1. Economics CAFI II Stage Gate Review Denver, CO May 1, 2007 Tim Eggeman* - Neoterics International Richard Elander - National Renewable Energy Laboratory NEOTERICS INTERNATIONAL Using Technology to Create Business Innovation

2. 2 Boiler + Generator Block Flow Hydrolysis + Fermentation Feed Handling RecoveryPretreatment Stover Syrup + Solids ChemicalsWater EnzymesCO 2 Water EtOH Steam Power

3. 3 Aspen Plus – GUI w/ Hierarchy

4. 4

5. 5 Current vs. Goal Cases Current: Laboratory Performance –Pretreatment –Conditioning –Enzymatic Hydrolysis –Fermentation Goal: Likely Performance of Above Steps at Commercial Scale

6. 6 Solicit Guidance from CAFI Advisory Board Enzymes –Loading –Type –Cost basis Fermentation –Conditioning –Concentration basis –Scale up of lab data Pretreatment Configuration –Reactor cost –Chemical recovery –Consistent basis for improvements

7. 7 CAFI 2 vs. CAFI 1 Poplar vs. Stover Improved Definition and Consistency of Modeling Assumptions Improved/Tailored Enzyme Cocktails Conditioning & Fermentability Tests

8. 8 Economic Modeling Capital Costs Fixed - Direct Purchased Equipment Installation - Indirect - Contingency - Start-up Working Revenues Ethanol Sales Electricity Sales Operating Costs Variable – Stover Enzymes Other Fixed - Labor Maintenance Insurance Depreciation Discounted Cash Flow 2.5 yr Construction, 0.5 yr Start-up 20 yr Operation 100% Equity, No Subsidy Rational EtOH Pricing Rather Than Market Pricing 10% Real After Tax Discount Rate Performance Measures Total Fixed Capital Per Annual Gallon of Capacity Plant Level Cash Costs Minimum Ethanol Selling Price (MESP)

9. 9 Results (Interim)

10. 10 Fixed Capital Stover Goal, Ideal Pretreatment

11. 11 Cash Costs and MESP Stover Current Cases, Proof Year: 4th Year of Operation $/gal EtOH MESP Cash Cost Plant Level

12. 12 Conclusions Consistent Protocols and Materials Improved Methodology vs. CAFI I Yield Drives Economics

13. 13 Acknowledgements US Department of Energy Office of the Biomass Program, Contract DE-FG36-04GO14017 The National Renewable Energy Laboratory Biomass Refining Consortium for Applied Fundamentals and Innovation (CAFI) Natural Resources Canada Genencor International

14. 14 Project Institutions

15. 15 Feedstocks

16. 16 Feedstocks