Challenges and Opportunitiesin Renewable Energy and Chemicals

34th Governor’s Conference on the Environment

Aiguo Liu, Ph.D.Sud-Chemie Inc. 1600 W. Hill, Louisville, KY

October 21, 2010

• Overview of Süd-Chemie

– Background/history

– Global presence

– Business focuses

• Strategic R&D and Investment in Renewable Energy and Fuels by Süd-

Outline

2

Chemie

– Bioethanol

– Battery technology

– Liquid fuels from coal or biomass

– Chemicals from renewable resources

Süd-Chemie: developing future-oriented products for more than 150 years

Founding of BAG (now Süd-Chemie AG) inHeufeld; founding shareholder: Justus von Liebig

Bleaching earth andbentonite products

1962: Start of catalyst business

1857:

1906:

1857 1890 1930 1970 2010

Catalysts

Fertiliser

Bleaching earth/bentonite

3

Entry into pharmaceutical protection packaging and water treatment business

Manufacturer of Cleantech products:

– Biocatalysts

– Exhaust gas purification catalysts

– Lithium ion battery materials

– CTL/GTL catalysts

1970: Production of foundry chemicals based on bentonite

Foundry chemicals

1996:

Proximity to customers with around 80 production and sales centresin around 40 countries worldwide

4

29 R&D sites safeguard our technological leadership

Louisville/USA

Needham/USA

Germany:Bendorf, Hilden,Moosburg, Unterneukirchen

Toyama/Japan

Little Ferry/USAPohang/KoreaGermany:

Heufeld, MoosburgAlfred Station/

USA

St. Bruno/Canada

Munich/Germany

5

Novara/Italy

Puebla/MexicoBelen/USA

Baroda/India

Cileungsi/Indonesia

• Catalysts• Adsorbents• Central Research

Choisy-le-Roi/France

Pune/India

Cochin/India

Palo Alto/USA

Lima/Peru

Jacarei/Brazil

Yuncos/Spain

Pieter-maritzburg/SouthAfrica

Chloorkop/South Africa

Port Klang/Malaysia

Jinshan/China

Highly innovative global technology company

Business Units

(Sales 2009: EUR 1,071.6 million)

Regional focus

(sales by region 2009)

Strategic focus

Technology and innovation

Customer loyalty and

• Global specialty chemicals company

• Products enable efficient use of resources in customers‘ value-added chains

• Core business: adsorbents, additives and catalysts

Süd-Chemie Group

6

loyalty andorientation

Process optimisation

Portfolio and investment

management

Adsorbents and Additives

Foundry Products andSpecialty ResinsPerformance Packaging

Water Treatment

Catalytic Technologies

Energy and Environment

Germany

Europe excl. Germany

America

Asia/Middle East

Africa

• World market leader in niche markets

• Leading innovator in future areas

• Business expansion, mainly in growth markets worldwide

• SÜD-CHEMIE GROUPSales: 1,071.6 (Fiscal

2009, EUR million); Employees: 6,485

Enzymes (biocatalysts) for Bioethanol production

®#

• Dedicated research center in Munich for enzyme and biomass process

• Integrated process with dedicated enzyme production

• Raw material and product-specific enzyme development

• Construction of demonstration production of bioethanol from lignocellulosic raw material

• Collaborate with and partially financed by Bavaria Government of Germany

7

The sunliquid® process developed by Süd-Chemie to produce cellulose ethanol

Hydrolysis FermentationPre-treatment

# is a registered trademark of Süd-Chemie AG®

Catalyst solutions as efficient alternatives to crude oil

Süd-Chemie catalysts enable chemical products to be made using the fossil fuels

natural gas, coal and biomass, as an alternative to crude oil

8

Gas-to-liquid (GTL)/Gas-to-

chemicals (GTC)

Only catalyst producer in natural-gas-rich country of QatarManufacturing processes of chemicals and fuels from natural gas

Coal-to-liquid (CTL)/Coal-to-chemicals (CTC)• Coal-to-methanol, e.g. MEGAMAX®* catalysts)• Coal-to-propylene (MTPROP®* catalysts for theLurgi MTP®# process)

• Synthetic gas catalysts: R&D partnership with Dow Chemicals for manufacturing chemicals from coal/biomass

* MEGAMAX® and MTPROP®* are registered trademarks of Süd-Chemie AG # MTP® is a registered German trademark of Lurgi GmbH

High-growth future markets

9

Holistic Approach towards biomass conversion

Gas Cleaning

Fuel UpgradingFischer-Tropsch Synthesis

Methane, Methanol , higher alcohols, DME

Hydrogen Production

HydrogenSNG (CH4)AlcoholsFT gasolineFT dieselOlefinsOxochemicals

Hydrogen

synthesisGas cleanupGasificationLignocelluloses

Lignocelluloses

10

Biomass

HydrogenationHydrogenolysis

HydrogenOlefinsChemicals

HydrogenAlcoholsPropylene glycolEthylene glycolOrganic acidsisosorbide

DehydrogenationOxidation

SugarsFermentation

Post-treatmentBio-oilPyrolysis

glycerinTransesterification

oses

Fatty Oils

Lignocelluloses/starch/sugar

Heterogeneousto replacehomogeneous

C6 Sugar Platform

+H2O

HO OH

HO OH

HO

glucose

HO

HO OH

HO OH

HO

sorbitol

OH

HO

1,2-propylene glycol

OH

HO

OH

ethylene glycol

OH

OH

HO

HO

OH

xylitol

HO

ethanol

OH

+H2

11

HO

O

H

H

O

OH

isosorbide

HO

OH

glycerol

O H

O

O H

la c t ic a c i d

H O

ethanol

OH

OH

butandiol

More Difficult but higher value

Green (bio) ethylene Green (bio) propylene

C5 Sugar Platform

O

OH

HO

HO

OHxylose

O

O

furfural

O

HO

furfural alcohol

O

-H2O acid+H2 Cu, Ni

Ni, 250-3000CHydrogenation/

12

O

furan

O

tetrahydrofuran

+H2

Cu, Co Ni

Hydrogenation/Hydrogenolysis

OH

HO

1,2-propylene glycol

HO

OH

ethylene glycol

HO

OH

1,4-butandiol

Glycerol Platform

OH

HO

1,2-propylene glycolOH

HO

OH

glycerol

H O

eth an o l

+H2

O H

H O

2 ,3 -b u ta n d io l

HO

OH

ethylene glycol

13

O

acrolein

OHO

glycidol

OH

methanol

H O

O H

O

O H

glyceric acid

HO OH1,3-propylene glycol

HO OH

1,3-butandiol

+H2O, + H2

O

OH

1-hydroxyl-2-propanone

Polymer building blocks from Biomass - Biopolymers

HO

O

H

H

O

OH

isosorbide

O

OH

O

HO

succinic acidOH

O

OH

lactic acid

O

OH

HO

Commercial

Developmental

Estimated annual

growth of ~20%

Could reach >2.6

million tons by 2015

Growth Rate

14

Oadipic acid

O

O

HO

O

OH

furan dicarboxylic acid

O

Futuristic

0%

5%

10%

15%

20%

25%

30%

35%

40%

Asia Pacific Western Europe

North America

Rate

• Tremendous opportunities and returns

• Many technical challenges

• Combined production of bioenergy and biochemicals

• Right catalysts make process feasible

Summary

15

• Right catalysts make process feasible

• Concerted efforts - commercial entities/private sectors working together with local community and governments