BIOFUEL CROP PROJECTS

Your Biofuel Crop Projects (a division of Global Leaf Energy Corporation) is our strategy for non-food crops, creating value from renewable materials; GLE is committed to sustainable development. Renewable materials, produced by agriculture as feedstocks for industry and energy, will play a vital part. Plants sustain life and have amazing diversity of form and function. Agriculture, manufacturing industry, end-user businesses and the science base can work together in using this diversity to deliver benefits for the economy, the environment and society.

Crops provide renewable materials which can substitute for fossil and mineral materials and so reduce depletion of the earth’s resources. In addition they can Benefit the environment by reducing greenhouse gases, cutting waste and pollution, helping biodiversity and prudent use of natural resources, Improve the economic competitiveness of industry through development of new markets and products, Produce social benefits by stimulating rural communities through establishment of local industries and providing new markets for farmers.

The long-term vision of our strategy is that a significant proportion of demand for energy and raw materials should be met through the commercial exploitation of science from crops, in a way which stimulates innovation and the rural economy, enhances biodiversity, reduces greenhouse gas emissions and waste, particularly biodegradable waste going to landfill, and slows depletion of finite natural resources.

These potential gains are extremely significant, but to realize them a concerted approach and investment is needed to build the necessary links between science, agriculture and industry, to disseminate knowledge and encourage changes both in industrial practice and in society. Some non-food crop uses such as textiles are widely known. Others may be less familiar such as plastics made from starch-based polymers. There are implications for consumer behavior – for example in choice of ‘green’ products, and co-operating with waste disposal strategies to realize the benefits of biodegradable materials.

The strategy for non-food crops needs to be viewed as part of a wider agenda for innovation and diversification in agriculture and industry to enhance the GLE competitive performance, in a way which contributes to environmental objectives. Non-food uses of crops will develop in new directions as science and technology advance and environmental factors and legislation change. Bioscience applications can have an important role in areas such as conversion of crop materials to chemical feedstocks and development of high value products such as pharmaceuticals where GLE has particular strengths.

Realizing the full potential benefits of non-food crops depends crucially on the development of markets, with products competing effectively on cost as well as environmental grounds, to pull innovation through to commercial application. This is not just about novel crops but also existing mainstream arable crops. At the farming end of the supply chain producers will be more inclined to move into non-food markets if the returns are attractive compared with other potential uses of the land. GLE Agricultural Policy will provide a new stimulus to diversification which may provide significant opportunities for non-food markets for crops.

At GLE we believe that businesses prosper if they fulfill human needs – and companies such fulfill the need for energy. Energy is central to growth and development because it provides affordable solutions for heat, light and mobility. It lights up our homes, helps us cook our meals, provides power for our factories, and fuels our modes of transport – from two-wheelers to buses and trains and airplanes. At GLE also believe that the right to energy is a fundamental right. It extends people’s lives and improves their livelihoods – so the foundation of any energy policy has to be that energy is a good thing – and people should not be denied energy. But at the same time as providing the benefits of energy, we have to address the challenges that it brings. These include energy security and the environment.

The environment is important – alongside providing secure energy for growth, to move beyond hydrocarbons in the energy we offer to the developing low carbon economy. If we are able to eliminate poverty, provide gainful employment to all and do these while protecting the environment, we would have shown a new path to sustainable development. This is exactly the kind of vision to inspire the world of business. Non-food crops may play a major role in creating the secure and sustainable energy of tomorrow. It is a significant business. And it exists because there is a strong business case for low-carbon power today – and there will be an increasingly strong case in the coming years. Biofuel, “Diesel” from Jatropha and other non-food tree crops has the ability to lift many people from poverty to financial independence, from despair to respect and unemployment to business owners.

Economic performance

Value creation from non-food uses of crops | Rural income generated | Rural economic development, rural infrastructure/resource development | Diversification of rural enterprises | Investment in non-food uses of crops | Positive balance of trade (inward investment, exports, import substitution) | Security of supply (development of indigenous resources).

Innovation

Development of GLE science base | GLE registered patents in non-food uses of crops | R&D activity

Environmental issues

Air pollution (including greenhouse gases) | Water pollution | Land pollution | Waste management | Impacts on renewable resources | Soil | Water | Biodiversity | Resource depletion | Impacts on non-renewable resources | Substitution of fossil fuels.

Social issues

Strengthening rural communities | Rural employment generation | Countryside recreation opportunities | Social acceptability issues | Animal welfare | Genetic modification

FEEDSTOCK FACT SHEET

Although the biodiesel industry has experienced tremendous growth, raw material supplies have served as a natural brake and created a strain on margins for biodiesel producers. The surge in commodities prices is a result of numerous factors including a weak dollar, expanding domestic and global biofuel production capacity, low commodity stocks due to global weather situations, increased energy and transportation costs, and the strength of global food demand. The National Biodiesel Board was formed during a time period of record inventories of fats & oils and extremely low feedstock prices. However, achieving the industry vision of replacing 5% of diesel demand by 2015 calls for additional focus on new raw materials sources for biodiesel production. New feedstock opportunities vary significantly; both in terms of potential impact on the market in terms of volume and timing to commercialization.

The following summary will highlight a limited number of near-term and longer-term opportunities to add to the U.S. supply of raw materials for biodiesel production. Existing feedstock supplies with a limited supply response or feedstock supplies that are primarily imported are not addressed in the summary. Near-term opportunities exist with the creation of “virtual acres” (greater yields of oil per acre), capitalizing on growth in the ethanol industry, and additional acres of high oil content crops such as winter canola and camelina.

ETHANOL USAGE

Ethanol producers may offer the biodiesel industry its nearest term opportunity for additive supplies. Historically, corn oil has not been a viable biodiesel feedstock due to its relatively high cost and high value as edible oil. In current dry grind processes, the corn oil essentially passes through the process and remains in the resulting distillers dry grains with solubles (DDGS). Ethanol firms are investigating fractionating technology to remove corn germ (the portion of the corn kernel that contains oil) prior to the ethanol process. Furthermore, some ethanol plants have already made public their intention to employ technology to remove the remaining vegetable oil from dried distiller’s grains, a co-product of the ethanol process. In addition to the various extraction technologies, the quantity of corn oil could also be increased in the long term by producing more high-oil corn varieties.

All of these technologies could add to the biodiesel raw material supply in a meaningful way. Corn oil could help to meet feedstock market demand in two ways. First is for edible corn oil to displace other edible oils that could then be diverted to biodiesel production. Second is for nonedible corn oil to be used directly for biodiesel production. For example, reaching the proposed goal of 15 billion gallons of ethanol production from corn could generate almost 400 million gallons worth of vegetable oil if only ½ pound of oil was extracted from each bushel of corn.

SOYABEAN VIRTUAL ACRES

“Virtual acres” is a term for generating additional feedstock from the same acre. Monsanto plans to introduce new technology that can increase soybean yields 9 to 11 percent. DuPont is commercializing soybean varieties that increase yields by as much as 12 percent. These technologies are set to have an impact in 2010. If 90% of U.S. soybean acres adopted the new technology, more than 60 million acres could benefit from a 10% increase in yield. This equates to more than 250 million additional bushels of soybeans (the equivalent of 380 million gallons of biodiesel) without increasing acreage in the U.S.

The same benefit can be achieved by increasing soybean oil content. Current industry genetic programs suggest 10% oil increases are achievable within the next few years. New approaches for achieving even higher oil levels in plants are needed. Previous efforts focused on increasing the flow of carbon into the oil biosynthesis pathway. However, downstream bottlenecks appear to reduce the value of this approach. The National Biodiesel Board (NBB) has teamed up with The Donald Danforth Plant Science Center to look at the potential to enhance the oil production in soybeans and other oilseeds, although this is a longer-term endeavor. At the heart of the Danforth Plant Sciences strategy is the hypothesis that the ability to utilize available carbon limits oil production. Therefore, their work will focus on engineering carbon sinks that will pull metabolites through the oil production process in plants. This is a three-year program, initiated in 2008.

CAMELINA, CANOLA & BRASSICA JUNCEA

The production of oilseeds on new acres may also offer additional raw material supplies to the biodiesel industry. Private firms are offering camelina contract opportunities in the Pacific Northwest and the U.S. Canola Association has established an initiative to increase canola acres by 2010. Although interest in these oilseeds is high, global wheat consumption has surpassed production in six of the last eight years. The resulting price spike in wheat has negatively impacted the current opportunity for expansion of winter canola and camelina acres.

Just as biodiesel producers like to say that biodiesel can be used in any application that diesel fuel is used, camelina is said to be adapted to any region in the Upper Midwest where wheat can be grown. According to Montana State University, camelina is a short season crop (85 to 100 days) that is well suited for marginal soils and has a lower break-even cost than wheat or canola. It performs well under drought stress and can yield up to 2,200 pounds per acre (1,200 to 1,500 lbs/acre typical) in areas with less than 16 inches of annual rain, although reported yields are still highly variable in different regions. Camelina is said to be a good fit for cool regions where canola production is difficult. In 2007 there were a reported 50,000 acres of production in Montana with limited acreage in surrounding states.

Camelina is an annual or winter annual crop that researchers say can be planted on marginally productive cropland from eastern Washington to North Dakota. Long considered a weed in northern states, camelina is a member of the mustard family and also known as false flax, gold of pleasure, and leindotter in Germany. Researchers and producers indicate the crop can be grown in arid conditions, prefers lower humidity levels, does not require significant levels of inputs such as fertilizer, and the oil will produce a high quality biodiesel. Typical varieties of camelina are approximately 38 to 40% oil. At least two firms are offering contracts to producers with stated goals of achieving two million acres of production. Depending upon the type of extraction technology used, more than 100 million gallons of oil could be added to the market.

Canola is a type of rapeseed that was first developed in the 1970s. Canadian plant breeders developed canola explicitly for its nutritional advantages compared to industrial rapeseed. Original rapeseed’s nutritional content has always been questioned due to their high levels of elcosenoic and erucic fatty acids, which is a fatty acid that has been shown to be related to heart disease. In the 1960s, Canada began researching rapeseeds by isolating specific lines that were low in erucic acid to produce an oilseed that could be considered safe for human consumption. The result of their efforts was “Canola,” defined as oil that contains less than 2% erucic acid.

Canola is a popular crop throughout the world because of its variety of uses and the nutritional value compared to competing crops. Canola can be produced in some countries where similar crops are not able to grow because of short growing seasons. In the U.S., North Dakota is the leading producer of canola. Canola oil has been increasing its market share in the United States, because of its nutritional advantages compared to other competitive vegetable oils. Although canola oil would primarily move into edible markets, increased U.S. acreage will have positive impacts on the overall vegetable oil supply. The U.S. Canola Association has established goals and programs to expand canola acreage to 2 million acres by 2010. Significant to a portion of this goal is expansion of winter canola acres. Canola in the U.S. is almost exclusively grown as a spring crop. Expansion of winter canola acres in the Great Plains and mid-South would add to the vegetable oil supply.

Mustard is the common name for multiple species in the Brassica genus. The species of which most people are aware is yellow mustard, referred to as white mustard in Europe, and is grown primarily for condiment mustard seed. As a result, it does not have as high oil content as the other commonly known Indian mustard referred interchangeably in commerce as brown or oriental mustard. This mustard’s botanical name is Brassica juncea. Juncea varieties are grown for edible leaves or greens or for condiment mustard, and have been and are increasingly grown as an oilseed crop. The crops commonly called rapeseed and canola in commerce are also in the Brassica genus, and are Brassica napus species. As a result, they are closely related to juncea. Because canola is not a botanical term, but one used to describe compositional qualities, the term is often used with juncea when discussing cultivars that have been developed for the oilseed market. Canadian plant breeders have developed Br. juncea cultivars with canola characteristics. As a result, canola varieties of napusand canola-type juncea have similar compositional characteristics but different crop or agronomic qualities. In theory, oils from both species have the same acid profiles (high in monosaturates and low in saturates) and oil characteristics (lower pour and melting point and better cold flow properties) and similar meal properties (35 to 40% meal protein content with low glucosinolate levels). The key differences between napus and canola-type juncea lie in their agronomic characteristics. Both are an annual, cool season crop. However, juncea tolerates high temperatures and drought better than napus, and thus is better suited for the warmer, drier climates of the Upper Plains of the U.S.

Lipid production from algae holds much promise for the biodiesel industry. Microalgae are microscopic aquatic plants that carry out the same process and mechanism of photosynthesis as higher plants in converting sunlight, water and carbon dioxide into biomass, lipids and oxygen. However, algae production does not require fresh water or arable land used for cultivation of food crops. Large scale production of these algal lipids is still a few years away but many companies and universities are working to unlock the potential of these single-celled plants, which can contain up to 50 percent oil by weight and double their numbers in a single day. Once realized oil yield per acre is expected to be the highest of any triglyceride source currently available. Yield projections in the medium term are estimated to range from 2,000-5,000 gallons per acre as compared to 61 gallons per acre for soybeans. There are two algae production paths that are being pursued: open ponds or bioreactors. The open pond method involves growing the algae in open ponds of water, much like it grows in nature. Open ponds are generally less capital intensive than the other production methods, but they require a reliable supply of water to replenish that lost from evaporation. The lack of temperature, weather and algae species control can decrease yields from the theoretical potential. Closed loop or bioreactor systems grow algae in a controlled environment using a wide variety of production processes like plastic bags, tubes or fermentation reactions. Closed loop systems provide the advantage of additional control over seasonal temperature changes, evaporation losses and contamination by undesired algae strains.

Jatropha is a small but versatile bush/tree from the Euphorbiaceae family. The tree flowers and produces clusters of about 10-15 fruits with a seed containing high concentrations of oil. Jatropha Curcas L. is gaining a lot of attention as a potential feedstock for biodiesel production due to its high oil content and ability to grow in less than ideal conditions. However, harvesting and logistical challenges have kept the plant from being grown in large scale production in places where there is not an abundance of low cost labor. Historically, most of the Jatropha has been grown in tropical areas including Africa and Asia, especially India. More recently, it has been grown on most continents around the world. The green shading on the map below indicates the primary areas where Jatropha is grown. These areas are mainly inside the tropics and are not known to have land of good quality. This low maintenance plant has generally proven to be resistant to local pests under common cultivation practices and can produce seeds containing up to 40 percent oil. While Jatropha is touted as being able to survive in poor soils with very little fertilizer and water, the fruit (and thus oil) yields increase significantly with increased soil fertility and water. For example, adding small amounts of magnesium, sulfur, and calcium have a significant impact on improving yields. Jatropha can survive in areas with annual rainfall of 8-12 inches. In extreme conditions, plants will survive drought by dropping its leaves to reduce transpiration loss. In fact, this resilient plant can survive three full years of drought before it would die. However, fruit production is very low during these drought years. While Jatropha is most commonly grown in low altitude regions that are relatively warm, it can grow at higher altitudes but can only handle a slight frost.

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