “The Cellulosic RIN Revolution”, Biomass Magazine, March 2, 2015, http://biomassmagazine.com/articles/11571/the-cellulosic-rin-revolution

46 Sharp, B., “Wegmans, others raise green fuel demand,” Democrat and Chronicle, August 8, 2016, http://www.democratandchronicle.com/story/money/2016/08/05/alternative-fueling-stations-increasing/87972322/

47 American Natural Gas, “Public compressed natural gas station opens on Rochester, New York expressway, “ August 2, 2016, 50 http://www.americannaturalgas.com/news_item/public-compressed-natural-gas-station-opens-on-rochester-new-york-expressway/

48 Johnson, M.W., “Breaking down renewable natural gas injection barriers,” Biocycle, 55(8), p. 60, September 2014

49 Alternative fuel data center, http://www.afdc.energy.gov/fuels/laws/BIOD/NY

50 Biodiesel Magazine, “NYC passes legislation to increase biodiesel in heating oil,” http://biodieselmagazine.com/articles/1670191/nyc-passes-legislation-to-increase-biodiesel-in-heating-oil

51 US Energy Administration, Monthly Biodiesel Production Report, Table 4. Biodiesel producers and production capacity by state, September 2016, www.eia.gov/biofuels/biodiesel/production/biodiesel.pdf

52 U.S. Environmental Protection Agency, 2016, Announcements for the Renewable Fuel Standard, https://www.epa.gov/renewable-fuel-standard-program/2016-announcements-renewable-fuel-standard-program

53 U.S. Department of Agriculture, Bio-based Products Economic Analysis, 2016

54 Iowa’s Cultivation Corridor, Bio-based Chemicals: The Iowa Opportunity, Hayes et al., 2016, http://www.cultivationcorridor.org/biochem/

55 Bioechnology innovation organization (BIO), Advancing the Bio-based Economy: Renewable Chemical Biorefinery Commercialization, Progress, and Market Opportunities, 2016 and Beyond, 2016, https://www.bio.org/sites/default/files/BIO_Advancing_the_Bio-based_Economy_2016.pdf

http://www.iea-bioenergy.task42-biorefineries.com

http://www.sunocoethanol.com/by-products/carbon-dioxide

http://www.ethanolproducer.com/articles/13733/turning-co2-emissions-into-fuel

https://energy.gov/eere/articles/integrating-production-biofuels-and-bioproducts

https://www.eia.gov/petroleum/data.cfm

http://energy.gov/eere/bioenergy/downloads/bioenergy-technologies-office-multi-year-program-plan-march-2016

http://www.cfare.org/UserFiles/Hall-3-13-2015-Bioeconomy.pdf

https://www.rit.edu/affiliate/nysp2i/business-assistance/organic-resource-locator

http://www.nrel.gov/gis/biomass.html

https://www.eia.gov/outlooks/ieo/world.cfm

https://www.eia.gov/outlooks/ieo/world.cfm

https://www.americanbiogascouncil.org/biogas_maps.asp

https://www.biocycle.net/2015/07/14/entrepreneur-connects-generators-to-ad/

http://biomassmagazine.com/articles/11571/the-cellulosic-rin-revolution

http://www.democratandchronicle.com/story/money/2016/08/05/alternative-fueling-stations-increasing/87972322/

http://www.americannaturalgas.com/news_item/public-compressed-natural-gas-station-opens-on-rochester

http://www.afdc.energy.gov/fuels/laws/BIOD/NY

http://biodieselmagazine.com/articles/1670191/nyc-passes-legislation-to-increase-biodiesel-in-heating-oil

http://www.eia.gov/biofuels/biodiesel/production/biodiesel.pdf

https://www.epa.gov/renewable-fuel-standard-program/2016-announcements-renewable-fuel-standard-program

http://www.cultivationcorridor.org/biochem/

https://www.bio.org/sites/default/files/BIO_Advancing_the_Biobased_Economy_2016.pdf


56 Research and Markets “World Bio-based Platform Chemicals Market - Opportunities and Forecasts, 2014 – 2021,” www.researchandmarkets.com/research/q2l3qw/world_bio-based

57 Werpy, T. and Petersen, G. (Eds.), “Top Value Added Chemicals from Biomass. Vol. 1: Results of Screening for Potential Candidates from Sugars and Synthesis Gas,” U.S. Department of Energy, August 2004

58 www.cedarck.com, (Note: this page has recently been taken down)

59 www.osmenv.com

60 “Firm plans for takeover of biomass plant at Griffiss,” Rome Sentinel, Feb. 2015, http://romesentinel.com/county/firm-plans-for-takeover-of-biomass-plant-at-griffiss/QBqobm!4u3MhNVWhg3@ckWU1Vzpg/

61 http://anellotech.com/press/anellotech-and-johnson-matthey-process-technologies-announce-advanced-catalyst-development

62 http://anellotech.com/press/suntory

63 Silicon Valley Bank, Cleantech Practice, “The Advanced Biofuel and Biochemcial Overview,” 2012

64 www.novomer.com

65 Miltner, K., “Rochester area becomes probiotics incubator,” USA Today, November 9, 2014, http://www.usatoday.com/story/news/nation/2014/11/09/the-probiotics-powerhouse-next-door/18779597/

66 Golden, J.S. et al. “An economic impact analysis of the US bio-based products industry: A report to the Congress of the United States of America.” Industrial Biotechnology 11.4 (2015): 201-209

67 Williamson, M. A., US bio-based products market potential and projections through 2025. Nova Science Publishers, 2010

68 U.S. Department of Agriculture, https://www.biopreferred.gov/BioPreferred/faces/catalog/Catalog.xhtml

69 Wilett, B. and Hrdicka, J., “A case for a Renewable Biochemical Tax Credit,” Cultivation Corridor and Iowa BIO.org

70 http://verdezyne.com/2014/11/19/verdezyne-to-build-and-operate-worlds-first-bio-based-ddda-plant-in-malaysia/

71 Alberta Government, Developing Botanical Ingredients for Natural Health products: From Concept to Commercialization, Natural Health Products and Functional Foods Workshop, Agri-Food Discovery Place, 2014. http://afdp.ualberta.ca/Portals/36/Documents/Conference/Past%20Presentations/Developing_Botanical_ingredients.pdf?ver=2015-08-21-110111-500

72 NYSERDA, Renewable Fuels Roadmap- Appendix E: Analysis of Sustainable Feedstock Production Potential in New York State, 2010. Assumes 25% can be removed to maintain ecological and agronomic properties, and only 50% of that can be harvested due to weather.

73 NYSDEC, Beyond Waste: A Sustainable Materials Management Strategy for New York State, adopted 12/27/2010, http://www.dec.ny.gov/docs/materials_minerals_pdf/frptbeyondwaste.pdf

http://www.researchandmarkets.com/research/q2l3qw/world_biobased

http://www.cedarck.com

http://www.osmenv.com

http://romesentinel.com/county/firm-plans-for-takeover-of-biomass-plant-at-griffiss/QBqobm!4u3MhNVWhg3@ckWU1Vzpg/

http://anellotech.com/press/anellotech-and-johnson-matthey-process-technologies-announce-advanced-ca

http://anellotech.com/press/suntory

http://www.novomer.com

http://www.usatoday.com/story/news/nation/2014/11/09/the-probiotics-powerhouse-next-door/18779597/

https://www.biopreferred.gov/BioPreferred/faces/catalog/Catalog.xhtml

http://verdezyne.com/2014/11/19/verdezyne-to-build-and-operate-worlds-first-bio-based-ddda-plant-in-malaysia/

http://afdp.ualberta.ca/Portals/36/Documents/Conference/Past%20Presentations/Developing_Botanical_ingredients.pdf?ver=2015-08-21-110111-500

http://afdp.ualberta.ca/Portals/36/Documents/Conference/Past%20Presentations/Developing_Botanical_ingredients.pdf?ver=2015-08-21-110111-500

http://www.dec.ny.gov/docs/materials_minerals_pdf/frptbeyondwaste.pdf



Eastman Business Park1669 Lake Ave.Rochester, NY 14652

2017