annual report 2012 - algae biomass...

Annual Report 2012Algae Biomass Organization

About the ABO

Founded in 2008, the Algae Biomass Organization (ABO) is a non-profit trade organization whose mission is to promote the development of viable commercial markets for renewable and sustainable products derived from algae. Our membership is comprised of people, com-panies, and organizations across the value chain. On behalf of more than 200 members, we work to:

• Facilitate commercialization and market development of microalgae biomass specifically for biofuels production and greenhouse gas abatement• Deliver information to the public on initiatives, funding opportunities, and industry development• Provide networking and collaboration opportunities• Establish cutting edge research and commercialization summits and other meeting opportunities• Develop a high quality interactive repository of information on algal biomass technology, science, products, processes, patents, and economics• Facilitate IP aggregation, licensing, and royalty management• Develop quality and measurement best practices for algal biomass, products, systems technology, and econometrics• Afford career advancement and consultant opportunities

More information about the ABO, including membership, costs, benefits, members and their affiliations, is available at our website: www.algaebiomass.org.

The Algae Biomass Organization is a 501(c)6 not-for-profit organization.

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Letter from the Executive Director

On the third day of 2013, the Algae Biomass Organization achieved one of its long-standing and most important legislative goals when President Obama signed the “fiscal cliff” legislation and thus helped level the playing field for algae-related technologies that are on the verge of providing renewable, domestically produced fuels and other products.

As part of that legislation algae-based fuels are now eligible for a $1.01 per gallon tax credit that previously only applied to cellulosic fuels.

This recognition by our elected officials comesafter a year of incredible achievements by the entrepreneurs and researchers that make up the industry. It will foster more of the investments needed to accelerate the commercial production of algae-based fuels, improve our nation’s energy security and our environmental sustainability.

Proof of algae’s potential came in several forms in 2012.

The Department of Defense used algae derived fuels in jets, helicopters and ships during its annual Rim of the Pacific exercises conducted in July. While the military’s use of domestically produced biofuel has been loudly criticized by some, those voices have been vastly out-weighed and their concerns continue to be challenged by the facts and the voices of ABO, our members and advocates for progress across the country.

Other milestones of 2012 included the first retail availability of algae-based biodiesel in California; the successful commissioning of a plant that produces algae for animal feed and nutritional markets; the commencement of operations at the world’s first commercial dem-onstration algae-to-energy facility; the recognition of algae as agriculture by Arizona and Ohio legislatures; research proving saltwater-grown algae can eliminate the need for fresh water; the deployment of algae wastewater treatment systems; and numerous technological break-throughs in algal strain development.

Also last year ABO conducted its first annual “Summer of Algae II” campaign which brought elected officials, the media and the public into our members’ labs and production facilities for a first-hand look at how far along the industry is in their own communities, driving local and national news coverage of the promise of algae.

These efforts are attracting more attention every month. More than 150 new members signed up to join ABO in 2012, and they came from a range of industries including United Airlines (aviation), The Scoular Company (agriculture), Duke Energy (energy), Church & Dwight (con-sumer packaged goods), SABIC (chemicals and fertilizer) and Mars Pet Care (food & nutrition).And while for the past several years it has been easy to make the case for algal biomass as a sustainable source for fuel, food, feed and other commodities, I was stunned to learn of one of the latest advances this year – using algae as a new treatment for cancer.

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The world’s first algae-to-fuel farm, built by Sapphire Energy, opened near Columbus, New Mexico in 2012.

That’s right. Algae just might be able to help cure cancer. Researchers at UC-San Diego announced they have coaxed algae into producing an anti-cancer drug more economically that existing methods.

This takes the importance of what our industry is doing to a whole new level, and ought to serve as a powerful justification for continued public and private investment in algae.

I am proud of each and every scientist, entrepreneur, engineer, student, professor - anyone who is working to unlock the full potential of algae to benefit the rest of us. Our industry has much to be thankful for, and it starts with the people working so hard and so smart to bring their visions to reality.

How will the next breakthroughs surprise us?

The accomplishments of 2012 make for a great year, and together we will have a great 2013.

Very sincerely,Mary RosenthalExecutive DirectorAlgae Biomass Organization

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Algenol’s algae-to-ethanol photobioreactors operating in Florida.

AllAboutAlgae.com

In February, 2012 the Algae Biomass Organizationtoday launched Allaboutalgae.com, a new website designed to showcase the potential of algae-based products to provide sustainable and scalable sources of food, energy and fuel. The website, developed in concert with the National Biodiesel Board provides information, videos and photos all about algae-derived products such as biodiesel, aviation fuel, biochemicals, animal feed and nutritional supplements.

Allaboutalgae.com is the first site designed to showcase algae’s potential for everyone – from those just learning about algae to seasoned algae enthusiasts and entrepreneurs looking for the latest information on the industry’s progress toward meeting challenges in energy security, food production and sustainability.

2012 Milestones and Highlights

February 2012The Algae Biomass Organization launches AllAboutAlgae.com (see previous page), a website to educate and inspire consumers about the potential of algae.

March 2012ABO’s Industry Survey shows plans for increased production and expectations for algae biofuel price-competitiveness.

April 2012ABO launches its first blog to track the industry’s fast-paced developments.

July 2012During its annual exercises in the Pacific the US Navy uses algae-derived fuels in ships, planes and helicopters as part of the Department of Defense’s initiative to make the military less reli-ant on fossil fuels.

August October 2012ABO conducts the “Summer of Algae II” national awareness campaign. Companies in Arizona, California, Colorado, Florida, New Mexico, Washington, and Minnesota host local elected of-ficials and the media at their facilities for hands-on experience with the latest advances.

August 27, 2012Sapphire Energy announces that its Green Crude farm near Columbus, New Mexico, the world’s first commercial demonstration algae-to-energy facility, is now operational.

September 25, 2012The Sixth Annual Algae Biomass Summit is held in Denver, Colorado. More than 700 algae en-trepreneurs, investors and researchers from around the world gather for the event. ABO recognizes six students with the Young Algae Researcher Awards at the Algae Biomass Summit.

October 3, 2012Bioprocess Algae and partner Green Plains commission their five acre algae project in Shenan-doah, Iowa.

Algenol Biofuels announces breaking ground for its 36-acre pilot biorefinery in Lee County, Florida. The facility will produce approximately 100,000 gallons of ethanol per year directly from algae growing in the company’s photobioreactors.

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November 2012 For the first time in history, algae biofuels are made available to drivers as part of a pilot pro-gram to test consumer response in California.

ABO hails research from UC San Diego that proves saltwater algae is suitable for biofuel pro-duction, further demonstrating that fresh water supplies won’t be impacted by commercial algae production.

December 2012The ABO Board of Directors establishes The Algae Foundation, a 501c3 organization to conduct public outreach and education about the benefits of algae.

Best of the ABO Blog

In June of 2012 the Algae Biomass Organization started blogging some of the fast-paced developments we see every day in this exciting industry. The new blog compliments ABO’s social media strategy, which already includes a presence on Facebook, LinkedIn and Twitter.

The ABO blog gives the organization the opportunity to help algae enthusiasts follow the latest developments, get the word out about new opportunities, or even to set the record straight when necessary.

The 10 most-read blog posts in 2012 were:

1. Sapphire Energy Fires up Worlds First Green Crude Farm2. Have a Look at This Algae Farm3. The First National Algae Testbed4. How About a Tank of Algae?5. Algae Companies Among the Hottest Companies in Bioenergy6. Algae Fuels Show Superior Performance7. Stepping Stones to Biofuel8. Seattle’s Beer Belly - Summer of Algae9. Algae in Europe Gets a Boost10. Full Speed Ahead After Algae Sustainability Report

To read the stories behind these headlines, and to learn more about what’s happening in the algae industry, check out www.algaebiomass.org/blog.

Government Relations Report

Early in 2012 the newly-formed ABO Executive Policy Council (EPC) determined that ABO’s policy priorities for the year would be: tax parity for algae; continued DOE funding for algae R&D; continued support from the Department of Defense for algae; and joining other biofuels organizations in supporting an Energy Title in the Farm Bill with mandatory funding.

TAX PARITYWe are very pleased to report that in the last hours of the 112th Congress, as part of the “Fis-cal Cliff” package, algae was granted parity tax status with cellulosic biofuels. Thanks to the leadership of Senator Bill Nelson (D-FL) and Senator Max Baucus (D-MT), the American Taxpay-er Relief Act of 2012 amended existing law in order to include algae as a “qualified feedstock” under section 40 of the United States Code. This change means that algae-based fuels are now eligible for a $1.01 per gallon tax credit that previously only applied to cellulosic fuels.The Fiscal Cliff bill also included language extending a special depreciation allowance on biofuel facilities that use algae. Now, facilities producing biofuel from algae can expense 50 percent of their eligible capital costs in the first year for facilities placed in service before the end of 2013.

DEPARTMENT OF ENERGY FUNDINGWith regard to continued DOE funding for algae, the algae industry enjoyed a milestone in the President’s 2013 budget request where, for the first time, the President specifically requests funding for algae. His request is for $22 million for algae R&D. In the past, any algae-specific language included Energy and Water Appropriations bills was inserted by Congress without budget request support from the administration. The inclusion of algae-specific language in the President’s budget sends a strong signal that this is now a priority of the administration. DEPARTMENT OF DEFENSE SUPPORT FOR BIOFUELSRecognizing the potential for commercialization of biofuels through Department of Defense programs, ABO identified continued Pentagon support for biofuels as a priority. This position has some very influential opponents in the Senate, and their proposed amendments to the National Defense Authorization Act (NDAA) were adopted during a Senate Defense Commit-tee amendment process. Specifically, their amendments would have prohibited the Depart-ment of Defense from purchasing significant quantities of fuel unless it was cost competitive with traditional fossil fuel. The second amendment would have prohibited the Department of Defense from investing in biorefineries.

ABO worked with other biofuels organizations to advocate for elimination of the anti-biofuels language in any final Defense Authorization Bill. Senate champions on this included Senators Mark Udall (D-CO) and Kay Hagan (D-NC), who offered amendments to strip the anti-biofuels language. These two amendments passed decisively.

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FARM BILLAfter consultation with a number of experts on the Farm Bill, we concluded that the most effective means for ABO to support an Energy Title in the Farm Bill would be to join other biofuels groups in supporting an Energy Title with no changes plus mandatory funding for the Energy Title. We were pleased, then, to see that the Senate-passed Farm Bill included an Energy Title with mandatory funding.

Since the Farm Bill did not pass during the last Congress, a new Farm Bill will have to be introduced. ABO will continue to work with our peers in the biofuels community and sup-porters in Congress to make sure algae is given fair treatment in any future Farm Bill drafts.

FLY-INOutside of work specific to legislative activity, ABO held a successful “fly in” in 2012. ABO members from algae companies and research organizations around the country held over 40 meetings with members of Congress, staff and administration officials, an industry brief-ing, internal education meetings for ABO members, and follow up activities.

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Cellana’s photobioreactors in Hawaii.

Greenhouses under construction at BioProcess Algae’s facility in Iowa.

2012 Algae Biomass Summit

For the 6th Annual Algae Biomass Summit, the largest algae conference in the world, we gathered in beautiful Denver, Colorado. More than 700 experts convened to participate in panels on all aspects of the industry, present the latest research breakthroughs, and make deals during networking events or pre-conference tours. On the research front we had a record number of poster sessions, and sold-out attendance at the pre-conference tour of The National Bioenergy Center at the National Renewable Energy Laboratory (NREL), a leader in state-of-the-art algae research in the United States. On the commercial side, attendees in Denver heard details about impressive projects like Sapphire Energy’s integrated biorefinery in New Mexico - more than 300 acres and 600 jobs that will soon be producing 100 barrels a day. Algenol’s incredible announcement that it is producing 7,000 gallons of ethanol per acre was a potent reminder of the incredible potential that algae have to produce a variety of fuels in great quantities with high efficiency. By the end of 2012 Algenol was closing in on 9,000 gallons per acre. The focus was not on fuels alone, however. We heard from corporate giants like Kimberly Clark about its use of algae to replace plant fiber in tissues and paper, as well as fibers used in carpets. We heard from The Scoular Company, a century-old agribusiness company buying, selling, storing, handling and transporting grain and food and feed ingredients worldwide, about their use of algae in the animal feed and food markets. Captivating photos of algae projects in Europe, shown by Vitor Verdelho Vieira, Chief Devel-opment Officer at A4F-AlgaFuel, reminded everyone that efforts in the U.S. are not alone and that we should not be complacent. Major government and private investment in India, China, and almost every OECD country (even Iceland) means many more companies are entering than exiting the space--the first signs of a possible global boom.

To encourage the next generation of algae entrepreneurs and scientists ABO also presented the first ever Young Algae Researcher Awards to six of the brightest up-and-coming minds in our industry. The excitement was so great this year that nearly 100 people approached the ABO booth to become new members.

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Financial Summary

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Algae Biomass Organization

2011 ‐ 2012

Income Statement

Year Ending December 2012 2011

Revenue

$

1,038,882.86

$

881,370.49

Expenses

$

(1,059,443.54)

$(910,348.89)

Net Income

$

(20,560.68)

$

(28,978.40)

Cash Flow Summary


Cash Balance Beginning of year

$

287,343.35

$

117,315.39

Revenues

$

1,038,882.86

$

881,370.49

Expenses

$

(1,059,443.54)

$(910,348.89)

Changes in Receivables

$

18,937.50

$

(18,937.50)

Changes in Accruals

$

(5,739.80)

$

50,468.86

Change in EPC Deposits

$

(60,000.00)

$

155,000.00

2011 Pre‐Paid Memberships

$

(78,875.00)

2010 Pre‐Paid Memberships $ ‐


$

(91,350.00)

$

91,350.00


$

86,400.00

Cash Balance End of year

$

215,030.37

$

287,343.35

Cash Flow Summary


Cash Balance Beginning of year

$

287,343.35

$

117,315.39

Revenues

$

1,038,882.86

$

881,370.49

Expenses

$

(1,059,443.54)

$(910,348.89)

Mr. John Pierce, Chair-DLA Piper LLP

Mr. Joel Murdock, Co-Chair- FedEx Express

Mr. Thomas Byrne, Secretary/Treasurer- Byrne & Company, Ltd.

Mr. Mark Allen, P.E.,- Accelergy Corporation

Dr. John Benemann- MicroBio Engineering, Inc.

Dr. Keith Cooksey- Director Emeritus

Mr. Billy Glover- The Boeing Company

Dr. David Hazlebeck- General Atomics

Dr. Qiang Hu- Laboratory for Algae Research and Biotechnology, Arizona State University

Dr. Ira “Ike” Levine- University of Southern Maine

Dr. Margaret McCormick- Matrix Genetics

Dr. Greg Mitchell- Scripps Institution of Oceanography

Dr. Philip Pienkos- National Renewable Energy Laboratory

Mr. James E. Rekoske- Honeywell / UOP

Mr. Paul Woods- Algenol

Mr. Tim Zenk- Sapphire Energy

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2012 Board of Directors

Committees

By-Laws & Government Committee 2012 Chair: Mark AllenThe purpose of the Bylaw Review and Governance Committee is to ensure that the ABO’s bylaws are function-ing efficiently and in the best interests of the organization. The Committee consults with the chairperson of each Committee and the ABO Directors from time to time to determine whether amendments to these Bylaws are necessary or desirable.

Director Recruitment Committee 2012 Chair: Joel MurdockThe Director Recruitment Committee recommends to the Board appropriate candidates for election as Direc-tors. It consults with other Directors and Members to seek recommendations of Members that are fit to serve and submits a report to the Board on an annual basis containing recommendations regarding which Members should be nominated by the Board for election as Directors. Events Committee 2012 Chair: Philip PienkosThe purpose of the Events Committee is to organize and oversee events hosted by the Algal Biomass Organiza-tion, whether such events are open to Members only or the general public. The goal of the Committee is to create events that increase and retain membership in the ABO by offering educational and trade opportunities to the ABO membership that will advance the purpose and mission of the ABO.

Executive Policy CouncilThe EPC is tasked with framing and executing policy and legislative strategy for the organization. Members of the committee include representatives from member companies that contribute funding for the EPC’s efforts, specifically lobbying and communications activities designed to help advance the ABO agenda, as well as three ABO directors—the Chairperson, Vice-Chairperson and one at-large director appointed by the Board.

The EPC’s goals include working to modify existing incentives, policies and regulations that fail to include algae or that impose barriers to commercialization of the algae industry; accelerating R&D funding that can lead to commercial algae production; and increasing the overall awareness about algae among policymakers and agency staff. Any member of the ABO is invited and encouraged to participate in the EPC.

Current EPC membership: Accelergy; Algenol; The Boeing Company; Bioprocess Algae; Duke Energy; General Atomics; Heliae; Sapphire Energy; and United Airlines.

Membership Development 2012 Chair: John BenemannThe purpose of the Membership Development Committee is to develop membership interest across a broad spectrum of companies, institutions, and individuals that are engaged in creating this new algal biomass indus-try.

Peer Review 2012 Chairs: Keith Cooksey and John BenemannThe purpose of the Peer Review Committee shall be to ensure that publications, articles, or other documents endorsed or promoted by the Corporation as “peer reviewed” are scrutinized by experts in the relevant fields. The Committee reviews and comments upon any and all submissions of articles to the ABO for publication on the its website as “peer reviewed” literature or position papers, policy reviews, or other documents commis-sioned by the ABO; develops a submission process and guidelines for approving such submissions; works to encourage Members and the general public pursuing scientific research or other activities related to the algal biomass industry or the purpose of the Corporation to submit articles for peer review; and recruits and ap-proves third parties to act as peer reviewers.

Technical Standards 2012 Chair: Jim SearsThe purpose of the Technical Standards Committee is to develop, review and comment upon, and advocate for the industry standards and best practices for the general benefit of the algal biomass industry. The Techni-cal Standards Committee develops standards relevant to the algal biomass industry for proposal to standard setting organizations or governmental entities; organizes industry comments and work to influence the cre-ation of standards affecting the algal biomass industry, whether those standards are being created by private organizations or governmental entities; liaises with Members, standard setting organizations and government entities to facilitate the flow of information between stakeholders; and drafts documents explaining new or proposed standards for consumption by Members, government officials, and the general public. 11

2012 Platinum Membership

2012 Gold Membership

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2012 Corporate Membership

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2012 Supporting Organizations

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National Laboratories


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