EXECUTIVE SUMMARY. organic fraction of MSW is needed to feed the Bio Refinery.

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1 Investing in the future of recycling, renewable fuel and Iowa Municipal Solid Waste (MSW) currently buried in landfills is a resource to Fiberight, LLC EXECUTIVE SUMMARY The key concepts for Fiberight have been brewing for many years as Founder and CEO, Mr. Craig Stuart Paul, blended the experience of working in the micro brewery and material resource recycling industries to brew renewable fuels from the organic mash in Municipal Solid Waste (MSW). While the two industries don t seem to mesh from the outside looking in, Stuart Paul is a visionary who knew the micro brewery process held the key to the organic mash becoming a viable feedstock for renewable bio fuel production. After seven years of research and development, Fiberight has perfected a proprietary process that unlocks high yields of glucose (sugar) from organic waste. The glucose is then converted into alcohol through fermentation and denatured to cellulosic ethanol to be sold to a fuel blender in Eastern Iowa. With over 4,000 continuous hours of operation at Fiberight s demonstration facility in Virginia under its belt, the process or pathway of using MSW as a feedstock for renewable fuels has been approved by the U.S. Environmental Protection Agency. Fiberight is confidently moving from the success of the pilot scale demonstration facility to commercialized production in a shuttered corn ethanol facility in Blairstown, Iowa. Fiberight is in the midst of retrofitting the former corn ethanol facility into a Renewable Fuels Bio Refinery that will process the organic fraction of MSW into 6 Million Gallon per Year (MMGY) of renewable fuel. The organic fraction of MSW is needed to feed the Bio Refinery. There are two approaches Fiberight can take to recover the organic fraction of MSW. The first depends on others delivering source separated organics to Blairstown, IA. The second builds the infrastructure needed to recover the organic fraction, otherwise destined to be buried in Iowa landfills. In doing so, the organic fraction is recovered for renewable fuel production and traditional recyclables in MSW are recycled. When doing so, greater landfill diversion is achieved, recycled content feedstock is provided to manufacturers to make new products out of old, sustainable renewable fuels replace imported fossil fuels, 80 plus green jobs are created, and Iowa moves one step closer to a zero waste reality. 1

2 Solid Waste Generation The Iowa Department of Natural Resources (DNR) reported 2.6 million tons of solid waste was buried in Iowa sanitary landfills during fiscal year If you take a closer look at the 2011 Waste Characterization Study conducted for the Iowa DNR, over 70% or 1.8 million tons of the material being buried in Iowa landfills is paper (25%), plastic (16%), metal (5%) and organics (26%). The organics includes items such as food waste, diapers and soiled paper like paper plates, paper towels, and tissue. The Iowa DNR also reports 1.2 million tons of materials are recycled in Iowa each year and it estimates 35 percent of all waste generated in Iowa is diverted from Iowa landfills through recycling. This is slightly higher than the national recycling average of 33 percent. While Iowans have done a good job reducing the amount of materials being buried in Iowa landfills since the 1989 Waste Reduction and Recycling Act was adopted, it is evident more can and should be done. Waste Management Hierarchy The 1989 Waste Reduction and Recycling Act established a 50% waste reduction goal in Iowa by the year The law also established a solid waste management hierarchy, the first of any state to do so: Volume reduction at the source Recycling and reuse Incineration with energy recovery Incineration for volume reduction Sanitary landfills While land filling was established as the very last management method, it is still the go to form of management today because it is difficult to compete with the economics of burying waste. Fiberight has been designated as a recycling facility by the Iowa Department of Natural Resources, which means the 50% waste reduction goal may finally be achieved in Eastern Iowa. Organics Yard waste is the only organic material banned from Iowa landfills, by law. Most communities have a designated place or facility where yard waste and brush is disposed of for composting. A handful of Iowa communities allow food waste and other organics to be composted with yard waste. However, over 468,000 tons buried in Iowa landfills today is still organic in nature. Organics, left to slowly decompose in a landfill, is a major source of methane production. A few Iowa landfills install a flare to burn off the methane so it does not become a greenhouse gas. While better than letting it escape into the environment, landfill gas could be used for energy production. Paper, Plastics & Metal Recycling nearly everything but yard waste in Iowa has always been voluntary, not mandated. Households and the business community have to make a conscious choice to recycle. In the last 10 years, single stream recycling has picked up in popularity, whereas paper, plastics and metals, are combined in one bin and separated for recycling at a material processing facility. While a combination of curbside and drop off recycling programs are well established throughout Iowa communities, 828,000 tons 2

3 buried in Iowa landfills today is still paper, plastics and metal. Barriers to Recycling Over 1 million tons of organics and recyclables are still buried each year in Iowa due to many reasons. Recycling varies by community or business with a lack of consistency in what can or can t be recycled. Recycling can be confusing at times. Households and businesses alike may feel recycling takes too much time, cost too much money, or requires too much space. Those who don t recycle may do so out of the feeling they don t have enough recyclables to make the effort worthwhile. That is the reality of recycling today in Iowa. As it stands, a significant quantity of materials continue to be buried in Iowa landfills. Voluntary or not, it is likely that there will always be recyclables disposed of in the solid waste stream. Increased Recycling Supported There are no plans to change, modify or mess with current curbside recycling or recyclable drop off programs. On the contrary, Fiberight is committed to the highest and best use for recyclables, such as paper, plastics and metals. Fiberight s initial investment is in processing equipment to sort, bale and transport recyclables. This equipment will be used for cardboard / paper, plastics and metal Fiberight separates out from organic waste as well as single stream recyclables delivered directly to the Material Resource Recovery Facility in Marion by solid waste and recycling companies. Establishing Economic Incentives Fiberight s processing fee for single stream recyclables will be between $5 and $20 per ton, depending on the volume delivered. On top of a lower processing fee, Fiberight intends to share revenue generated from the singlestream recyclables with those who deliver recyclables to them. The processing fee for MSW, on the other hand, will be between $34 and $38 per ton, with no revenue sharing program. The processing fee is comparable to landfill disposal fees. Fiberight is doing all they can to ensure community and business recycling programs continue. In the end, it is the choice of the waste generator, in coordination with their contracted hauler. As with any business, strictly involved with waste / recyclables processing, Fiberight must abide by the decisions of the waste generator. Landfill Diversion is Core Business Fiberight s core business is diverting garbage that otherwise would end up buried at the landfill. Fiberight is intent on recovering every last pound of cardboard, paper, plastic, metal and organics from waste destined for the landfill. Cardboard, most paper, plastic and metal will be recycled, just like always. Organics, including soiled papers and diapers will be used to produce renewable fuels. Iowans can be assured recycling will increase by 70% or better with the diversion of materials now buried in landfills. The only materials that will end up in a landfill are inert in nature (dirt, 3

4 kitty litter, etc.) that cannot be recycled or processed into renewable bio fuels at this time. Manufacturing Cellulosic Ethanol The Delivery There are many stages to getting cellulosic ethanol from MSW. The process starts with the MSW picked up from the waste generator. Contracted haulers deliver MSW to Fiberight, as opposed to the landfill. The Pre Sort The first stage of the Fiberight process removes large bulky items before the remaining MSW is loaded into the slow speed, low torque bag opener that processes 40 to 45 tons per hour. The open bags and all their contents come out of the bottom of the shredder and land on a shaking table that spreads out and conveys the materials to a trommel screen (which looks like a gigantic grain cleaner). Anything larger than 16 passes through the trommel screen, onto a conveyor belt and is hand sorted by employees for recycling. This step recovers recyclables such as cardboard, paper, wood waste, clothing, stuffed animals, electronics and small household appliances, etc. However, paper and cardboard contaminated with food waste passes through this step on to the next. Everything smaller than 16 inches drops through the trommel screen openings on to another screen where anything 2 inches or smaller, like kitty litter, broken glass and other fines drops out, and is directly loaded into a truck and transported to the landfill for final disposal. Based on Fiberight s experience at its demonstration plant, 20% of processed MSW will be sent directly to the landfill in the initial separation stage. The Middlings The material left after the Pre Sort stage is larger than 2 inches and smaller than 16 inches. This middle material or, in industry speak, the middlings, drops to a conveyor and are loaded on trucks for transport to the Blairstown Bio Refinery. The middles include nonrecyclable papers, such as paper towels, tissues and paper plates, pre and post consumer food waste along with packaged food, plastics and metals. It should be noted, at this time no hands have physically touched the middlings prior to it being transported to the Blairstown Bio Refinery. The Pulper Once the middles are delivered to the Blairstown Bio Refinery they are loaded directly into a pulper machine. In the pulper machine, hot water is added to pasteurize the materials. The drum is slowly rotated pulping the food and paper waste preparing the materials for ethanol production. Once the pulping is complete, the materials pass across a second screen built into the pulper to separate the pulped fibers and food waste from the larger (>3 ) plastics and metal. Second Screen At the second screen, plastics and metals are separated from the pulped fiber and organics. The plastics and metals which includes ferrous and non ferrous metals, are sorted, baled and transported to manufacturers who will use 4

5 them to make new products. Based on Fiberight s experience at its demonstration plant, 30% of the materials pulped will be plastic and metal in nature, 70% is suitable for renewable fuel production. The Washer The pulped fiber and organics are conveyed into a counter current washing machine, where the organic nutrients are stripped from the fiber materials. The high strength, organically rich wastewater is recycled as many times as possible before it is sent to the anaerobic digester to produce methane that is used to help meet the bio refinery s energy needs. Pre treatment As the fibers exit the washer they flow through a milling process to further reduce their size which ensures a consistent particle size for hydrolysis conversion. The Cooker After washing, the fibers have a lot of active bacteria that inhibit the sugar making process. The fiber materials are sent through a high temperature cook system for sterilization. Once cooking is complete, bacteria is destroyed by heat and the remaining fiber is ready for the hydrolysis reaction. The Reactor After sterilization, the fibers are pumped into the reactor where clean water and enzymes are added into the reactor tank. During this stage, the temperature and ph are closely controlled while the natural enzymes designed for sugar conversion do their jobs. Once complete, the materials are sent through a plate filter where the sugar water is separated from the remaining fiber biomass. The Fermenter The sugar water is pumped to a fermenter. Once in the fermenter, yeast is added and once again temperatures and ph are closely controlled. The Distiller Once the fermentation process is complete, it passes through a distillation plant and the end result is a 190 proof cellulosic ethanol suitable for transport fuel. Renewable Fuel Once the cellulosic ethanol has been denatured it can be marketed as a renewable fuel. Fiberight has an agreement with an Iowa City fuel terminal that will blend the ethanol with gasoline to an E10 or E85 fuel grade. Local Recycling Market Created Currently, all recyclables collected through curbside programs, are sorted, baled and transported to end markets that produce new products out of old. Many of these markets exist overseas. For example, lower grade cardboard and paper, plastics and electronics are shipped from Iowa to China, which is approximately 6,500 miles from Iowa. Compare those recycling markets to the transportation involved with trucking middlings from Marion to Blairstown, which is 34 miles one way. The materials will be shipped in semis that get six miles per gallon. Six gallons of diesel fuel is needed to transport 20 tons of MSW to Blairstown or 0.3 gallons of diesel needed per ton transported. 5

6 A long range goal for Fiberight though is for compressed natural gas (CNG) produced at the Blairstown Renewable Fuels Bio Refinery be used for fuel, rather than diesel. Environmental Impacts Emissions The Iowa Department of Natural Resources (IDNR) issued an Air Quality permit to Fiberight in February The Blairstown facility is considered a synthetic minor source of air pollutants with regards to Prevention of Significant Deterioration (PDS) regulations and Title V Operating Permit regulations. There are twelve potential sources of air pollution, all potential sources have release limits, with 5 of the 12 requiring monitoring for one or more air pollutants: Particulate Matter (PM), Sulfur Dioxide (SO2), Oxides of Nitrogen (NOx), Carbon Dioxide (CO), Volatile Organic Compounds (VOC) and Hazardous Air Pollutants (HAP). All potential pollutants from the Fiberight Bio Refinery fall below National Ambient Air Quality Standards. Odor While Iowa does not have rules for odors, MSW does generate odor. MSW will be processed immediately upon arrival to minimize off site migration of odor. In order to prevent odor issues, a scrubber system that works in tandem with air exchange equipment, will be installed. Groundwater Outside water will be drawn from a permitted well in the initial phase. This is required to generate the large quantities of steam needed to get the processes involved with renewable fuels production started. However, due to the 50 percent moisture content of the MSW, the Fiberight Bio Refinery sustaining water demands will be minimal. If needed, water will be supplemented by Poweshiek Water Association. However, once production is in full swing, it is anticipated that surplus water will be generated, by the process, rather than needed to support production. Wastewater There will be no direct off site discharges to a surface water from the production process. There will be a water recycling program whereby water used in one process will be reused in the next stage of the production process and so on. The process will eventually generate a water surplus that will be discharged into the Blairstown sanitary sewer system for treatment by the local wastewater treatment facility located 1.5 miles north of Fiberight. All discharges into the sanitary sewer will meet the effluent limits set by the wastewater treatment facility. Surface Water Fiberight will be permitted for surface water discharges through the National Pollutant Discharge Elimination System (NPDES) permitting program for both construction (GP#2) and operations (GP#1). A Stormwater Pollution Prevention Plan will be developed for both permits to ensure surface runoff discharged into Coon Creek meets Iowa water quality standards. Solid Waste There is no waste generated as a result of the production of renewable fuels. There will be a bio pulp generated at the end of the hydrolysis process, however, that material has value for 6

7 composting, animal bedding and possibly energy production. Hazardous Waste Renewable fuel production will not generate any hazardous waste as a result of the production process. Household hazardous waste may be found in MSW and will be pulled out and disposed of safely. Knowing that ethanol and sewer water have the potential to spill, Fiberight has developed a Spill Prevention, Control, and Countermeasure (SPCC) Plan that outlines a step by step plan to prevent spills and / or manage them in a safe manner that will keep employees safe and protect our natural resources. Energy Needs Organic waste naturally produces methane or natural gas in one of three ways: In nature, which takes millions of years to form; In a landfill, taking at least years to produce under anaerobic conditions and is typically not managed or, when managed, it is normally flared off; and In an anaerobic digester (AD), which takes less than 30 days for the conversion of organic waste to methane (natural) gas. Fiberight uses AD technology to convert organic waste into methane gas. The methane gas, also known as bio gas, is used for energy production. Once the washing of the bio pulp is complete, the high organics wash water is piped to the AD system where naturallyoccurring bacteria convert the wash water into methane gas. The bio gas is piped to a boiler, the boiler drives a turbine, and the turbine produces electricity and steam. Both are used to help provide the energy needs of the Renewable Fuel Bio Refinery. Climate Change / Carbon Footprint Recycling Transportation Fiberight recycles waste that would otherwise end up in Iowa landfills. This material is being transported now, between the waste generator and the landfill. Fiberight projects an increase in transportation to move processed waste from Marion to Blairstown. The increased environmental impact related to transportation between Marion and Blairstown is greatly offset by the benefit of recovering 16,251 tons of paper, plastic and metal being buried in Iowa landfills, which is based on processing 350 tons of waste per day. The environmental benefit and savings of manufacturing new goods out of old include: 85,524,415 Kwh of energy, 229,691 barrels of oil and 362,238 cubic yards of landfill space. Greenhouse Gas Reduction According to the U.S. Environmental Protection Agency s Waste Reduction Model (WARM) Calculator, greenhouse gas emissions are reduced by 156,011 metric tons of carbon dioxide equivalent (MTCO2E) by capturing and recycling 109,200 tons of materials being buried in Iowa landfilled. 7

8 Energy, Oil and Landfill Space Saved Savings based on 350 tons of waste per day Recyclable Tons Per Year Kwh Energy Barrels of Oil Landfill Space Paper 4,562 18,702,193 41,054 15,053 cubic yards Plastics 11,558 66,738, , ,752 cubic yards Metal , cubic yards Total 16,251 85,524, , ,238 cubic yards One ton of recycled office paper saves 4,100 Kwh of energy, 9 barrels of oil, 54 million Btu's of energy, and 3.3 cubic yards of landfill space. One ton of recycled plastic saves 5,774 Kwh of energy, 16.3 barrels of oil, 98 million Btu's of energy, and 30 cubic yards of landfill space One ton of recycled steel saves 642 Kwh of energy, 1.8 barrels of oil, 10.9 million Btu's of energy, and 4 cubic yards of landfill space. Source: Greenhouse Gas Reduction 1/1/14 12/31/14 Landfilled Tonnage Recyclable Tons GHG Emissions* Landfilled Landfilled Organics 64,428 91,902 Paper 5,460 7,380 Plastic 10, Metal 1, Textiles 3,276 Wood 3, Residue (inert) 20, TOTAL 109, ,796 *Reported in Metric Tons of Carbon Dioxide Equivalent (MTCO2E) 1/1/14 12/31/14 Recycled Tonnage Recyclable Captured Tons Diverted Change in GHG Emissions* Organics 64,428 12,735 Paper 5,460 19,207 Plastic 10,920 10,720 Metal 1,092 4,339 Textiles 3,276 Wood 3,276 8,050 Residue (inert) 20, TOTAL 109, ,011 *Reported in Metric Tons of Carbon Dioxide Equivalent (MTCO2E) Calculator Scenario: 350 tons per day; 301 days; January December 2014 Source: EPA WARM calculator epa.gov/epawaste/conserve/tools/warm/index.html 8

9 Frequently Asked Questions and Shared Concerns 1) Why should Iowa and in particular Eastern Iowa be the guinea pig for this company? Response: Eastern Iowa isn t the guinea pig by any means. This is second generation ethanol production. The first generation used corn as a feedstock. Fiberight is using the plentiful supply of MSW being buried in Iowa landfills today. Fiberight has over 4,000 hours of continuous operations in its plant in Lawrenceville, VA which is an exact replica of the process and machinery, which will be used in Iowa the only difference is the scale and volume of materials processed. The Iowa plant is a natural next step to growing the company and the cellulosic ethanol industry as a whole. 2) How much of my hard earned tax dollars are being used to subsidize Fiberight s Blairstown plant? Response: Fiberight has secured a $25 million dollar USDA Loan Guarantee, and must pay for this insurance, just like a homeowner pays for Private Mortgage Insurance (PMI). 3) Won t this process just promote a garbage can free for all where everything is put in one bag? Response: Quite the opposite, Fiberight will work hard to promote single stream recycling, because we believe in the highest and best use for all products no longer needed and keeping them separate from our organic waste stream. Fiberight is working with solid waste haulers, your direct connection to waste and recycling collection, to ensure they understand our process and our capabilities to help them, which in turn, helps their customers move closer to zero waste. 4) Will any of the trash be used or burned / incinerated to generate energy, i.e. trash to ash? Response: Absolutely no incoming MSW will be burned or incinerated by Fiberight. A more appropriate term for Fiberight s process is waste to renewable fuels, not waste to energy (which means incineration or burning trash for energy to most people). 5) Will Fiberight use Genetically Modified Organism in the production process and if so, aren t they dangerous if they happen to escape into the environment? Response: Fiberight uses enzymes in its production process. Enzymes are NOT living organisms, nor are they genetically modified organisms (GMOs). Enzymes are inert, natural, organic catalysts, responsible for the breakdown of foods into their individual chemical constituents. People are able to get the energy out of the food they eat with the help of enzymes, starting with the enzymes that reside in saliva (or spit). The Fiberight process is no different. Enzymes are used to break down the cellulous locked up in organics into sugars. These sugars, and what s left over of the hydrolysis process, are used to manufacture renewable fuels. 9

10 6) How does this process compare to a dirty MRF, which often have unsuccessful business models? Response: The old concept of a dirty MRF involved bringing in MSW, sorting out paper, plastic and metals, which is approximately 20 percent of the waste stream, and selling those products to generate revenue to support the MRF. What caused most MRF s to fail in the past was the need to dispose the remaining 80 percent inert and organic waste, which was heavy and expensive to landfill. Turning the organic fraction into a revenue stream was the impetus behind Fiberight. The Fiberight business model reverses the dirty MRF recycling rate as 70 to 80 percent of what comes in is recycled or used for renewable fuel production and the remaining 20 percent is landfilled. 7) Ethanol is ethanol no matter what the feedstock. Bio fuels are not an economically viable fuel source for our transportation needs as it provides less BTU s per gallon and requires more energy than it provides to make. Response: That may be true for the first generation ethanol manufactured with corn, however, Fiberight does not use corn as its feedstock. This is a second generation process using MSW to produce cellulosic ethanol. This organic fraction of the waste stream would otherwise end up in Iowa landfills, which would eventually lead to methane production, greenhouse gas generation and lost energy. While cellulosic ethanol may provide less BTU s per gallon now, the alternative is burning fuel manufactured with non renewable fossil fuels, largely imported from foreign countries. Fiberight is producing a renewable fuel, produced within a 40 mile radius of where the feedstock is generated, and is adding value to what others consider garbage. Another benefit is the Greenhouse Gas Emissions Reduction using cellulosic biomass as a transportation fuel, as compared to gasoline / petroleum, corn ethanol and sugarcane biomass. Fiberight produces ethanol with cellulosic feedstock Source: Life cycle Energy and Greenhouse Gas Emission Impacts of Different Corn Ethanol Plant Types (2007)(PDF) and DOE Bioenergy Technologies Office 10