1. Todd Campbell Policy Advisor, USDA Rural Development WORKFORCE DEVELOPMENT INSTITUTE CLEANTECH WORKSHOP JANUARY 20TH, 2016

2. “opportunity that can truly revolutionize ” “We need to think more broadly, beyond (just) fuel and energy, that there is an amazing opportunity in chemicals, in enzymes, in bio- plastic materials, in forest products…It's the kind of opportunity that can truly revolutionize and change the American economy” -- Secretary Tom Vilsack, U.S. Department of Agriculture http://www.reuters.com/article/2015/06/17/usa-usda-bioeconomy-idUSL1N0Z303L20150617/ http://www.reuters.com/article/2015/06/17/usa-usda-bioeconomy-idUSL1N0Z303L20150617/

3. “a post-petroleum industrial society” “…What gets us extremely excited as a next step, are the possibilities beyond fuel. The products we mentioned at the outset: packaging, consumer goods, bioplastics. We are learning that biobased processes can deliver unique functionality and benefits that cannot be achieved by petroleum-based manufacturing.” --Jan Koninckx, Global Business Director for Biofuels at DuPont Industrial Biosciences http://www.renewableenergyfocus.com/view/42940/field-to-fuel-a-biobased-economy-for-a-post-petroleum-industrial-society/

4. Bioeconomy Definition The bioeconomy is defined as: The global industrial transition of sustainably utilizing renewable aquatic and terrestrial biomass resources in energy, intermediate, and final products for economic, environmental, social, and national security benefits. --From 2014 Report commissioned by USDA BioPreferred: Why Biobased? Opportunities in the Emerging Bioeconomy

5. The Bioeconomy Concept Revenue and economic growth Broad spectrum of new jobs Rural development Advanced technologies and manufacturing Reduced emissions and Environmental Sustainability Export potential of technology and products Positive societal changes Investments and new infrastructure Revenue and economic growth Broad spectrum of new jobs Rural development Advanced technologies and manufacturing Reduced emissions and Environmental Sustainability Export potential of technology and products Positive societal changes Investments and new infrastructure 5

6. Why Expand the Bioeconomy? Major Motivations – Energy security – Environmental quality – Economic opportunity U.S. job creation U.S. revenues Other Reasons – Reinvest in our “working lands” heritage Bring marginal agricultural soils and land back into production Provide market incentives for forest restoration and management Keep working farms and woodlots productive Support the rural community – Provide additional environmental benefits Give farmers more conservation options Improve ecological systems across the landscape Restore forests 6

7. The Challenge and The Opportunity Challenge More than 13 million barrels of fuel are required every day to fuel the U.S. transportation sector. 1 67% of petroleum consumed in the United States is in the transportation sector—at a commercial value of $350 billion; only 7% of petroleum consumption is in the chemicals and products sector—at a commercial value of $255 billion. 2 Potential Biomass is a leading renewable resource with the potential to provide drop-in replacements for the 11 million barrels per day of petroleum fuels consumed in 245 million existing light and heavy duty vehicles on the road and specifically for air transportation needs (an additional 1 million barrels/day) utilizing existing infrastructure. 1 The United States could produce more than 1 billion tons of sustainable biomass resources that can provide fuel for cars, trucks, and jets; make chemicals; and produce power to supply the grid. By 2030, there is the potential to develop terrestrial biomass resources to displace 30% of current U.S. petroleum usage. This does NOT take into account algae. 3 1 Energy Information Administration, 2012 Energy Review, U.S. Department of Energy, 2013 2 Frost, John, “Redefining Chemical Manufacture,” Industrial Biotechnology, Spring 2005 (numbers are assumed to be annual figures for 2004) 3 Update to the Billion-Ton Study, U.S. Department of Energy, 2011 7

8. Determining Biomass Availability in 2030 Based on the U.S. Billion-Ton Update, modified to use the 2013 USDA Long-Term Forecast. Modified biomass supply curves to include transportation, preprocessing, and storage/handling. Used an average cost of $60 per dry ton to the throat of the convertor. Included all feedstock types as well as “currently used” and “potential.” Applied a 10% loss factor. 8

9. Supply Curve Results 2012 Baseline scenario at $80 per dry ton

10. Supply Curve Results 2030 Baseline scenario at $60 per dry ton

11. Opportunities across the Supply Chain

12. Public Policy which Supports our Growing Bioeconomy Legislative Biomass Research and Development Act of 2000 Farm Security and Rural Investment Act of 2002 Energy Policy Act of 2005 Energy Independence Act of 2007 Food, Conservation, and Energy Act of 2008 Agricultural Act of 2014 Strategic Blueprint for a Secure Energy Future National Bioeconomy Blueprint Climate Action Plan President’s Council of Advisors on Science and Technology 2012 report, etc. USDA Strategic Plan 2014-2018 Secretary's Biofuels Production Roadmap, Biogas Opportunities Roadmap, Farm to Fly 2.0, Wood to Energy Partnership and others

13. Agricultural Act of 2014 - Title IX – Energy Biobased Markets Program (9002) Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Program(9003) Repowering Assistance Program (9004) Bioenergy Program for Advanced Biofuels (9005) Biodiesel Fuel Education program (9006) Rural Energy for America Program (REAP - 9007) Biomass Research and Development (9008) Feedstock Flexibility Program (9009) Biomass Crop Assistance Program (9010) Community Wood Energy Program (9012)

14. Construction and Fuel Production Rural Development supporting efforts to build six new pioneer plants, in addition to two existing facilities through the expanded Biorefinery, Renewable Chemical and Biobased Manufacturing Assistance Program (9003); Loan Guarantees up to $250 millionBiorefinery, Renewable Chemical and Biobased Manufacturing Assistance Program (9003) Updated Rural Energy for America Program (REAP) Regulation in Dec 2014, made ~$280 million available with Loan Guarantees up to $25 million open year round; NOSA open for 2016 applications, also covers pellet and biogasRural Energy for America Program To encourage advanced biofuel production, USDA made payments through the Advanced Biofuel Payment Program for over $286M to over 300 companies in 47 states; Applications accepted in October each yearAdvanced Biofuel Payment Program

15. Bolstering New Markets and Additional Substrates USDA is strengthening markets for biobased products – ~2,500 products carrying the BioPreferred label, Represents companies in >40 countries on six continents; BioPreferred.govBioPreferred.gov – 97 designated product categories representing ~14,000 products included in the mandatory federal purchasing USDA and EPA have joined with private sector, charitable organizations to set nation's first food waste reduction goals of 50% reduction by 2030: http://www.usda.gov/oce/foodwaste/http://www.usda.gov/oce/foodwaste/ $200M+ invested with states for infrastructure for renewable fuel use, seeking to double number of higher-blend retail fuel pumps Announced the winners of the U.S. Tall Wood Building Prize Competition, in partnership with the Softwood Lumber Board and the Binational Softwood Lumber Council. – mass timber, composite wood technologies and innovative building techniques, two winning teams were granted a combined $3M for demo

16. Feedstock Establishment, Harvest, Storage, Transportation Risk Mitigation for Growers USDA invested $332M since 2009 to accelerate research ranging from genomic research on bioenergy crops, to development of conversion processes and costs/benefit analysis, through Agriculture and Food Research Initiative, Biomass Research and Development Initiative, Forest Service Research and DevelopmentAgriculture and Food Research InitiativeBiomass Research and Development InitiativeForest Service Research and Development Through the Biomass Crop Assistance Program (BCAP), USDA has incentivized more than 800 producers to establish and produce seven different dedicated energy crops across 12 states on nearly 50,000 acresBiomass Crop Assistance Program In 2014, Farm Service Agency county offices supported BCAP contract approvals to deliver approximately 220,000 dry tons; targeting up to 500,000 dry tons of biomass material in 2015; 56 facilities qualified USDA offers insurance coverage for farmers growing biofuel crops like switch grass and camelina and we are helping identify farmland most suitable for energy crops. Noninsured Crop Disaster Assistance Program expanded in 2014 Farm Bill for bioenergy crops not covered under crop insurance program.

17. Regional Feedstocks Focus Crop residues Perennial grasses Energy cane Non-food biomass sorghum Lipid seed crops Woody Biomass Invasive rangeland trees Agriculture Research Services and Forest Service R&D

18. . $156 million in seven projects Projects address production, transportation logistics, conversion technologies, and associated impacts on agricultural and forestry markets, rural communities, and ecosystems AFRI Coordinated Agricultural Projects: Bioenergy

19. Biomass Crop Assistance Program

21. Institutes for Manufacturing Innovation President’s 2016 Budget included $80 million for public-private partnerships to establish two Innovation Institutes which engage industry, leverage funding, and facilitate technology transfer. Bio-Manufacturing Building the scientific foundation, processes, and workforce capacity to move bioenergy and biobased product research from development to deployment and commercialization. Nanocellulosics Focused on utilization of cellulose to be turned into a renewable supply of industrial materials. ensuring that the United States is the leading global source of commercial cellulosic nanomaterials research, innovation, production, and commercialization. In line with the December 2012 report by the President’s Council of Advisors on Science and Technology.

22. Thank you! For more information on USDA Energy and Bioeconomy Programs, visit: www.usda.gov/energy todd.campbell@osec.usda.gov