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  1. Developing a Canadian Forest Industry Biomass Strategy-Potential in Biofuels Task 38- Rotorua, New Zealand- Mar 24, 2004 Australia Bioenergy Association- Sydney, Australia- Mar 26, 2004 Doug Bradley 69 Fulton Avenue ∙Ottawa, Ontario ∙Canada K1S 4Y7 phone ∙ 613.730.1999 email ∙douglas.bradley@rogers.com web site ∙ www.climatechangesolutions.net

  2. Forest Industry Biomass Strategy Bioenergy- Forest residue, agriculture, municipal waste Forest Industry- Policy, Competitiveness, Energy….

  3. Strategy Timing 2004 Apr May Jun Jul Aug Sept Oct Nov Biomass inventory Biomass costs Technology readiness Development options Financing models Gov’t incentives Environmental repositioning

  4. Energy Use – 2001 Pulp & Paper Biomass: includes wood, bark, sawdust, and pulping liquor Source: Forest Products Association of Canada

  5. Volume Biomass Utilization in Pulp & Paper Industry

  6. Forest Biomass Supply Potential MBDT pa • Mill Residues 5.9 • Stock piles 0.3 • Pulp Sludge 1.0 • Forest Floor 0.2*- 43.1** • Total 7.4 – 50.3 * BW McCloy and Associates- Assumes 15% recoverable (12%-chips, 3% energy) ** BIOCAP Canada

  7. BC Interior- Mountain Pine Beetle 9 million ha infested- 108 million M3

  8. Potential from Forest Floor

  9. Location of Harvest Slash

  10. Biomass Long Term Supplyl

  11. Technology Readiness • Direct Combustion • Bio-oil from Fast Pyrolysis- 100 TPD in 2004 • Gasification • Bioproducts, biochemicals

  12. Biomass Long Term Plan Development Options- hypothetical Gasification Fast Pyrolysis Oil Combustion

  13. Financing Models Needed • Much capital needed • Forest Industry has no money! • Focus $capital on core business • Need to explore options to funnel $investment into bioenergy • Developer ownership • Joint Ventures • Flow through shares • Oil&gas exploration examples

  14. Government Policy • Existing • REDI (Renewable Energy Deployment Initiative)max $80,000 • Cdn Renewable & Conservation Expenses (Tax) • Tax Depreciation 43.1 for generation equipment • MIP (Market Incentive Program) 40% refund of marketing costs only • 10¢ per litre excise tax exemption on ethanol fuel • 20% gov’t power purchases from renewable • Wind Power 1¢/KWh production incentive $250 million • Need meaningful incentives • Feed-in-tariffs (price premiums) • RPS (Renewable Portfolio Standard) • Grants (capital support)

  15. Environmental Repositioning • Loss in Nutrients • Most soil nutrients from roots • Most agb nutrients in needles/leaves • Have to eliminate “misinformation” • Particulates- eg. Williams Lake • NGO workshop planned in September

  16. Strategy Timing 2004 Apr May Jun Jul Aug Sept Oct Nov Biomass inventory Biomass costs Technology readiness Development options Financing models Gov’t incentives Environmental repositioning

  17. Dynamotive Overview • Company founded in 1990 • BioTherm™ - a patented fast pyrolysis process that converts forest and agricultural biomass residue into a liquid fuel called Bio Oil, char and non-condensable gases. • Independently proven as reliable, replicable and commercially scaleable • 2 plants built (Vancouver Pilots) • 2 commercial demo plants under construction (2004) • Aim- low cost producer of bio oil / commoditize technology and output.

  18. What Is Fast Pyrolysis? Rapid heating of biomass in the absence of oxygen. BioOil (yield 55 – 73%)Char (yield 15 – 25%) Non-condensable gases are recycled in the process. Feedstocks - agricultural and forest residue including: bark and whitewood , sugar cane residue, wheat straw, rice hulls (over 120 feed stocks tested). BioTherm Process

  19. What is Bio Oil? • Clean burning CO2 neutral fuel • Alternative to fossil fuel in gas turbines and boilers • Characteristics • No SO2 Emissions • Trace NOx Emissions • Transportable and storable • Produced from non-depleting agricultural and forest biomass • 19.5 MJ/litre ( vs 36.9 for light oil)

  20. Lumber dry kilns, pulp mill lime kilns, diesels Electricity and Process Heat Bio Oil Green Power Generation Electricity Export to Grid Char Europe Shipping / Export of Bio Oil Japan United States Bio Oil Refinery Activated Carbon Heat Briquettes

  21. 15 Tonne Per Day Pilot Plant

  22. 1996 to 2003 Capital Cost Progression and Projections $29

  23. 1996 to 2003 Production Cost Progression and Projections. * * Includes all CAPEX and OPEX with a 15% ROE

  24. Staged Development 1996 / 2000 2001 2002 2003 2004 >>>>>> STAGE 4: Chemical Refining Derivative Products Higher STAGE 3: Transportation Fuels Blends, Syngas, Bio-Methanol ValueAdded STAGE 2: Power Generation - Turbines, Diesels Small Scale Industrial, Remote Lower STAGE 1: Industrial Fuels - Boilers, Kilns, Furnaces Sugar Industry, District Heating, etc. Time

  25. Success through strategic partnerships R&D Partners: Technology: • Tecna Engineering (Scale up, integration, design) • UMA Engineering (Scale up, design, modularization) • Harper International (Reactor Modeling, scale up, design, construction) • Ramsay Group (Modular fabrication, design) • Resource Transform International (RTI): Technology base Applications (amongst other): • CanFor: Lumber Kiln applications (Industrial test completed) • Magellan Aerospace Corp, Orenda: Turbine (CHP) • Leading Briquette Manufacturer: Briquette production from char • University of Iowa + Alliant Energy: CHP applications • University of Saskatchewan: Activated Carbon • University of New Hampshire – Bio Oil applications and market opportunity • Bio Mass Refinery: Dr. Desmond Radlein

  26. Keys to success • Solid patented process • Resolved technical issues- stability • Multiple feedstocks- sawdust. Bark, sugar cane etc. • No steam host needed • Modular plants- 100 TPD plant on 7 skids • Moveable plant- reduced risk • Self-sustaining plants (2-3 years) • Partnerships- eg Orenda 2.5 MW package

  27. First Modular 100 TPD Plant

  28. Plants 200 tpd 300 tpd 500 tpd 800 tpd BC / Alberta Surplus Wood Residue Total Production Mills 100 Production 9.3 M tpy Surplus 3.0 M tpy

  29. Corporate Objectives 2004 • Establish DynaMotive’s technology as benchmark. • Complete initial wood based commercial projects, launch bagasse project • Establish order book for plant construction- Canada / US / Europe / Asia / Latin America. • Launch construction in US, Europe & Latin America. Contract Asia construction • Migrate technology to dirty waste streams (Construction wood waste, Sewage sludge and animal waste). • Scale reactor for fixed and mobile plant market opportunities. • Launch research into mobile fuel applications. Complete activated carbon and lime kiln program. • Establish model for biomass reserves, like oil exploration and production model. • Develop bio oil export model / first shipment to Europe from Canada contracted.

  30. Overview European Strategy • Establish network of agents / representatives. Support by European desk in Vancouver Business / Financial Modelling / Technical support. • European Desk: Reports to CEO. Natalia Stepanova (Business Development), Ivette Vera (Technical support), Nathan Neumer (Communications). Support Services (Technical Group, Financial Services Group). • Year 1 Establish fabrication capabilities based on Canadian Model. Establish Flagship project  Export plant from Canada. Feed conditioning Bruks Klockner, Generation equipment Orenda (70% European content), integration European Engineering (Three candidates – Spain / Germany). • Agency’s France, Switzerland, Italy, Austria and CIS Countries. Representation Germany, Sweden, Bulgaria, UK, Poland, Spain, Belgium. Others to be advised.

  31. Dynamotive Development Plan

  32. Staged Development 1996 / 2000 2001 2002 2003 2004 >>>>>> STAGE 4: Chemical Refining Derivative Products Higher STAGE 3: Transportation Fuels Blends, Syngas, Bio-Methanol ValueAdded STAGE 2: Power Generation - Turbines, Diesels Small Scale Industrial, Remote Lower STAGE 1: Industrial Fuels - Boilers, Kilns, Furnaces Sugar Industry, District Heating, etc. Time

  33. Biomass Refinery Critical Precursor: Reliable High Quality BioOil Supply

  34. Conclusion • Canbio-FPAC promoting bioenergy LT biomass development strategy • Bio-Oil can be major part of strategy • Dynamotive a world leader in fast pyrolysis • Excellent process, modular plant design • Global development schedule • New business opportunity for forest industry