Aviation Biofuels Barriers to Adoption and Value Chain

Aviation Biofuels Barriers to Adoption and Value Chain Risk Mitigation Advanced Biofuels Leadership Conference 21 April 2011 Jim Rekoske, VP & GM Honeywell’s UOP © 2010 UOP LLC. All rights reserved. UOP 5191 -01

Value Chain in Biofuel Production Land Owners Energy Crop Growth & Development Oil Production & Pre-purification Conversion Distribution to Market General Observations § Long, fractured value chain in several distinct industries: § Rural real estate / farming § Biotechnology § Oleo Chemicals § Refining and Chemicals § Fuels Marketing Many stakeholders = added transactions costs

Value Chain in Biofuel Production Land Owners Energy Crop Growth & Development Oil Production & Pre-purification Conversion Distribution to Market • Market demand at pricing which permits value creation for the chain • Technology risks – will it work • Competitive equipment uses, technology need for fuels • Technical risks, capital access, deployment between food / fuel • Competing uses for land, other resources; aversion to “new”, production and scheduling risks Sustainability, Energy Security, Rural Development

Biofuel and Fossil Fuel Comparison Energy Crop Growth & Development Land Owners Oil Production & Pre-purification Conversion Distribution to Market Risk Profile Mineral Rights Owners Outcomes Exploration & Production Logistics / Transport Outcomes Conversion Distribution to Market Highly Integrated Majors Risk Profile Outcomes Risk throughout the value chain in biofuels Outcomes

Barriers and Tools to Manage Risks Barriers Tools Feedstock Partnerships – Can I acquire sufficient feed at manageable price while limiting commodity risk? Demonstrations Technology – Does the technology work as advertised? Market – What combination of price and volume will the market demand? Financial – Can a sufficient financial return be made available to compensate the risks? Policy stability “Market Leader” Advantaged Pricing Financial risk mitigation, performance guarantees, loan guarantees, stable partners / customers Most elements in place – environment improving

Valero + Darling = Diamond Green Diesel LLC Announced in January 2011, Diamond Green Diesel, LLC plans to construct a 10, 000 BPSD Ecofining Unit in the US

Backup Material

Honeywell Overview $33 B Broad and Diverse Businesses, Technologies and Products Specialty Materials 14% Aerospace 38% 32% Automation and Control Solutions 16% Transportation and Power Systems

UOP Overview • Since 2005, a Honeywell Company – part of Specialty Materials business unit • Leading supplier and licensor of processing technology, catalysts, adsorbents, process plants, and technical services to the petroleum refining, petrochemical, and gas processing industries. • UOP Technology Furnishes: 60% of the world’s gasoline; 85% of the world’s biodegradable detergents; 60% of the world’s para-xylene. • 3400 employees worldwide. • Strong relationships with leading refining and petrochemical customers worldwide. 2003 National Medal of Technology Recipient Refining Gas Processing Petrochemicals Renewable Energy Biofuels: Next in a Series of Solutions

Honeywell Renewable Fuels Vision Building on 96 years of petrochemical industry technology and expertise Produce real “drop-in” fuels instead of fuel additives/blends Leverage existing refining, transportation, energy, biomass handling infrastructure to lower capital costs, minimize value chain disruptions, and reduce investment risk Focus on path toward second generation feed stocks and chemicals Oxygenated Biofuels Ethanol Biodiesel First Generation Natural Oils From Vegetables and Greases Renewable Energy Fuel & Power Hydrocarbon Biofuels Diesel “Other” Oils: Camelina, Jatropha Jet Gasoline Second Generation Lignocellulosic Biomass, Algal Oils

UOP Renewable Fuel Technologies Natural Oil/Fats Hydrogen UOP/Eni Ecofining. TM Process Renewable Jet Process Gasification Honeywell Green Diesel. TM Green Jet (if req) Honeywell Green Jet. TM Green Diesel Rentech / UOP Alliance Separation FT Synthesis Conversion Biomass RTP® (Pyrolysis) Envergent Technologies – UOP/Ensyn JV Green Fuels Green Power / Fuel Oil (now) Upgrading Process Green Fuels (2013) Sustainable Technologies – Feedstock Flexible / 2 nd Generation

Natural Oils v. Diesel and Jet Fuel Crude Oil Gasoline Gases Diesel No. 2 Jet Lubricating Oils Asphalt Heavy Fuel Oils 60 300 400 500 650 Boiling Point, °F 1000 1300 Natural Fats and Oils 1 6 8 10 15 20 Number of Carbon Atoms Nature stores excess energy in triglycerides – fats and oils Triglycerides have chemical structures similar to diesel and jet fuel − Less branched, but similar structrure 43 71

UOP/ENI Ecofining™ Green Diesel Ecofing Process Chemistry and Flow Scheme Process Comparison vs. Biodiesel Natural Oil/ Grease + Biodiesel (FAME) + Glycerol Methanol Natural Oil/ Grease + Green Diesel X + n. C 3 & Naphtha Hydrogen • Technology that produces a fully fungible hydrocarbon product • Uses existing refining infrastructure, can be transported via pipeline, and can be used in existing automotive fleet • Two units licensed in Europe with first commercial start-up in 2010 • Excellent blending component, allowing refiners to expand diesel pool by mixing in “bottoms” • Can be used as an approach to increase refinery diesel output Performance Comparison Green Diesel Petrodiesel Biodiesel Baseline +10 Baseline or better 40 -55 50 -65 75 -90 Cold Flow Properties Baseline Needs Additives Baseline or better Oxidative Stability Baseline Needs Additives Baseline or better NOx Cetane

UOP Renewable Jet Process Initially a DARPA-funded project to develop process technology to produce military jet fuel (JP 8) from renewable sources Targets maximum Green Jet production Green Jet Fuel can meet all the key properties of petroleum derived aviation fuel, flash point, cold temperature performance, stability Certification of Green Jet as a 50% blending component in progress Built on UOP Refining Technology Natural Oil/ Grease Deoxygenating/ Isomerization Green Diesel Natural Oil/ Grease Deoxygenating/ Selective Cracking/ Isomerization Green Jet DARPA Project Partners

Completed Flight Demonstrations Feedstock: Jatropha oil Feedstock: Jatropha and algal oil Feedstock: Camelina, Jatropha and algal oil Feedstock: Camelina Feedstock: Jatropha oil

Recent UOP Green Fuel Demonstrations US Navy Green Hornet 22 April 2010 Pax River NATC USAF A-10 C 25 March 2010 Eglin AFB Royal Netherlands Air Force 16 June 2010 Gilz Rijen Air Base Netherlands Deliveries exceeding 400 k gallons in 2010 USAF C-17 27 August 2010 Edwards AFB F-15 III Strike Eagle 25 October 2010 Eglin AFB US Navy RCB-X 22 October 2010 Naval Station Norfolk

Biomass to Liquid Biofuels through FT • UOP Alliance with Rentech • Gasification & Fischer-Tropsch technologies to convert biomass to jet, diesel and naphtha • Utilize available forest and agricultural waste to create valuable fuels Rentech Rialto Project 640 bbls / day diesel 35 MW electricity UOP licensed technology

Rapid Thermal Processing (RTP™) Pyrolysis Oil 510°C, <2 seconds Biomass converted to liquid pyrolysis oil Fast fluidized bed, sand as heat carrier High yields; >70 wt% liquid on woody biomass Solid Biomass Commercially Proven Patented Technology ENV 5233 -04