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ABENGOA BIOENERGY

ABENGOA BIOENERGY R&D

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ABENGOA BIOENERGY


Abengoa Bioenergy

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ABENGOA BIOENERGY


Abengoa is a technological company that applies innovative solutions for sustainable development in infrastructures, environment and energy sectors. It is present in over 70 countries where it operates through its five

Business Units: Solar, Bioenergy, Environmental Services, Information Technology, and Industrial Engineering and Construct ion.

Abengoa overview

Profit and Loss Account

(M )

Sales 2,677.2 32.3 2,023.5 578.8 16.5Net Earnings attrib. to Parent Company 100.3 52.0 66.0 16.1 20.1

Gross Cash Flows from Operating Activities (* * ) 287.9 33.0 216.4 53.8 18.3

Important Variables

Margin (% Gross Cash Flows/Sales) 10.8 10.7 9.3

Gross Cash Flows/Financial results 3.13 3.68 3.32

Return on equity (ROE) (%) (* * * ) 22.45 14.91 10.09Data per share:

- Earnings per share () 1.11 0.73 0.18 19.9- Dividend per share () 0.16 0.15 0.05 12.3

(* ) CAGR: Compound Annual Growth rate.

(* * ) Earnings before interest, tax, depreciation and amortization, adjusted by the works flows done for own f ixed assets

(** * ) Net earnings/ Shareholders' funds

% Variation

(06-05)

% CAGR

(96-06) (* )2006 2005 1996

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ABENGOA BIOENERGY


Ethanol production from vegetal raw materials (cereal and biomass)Abengoa

Bioenergy

Bioproducts

Abengoa Bioenergy Business

Renewable Biofuel

Null CO2emissions

DGS Animal feed

CO2Industrial applications

Ethanol

ETBE

Direct blending

Hydrogen

Cereal

Biomass

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ABENGOA BIOENERGY

ABENGOA BIOENERGY R&DProduction Process

Technology based in fermentation of sugars

Sugar (glucose)+ Air CO2+ Ethanol

C6H12O6+ O2 3 CO2+ 3 C2OH6

Yeast

Used feedstock is transformed into sugars, the process would change depending on the chemical composition:

Sugar beet or sugar cane: direct fermentation

Cereal: starch, previous saccharification (enzymes)

Lignocellulosic biomass: cellulose and hemicellulose. Hydrolysis to

break long chains and produce C6and C5sugars

Level of

Complication

Feedstock price

Each feedstock yields different co-products

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Feedstock Preparation Transformation into sugars Fermentation Distillation

Collection

Sugar case

Milling and filtering DistillationFermentation

C6

Cereal case

Cooking DistillationFermentation

C6

SaccharificationLiquefactionMillingFeedstock cleaning

Lignocellulosic Biomass case

Conditioning Milling Separation L/STermochemical hydrolysis

Distillation

2nd Enzymatic Hydrolysis Fermentation

C6

Fermentation

C5

Production Processes

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ABENGOA BIOENERGY


Abengoa Bioenergy Goals

Promote development of seeds with improved characteristics to establish win-win contracts with farmers, link

certified seeds to the contracts.

Abengoa Bioenergy is establishing strategic alliances with seeds

companies to develop/improve specifics crops

Promote better agronomic practices under long term contracts to

increase farm income

Promote energy crops for ethanol production

Abengoa Bioenergy is working closely with research centers to promote the development of crops

for ethanol production.

Abengoa Bioenergy is helping governments define policies and R&D programs to promote

energy crops.

Feedstocks

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Objective

Taylor made energy crops for the different conversion pathways and for particular regions ensuring sustainability

and environmental quality. Main crops characteristics:

Domestic crops, high starch and biomass yields per hectare,

stress tolerances (abiotic, disease)

Minimum inputs maintaining sustainability

Composition to maximize the ethanol

Ensure sustainability and environmental quality

(fromanalysis of microbial communities underlying soils

to formulation of management guidelines for biomass

removal)

Feedstocks

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Cereal technology current situation

All Abengoa Bioenergy plants are currently running on cereals

Yields varying depending on cereal used

DDGs produced containing 30% protein and 10% humidity

Cereal technology Future situation

ObjectiveIncrease competitiveness of the production facilities. Abengoa Fuel and Feed (AFF)

process to be patented by Abengoa Bioenergy

Steps

Decrease amount of residual starch (minimum facility modifications)

Increasing protein content (>40%)

Increase digestability

Increase the quality of the co-product (DDGs)

Technology

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Enzymatic hydrolysis technology current situation

Abengoa Bioenergy has develop a proprietary fractionation technology for biomass processing.

Pilot scale plant in York, (Nebraska, US) to validate our biomass fractionation process and

integrate downstream systems

Demonstration plant in Babilafuente (Salamanca, Spain) to validate biomass to ethanol

enzymatic technology at a commercial scale.

Enzymatic technology Future situation

Objective

Competitive production of ethanol from biomass.

Steps

Complete the process engineering development demonstrations phases.

Build first of a kind commercial facility after the

demonstration of the technology in Salamanca and

NebraskaValorization of all biomass fractions

Technology

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Steps (continue)

Research in the biological deconstruction of the biomass to produce tailor made enzyme mixes for each specific

case:

Determine fundamental physical and chemical factors in the recalcitrante of lignocellulosic biomass to

processing

Understand cellulase and cellulosome

Develop new enzymatic systems to soften termochemical pretreatment conditions

Advance in the sugar fermentation to ethanol through the engineering of microbial systems to achieve:

high yield with complete sugar utilisation, minimal by- product formation, and minimal loss of carbon

into cell mass.

high final ethanol concentration

tolerance to inhibitors present in hydrolysates

higher overall volumetric productivity, especially under high solids conditions

Technology

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Biomass gasification and synthesis (BtL) technology current situation

Available catalysts are not productive enough to make the

process economically feasible.

Low conversion per pass

Mixed alcohols product with low ethanol selectivity

Several existing technologists licensing gasification processes

for syngas production for further chemical synthesis.

Catalysts development programs in European research centers,

combined with process design and analysis.

Recently granted by the US-DOE a program (3 MM$) for

synthesis catalysts development

Technology

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ABENGOA BIOENERGY


La Corua (50 Mgal) York, NE (55 Mgal)

Colwich, KS (25 Mgal)

Portales, NM (30 Mgal)

Ravenna, NE (88 Mgal)

Cartagena (40 Mgal)

Salamanca (52 Mgal) AB France (65 Mgal)

Abengoa Bioenergy is the only international producer of ethanol

Production Facilities in EU Production Facilities in U.S.

EU (Mgal) 2006 2007 2008

Production 142 142 208

Construction * 66 66

US (Mgal) 2006 2007 2008

Production 110 198 286

Construction 88 88

YTD Production Capacity

GO O G

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ABENGOA BIOENERGY


Abengoa Bioenergy plans to be a leader in commercialization of cellulosicethanol production

Objective

Build first commercial scale cellulose facility by 2011

15 million gpy from biomass, 85 million gpy from starch(hybrid facility)

Cornerstones

Two biomass facilities now underconstruction

York, NE pilot plant (operational 2006) will demonstratebiomass fractionation and fermentation technology

Salamanca, Spain facility (2 mgpy - operational 2007)will demonstrate enzymatic hydrolysis technology

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DOE integrated biorefinery solicitation

Overview

DOE will award of up to 40% of the cost of a biorefinery facility ($76.8 million)

Award criteria:

Facility must be able to utilize 700 bone dry metric tons of biomass per day

Facility must be replicable and proposal to include appropriate deployment plan of the proposed technology

After construction costs are paid, the facility must be profitable without subsidies

Additional merit points given for:

Significant showing of state support

Energy generation from multiple sources feedstocks

Barrels of oil displaced

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Risk mitigation for biomass availability and site selection

Risk factors Inclimate weather during biomass harvest period

Due to this risk factor, Eastern US corn-belt was not considered as aviable location for plant location until one-pass harvest technology isavailable (potential for one in seven years for biomass harvest to belimited)

Biomass crop residue abundance As the DOE is focused on cereal crop residues, areas such as

California and South East US (wood residue) were not considered asviable locations for proposal

Multiple sources of biomass Multiple biomass sources demonstrate plant replicability over a wider

geographic area Multiple biomass sources with harvest periods during different times of

the year reduce risk of biomass harvest being compromised by badweather

Multiple biomass sources and harvest times spread harvest machineryinvestment and will reduce feedstock costs

DOE integrated biorefinery proposal

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Biomass available in Kansas38 million tons per year

Crop Corn Milo Wheat Sw itchgrass

Harvested Acres 3,400,000 2,600,000 9,500,000 2,900,000

Production (bu) 464,000,000 195,000,000 380,000,000

Residue 11,000,000 6,700,000 12,800,000 7,500,000

DOE integrated biorefinery proposal, cont

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Abengoas hybrid plant concept

35 million bushels grain facility 88 million gallons ethanol 290,000 tons feed co-product

245,000 BD metric tons biomass (315,000 short tons-as is) 400 BD metric tons/day

15 million gallons ethanol

300 BD metric tons/day Syngas production

1,597,200 MMBTU (syngas+flue gas) 100% steam needs of biomass processing ~30% steam needs of grain to ethanol processing

Syngas can be utilized for production of chemical intermediates

Opportunity to leverage infrastructure and many plant operations


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Technical process


Enzymatic Hydrolysis (EH) will convert biomass to ethanol, lignin andbiomass animal feed.

- The EH technology is being developed in house and will be tested andimproved at the facilities in York, NE (pilot plant) and Salamanca (demo plant).

- Coproduct development (lignin and biomass animal feed) is being performedand will contribute to the overall profitability of the facility.

Gasification will convert biomass to syngas, which will be combustedfor steam generation.

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Oil DisplacementFrom 245,000 BD metric tons biomass


386,721 barrels of oil displaced

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Strong showing of state support

State government

Attractive incentive package

Strong governmental support

Producer organization support Kansas Farm Bureau

Kansas Wheat Growers association

Kansas Milo Growers association

Kansas Corn Growers association

Kansas BioAuthority

Kansas Association of Ethanol Processors


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Biomass logisticsP&L cornerstone

Biomass inputs

50 mile radius of plant site

65% wheat straw, 20% milo residue, 15% corn stalks

Opportunistically use other residues such as gin trash, woodchips, etc.

Areas evaluated = ~5% of total available

80 to 85% of input needs

Producer harvests and stores material field side Abengoa collects material as needed

15 to 20% of input needs

Producer delivered material to plant site


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Biomass economics

80 to 85% of material

Contracted at least one year in advance

Crop residue is valued at $10/short ton in the field

Added to the $10/ton Custom rates for harvesting

Custom rates for transporting/stacking at field side

Storage fee dependant on amount of time between harvest andAbengoa collectionto include competitive insurance rate and

weather protection $10 plus rates above = price paid for biomass at field side

15 to 20% of material

Spot market pricing


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GO O G


Biomass economicsWhat $10/ton means to biomass producers

Of the $10/ton, between $3 to $4 needs to be returned to thesoil for nutrient loss

Producer net will be $6 to $7 per ton

Wheat @ 1 ton/acre net = $6 to $7 per acre

Corn/milo @ 2.4 ton/acre net = $14.4 to $16.8 per acre

Switchgrass @ 5 ton/acre net = $30 to $42 per acre

Many Kansas producers live on $25 per acre profit


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Wheat versus corn/milo residue and switchgrass

Operation Per/ Per Ton Per/ Per Ton Per/ Per Ton

Mow/Swath $0.00 $9.85/acre $4.10 $9.85/acre $1.97

Baleing $11.50/bale $23.00 $13.00/bale* $25.30 $11.50/bale $23.00

Haul to Storage $4.75 $4.75 $4.75

Total $27.75 $34.15 $29.72

Delta to Wheat $6.40 $1.97Delta value for

300K tons $1,920,000 $ 591,000* Estimate 10% higher baling costs for corn/milo residue due to dirt /increase machinery wear

Comparison of select variable costs based on 2004 Kansas Custom Rates

Wheat, 1 ton/A Corn/Milo Residue, 2.4 ton/A Swi tchgrass, 5 ton/A

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Needs to make cellulosic ethanol cost effective/competitive with grain ethanol

Process

Cost effective enzymes

Pentose to ethanolorganism (s)

Fractionation process Plant design and

operational learning curve

Feedstock

High density balers

One-pass harvestingsystems

Storage infrastructure andsystems to maintain quality

Improved genetics offeedstock varieties

Energy efficient harvestingsystems

Transportation infra-structure and biomassfriendly regulations

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www.abengoabioenergy.com

Abengoa Bioenergy

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