Cellana’s
Second-Generation Biofuels from Multi-Product
Biorefineries Combine Economic Sustainability With
Environmental Sustainability
Martin Sabarsky, CEO
April 23, 2014
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© Cellana Inc. 2014
© Cellana 2014
Summary of Presentation
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To date, over 20 MT of highly diverse algae have been produced using Cellana’s
patented ALDUO™ process, one of the most thoroughly validated outdoor algae
production technologies in the world.
Cellana’s multi-product business model, which is initially anchored by high-value
Omega-3s, permits the profitable production of crude oil and animal feed at
market-competitive prices based on current yields, costs, and prices of crude oil,
animal feed, and algae-based Omega-3s.
In 2013, Cellana successfully leveraged this technology/business model
combination to sign one of world’s largest algae biofuel off-take agreements, with
Neste Oil. This industry-leading agreement validates the Cellana model of
combining economic sustainability with environmental sustainability for producing
commercial-scale quantities of second-generation biofuels.
To the extent that the prices of food/feed and crude oil continue to rise based on
scarcity and population growth/increased demand, a two-product business model
based on food/feed and crude oil for fuels may become more commercially viable
than it is today, especially for algae companies at commercial scale who will have
been able to increase biomass yield and lower unit production
costs in parallel.
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© Cellana 2014
Cellana History:
Building Capabilities & Credibility at Every Step
Recent Off-Take Agreement with Neste Oil Validates Cellana’s Entire Model
ALDUO™
Patent Filed
HR BioPetroleum (HRBP)
Founding in 2004
In-license of Aquasearch algae
production technology
($25MM prior investment)
Key
Publication
1997
2006
2004

2005
Commercial-Scale
Algae-based
Kona Demo
HRBP Acquires
Biocrude oil
Facility
Cellana; New Name;
Off-Take
Operational
New CEO, BOD
Agreement
(June
ALDUO™ patent
Launch of
2013)
issued in U.S.
ReNew brand


Cellana
JV Formed
2007

2008

2009

2010
Aquasearch / HRBP Pilot Facility Production
CEROS (DARPA) Funding
$70MM DOE-Funded
$1M DoD (CEROS/DARPA) Consortium-- National
contract for
Alliance for Advanced
biodiesel feedstock oil
Biofuels & Bioproducts
production at industrial scale
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2011 
2012  2013
Demo Facility Production
Shell JV Funding ($70MM+)
$9M DOE
Consortium Grant
(production +
fish feeding
trials)
$5.5MM USDA
Grant for
Animal Feed
$15MM DOEFunded Algae
Test-Bed PublicPrivate Partnership
Intensive, Efficient Algae Production at the
Kona Demonstration Facility (KDF) on Hawaii
• 2.5 hectare site in Kona, HI
• $20MM replacement cost;
owned free & clear by Cellana
• >750,000 liter large-scale
cultivation capacity
• Produced over 13 tons of
microalgae since 2010 for R&D
/ testing purposes
• Commercially significant
biomass/oil yields (over 15
g/m2/day biomass yields)
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Cellana’s Biorefinery Business Model Builds on a Foundation
of Biofuel Research to Address Additional Valuable Products
Omega-3 nutritional oils and high-value aquaculture / animal feed products are
an extension of Cellana's core competency - screening, developing, and
producing algae biofuel feedstock.
= oil separation
$4B Omega-3
nutritional oils
market
2
1
$1T+
fuels and
energy
markets
$9B
aquaculture
feed /
fishmeal
market
$300B
livestock
feed
market
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ALDUO™ Enables Economic Algae Production Unencumbered by
Contamination by Balancing Higher-Cost PBRs with Lower-Cost Open Ponds
High
100% PBRs
<50% PBRs /
>50% Open Ponds
Cost
100% Open Ponds
Low
Low
Risk of Contamination
High
Covered by US Patents 7,770,322 & 5,541,056, Similar Patents/Patents pending in Europe, Australia, South Africa, Brazil, Japan, Mexico
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Biofuels from Cellana’s
Algae-Based Biocrude Oil
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© Cellana 2014
Commercial-Scale Off-Take Agreement
with Neste Oil
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Off-Take Agreement for algae oil
announced June 2013
Neste Oil is the largest refiner of
renewable diesel in the world
Multi-year off-take agreement
Commercial-scale quantities of algae oil
Contingencies for Cellana production
capacity, EU/US sustainability criteria, and
other factors
Non-Exclusive for both parties
“Samples have shown that Cellana is able
to produce algae oil suitable for
renewable fuel production by Neste Oil.”
“The off-take agreement with Cellana
allows us access to commercial-scale
volumes of cost-competitive algae oil
in the future.”
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Neste Oil's renewable fuel plant in Rotterdam in the
Netherlands was commissioned in 2011.
Neste Oil started up the world's largest renewable diesel
refinery in Singapore in November 2010.
Animal Feed & Food
Supplements from Cellana’s
High-Protein Algae Meal
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Population Growth/Asia Will Drive Increasing Protein Prices
Source: http://www.washingtonpost.com/blogs/worldviews/wp/2013/05/07/map-more-than-half-of-humanity-lives-within-this-circle/
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Opportunity for Algae Meal to Replace Fishmeal
in Aquafeeds and Soymeal in Livestock Feeds
Aquaculture growing rapidly
and in need of protein; Fish capture
peaked in 1990s & is now in decline
Price per Metric Ton
Fishmeal trades at ~4x the price of
soymeal historically
Source: prices for fishmeal and soymeal from http://www.indexmundi.com
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Source: FAO, “THE STATE OF WORLD FISHERIES AND AQUACULTURE 2012”
Over 6 MT of Cellana’s ReNew Feed in Diverse
Feed Trials; All Trials Successful To Date
• Finfish, shellfish, chicken, pigs, cattle – most major sources of
meat
• Successful large-scale feed trial for Salmon, Carp, & Shrimp
– Marine microalgae from biorefinery as a potential feed protein
source for Atlantic salmon, common carp and whiteleg shrimp,
V. Kiron (Bodo University) et al., published online:
Aquaculture Nutrition, 3 APR 2012
▪ Cellana’s ReNew Feed was acceptable for the three animals at the maximum
levels tested (Salmon 10%, Carp 40%, Shrimp 40%)
▪ There were negligible differences in growth and hardly any in the biochemical
composition during the study period
• Successful large-scale feed trial for Broiler Chicks
– Potential and Limitation of a New Defatted Diatom Microalgal Biomass in
Replacing Soybean Meal and Corn in Diets for Broiler Chickens, Xin Gen
Lei (Cornell) et al., published online: J. Agric. Food Chem., 4 JULY 2013
▪ Cellana’s ReNew Feed could substitute for 7.5% of soybean meal alone, or in
combination with corn, in diets for broiler chicks when appropriate amino
acids are added
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High-Value Nutritional
Supplements from
Cellana’s Omega-3 Oils
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Increasing Number of Everyday Products Contain
Omega-3 Ingredients & Make Omega-3 Claims
Milk
Cheese
Peanut Butter
Baby Food
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Breads
Sauces
Yogurt
© Cellana 2014
Snacks
Eggs
Cooking Oil
Butter/Spreads
Algae is Key to Sustainable Omega-3 Production
Fish Oil / Omega-3 Food Chain
Marine
ZooHerbivorous/
microalgae plankton planktivorous fish
Smaller
carnivorous fish
Larger carnivorous fish (e.g., Salmon)
Sustainable Omega-3 Production Direct from Algae
Fish Oil with
Omega-3
+
Mercury,
Dioxins, & PCBs
Cellana “Cuts Out the Middle-Fish”™
Marine
microalgae
Vegetarian, Low-Cost, Sustainable Omega-3s
without Mercury, Dioxins, or PCBs from Fish
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© Cellana 2014
Algae Oil with
Omega-3
30-cent retail premium for Algal-DHA-Supplemented
Milk = $1,172 per kilogram = $1.2MM per metric ton!!!
$4.89 - $4.59 = $0.30 premium
32mg Algal DHA per serving; 8 servings
per half-gallon container
32mg x 8 = 256mg per container
256mg x 1g/1,000mg = 0.256g
0.256g x 1kg/1,000g = 0.000256kg
$0.30/0.000256kg = $1,172/kg
$1,172/kg x 1,000kg/MT = $1.2MM/MT
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Cellana’s culture collection
Large collection of strains for high value co-products
C003
C870
KA11
40%
35%
C010
C870
KA19
C543
C971
KA22
C624
KA 21
KA23
EPA
C739
KA 28
KA24
C870
KA 29
KA18
DHA
- 3+ MT EPA-rich
biomass produced
30%
% fatty acids
- Large collection of high
performing strains, rich
in Omega-3 fatty acids
25%
- Additional strains
making both EPA &
DHA are in large-scale
production at KDF
20%
15%
10%
5%
0%
C20:4
C20:5
C24:0
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C22:5
C22:6
© Cellana 2014
- Ability to screen for
other valuable PUFAs
/lipids (e.g., DPA)
Flexible Biorefinery Production / Revenue Model
Bioproducts Generated from the Use of the Entire Algae Biomass
891kg Total per MT*
(11% yield loss)
121kg Biocrude Oil
2
62kg Omega-3 Oil
(35% conc.)
1
$6,928 per MT (dry weight)
@ $100/bbl, $0.68/kg
(fossil petroleum px benchmark)
@ $100/kg
(discount to Martek DHA
wholesale px benchmark)
$82
$6,138
= oil separation
708kg Algae Meal
(Residual Proteins,
Sugars, Minerals,
Lipids, &
Micronutrients)
@ $1.00/kg
(premium to soymeal px
benchmark; discount to fishmeal
px benchmark)
* Reflects recovery based on initial whole algae fraction of 6% Omega-3 oils,
25% Biocrude oil, 69% Algae Meal (Protein/Sugars/Minerals/Lipids/Micronutrients),
and 11% total yield loss after two separations
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© Cellana 2014
$708
Highly Profitable Production of Algae Bioproducts
Projected Revenue & Costs per MT for 88-ha. Commercial-Scale Facility in USA, 2016
Estimated 46% Gross Margin and 62% Cash Margin at current yields / costs
(Higher margins / lower unit costs at larger scale and over time)
$7,000
$6,928 per MT
$6,000
US$/MT
$5,000
Estimated:
Gross Margin 46%
Cash Margin 62%
$6,138
$4,000
$3,712 per MT
$3,000
depreciation
$1,046
Algae Meal
$1.00 per kg
Biocrude Oil
$100 per bbl, $0.68 per kg
$2,000
$2,666
cash cost
$1,000
$0
Omega-3 Oil
$100 per kg (35% conc. DHA/EPA)
$708
$82
Revenue
Production cost
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© Cellana 2014
Scaling of Algae Biofuel Industry – Easy as “A, B, C”
B. Bolt-On
Expansions
for Fuel + Feed
C. Standalone
Biorefineries for
Fuel + Feed
$4
70
$3
60
$2
50
$1
40
Crude Oil
Production
≤ 1 billion gpy
1-2 billion gpy
10+ billions gpy
Production cost
> $2/kg
≤ $2/kg
≤ $1/kg
< 70MT/yr
> 50MT/yr
> 60MT/yr
Low
Medium
High
Algae biomass
yield
Food, feed, &
fuel prices
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© Cellana 2014
Biomass Yield MT / ha / yr
Production Cost / Kg
A. Biorefineries with
High-Value Anchor
Product(s)
Thank You
For further information please visit www.cellana.com
or contact:
Martin Sabarsky
Chief Executive Officer
martin.sabarsky@cellana.com
(858) 774-7915
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Backup Slides
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© Cellana 2014
U.S. Sugar Prices Up 36% Over Last 5 Years
Source: http://www.indexmundi.com/commodities/?commodity=sugar&months=60,
Description: Sugar, Free Market, Coffee Sugar and Cocoa Exchange (CSCE) contract no.11 nearest future position
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© Cellana 2014
U.S. Sugar Prices Up 200% Over Last 15
Years
Source: http://www.indexmundi.com/commodities/?commodity=sugar&months=180,
Description: Sugar, Free Market, Coffee Sugar and Cocoa Exchange (CSCE) contract no.11 nearest future position
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Sugar: Not So Sweet a Feedstock….
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Mass Yields for Microbial Fuel Pathways
Source: Claudia Schmidt-Dannert, University of Minnesota
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NREL cost model for biological hydrocarbon
production
Source: “Process Design and Economics for the Conversion of Lignocellulosic Biomass to Hydrocarbons: Dilute-Acid and
Enzymatic Deconstruction of Biomass to Sugars and Biological Conversion of Sugars to Hydrocarbons,” R. Davis, L. Tao, E.C.D.
Tan, M.J. Biddy, G.T. Beckham, and C. Scarlata, National Renewable Energy Laboratory, J. Jacobson and K. Cafferty, Idaho
National Laboratory, J. Ross, J. Lukas, D. Knorr, and P. Schoen, Harris Group Inc.
Both this and the previous slide that expected mass yields for free fatty acids (and by extension lipids) from sugar
(i.e., glucose) are on the order of 30-35% which is consistent with what Solazyme said as far as requiring
approximately 900 ktpa sugar for a 300 ktpa product plant. However, the above are purely theoretical yields so one
would expect that actual yields are <80% of theoretical yield, putting them at about 25% by weight. This makes the
economics difficult unless the product is higher value than fuels or they incorporate co-products (as they are
expecting to do).
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Amyris’s Farnesene @ Almost $600/kg
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Increasing Cost of Solazyme Fuels….?
2013: Fuel Cost Target $1,400/ton (or higher?)
2011: Fuel Cost Target $1,000/MT
Source: Solazyme Annual Report on Form 10-K, Filed March 2013
http://www.sec.gov/Archives/edgar/data/1311230/000119312513105081/g4563
1m73.jpg
Source: Solazyme IPO Prospectus, May 2011
http://www.sec.gov/Archives/edgar/data/1311230/
000119312511152352/g144178g35w31.jpg
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