1. The Strategic View What’s Next in Fuels Brian Foody Iogen Corporation ABLC Next San Francisco November 11, 2014

2. The Strategic View What’s Next in Fuels Brief Introduction to Iogen The First Wave of Cellulosics Arrives What’s behind the curtain? Driving better economics The Quest for Yield Breaking Through the Blend Wall Drop-ins or not? 2

3. 3 2004 2005 Making Cellulosic Ethanol Since 2004 2007 Over 30 years development, with $500 million invested Over 300 patents issued or pending Strong focus on technology validation and commercial implementation History with blue chip partners Enzyme Business: Historical relationships include:

4. One of the world’s largest and most experienced teams in cellulosic biofuels 9 years developing, designing, de- bugging and scaling-up cellulosic ethanol technology in our integrated demo plant Achieved steady, reliable production operations - integrating biotech, process tech and engineering Projects developed in Canada, US, Germany and Brazil Extensive feedstock supply chain experience, with contracts totaling over 2.8 million MT/yr 4

5. The Strategic View What’s Next in Fuels Brief Introduction to Iogen The First Wave of Cellulosics Arrives What’s behind the curtain? Driving better economics The Quest for Yield Breaking Through the Blend Wall Drop-ins or not? 5

6. The First Wave of Cellulosics Arrives Over $2 billion has been invested in commercial cellulosic biofuel production Ten technology platforms have been scaled up (including two failures) Five platforms, including Iogen’s, are enzyme based cellulosic ethanol At least another two pre-commercial platforms have big corporate sponsors 6

7. Our commercial facility is in Brazil - Allied with Raizen 7 Brazilian Sugar Mills Raízen Costa Pinto Mill, Piracicaba, Brazil Brazil’s largest cane processor, Iogen partner 24 sugar/ethanol mills, ~ 65 m tonnes/yr. crushing ~ $30 billion sales ~ 40,000 employees The Costa Pinto 2G Ethanol Project – Start-up Q4 2014 US ~$100 million 40 m litres/yr. 2G ethanol Bagasse as feedstock Residue to boiler Once operational, Raizen plans for 7 more plants

8. The Costa Pinto Cellulosic Ethanol Facility 8

9. Brazil’s unique advantage: Co-location synergies Meets the need to wring more out of existing assets 50% higher yield per acre Extend the operating season Uses feedstock that’s already delivered on-site Significant cost savings Opportunity to share existing equipment and facilities Enables mills to “extend” their operating season 9

10. The First Wave of Cellulosics Arrives With all these facilities now in “start-up”, what’s really happening? 10

11. The First Wave of Cellulosics Arrives With all these facilities now in “start-up”, what’s really happening? - RELIABILITY 11 R8R7R6 Upgrade Target Range

12. Eliminate Line Plugging What does it mean to work on reliability? Resolve Erosion Problems

13. The First Wave of Cellulosics Arrives With all these facilities now in “start-up”, what’s really happening? - RELIABILITY 13 R8R7R6 Upgrade Target Range

14. The Strategic View What’s Next in Fuels Brief Introduction to Iogen The First Wave of Cellulosics Arrives What’s behind the curtain? Driving better economics The Quest for Yield Breaking Through the Blend Wall Drop-ins or not? 14

15. Cellulosic Processes Need to Drive Better Economics 15 Rough landscape: OPEX: $1.50/gal CAPEX:$6 - $10/gal/yr Yields:75 - 95 gal/MT Typical strategic choices Drive improvements in the yield / cost curve Simplify to make it cheap Complicate to add yield / product revenue Source low cost feedstock Tipping fee for MSW vs “pay to collect” ag residues, etc. Generate large by-product revenues Get financial support on capital

16. Cellulosic Processes Need to Drive Better Economics 16 Rough landscape: OPEX: $1.50/gal CAPEX:$6 - $10/gal/yr Yields:75 - 95 gal/MT How good, really, are our yields? Biotech processes can drive very high yields, but (at least conventionally) on only 50% - 55% of feedstock 45% - 50% of the feedstock: Doesn’t make it to market; and Doesn’t capture renewable fuel premiums Can all our feedstock sell as fuel? Potential for twice our current yields and half our current unit capital costs

17. Quest for Yield – Shift more feedstock to fuel Iogen has been looking for approaches that can “Bolt-on” to any of the existing cellulosic platforms; Produce drop-in fuels that fit existing infrastructure; Use existing equipment and infrastructure to save capital Introducing Renewable Hydrogen Made from cellulosic-based biogas using SMR technology – a staple of petroleum refining Incorporated into gasoline with standard refinery equipment Allows a shift from making process fuel from the feedstock to making transportation fuel – capturing significant renewable fuel premiums 17

18. Renewable Hydrogen is a true drop-in fuel Potential for RH fuels is very large 7 billion gallons (ethanol equiv)/yr about 14X the current capacity for CNG/LNG Applicable to many of the existing cellulosic process Subject to proprietary protection U.S. Patent No 8,658,026 H 2 SourceH 2 Sink 18

19. Quest for Yield – Shift more feedstock to fuel It is critical for cellulosic biofuel processes to drive up yield Need it for basic economics Competitiveness This is not a lost cause … there are options Lots of different groups will have different strategies This quest for yield should drive collaboration among competitors 19

20. The Strategic View What’s Next in Fuels Brief Introduction to Iogen The First Wave of Cellulosics Arrives What’s behind the curtain? Driving better economics The Quest for Yield Breaking Through the Blend Wall Drop-ins or not? 20

21. The Strategic View on Biofuels Biofuels are steadily becoming more competitive with petroleum  Real costs in agricultural products are generally flat  Real oil prices have seen a long term (bumpy) upward trend  Ethanol is close to competitive with gasoline on an energy basis 21

22. The Renewable Fuel Standard is also driving biofuel use America has a renewable fuel standard intended to push biofuel market share up 22 Put in place for energy security and environmental reasons Works through a credit trading system that creates a positive price signal for biofuels The design of this credit system has big implications for fuel choice

23. Debate about the future for biofuels The market for ethanol as a 10% blend with gasoline (E10) is fully penetrated Pushing ethanol use beyond this level runs up against the so-called blend wall Debate about the future for biofuels: 23 E85 blends Drop-in fuels

24. What’s Next in Biofuels Simple Story Whatever is the cheapest on an energy basis will win More precisely: In order to succeed, drop-ins need to be competitive with ethanol (of the same class) on an energy basis …. And this is not an easy competition 24

25. What’s Next in Biofuels In order to succeed, drop-ins need to be competitive with ethanol 1 on an energy basis Why no premium for drop-ins? The price signal from the RFS will be capped at what it takes to move E85 into the market That price signal looks like it won’t be that far from what it takes to deliver cost parity on an energy basis 25 1. (of the same class)

26. Two Lines of Evidence for competition on an energy basis Conceptual Imagine you had a price signal big enough to make E85 cost effective on an energy basis Would people buy it if: It was cost effective; Their cars could run on it; and It was available at a nearby station What does it cost to deliver on these? Not that much E85 station conversions are only 2% to 5% of the cost of cellulosic facilities Market Results Bottom line: The market price for credits matches the price needed to make E85 cost effective! 26

27. What does this mean for cellulosic ethanol? The “Blend Wall” is not a barrier for cellulosic ethanol If cellulosics can compete with corn ethanol, given whatever green premiums are available, … then they will have a place in America Ultimately … cellulosic biofuels will need to compete on an energy basis … but the industry still has a long learning curve 27

28. The Strategic View What’s Next in Fuels Brief Introduction to Iogen The First Wave of Cellulosics Arrives What’s behind the curtain? Driving better economics The Quest for Yield Breaking Through the Blend Wall Drop-ins or not? 28

29. Thank You 29