Biorefining: Commercial Opportunitiesfor Green Chemicals and Fuels

TSX-V: LEC

Biorefining: Commercial Opportunitiesfor Green Chemicals and FuelsWilliam B. Armiger, Ph.D. & E. Kendall Pye, Ph.D.

Joseph Priestley Society Symposium

Chemical Heritage Foundation Philadelphia, PA Dec 11,2008

Forward Looking Statements

This presentation contains historical and forward-lookingstatements. The forward-looking statements involve risks anduncertainties. Forward looking statements appearing in thispresentation represent management’s current estimates andthese may change significantly as new information comes to hand.

The information contained in this presentation has been obtainedby Lignol from its own records and from other sources believed tobe reliable, however no representation or warranty is made as toits accuracy or completeness. Reference should be made to theCompany’s most recent Annual Report filed with Canadiansecurities regulatory authorities (available at www.sedar.com) fora description of the major risk factors.

– Cost of Crude Oil

Drivers for Chemicals & Biofuels fromRenewable Biomass Materials


– Demand for Sustainable Raw Materials




– Climate Change from Fossil Carbon Greenhouse Gases





– Energy Security for Oil Importing Nations





– Energy Security for Oil Importing Nations

– Balance of Trade Problems for Oil importers


The Renewable Fuel Standard (RFS)

• Energy Policy Act of 2005– Established 7.5 billion gallon RFS for ethanol and biodiesel

use by 2012

The Renewable Fuel Standard (RFS)

• Energy Policy Act of 2005– Established 7.5 billion gallon RFS for ethanol and biodiesel

use by 2012

• Energy Independence and Security Act of 2007– Extended RFS to 36 billion gallons of renewable fuel by 2022– Identified targets for specific renewable biofuels

• Cellulosic• Conventional (corn, etc.)• Advanced• Biomass-based• Undifferentiated advanced

US Energy Independence and Security Act of 2007

Other Advanced Biofuels

Biomass-Based Diesel

Cellulosic Biofuel

Corn Ethanol

0.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

10



Cellulosic Biofuel

Corn Ethanol

Bill

ions

Gal

lons

/Yr

Projected Cellulosic Ethanol Component



Cellulosic Biofuel

Corn Ethanol

0.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

11



Cellulosic Biofuel

Corn Ethanol

Bill

ions

Gal

lons

/Yr

2009

2018

2013

Today

1 billion

7 billion

2022 16-20 billion

Lignol’s Biofefining Technology

High-yield ethanol production and high-value biochemicals (High Purity Lignin, HP-L™)

LignolExtractionProcess

Separation

Enzymes&

YeastDistillation

DistillationSaccharification & Fermentation

ETHANOL

LIGNIN

12

Extractives & biochemicals

GE• Biomass cracking

pilot plant

Repap• Biomass Refining

for paper pulp production at industrial scale

• Markets for novel “High Purity Lignin” (HPL™)

Lignol acquired commercial-scale organosolv Penn-GE Process Technology developed by General Electric and Repap

Alcell Demonstration Plant: Operated for Six Years

Established markets for new “High purity Lignin”

The Biorefinery Opportunity

Cracking Biomass into Basic Fractions Lignin……Aromatics Cellulose…..C6 sugars Hemicellulose……Mostly C5 sugars for hardwoods & annual fibers Extractables……..Complex Structures

The Biorefinery Opportunity

Cracking Biomass into Basic Fractions Lignin……Aromatics Cellulose…..C6 sugars Hemicellulose……Mostly C5 sugars for hardwoods & annual fibers Extractables……..Complex Structures

Converting Fractions into Value-Added Products by:– Chemical Processing– Biological Processing

Only ~60% Fermentable Components

Lignol’s Cellulosic Fraction

Dilute-Acid Pretreated Corn Stover

Steam-Exploded Wood

~95%Fermentable Components

Lignol’s “Clean” Fractionation of BiomassOther Biomass “Pretreatment” Technologies:

Market Sector End use Relative Value

Energy Cellulosic ethanol Medium

Bio-butanol Medium

Methane Low

Materials Cellulose Derivatives High

Specialty pulps Medium/High

Paper Pulp Medium

Chemicals Nutraceuticals & Bioactive Products

High

Chemical Building Blocks

Medium

Sweeteners & Food Additives

Low

CellulosicFraction from

the Lignol Biorefinery

Platform Products from Cellulosic Fraction

19

Lignol’s HP-LTM Lignin Fraction……….Pure & Natural

Lignin Structure…Rich in Aromatics

Mol Wt 150 Mol Wt 180 Mol Wt 210

Lignin Structure…Three Basis Building Blocks

OH

OCH3

O

HOCH2

H3CO

O

CH2OH

HCOH

OH

H3CO

HO

CH2

OCH3

HOCH2

O HCOH

HCOH

CH2OH

H3CO

Typical HP-LTM Lignin Fragment

Properties HP-LTM

LigninKraft Lignin

Sulphite Lignin

Ash <0.5% 3% ~2.5%

Carbohydrates <1% Low Up to 50%

Sulphur <0.5 ppm ~ 1.6% >6%

H2O Solubility Low Low ~ 100%

23

HP-LTM Lignin Properties

Market sector End use Relative Value

Energy Fuel Additives High

Bio-Aromatics Medium

Burn as Fuel Very Low

Materials Carbon Fiber High

Polyurethanes Medium

PF Resin Substitutes Medium

Animal feed Medium

Chemicals Nutraceuticals High

Pharma Intermediates High

Specialty Chemicals Medium

Ligno-chemical Intermediates

Medium

HP-LTM Lignin Fractionfrom the Lignol

Biorefinery

Platform Products from HP-LTM Lignin Fraction

HP-LTM Lignin Applications

Lignol’s Biorefinery….25 lb/day Batch Plant

26

27

2500 Times Scale-up from the 25 lb/day Batch Plant

2500 Times Scale-up from the 25 lb/day Batch Plant

28

Lignol’s 1 Ton/day Biorefinery Pilot Plant

Integrated pilot plant operating in 4th Qtr 2008

29

Will Provide Technology & Engineering Scale-up for100 ton/day Demonstration Plant Funded by DOE

Lignol’s Integrated Pilot Plant

Lignol’s Integrated Pilot Plant

Lignol’s Technology canBuild Sustainable Ligno-chemical

and Fuel IndustriesBased upon Renewable

Feedstocks

The Time Has Come….

Projected Cellulosic Ethanol Component



Cellulosic Biofuel

Corn Ethanol

0.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

33



Cellulosic Biofuel

Corn Ethanol

Bill

ions

Gal

lons

/Yr

2009

2018

2013

Today

1 billion

7 billion

2022 16-20 billion

• U.S. National Mandate…20 Billion gal/yr of ethanol from biomass

New Era: Ligno-chemicals and fuels from Biomass

• U.S. National Mandate…20 Billion gal/yr of ethanol from biomass

• Lignol’s Biorefinery Technology will generate 50 million tons/yr of Ligno-chemical feedstocks

New Era: Ligno-chemicals and fuels from Biomass

Current World Output110 MM Tons/yr

65 MM Tons/yr

70 MM Tons/yr

Petrochemical Industry Uses Crude Oil & Natural Gas to Produce Primary Olefins and Aromatics

October 28, 2008

• Lignol Signs US $30 million Cooperative Agreement with U.S. Dept. of Energy

• The 100 ton/day Biorefinery for cellulosic ethanol and ligno-chemicals will be located in Grand Junction, CO

• Lignol’s partner in the project is SUNCOR

Lignol’s 100 ton/day Demonstration Plant

• 1908– Ford begins mass production of Model T– AIChE Founded in Philadelphia– Demand for petrochemicals accelerates

The New Era Begins: Ligno-chemicals and fuels from Biomass

• 1908– Ford begins mass production of Model T– AIChE Founded in Philadelphia– Demand for petrochemicals accelerates

• 2008– Lignol begins operation of 1 ton/day integrated

ethanol biorefinery & design of 100 ton/day plant– Biorefining has “roots” in Penn-GE cellulose process

developed in Philadelphia– The Ligno-chemicals industry has begun

The New Era Begins: Ligno-chemicals and fuels from Biomass

TSX-V: LEC

Biorefining: Commercial Opportunitiesfor Green Chemicals and FuelsWilliam B. Armiger, Ph.D. & E. Kendall Pye, Ph.D.

Joseph Priestley Society Symposium

Chemical Heritage Foundation Philadelphia, PA Dec 11,2008

Biorefining: Commercial Opportunitiesfor Green Chemicals and Fuels

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