Green Chemistry Case Studies: Presidential Green Chemistry Challenge Awards 2012 Winners

1. Green Chemistry Case Studies: Presidential Green Chemistry Challenge Awards 2012 Winners Nicole Casasnovas Hannah Needleman July 2012

2. Project Summary • The purpose of this project is to present an overview of the technology and business development process for green chemistry technologies. • We will focus on three winners of the 2012 Presidential Green Chemistry Challenge Awards whose technologies are currently in the business market: 1) Elevance Renewable Sciences, Inc. 2) Codexis, Inc. & Dr. Yi Tang, UCLA 3) Buckman International, Inc.

3. Format • We will present information on the business winners in the following case study format: • Overview • Motivation • Business Drivers • Innovations in Science and Engineering • Technology Development • Business Activities • Impact • Environmental, Health, and Safety Benefits • Economic Benefits

4. Case 1: Elevance Renewable Sciences, Inc. Winner in the Small Business Category

5. Disclaimer: Elevance recently filed a Form S-1 with the US Securities and Exchange Commission (SEC) which allows public companies to register their securities. In this pre-IPO period, there are restrictions on what Elevance can say to promote or market itself. Therefore, the information for their section of this report may be missing or incomplete.

6. Overview Title: Using Metathesis Catalysis to Produce High-Performing, Green Specialty Chemicals at Advantageous Costs Summary: Elevance employs Nobel-prize-winning catalyst technology to break down natural oils and recombine the fragments into novel, high-performance green chemicals. These chemicals combine the benefits of both petrochemicals and biobased chemicals. The technology consumes significantly less energy and reduces greenhouse gas emissions by 50 percent compared to petrochemical technologies. Elevance is producing specialty chemicals for many uses, such as highly concentrated cold-water detergents that provide better cleaning with reduced energy costs.

7. Elevance Receiving EPA Presidential Green Chemistry Challenge Award

8. MotivationBusiness Drivers Why was it important to spend resources developing this technology? • A number of challenges currently impact the specialty chemical industry, including the following: • Demand for improved performance characteristics driven by evolving consumer preferences or changing regulatory requirements; • Limited availability of certain critical feedstocks and intermediate chemicals • Feedstock price level and volatility; and • Increasing demand for products made from non-toxic, environmentally friendly and renewable sources. • Elevance saw a demand for a technology that meets these needs

9. MotivationBusiness Drivers Cont. Why was it important to spend resources developing this technology? • The Elevance biorefinery is a key element of their business strategy • Allows Elevance to produce innovative high performance specialty chemicals that are the company’s primary products. • Elevance strives to produce high-performance green chemicals through more efficient processes and at lower costs, especially when compared to petrochemical processes • Markets of $176 billion for Elevance’s green chemicals produced from renewable oils

10. MotivationInnovations in Science and Engineering • Specialty chemicals are used in multiple products like novel surfactants, lubricants, additives, polymers, and engineered thermoplastics. • Industry customers need specialty chemicals with the functional attributes of multiple chemistry families to make their products • Existing Technology • Conventional producers have developed manufacturing capabilities using either • Olefins and related derivatives (largely produced from petroleum), or • Esters and acids (often oleochemicals derived from natural oils) • To access these functional attributes simultaneously, producers have to blend and formulate a number of separate ingredients, which increases production costs • Can we do better?

11. Technology Development • Elevance’s core technology is based on Nobel Prize-winning innovations in metathesis catalysis by Dr. Robert H. Grubbs, Dr. Yves Chauvin, and Dr. Richard Schrock. • Metathesis catalysis is a chemical reaction that uses a highly efficient and selective catalyst to break down and recombine molecules into new chemicals • Metathesis can break carbon-carbon double bonds • Desired fragments and new molecules are made by controlling reaction conditions • Elevance uses metathesis to make novel, difunctional molecules which can be used as building blocks for the specialty chemical business Elevance’s molecules combine the functional attributes of an olefin (typical of petrochemicals) and a mono-functional ester or acid (typical of oleochemicals) in a single molecule.

12. Technology Development • Elevance’s core technology is based on Nobel Prize-winning innovations in metathesis catalysis by Dr. Robert H. Grubbs, Dr. Yves Chauvin, and Dr. Richard Schrock. • Metathesis catalysis is a chemical reaction that uses a highly efficient and selective catalyst to break down and recombine molecules into new chemicals • Metathesis can break carbon-carbon double bonds • Desired fragments and new molecules are made by controlling reaction conditions • Elevance uses metathesis to make novel, difunctional molecules which can be used as building blocks for the specialty chemical business Elevance’s molecules combine the functional attributes of an olefin (typical of petrochemicals) and a mono-functional ester or acid (typical of oleochemicals) in a single molecule.

13. Business Activities • Elevance has about 125 employees and has generated almost $400 million in annual revenues since 2007 • Elevance is the only company to date that can economically produce these chemicals, which provides access to a large market opportunity • Collaborations with the US Department of Energy (DOE) and industry leaders • Elevance has secured strategic collaborations with the following companies: Arkema, Cargill Inc., Clariant, Dow Corning Corporation, Stepan Company, Trent University, Tetramer Technologies, United Soybean Board, SaskCanola and Wilmar • Other relationships are not currently public. • Committed to advancing partners’ businesses with high performing specialty products

14. ImpactEnvironmental, Health, and Safety Benefits • Elevance’s biorefinery process allows for lower energy requirements and reduced source pollutants due in part to: • Fewer major process steps • Lower operating temperatures and pressures providing energy efficiency • Limited production of hazardous and toxic by-products • GHG emissions are reduced by 50% when compared to petrochemical technology • Competitive strengths include: • Flexibility in feedstock requirements given that a variety of natural oils found in multiple geographic regions can be used (e.g., palm, soy, rapseed, algae oils) • Ability to integrate process into existing industrial sites • Low capital requirement and relatively short engineering/construction cycle 14

15. ImpactEconomic Benefits Elevance’s biorefinery results in lower production costs, energy consumption, and capital expenditures than petrochemical refineries Elevance addresses a market of $176 billion in the specialty chemicals industry • Consumer Impact Example: Detergents • Elevance’s specialty chemicals enable detergents that have more concentrated formulations and improved solvency (better cleaning) while working in cold water (reduced energy costs)

16. Case 2: Codexis, Inc. & Dr. Yi Tang, UCLA Winner in the Area of Greener Synthetic Pathways

17. Overview Title: An Efficient Biocatalytic Process to Manufacture Simvastatin Summary: Simvastatin, a leading drug for treating high cholesterol, is manufactured from a natural product. The traditional multistep synthesis was wasteful and used large amounts of hazardous reagents. Professor Tang conceived a synthesis using an engineered enzyme and a practical low-cost feedstock. Codexis optimized both the enzyme and the chemical process. The resulting process greatly reduces hazard and waste, is cost-effective and meets the needs of customers. Some manufacturers in Europe and India use this process to make simvastatin.

18. Codexis Receiving EPA Presidential Green Chemistry Challenge Award

19. MotivationBusiness Drivers • Simvastatin was originally developed by Merck under the brand name Zocor® as a cholesterol lowering drug • In 2005, Zocor® was Merck’s best selling drug and the second-largest selling statin in the world with about $5 billion in sales • In 2006, Zocor® went off patent and simvastatin became the most-prescribed statin in the world • Why was it important to spend resources developing this technology? • Simvastatin is one of the most important drugs on the market for treating cardiovascular diseases • In 2010, there were over 94 million prescriptions for Simvastatin • Codexis saw a great opportunity to reduce cost and waste to environment by reducing complexity of manufacturing process

20. MotivationInnovations in Science and Engineering Simvastatin is a derivative of lovastatin, a fungal natural product, and contains an additional methyl group at the C2’ position of the side chain. This subtle structural modification makes simvastatin more potent in the reduction of total and low-density lipoprotein cholesterol (LDL-C) with decreased hepatoxicity and reduced side effects. Chemical structure of lovastatin (left) and its semi-synthetic derivative simvastatin (right) with additional methyl substituent (arrow). • Existing Technology • Two routes to manufacturing simvastatin: • Hydrolysis/Esterification • Direct Methylation • Disadvantages for both processes: • Low overall yields (<70%) • Utilize excess hazardous and toxic reagents • Require copious amounts of solvents • Can we do better? ?

21. Technology Development • Approach: Design a green manufacturing process for simvastatin using biocatalysis while optimizing chemical process engineering. • The UCLA team… • cloned and identified the LovD enzyme for biological synthesis of lovastatin, • demonstrated that LovD can be used to synthesize simvastatin, and • identified a simple acyl donor (DMB-SMMP) that could potentially support an economic, large-scale process. LovDacylase

22. Technology Development • Codexis… • recognized that this basic process could be improved via its CodeEvolver™ technologies and licensed the UCLA technology, • improved the enzyme as well as the process chemistry to enable a large scale simvastatin manufacturing process, • established commercialization path via Arch Pharmalabs and a second undisclosed partner, and • established biocatalyst manufacture at contract manufacturer. Natural Biocatalyst Directed evolution Optimized Biocatalyst + =

23. Business Activities • Established commercialization path via Arch Pharmalabs and a second undisclosed partner • Established biocatalyst manufacture at contract manufacturer • Have maintained long term relationships with several partner companies • Partner companies come inbound seeking new technology and processes--limited outbound marketing

24. ImpactEnvironmental, Health, and Safety Benefits • Catalyst is produced efficiently from renewable feedstocks • Reduced use of toxic and hazardous substances like tert-butyl dimethyl silane chloride, methyliodide, n-butyl lithium • Improved energy efficiency as the reaction is run at ambient temperature and at near atmospheric pressure • Reduction in solvent use due to the aqueous nature of the reaction conditions • The only biproduct (methyl 3-mercaptopropionic acid) is recycled • The major waste streams generated are biodegraded in biotreatment facilities • Codexis’ process can produce simvastatin with yields of 97% • Significant when compared to <70% with other manufacturing routes 24

25. ImpactEconomic Benefits • Customers have evaluated the simvastatin produced biocatalytically and confirmed that it meets their needs • Total manufacturing costs are reduced by this new process • Less feedstock materials and solvents required • Less energy and water required during the • Aqueous and biodegradable waste streams 25

26. Case 3: Buckman International, Inc. Winner in the Area of Design of Greener Chemicals

27. Overview Title: Enzymes Reduce the Energy and Wood Fiber Required to Manufacture High-Quality Paper and Paperboard Summary: Traditionally, making strong paper required costly wood pulp, energy-intensive treatment, or chemical additives. But that may change. Buckman’s Maximyze® enzymes modify the cellulose in wood to increase the number of "fibrils" that bind the wood fibers to each other, thus making paper with improved strength and quality -- without additional chemicals or energy. Buckman's process also allows papermaking with less wood fiber and higher percentages of recycled paper, enabling a single plant to save $1 million per year.

28. Buckman Receiving EPA Presidential Green Chemistry Challenge Award

29. MotivationBusiness Drivers • The paper and packaging industry is an important part of the US economy • Product sales: $115 billion per year • Employment: About 400,000 people • Shipping: Over 95% of all products in the US are shipped in corrugated boxes • Why was it important to spend resources developing this technology? • Buckman has been developing this type of technology for over 20 years • Many good reasons to use enzymes, which helps in making profits to keep the company sustainable • History of creating and improving enzymes for the paper industry

30. MotivationInnovations in Science and Engineering • Cellulose fibers are the basic structural material of paper • Properties of a sheet of paper like strength and weightdepend on bonding between cellulose fibers • Existing Technology: • Papermakers can improve paper strength by: • Adding different wood pulps (costly) • Increasing mechanical treatment (requires significant energy expenditure) • Using various chemical additives (many derived from non-renewable resources) • In nature, cellulases are enzymes that catalyze the hydrolysis of cellulose to degrade and recycle this organic compound • Endoclucanases disrupt the crystalline structure of cellulose and expose individual chains • Exocellulases separate pieces of two to four sugar monomers from the exposed chains • Cellobiases hydrolyze those fragments into glucose • Can enzymes like cellulases be used to improve papermaking? • Can we do better?

31. Technology Development Approach: Select enzymes within the cellulase group to modify cellulose fibers in order to improve paper quality and support greener manufacturing practices. Maximyzetechnology consists of certain new enzymes and combinations of enzymes, not previously available on a commercial basis, which allow for the production of paper and paperboard with improved strength and quality. Using selected cellulase enzymes to modify the surface of the cellulose fibers improves the inter-fiber bonding, increasing the strenght of paper.

32. Technology Development Approach:Select enzymes within the cellulase group to modify cellulose fibers, improving paper quality and the manufacturingprocess. Bonding of Cellulose Fibers (500x) Refined, no enzyme treatment Treated with Maximyze, then refined The untreated fibers display minimal amounts of fibrillation that contribute to interfiber bonding. There are limited examples of fibrils interconnecting adjacent fibers. With Maximyze, a stronger sheet can be made.

33. Business Activities • Partnered with some major suppliers of enzymes • Buckman has established long term relationships with customers • Intimately involved in the entire papermaking process • Unique sales people with biology and chemistry backgrounds form personal relationships with customers

34. ImpactEnvironmental, Health, and Safety Benefits • Less cellulose fiber required to produce paper and related products • Less trees required to produce pulp, which helps maintaing our woodsources • Increase in the proportion of hardwood fiber needed to maintain paper strength (reduces amount of softwood fibers, which have a higher cost) • Reduced energy per ton of paper produced due to a more efficient refining process and using less steam to dry products during the papermaking process • Less resources required for shipping due to lighter paper weight • More utilization of recycled paper, which reduces volumes in landfills • The paper industry has a strong commitment to sustainability, maintaining forest lands, and recycling: 63.5% of paper consumed in the US is recovered and recycled to be reused back in the manufacture of paper and paperboard. • Use of enzymes, which are safer with regard to human health and the environment • Made using renewable raw materials in a fermentation process • Completely biodgeradable 34

35. ImpactEconomic Benefits • Manufacturing plants using Maximyze see clear economic benefits and improved sustainability in a variety of areas. • Estimated total savings: $1,058,000 per year 35

36. Thank You! • The following representatives were integral in the creation of this report: • Rick Black, Elevance Renewable Sciences, Inc. • Wes Bolsen, Codexis, Inc. • Philip Hoekstra, Buckman International Inc.