West Coast Biorefinery February 1-2, 2011 Biomass Program Peer Review Department of Energy Forrestal Building Washington D.C. Paul Koehler, Pacific Ethanol Inc. Principle Investigator Niels Langvad, BioGasol ApS Project Manager This presentation does not contain any proprietary, confidential, or otherwise restricted information

Project Overview 2.7 MGY Enzymatic Hydrolisis Project start date BP-1: 3/2/2009 BP-2: 11/27/2011 Project end date ( time table under review) Mechanical Turnover Planned:9/04/2012 Start-up Planned: Q Hand over to commercial operation: Q Status of the project: The project is in the FEL2 phase. 3rd party engineering firm – tbd. Feedstock plan for Demonstration Cost and schedule Project completion: Q Total project funding –DOE: $24.3 million –Pacific BioGasol: $24.3 million DOE Funding to date -$422,778 Timeline Project Development Pacific Ethanol, Inc.& BioGasol ApS – Joint Venture Partners PEI Technical and Operation Team BioGasol – Technology developer 3 rd Party Engineering Firm – tbd JBEI & BSEL for R&D Project ParticipantsBudget

3 WCB Spend Plan

Project Overview (cont) Cost variances: No Schedule variances: Delayed for FEL 3 completion Milestones or critical decision points: –Freeze M&E balance – December 2010 –Submit NEPA application – January 2011 – EIR 2 and CD-3 Approval/Start of Construction (by DOE/PMC) – September 2011 Baseline: Project Management Plan Q

WCB Project Overview-Gant Chart 5

Project Overview: Technical Review Biggest technical hurdles (pilot scale) that were addressed: 6 Continuous pretreatment process Several mechanical issues related to the handling of the biomass in the small scale equipment. The problems were solved by de-bottlenecking and minor equipment modifications. Continuous C5 sugar fermentation Mechanical/control problems: operational modifications has been made from the 250 L to the 2500 L reactor. Process performance: media preparation at pilot scale was different from the preparation in the laboratory and resolved by chancing the procedure for media preparation.

Project Overview: Technical Review Hurdles to be overcome: 7 Up-scaling and design of commercial scale continuous C5 sugar fermentation Completion of the design of the integrated process plant Feedstock Supply Chain Construction of the plant 1 st continuous operation

Project Overview: Scope Change Project baseline scope change: In order to focus on proprietary processes and to reduce capital cost it was decided to abandon the Biogas process step. The emphasis is focused on the important demonstrated performance of the two core process technologies:(i) pretreatment and (ii) C5 sugar fermentation Ethanol yield is increased from 71 gal/t (Grant Application 2007) to 83 gal/t, i.e. a substantial 17% increase in ethanol yield Baseline: Original Grant application 8

Project Overview: Commercial Scale Anticipated commercial cost of production: –Proformas for a 27 mn gal/yr plant shows production costs as 2.0 USD/ Gallon for a commercial plant (see below). 9 OperationCommercial CaseDesign (2010*) Capacity27 MGY CAPEX183.7 M $ OPEX (3. year)58.0 M $/yr Yield83 gal/ton DM MESP2.0 $/gal * With 50% loan financing

Approach 10 Risk mitigated by parallel testing at pilot scale during engineering and up through start-up Utilize best in class 3 rd party engineering firm for integration and non- proprietary design R&D collaborative relationships with JBEI and BSEL for process optimization Integration with existing corn ethanol plant Process verified by integrated pilot scale operation BioGasol Pilot Plant V01

Technical Accomplishments Technical accomplishments achieved: Mass & energy balance from integrated pilot tests Design of up-scaled versions of key technologies P retreatment: Tested in pilot plant for 3 years 60 kg/hour batch process- Maxifuel pilot plant: kg/hour continuous reactor in operation: Since May kg/ hour continuous reactor in operation since Nov –Low enzyme dosage –High sugar release –Low toxicity towards enzymes and fermenting organisms C5 sugar fermentation: Tested in pilot plant for 3 years 2000 liter fermentor: liter fermentor since June liter fermentor since January 2011 –Stable high ethanol yield –High ethanol productivity –Simultaneous conversion of both C5 and C6 sugars. 11

Technical Accomplishments Progress made in meeting project objectives and following the project management plan 12 Integrated pilot plant –September 2006 until June 2008: MaxiFuel pilot plant in Lyngby, Denmark –April Current : Pilot plant “V02” in Ballerup, Denmark What does the current pilot do? –Continuous pretreatment: 50 kg/hr (500 kg/hr ready for operation) –Separation with filter press equipment: Capacity corresponding to the C5 fermentation unit –Continuous C5 sugar fermentation: 250 l (66 Gal) up to 2.5 m3 (660 Gal) V01 V02

Technical Accomplishments Development of key process technologies 13 State-of-the-art, cost- effective equipment design Modular and industrial solutions that are scalable to commercial level 3 new proprietary solutions (pat. pending) Improved continuous process and optimisation of process parameters for different feedstock State-of-the-art, cost- effective reactor designs and proprietary solutions High productivity scalable reactor design 2 new inventions (pat.pending) New microorganism strains BG10 Pretreatment C5 Fermentation

Technical Progress & Results Key Milestones and Status 14 Timetable - high level view for remaining BP1 tasks( timetable under review): 10/29/10: EIR 1 12/17/10: Freeze M&E balance 01/01/11: Submit NEPA application 02/27/11: Complete preliminary engineering 06/30/11: NEPA approval 07/01/11: Submit BP2 application 05/10/11: EIR 2 08/27/11: CD-3 start of Construction (After approval by DOE/PMC)

Technical Progress & Results Summarize Key Milestones and Status 15 Timetable-high level for BP2 tasks. After approval of BP2 application by DOE/PMC: 09/16/11: EPC partner selected 11/02/11: Site work initiated 03/10/12: Detailed design completed 08/02/12: Mechanical completion-water test initiated 09/04/12:Start of operation Wheat straw Corn Stower Hybrid popler 07/03/14: Begin transfer to operations team 09/02/14: Commercial operation

Relevance Demonstration project designed at 2.7 million gallons per year. Expected to be integrated with corn ethanol plant for continuous operations. Replicable to other corn ethanol plants Provides platform for development of 30 million gallon per year plant with competitive process economics Integration with energy systems to minimize life cycle carbon emissions 16

Success Factors and Challenges Describe which critical success factors will define technical and commercial viability of your project: –Managing technology and project implementation risk –End-to-End Process Integration - The challenge of feed-to- product process integration is crucial, as it impacts both performance and profitability. –Additional grant funding for demonstration scale –Progressing to BP 2 Explain the top 2-3 challenges (technical and non-technical) which were/or need to be overcome for achieving successful project results –Submit NEPA application - 01/01/11 –Selection of Engineering partner and EPC contractor for construction –High capital needs and project financing –EIR 2 and CD-3 Approval/Start of Construction (by DOE/PMC) - 08/27/11 –1 st continuous operation of plant 17

Benefits and Expected Outcomes Demonstrate that the successful project will advance the state of technology and positively impact the commercial viability of biomass and /or biofuels –Product cost (MESP): 2.0 USD per Gallon –Return on investment with 25 year life: 24% –Product Yield 83 gal/ton –Water use: 1 gal water per gallon ethanol –Energy demand 1 kWh/gal;.05MMBTU/Gal –Environmental sustainability - waste water (Gallon/ Gallons fuel): With evaporator: 1.0 Compliance with EIA for facility 18

WCB Summary WCB well positioned on conceptual design; ready for FEL 3, detailed engineering, and NEPA submission Cost estimation based on work completed in Denmark Feedstock supply in region for 2.7 MGY Operations and integration into existing ethanol production facilities Low cost development to date Raising equity and additional financing 19