Blue Biofuels (BIOF) and the United States Department of Agriculture’s Agricultural Research Service (USDA ARS) are collaborating on optimizing the yields of Pennisetum hybridum, commonly known as king grass, a perennial grass biomass crop, that the Company is using as feedstock for its patented mechanocatalytic cellulose-to-sugar (CTS) process.

The USDA ARS and BIOF are cooperating to develop production methods which can be used to increase the productivity of land in Florida formerly used for orange production prior to the devastation of the industry by citrus greening.

(Citrus greening is one of the world’s most serious citrus plant diseases. It is also known as Huanglongbing (HLB) or yellow dragon disease. Once a tree is infected, there is no cure. While the disease poses no threat to humans or animals, it has devastated millions of acres of citrus crops throughout the United States and abroad. Citrus greening is spread by a disease-infected insect, the Asian citrus psyllid (ACP) (Diaphorina citri Kuwayama)).

The growth of a perennial grass biomass crop can add additional profit opportunities for Florida and to other parts of the US with climates suitable for tropical biomass production.

This agreement will study the ability to minimize inputs using nitrogen fixing cover crops, or other production practices, while maintaining or increasing biomass yields. The USDA ARS will gain knowledge which would then be published, and BIOF will optimize its production practices for biomass feedstocks.

The knowledge gained from this agreement will be available to growers to allow them to efficiently supply the required biomass feedstock for production of sugars for cellulosic ethanol or further processed into renewable jet fuel.

Both the USDA ARS and BIOF will supply resources needed for the project. BIOF has a research farm near Arcadia, Florida, upon which king grass is growing, and facilities for conducting tests for productions trials; The USDA ARS will supply expertise and harvesting equipment to collect materials for storage, processing, and conversion by BIOF.

The trials will be set up to allow for public presentations and publications. The work will be open access via scientific and popular press to allow both local and other producers to use the production practices developed to help supply feedstock to BIOF facilities and other bioenergy conversion facilities. This project allows BIOF and the USDA ARS to support missions to help producers develop integrated solutions that solve their problems related to productivity, profitability, energy efficiency, and natural resource stewardship.

CTS technology is a near-zero-carbon footprint system that can convert virtually any plant material—grasses, wood, paper, farm waste, yard waste, forestry products, fruit casings, nut shells, and the cellulosic portion of municipal solid waste—into sugars and lignin. Sugars are subsequently processed into biofuels. Lignin may be further converted into biodegradable bioplastics or used in ion exchange resins.

Management believes that biofuel originating from the Company’s CTS process will be eligible to receive generous D3 cellulosic Renewable Fuel Credits (RINs) from the US Government. The D3 RIN is currently around $3/gallon of ethanol, which could be earned in addition to the market price of ethanol. This incentive is offered to all domestic cellulosic fuel producers whose fuel is used in the transportation industry. The Environmental Protection Agency’s newly proposed revised mandate for cellulosic ethanol for 2020 is 510 million gallons, for 2021 is 620 million gallons, and for 2022 is 770 million gallons.