OUR COMPANY, OUR ROLE: Understanding adM and biofUels A world in need of

clean, renewable fuels to meet growing energy demand and achieve greater energy security is turning to agriculture for answers. And as one of the worlds largest agricultural processors, Archer Daniels Midland Company is providing real solutions.

The role of renewable fuels at aDm

the same agricultural processing operations aDm uses to produce hundreds of ingredients for food and animal feed also provide us the ability and scale to efficiently produce clean, renewable fuels. today, we are a leading producer of ethanol and biodiesel, and we are working independently and in cooperation with partners to develop a new generation of even more efficient biofuels.

FOOD
In the hands of a skilled agricultural processor such as aDm, crops corn, oilseeds, wheat, cocoa can be used to manufacture hundreds of ingredients essential to the production of food and animal feeds.
our business spans the agricultural value chain: from sourcing crops from the most fertile growing regions of the world; to cleaning, storing and transporting them via one of the largest agricultural transportation networks; to processing them into food, feed, fuel and industrial products; to selling and distributing those products globally. With this model, we serve a critical function of efficiently and reliably connecting crops to world markets. the majority of our business has historically been, and continues to be, producing food and feed ingredients. We are the largest corn processor in the world, processing more than 2.4 million bushels per day. and out of a single kernel of corn, we make more than two dozen different food and feed ingredients and industrial products. We are a leading processor of oilseeds soybeans, cottonseeds and canola. We process 3.5 million bushels of oilseeds every day. a million bushels of wheat go through our processing plants every 24 hours. and we grind 15 percent of the worlds cocoa crop.

o u r c o m pa n y, o u r r o l e

+ fuel
Its from this position as a diversified agribusiness, with existing scale and expertise in corn and oilseed processing and a global transportation and distribution network that we have developed our biofuel product streams. and it is our continued growth across the whole of our integrated business that enables us to pursue leadership in the production of advanced bioenergy products, including those manufactured from biomass and crop residue, such as corn stalks and husks. In partnership with other leading agribusinesses, traditional fuel producers and research institutions, we share the view that these nascent biofuels made from non-food sources will be part of a comprehensive, diversified global energy supply that will include current-generation biofuels and a variety of other sources, such as wind, solar, hydroelectric and geothermal power. looking ahead, our biofuels business will continue to represent an important part of aDms overarching business strategy and a key means by which we fulfill our vital purpose: connecting the harvest to the home to serve growing global demand for food and energy.

u n D e r s ta n D I n g a D m a n D b I o f u e l s

The compelling case for bIofuels

a global population that will surpass 8 billion by 2030 is expected to consume 55 percent more energy than it used in 2005. but with petroleum reserves declining and greenhouse gas emissions from fossil fuels increasing, traditional approaches cant be the only answer to tomorrows energy needs.

125 100 75 50 25

expecteD DemanD*

mIllIon barrels per Day

traDItIonal supply
1971 1990 2010 2030

* Source: World Energy Outlook 2004

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the challenge today is to find cleaner, renewable alternatives to petroleum that can serve as reliable, sustainable, long-term energy sources. We at aDm believe that biofuels represent one of the most viable alternatives for transportation energy sources. already, biofuels are making a host of
highly significant contributions to the worlds overall energy landscape by:

Expanding the fuel supply and lowering gas prices The U.S. Department of Energy estimated in 2008 that gasoline prices would have been 20 to 35 cents per gallon higher without corn-based ethanol. This amounted to an estimated yearly savings of between $150 and $300 per household, or approximately $28 billion to $49 billion in annual savings for the nation as a whole.

Reducing greenhouse gas emissions the argonne national laboratory notes that u.s. ethanol use in 2007 reduced greenhouse gas emissions by approximately 10 million tons, the equivalent of taking 1.5 million cars off americas roadways. looking ahead, the natural resources Defense council has estimated that by 2050, biofuels could reduce u.s. greenhouse gas emissions by 1.7 billion tons per year, which is roughly equivalent to 80 percent of current transportation-related emissions.

Serving as a renewable, homegrown source of energy biofuels production in the u.s. and europe has cut crude oil use by 1 million barrels per day, according to the International energy agency.

Each of these factors helps explain why we at ADM are confident in biofuels potential to address the worlds growing demand for energy.

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proDucIng toDays alternatIves: eThanol + biodiesel

Ethanol and biodiesel are the only two alternative transportation fuels currently available to consumers, and ADM is a leading producer of both.

ethanol is a cleaner-burning, high-octane motor fuel made from renewable

sources. most ethanol produced in the u.s. is made from corn; in brazil, it is produced from sugar cane. but aDm is also working to develop supplies from other plentiful sources, including biomass (see page 10). ethanol is blended with gasoline in various concentrations to produce a fuel that can improve engine performance and reduce potentially harmful impurities. every gasoline-powered vehicle on u.s. roads is able to run on a fuel blend consisting of 10 percent ethanol.

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though aDm has been manufacturing corn ethanol for decades, we are continually refining and improving our production processes to conserve natural resources. our cogeneration plants now provide much of the energy required at several of our u.s. plants. these plants can burn coal or biomass to produce steam and electricity, and they reduce the amount of fuel burned per unit of energy output, thereby lowering emissions of pollutants and greenhouse gases.

between 2002 and 2007, we reduced the amount of water used in ethanol production by more than 35 percent.

Walhalla, n.D. marshall, minn. columbus, neb. cedar rapids, Iowa peoria, Ill. clinton, Iowa Decatur, Ill.

1.8

billion gallons
We produce ethanol in the U.S. at our facilities in Decatur and Peoria, Ill.; Cedar Rapids, Iowa; Walhalla, N.D.; Marshall, Minn.; and Columbus, Neb. Our new Cedar Rapids ethanol dry mill is anticipated to come on-line later in 2010, bringing our total annual U.S. ethanol production capacity to 1.8 billion gallons.

one of the primary coproducts generated by dry mill corn ethanol production is Distillers Dried grains and solubles, a high-protein animal feed favored by many cattle farmers. by capturing the DDgs from our corn dry-milling operations and making it available to livestock producers, we help ensure corn used for ethanol also contributes to meeting demand for animal nutrition.

DDGS

railcars

3 million gallons
per day
Our extensive transportation and logistics network enables us to serve ethanol customers throughout North America quickly, consistently and efficiently. Our thousands of railcars, trailers and barges are capable of transporting 3 million gallons of ethanol each day.

trailers

barges

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aDm is also a leading producer of biodiesel, a vegetable oil-based fuel that reduces greenhouse gas emissions from diesel engines. today, biodiesel is the alternative fuel of choice throughout most of europe, and its popularity is growing in the united states, brazil, canada, argentina and Indonesia.

bioDiESEl conSUMpTion
(millions of metric tons)

5.713

1.5 .905 EURopE U.S. 2007

.016 2001

(lifecycle analysis)

co2 EMiSSionS*

pETRolEUM DiESEl

b20 b100

biodiesel is a renewable, sulfur-free substance that can be made from vegetable oils. Most biodiesel is blended with traditional diesel fuel at ratios up to 20 percent biodiesel, which reduces carbon dioxide, carbon monoxide and particulate matter associated with petroleum-based diesel. *Source: National Renewable Energy Laboratory

aDm owns, wholly or jointly, biodiesel production facilities in germany, brazil, India, Indonesia and the states of missouri and north Dakota. our annual producTion
capaciTy is 450 million gallons.

450m

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engIneerIng tomorroWs alTernaTive fuels + indusTrial producTs

The biofuels ADM makes are expanding the fuel supply and reducing greenhouse gas emissions today. We arent stopping there. We believe additional advances and efficiencies in such areas as seed genetics, farm machinery and crop and fuel processing technology will result in more energy efficient, environmentally favorable and sustainably produced transportation fuels made from a greater variety of sources.

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our research efforts, aimed at identifying viable fuel alternatives beyond todays ethanol and biodiesel, demonstrate our commitment to a truly forwardlooking biofuels strategy. Among the most promising initiatives we are undertaking:

corn sTover research parTnership

In august 2008, aDm embarked on a research collaboration with Deere & company and monsanto company that focuses on the logistical hurdles associated with turning biomass into biofuels. this effort seeks to identify environmentally and economically sustainable methods of harvesting, storing and transporting corn stover the stalks, cobs and leaves of corn plants. these agricultural residues can be used as cellulosic feedstocks for biofuel production, as biomass to generate steam and electricity, and as animal feed. a successful outcome would maximize the value and productivity of existing corn-crop acreage and could ultimately lead to more efficient and cost-effective biomass collection and transportation methods around the world.

bioFUEl FEEDSTocK

STAlKS

lEAvES

GEnERATE STEAM AnD ElEcTRiciTY

cobS

AniMAl FEED

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o u r c o m pa n y, o u r r o l e

biocrude developmenT alliance

In september 2007, aDm forged a partnership with conocophillips designed to address the technical challenges involved in processing biomass including grasses, wood, and crop residues into biocrude, a type of renewable crude oil that can be made into gasoline in existing petroleum refineries and transported through existing pipelines, pumps and delivery networks. this would obviate the need to finance and create an alternative transportation energy-delivery infrastructure. the effort is intended to examine high volume, low-value biomass resources including corn stover and other residues as feedstocks for the production of biofuels. the collaboration combines aDms expertise in agricultural sourcing and conversion technologies with conocophillips leadership in petroleum refining and distribution.

thermochemIcal processIng

refInery

research
bioMASS

REnEWAblE FUElS biocRUDE

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advanced biofuels research

aDm and Iowa state university are working to determine the technical feasibility and cost-effectiveness of developing novel reactors to turn biomass into pyrolysis oil, a substance that can be used either directly, as heating oil in stationary applications, or refined into transportation fuel and other products.

bioMASS

pYRolYSiS oil

REnEWAblE FUElS

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o u r c o m pa n y, o u r r o l e

replacing The resT of The oil barrel

aDm is partnering to develop crop-based alternatives to other products made from petroleum. In collaboration with the bioscience company metabolix, Inc., we are producing a line of renewable plastics under the mirel brand name. and in Decatur, Illinois, we are building a plant to produce renewable propylene glycol a chemical commonly used in plastics and in the manufacture of cosmetics and pharmaceuticals. propylene glycol is also used as a de-icing agent on airplanes. the feedstock for our pg production is glycerin, which is a coproduct of biodiesel production.

These initiatives are pointing the way to next-generation bioenergy products with the potential to foster greater energy security and a healthier environment.

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the long roaD, the bIg pIcture, and The challenges along The way
Because we are one of the leading agricultural businesses in the world and a leading producer of biofuels, we are often asked our view of the broad future of agriculture and its intersection with energy. Can biofuels continue to play a significant, economically viable, environmentally sustainable, socially responsible role in the future of transportation energy? We believe they can and must.

Through innovation, agriculture has the ability to increase productivity to meet growing global demand. that ability will be enhanced by technological advances that will boost crop yields, reduce waste, improve processing methods, and reduce water and energy usage. While innovation will be realized season-byseason in coming years, there may also be temporary disruptions and volatility in food and energy value chains. Today, there are questions about the role biofuels play in rising food costs and food availability. many complex factors are involved, the most important of which are growing demand for agricultural commodities and rising energy prices. the u.s. Department of agriculture has stated that increasing petroleum prices have had about twice the impact on consumer food prices as equivalent increases in corn prices. food prices also have been affected by a weak u.s. dollar, growth in speculative trading in commodities markets, and other factors. the food and agriculture organization of the united nations has stated that biofuels production accounts for only one-tenth of the global rise in food prices. There are also questions about the availability of land for both food and nonfood crops. Increasing productivity on agricultural lands already in production should be a global priority. through advanced farming practices, seed traits and technologies, current agricultural lands not only can yield more they can also require fewer inputs such as water and nitrogen. as this evolution proceeds, we will have not just more crops but more crop residue as well, which may well be an important source of biomass for fuel production in the future. Equally important, biofuel feedstocks must be produced sustainably. aDm is a member of the roundtable on sustainable palm oil and the round table on responsible soy, forums that bring together diverse stakeholders to collaborate on standards and solutions to ensure sustainable, responsible growth.

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Government policies that support demand and encourage the investment and research needed to develop an alternative fuel industry can provide critical social returns by meaningfully enhancing energy security and environmental improvement. ultimately, we believe that the biofuel industry can and will stand on its own. As we innovate, the benefits of biofuels grow more pronounced. In recent years, for instance, the amount of energy needed to produce ethanol from corn has decreased significantly thanks to improved farming techniques, more efficient use of fertilizers and pesticides, higher-yielding crops, and more energy-efficient conversion technology. In June 2010, the u.s. Department of agriculture stated that corn ethanol yields 34 percent more energy than is required to produce it, including growing the corn, harvesting it, transporting it, and distilling it into ethanol. and with continual advances in farming methods and production technologies, this first-generation biofuel will become more energy- and resourceefficient. our view of the worlds long-term energy needs includes a vital role for agriculture. We share the view of many governments, energy policy experts and agricultural authorities that biofuels represent one critically important piece of an overall energy policy equation; we do not believe that biofuels alone can meet the worlds demand for clean, renewable and sustainable energy. biofuels, used in conjunction with other renewable and sustainable energy sources such as wind, solar, hydroelectric and geothermal, can make significant and enduring contributions to meeting the worlds growing energy needs, particularly in the transportation sector.

Meeting the worlds growing need for food, feed, fuel and industrial products made from renewable, sustainable sources is a challenge and a responsibility we are proud to accept. It will require dialogue, collaboration, innovation and a shared sense of possibility and purpose. To learn more, or to share your thoughts with us, please visit www.adm.com.

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every day, the 28,000 people of archer Daniels midland company turn crops into renewable products that meet vital needs. at more than 230 processing plants, we convert corn, oilseeds, wheat and cocoa into products for food, animal feed, chemical and energy uses. We also operate the worlds premier crop origination and transportation network, connecting crops and markets in more than 60 countries. our global headquarters is in Decatur, Illinois. for more information about our company and our products, visit www.adm.com.

archer Daniels midland company 4666 faries parkway p.o. box 1470 Decatur, Il 62525 www.adm.com

i405 100618