BMASS 10 Executive Summary

Biomass Markets
and Technologies
EXECUTIVE SUMMARY:
Biomass Markets and Technologies
Biomass Energy Generation, Biofuels, and
Bioproducts: Market Analysis and Forecasts
NOTE: This document is a free excerpt of a larger research report.
If you are interested in purchasing the full report, please contact
Pike Research at sales@pikeresearch.com
Published 3Q 2010
Leslie Los
Industry Analyst
Clint Wheelock
© 2010 Pike Research LLC.
Managing Director
All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the
express written permission of Pike Research LLC.
1
Biomass Markets
and Technologies
Section 1
EXECUTIVE SUMMARY
1.1 Introduction
Biomass markets are dynamic and rapidly evolving. Pike Research’s analysis indicates
that developers and investors are constantly monitoring and evaluating new feedstock
opportunities, federal and state policy changes, environmental concerns, and developing
technology improvements. At this time, investment in the biomass market is generally in
the R&D sector as well as in unique smaller scale projects that are integrated into existing
businesses and target reducing operation costs. The bioplastics market has significant
growth potential and will see major investments in response to technology advancements,
current waste practices, and public concern. Large grid-tied biomass energy projects are
emerging as possible new base-load power source opportunities, but the effects of the
economic recession are making it difficult to attract investor dollars, limiting market
expansion.
Private equity investment in renewable energy projects experienced a surge in February

2010, up 133% from January ($547 million from $235 million) and a three-fold year-over-
year increase ($149 million recorded in February 2009). The United States accounted for
43% of the investment volume, due to the number of deals, and Spain reported the highest
value in deals at $216 million. This is a sign that the recession could be waning and
investors are starting to support the industry again.
Unlike other renewable energy resources, biomass is conducive to producing different

types of energy products, such as transportation fuels, bio-derived products (like plastic
and chemicals), and electricity generation. Biomass obtains its energy from the sun while
a plant is growing. Plants convert solar energy into chemical energy during the process of
photosynthesis. This stored energy is released when the plant material is burned or
chemically altered. Taking the lead from fossil fuel refineries, which produce multiple
products from a single processing line, biorefineries process biomass feedstock,
unleashing the sun’s energy and yielding various combinations of energy products.
Biomass resources are evenly distributed over the Earth's surface and may be exploited
using more environmentally friendly technologies. This gives biomass energy a number of
advantages over finite petroleum sources.
Many different feedstocks can be classified as "biomass" including: corn and grains, plants
and forest resources, construction/industry waste, agricultural and food industry wastes,
terrestrial and aquatic energy crops, municipal waste, and manure. Agricultural wastes
include materials like corn husks, rice hulls, peanut shells, grass clippings, and leaves.
Trees and fuel crops (intentionally grown for the biomass market) are considered
renewable resources since they can be restored in a short time period. Organic wastes,
such as food industry waste, municipal waste, and livestock manure, are constantly
produced by society, so they, too, are considered a renewable resource.
In the United States, the biomass opportunities are coast-to-coast, with a higher
concentration in the fertile lands of the Midwest. Biomass feedstock is ubiquitous to the
general populace and, therefore, it is unique in its supply characteristics when compared to
other renewable energy sources (RES) and fossil fuels. Many parts of the European Union
also share the opportunity to take advantage of local biomass resources to generate

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Biomass Markets
and Technologies
energy.
Worldwide support for increasing the deployment of renewable energy, coupled with
voluntary consumer decisions to buy electricity supplied from RES, represent a powerful
market driver for renewable energy deployment. As an example of this support, more than
850 (about 25%) U.S. utilities already offer green power programs to their customers.
Renewable energy, including biomass, is already the fastest-growing source of energy and
is well-positioned to address the expected 3% per year increase of world energy
consumption. Of all U.S. energy consumed, 7% is supplied by renewable resources and
more than half (53%) is supplied by biomass resources.1
Chart 1.1 The Role of Renewable Energy/Biomass in the U.S. Energy Supply
Solar 1%
Geo 5%
Wind 7%
Coal
23% Hydro
34% Solar
Nuclear
9%
Renewable
Energy GeoThermal
Natrual 7%
Gas Wind
24%
Biomass Hydropower
Petroleum 53%
37%
Biomass
Renewable Energy
(Source: National Energy Education)
Using the biomass contribution projections and the International Energy Agency (IEA)
venture estimates, the capital investment into the biomass market will be in the range of
$41 billion to $83 billion per year over the next 20 years.
The biomass market has many proven technologies that can exploit existing biomass
feedstock sources. They include power generation from anaerobic digestion (AD), rapid
thermal processing, combustion and gasification, and municipal waste (methane gas
capture). With renewable electricity generation projected to grow from 9.5% in 2006 to
14.2% in 20302, the immediate opportunity to further deploy these technologies exists.
1
National Energy Education
2
Updated AEO2009 reference case (April 2009)

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Biomass Markets
and Technologies
The emerging energy plans, which Pike Research believes will be supported by the U.S.
government’s investment in national security, influences of carbon tax and/or carbon cap
and trade economics, and profitable prospects over the next 5 to 10 years, will drive a
paradigm shift to renewable, sustainable energy. Government policies and public opinion
will progressively enable increasing amounts of biofuels, bioproducts, and biopower to be
deployed across the world from a widening array of feedstock, resulting in a significant
displacement of oil use and a massive change to the world’s energy supply.
Pike Research has concluded that the biomass industry, driven by strong R&D investment
and some niche project opportunities, is just starting to emerge from its investment hiatus.
The biofuels sector will continue to lag behind bioenergy and bioproducts until second- and
third-generation cellulosic technologies are available on a commercial scale, which is
estimated to be 2 to 3 years away. The waning economic atmosphere and the shift to non-
food feedstocks are major drivers that will negatively influence the biofuels market growth
rate over the next 2 years.
The biochemical and the bioenergy sectors will progress much faster than biofuels and see
immediate investment in 2010 and a 1% growth rate through 2035. The industry is
increasingly moving to explore economical opportunities to use fast growing crops (referred
to as energy crops) and biomass waste streams (e.g., wood chips from forest thinning
activities, crop residues, municipal waste streams, etc.) as renewable energy feedstocks
for:
 Power generation (electricity, steam, combined heat and power [CHP])

 Biogas for manufacturing use (heat for product drying)
 Oil (pyrolysis liquids from biogasification waste stream)
 Hydrogen production (e.g., transportation fuel sector)
 Biorefineries (steam, power, value added bioproducts)
The challenge at hand is to identify which solutions will be right, and how to address the
massive economic, technological, and social changes to come. Solutions need to be
economical, environmentally acceptable, and sustainable. Pike Research believes that
governments must be cautious not to support any one solution or technology too early, and
that the industry needs to pick the winners based on market needs and definitive financial
rewards. The influence of government policies and incentives in supporting any one
technology or solution could cause unwanted results that are not sustainable.

4
Biomass Markets
and Technologies
Section 8
TABLE OF CONTENTS
Section 1 ...................................................................................................................................................... 2
Executive Summary .................................................................................................................................... 2
1.1 Introduction.................................................................................................................................... 2
Section 2 ...................................................................................................................................................... 5
Market Issues .............................................................................................................................................. 5
2.1 Defining the Biomass Market ........................................................................................................ 5
2.1.1 Market Segments .................................................................................................................... 7
2.2 Proven Technology ..................................................................................................................... 18
2.3 Political Support .......................................................................................................................... 19
2.3.1 Partners of the U.S. Biomass Initiative .................................................................................. 22
2.3.2 American Recovery and Reinvestment Act Biomass Initiatives............................................ 23
2.3.3 Applicable Renewable Energy Legislation ............................................................................ 23
2.3.4 Biofuels Incentives, Subsidies, and Tariffs, United States .................................................... 25
2.4 Base-Load Energy Source .......................................................................................................... 26
2.5 Viable Biomass Feedstock Capabilities ...................................................................................... 26
2.6 Improvements to Existing Technologies ..................................................................................... 27
2.6.1 Converting Biomass to Fuels (Biochemical and Thermochemical)....................................... 27
2.6.2 Microorganisms ..................................................................................................................... 29
2.6.3 Cascading & Integrated Biorefinery Processes..................................................................... 29
2.7 Implementation Issues ................................................................................................................ 32
2.7.1 Potential Barriers to the Biomass Market .............................................................................. 32
2.7.2 Transmission Line Constraints .............................................................................................. 34
2.7.3 Regulatory and Legal Environment ....................................................................................... 35
2.8 Land Use Potential ...................................................................................................................... 37
2.8.1 Land Use/Impacts for Biomass Compared to Wind and Solar Energy ................................. 37
Section 3 .................................................................................................................................................... 42
Technology Issues .................................................................................................................................... 42
3.1 DOE Strategy for Biomass Technology Development ................................................................ 42
3.2 Biochemical Conversion.............................................................................................................. 44
3.3 Thermochemical Conversion ...................................................................................................... 44
3.4 Biorefineries ................................................................................................................................ 45
3.5 Biomass-Based Energy Technology Classification..................................................................... 46
3.5.1 Fermentation ......................................................................................................................... 48
3.5.2 Hydrolysis .............................................................................................................................. 50
3.5.3 Pyrolysis and Gasification ..................................................................................................... 51
3.5.4 Direct Combustion ................................................................................................................. 51
3.5.5 Anaerobic Digestion .............................................................................................................. 52
Section 4 .................................................................................................................................................... 54
Market Forecasts and Demand Drivers .................................................................................................. 54
4.1 U.S. Market ................................................................................................................................. 54
4.1.1 Industry Growth Drivers ......................................................................................................... 54
4.2 European Market ......................................................................................................................... 64
4.2.1 Market Drivers ....................................................................................................................... 66
4.2.2 Financial/Political Support ..................................................................................................... 67
4.2.3 Energy Taxation Directive - CO2 Tax .................................................................................... 68
4.2.4 Biofuels .................................................................................................................................. 68
4.2.5 Bioenergy from Solid Biomass .............................................................................................. 70

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Biomass Markets
and Technologies
4.2.6 Waste-to-Energy ................................................................................................................... 73

4.2.7 Biogas.................................................................................................................................... 74
Section 5 .................................................................................................................................................... 75
Key Industry Players................................................................................................................................. 75
5.1 Bioplastic/Bioproducts ................................................................................................................. 75
5.1.1 NatureWorks, LLC ................................................................................................................. 75
5.1.2 Metabolix ............................................................................................................................... 75
5.1.3 Dow Chemical Company ....................................................................................................... 75
5.1.4 Plantic Technologies Limited................................................................................................. 76
5.1.5 Cargill Incorporated ............................................................................................................... 76
5.2 Bioenergy .................................................................................................................................... 76
5.2.1 GE Energy ............................................................................................................................. 76
5.2.2 Acciona Energia .................................................................................................................... 77
5.2.3 Siemens AG .......................................................................................................................... 77
5.2.4 E.ON ...................................................................................................................................... 77
5.2.5 Xcel Energy ........................................................................................................................... 78
5.2.6 Constellation Energy ............................................................................................................. 78
5.2.7 DTE Energy Company .......................................................................................................... 78
5.3 Additional Biomass & Utility Companies - Projects Operating or Under/Pre -Construction........ 78
Section 6 .................................................................................................................................................... 81
Company Directory ................................................................................................................................... 81
Biomass Thermal Energy Council (BTEC) Members ............................................................................ 82
Section 7 .................................................................................................................................................... 86
Acronym and Abbreviation List ............................................................................................................... 86
Section 8 .................................................................................................................................................... 90
Table of Contents ...................................................................................................................................... 90
Section 9 .................................................................................................................................................... 92
Table of Charts and Figures..................................................................................................................... 92
Section 10 .................................................................................................................................................. 94
Scope of Study .......................................................................................................................................... 94
Sources and Methodology ....................................................................................................................... 94
Notes .......................................................................................................................................................... 95

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Biomass Markets
and Technologies
Section 9
TABLE OF CHARTS AND FIGURES
Chart 1.1 The Role of Renewable Energy/Biomass in the U.S. Energy Supply ..................................... 3
Chart 2.1 Biofuels CAGR by Type and Region, World Markets: 2009-2022 ........................................ 14
Chart 2.2 Biofuels Market Value, World Markets: 2010-2022 ............................................................... 15
Chart 2.3 Share of Ethanol Production by Country, World Markets: 2008 .......................................... 16
Chart 2.4 Renewable Fuel Standard Mandates, United States: 2009-2022 ........................................ 22
Chart 4.1 Energy Consumption by Country Grouping, World Markets: 2006-2030 ............................. 55
Chart 4.2 Biomass Energy Production and Capital Investment, World Markets: 2010-2035 ............... 57
Chart 4.3 Primary Energy Production by Energy Source: 2008-2035 .................................................. 58
Chart 4.4 Biomass Electricity Generation and Consumption Value, United States: 2010-2035........... 60
Chart 4.5 Biodiesel Demand Projection, United States: 2009-2022 .................................................... 61
Chart 4.6 Ethanol Demand Projection, United States: 2009-2022 ...................................................... 62
Chart 4.7 Market Share of Biodiesel Production, World Markets: 2008 .............................................. 69
Figure 2.1 Estimated Clean Energy Annual Investment to 2030 ............................................................. 6

Figure 2.2 Electricity Generation by Fuel, World Markets: 2006-2030 .................................................... 9
Figure 2.3 Sensitivity of Power Costs to Changes in Inputs................................................................... 12
Figure 2.4 Major Policy Shifts, Key Legislation, and Federal Funding Levels -
Biomass-Related: 1998-2009 ................................................................................................ 20
Figure 2.5 Biochemical Conversion ........................................................................................................ 28
Figure 2.6 Integrated “Energy Island” Renewable Energy Complex ...................................................... 31
Figure 2.7 Biodiesel Refueling Stations by State, United States: 2008 ................................................. 33
Figure 2.8 E85 Refueling Stations, United States .................................................................................. 33
Figure 2.9 Government Organizations Involved with Biofuels Development ......................................... 36
Figure 2.10 U.S. Biomass Land Resources Capacity .......................................................................... 37
Figure 2.11 Renewable Energy Technology Efficiency Comparisons ................................................. 38
Figure 2.12 U.S. Biomass Resources ................................................................................................. 39
Figure 2.13 U.S. Biomass Projects Operating or Under/Pre-Construction .......................................... 39
Figure 2.14 U.S. Wind Resources ....................................................................................................... 40
Figure 2.15 U.S. Wind Projects Operating or Under/Pre-Construction ................................................ 40
Figure 2.16 U.S. Photovoltaic Solar/Solar Thermal Resource ............................................................. 41
Figure 2.17 U.S. Photovoltaic Solar/Solar Thermal Projects Operating or Under/Pre-Construction . 41
Figure 3.1 DOE/EERE’s Biomass Program Strategy for Technology Development .............................. 43
Figure 3.2 Resource-Based Biorefinery ................................................................................................. 44
Figure 3.3 Biorefinery Process ............................................................................................................... 45
Figure 3.4 Biomass Energy Conversion Overview ................................................................................. 47
Figure 3.5 Alcohol Family of Fuels – Energy Content ............................................................................ 48
Figure 3.6 Strengths and Weaknesses of Combustion/Gasification Conversion Technologies ............ 52
Figure 4.1 Energy Consumption by Fuel: 1980-2035 ............................................................................. 59
Figure 4.2 Fossil Fuels vs. Zero-Carbon Fuels Demand to 2030........................................................... 59
Figure 4.3 Country-Specific Deployment of RES (in total) by 2020 ....................................................... 66
Figure 4.4 Biomass Potentials in Terms of Primary Energy in the European Union (EU-27) ................ 72
Figure 4.5 Solid Biomass Energy Production – Europe: 2008 ............................................................... 72
Figure 4.6 Summary of the Overall Development of Renewable Energy from WtE for EU 27 .............. 73

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Biomass Markets
and Technologies
Table 2.1 OECD and Non-OECD Net Electricity Generation by Energy Source: 2006-2030............... 10
Table 2.2 Advanced Biofuels Annual Base Volumes Mandates, United States: 2006-2022 .............. 21
Table 2.3 Biofuels Incentives Description and Scheduled Duration ..................................................... 25
Table 2.4 Renewable Energy Technology – Total Area Impacted ........................................................ 38

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Biomass Markets
and Technologies
Section 10
SCOPE OF STUDY
Pike Research has prepared this report to provide participants at all levels of the biomass market,
including producers, feedstock suppliers, equipment manufacturers, utilities, service providers, end users,
researchers, and investors, with a study of the market for biomass. Its major objective is to offer insights
on the state of the industry and likely future growth of biomass electricity generation, biofuels, bioplastics,
and biochemicals. The report also discusses major supply and demand drivers, as well as key industry
players within the competitive landscape.
The report’s purpose is not to provide an exhaustive technical assessment of the technologies and
industries covered; rather, it aims to present a strategic examination from an overall tactical business
perspective that delivers an understanding of the economic implications and timelines on when new
technologies and practices will significantly affect the market. Pike Research strives to identify and
examine new market segments to aid readers in the development of their business models. All major
global regions are included.
SOURCES AND METHODOLOGY

Pike Research’s industry analysts utilize a variety of research sources in preparing Research Reports.
The key component of Pike Research’s analysis is primary research gained from phone and in-person
interviews with industry leaders including executives, engineers, and marketing professionals. Analysts
are diligent in ensuring that they speak with representatives from every part of the value chain, including
but not limited to technology companies, utilities and other service providers, industry associations,
government agencies, and the investment community.
Additional analysis includes secondary research conducted by Pike Research’s analysts and the firm’s
staff of research assistants. Where applicable, all secondary research sources are appropriately cited
within this report.
These primary and secondary research sources, combined with the analyst’s industry expertise, are
synthesized into the qualitative and quantitative analysis presented in Pike Research’s reports. Great
care is taken in making sure that all analysis is well-supported by facts, but where the facts are unknown
and assumptions must be made, analysts document their assumptions and are prepared to explain their
methodology, both within the body of a report and in direct conversations with clients.
Pike Research is an independent market research firm whose goal is to present an objective, unbiased
view of market opportunities within its coverage areas. The firm is not beholden to any special interests
and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by
technology hype, political agendas, or emotional factors that are inherent in cleantech markets.

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Biomass Markets
and Technologies
NOTES
CAGR refers to compound average annual growth rate, using the formula:
CAGR = (End Year Value ÷ Start Year Value)(1/steps) – 1.
CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer years are
given, the CAGR is for the range presented. Where relevant, CAGRs for shorter timeframes may be
given as well.
Figures are based on the best estimates available at the time of calculation. Annual revenues,
shipments, and sales are based on end-of-year figures unless otherwise noted. All values are expressed
in year 2010 U.S. dollars unless otherwise noted. Percentages may not add up to 100 due to rounding.

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Biomass Markets
and Technologies
Published 3Q 2010
©2010 Pike Research LLC

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Biomass Markets

Private equity investment in renewable energy projects experienced a surge in February

Unlike other renewable energy resources, biomass is conducive to producing different

© 2010 Pike Research LLC.

(Source: National Energy Education)

© 2010 Pike Research LLC.

 Power generation (electricity, steam, combined heat and power [CHP])

© 2010 Pike Research LLC.

© 2010 Pike Research LLC.

4.2.6 Waste-to-Energy ................................................................................................................... 73

© 2010 Pike Research LLC.

Figure 2.1 Estimated Clean Energy Annual Investment to 2030 ............................................................. 6

© 2010 Pike Research LLC.

© 2010 Pike Research LLC.

SOURCES AND METHODOLOGY

© 2010 Pike Research LLC.

CAGR = (End Year Value ÷ Start Year Value)(1/steps) – 1.

© 2010 Pike Research LLC.

©2010 Pike Research LLC

© 2010 Pike Research LLC.

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