1. Rethink & Discovery - III “Opening Doors to Innovation and Learning” -- “A Thought Leadership Program” – Gary Peter – Innovation Panel North Carolina State University Pulp & Paper Foundation Annual Meeting -- October 10, 2002 – Raleigh, North Carolina – NCSU P&P FOUNDATION

2. 2 Program Overview  Introductory Remarks -- Background & Program Overview – Kathy Buckman Davis  Keynote – Richard Phillips  Panel Session 1: Innovation Pathways or Dead ends? – Ben Thorp Innovation Pathways or Dead ends? – Ben Thorp  Panel Session 2: Learning Doorways or Roadblocks? – Mike Kocurek Learning Doorways or Roadblocks? – Mike Kocurek  Summary & Wrap-up – Jim McNutt  Adjourn

3. Trends in Tree Genetics -- Coevolutionary Innovations in Raw Materials, Pulp and Paper Manufacturing Methods Gary Peter Research Faculty, CPBIS & Associate Professor, School of Forest Resources and Conservation University of Florida University of Florida gfpeter@ufl.edu

4. 4 Industry Innovations  Historical – Adapted processing technologies to fit natural raw materials Adapted processing technologies to fit natural raw materials  Current – Wood supply altered to better fit current processing technologies Wood supply altered to better fit current processing technologies  Future Wood supply and processing technologies altered in concert Wood supply and processing technologies altered in concert

5. 5 Co evolution of Raw Materials & Processing Methods: Low Lignin Trees  Positive Impacts -- Reduced cost of pulp production and improved pulp quality Reduced cost of pulp production and improved pulp quality  Negative Impacts – Reduced ability of mill to supply its own energy needs Reduced ability of mill to supply its own energy needs

6. 6 Low Lignin Trees & Energy Generation Technologies on -- Kraft Linerboard Costs CURRENT  Recovery Boiler Linerboard cost optimum closer to 20% than 15% Linerboard cost optimum closer to 20% than 15% Weighted pulp yield for 20% lignin 68% Weighted pulp yield for 20% lignin 68%FUTURE  Black Liquor Gasification Linerboard cost optimum closer to 12-15% Linerboard cost optimum closer to 12-15% Weighted pulp yield for 15% lignin 75% Weighted pulp yield for 15% lignin 75%

7. 7 Tree Selections Forest Tree Improvement Cycles Novel Traits Segregating Family BREEDINGBREEDING GENETIC ENGINEERING Elite Tree CLONAL FORESTRY ASEXUAL PROPAGATION

8. 8 Tree Selections Breeding Segregating Family Genetic & Physical Mapping Phenotyping Molecula r Markers ControlledCrosses Clonal Selection TOOLS APPROACHES Hybrids

9. 9  Preferred Outcrossing No inbreds No inbreds  Oldest pedigrees three generations  Quantitative traits Combinations of multiple genes/alleles Combinations of multiple genes/alleles  Asexual capture & propagation Distribution of Individuals # Genotypes Phenotype 5%

10. 10 Clonal Seedling Production -- Commercial Implementation ASEXUAL PROPAGATION 1 ELITE TREE 10 5 -10 6 ELITETREES ROOTEDCUTTINGS SOMATICEMBRYOGENESIS Genotype 1 Genotype 2

11. 11 Genetic Engineering Novel Traits Elite Tree Gene Discovery Genomics Genomics Gene Regulatory Elements DNA Transfer Selection of Transformed Cells Plant Regeneration Over & Under Expression TOOLS APPROACHES Introduction of Novel genes

12. 12 Key Barriers to – Improved Germplasm  Cost effective clonal seedling production  Rapid cycle breeding Controlled flowering Controlled flowering  Early estimation of phenotypes Molecular markers Molecular markers Models for fiber properties Models for fiber properties  Low cost, rapid, nondestructive methods for wood and fiber property estimation  Societal acceptance of genetically engineered trees Sterility Sterility  Gene discovery Knowledge of genes that when modified improve processing synergies and value of end products Knowledge of genes that when modified improve processing synergies and value of end products  Knowledge of synergies between wood, fiber, paper and processing technologies

13. 13 Alternative Co evolutionary Ideas for -- New Tree Materials  New wall layer arrangements to affect need for refining and influence fiber-fiber bonding Thin S1 layer Thin S1 layer Altered arrangement of S1 layer Altered arrangement of S1 layer  Super efficient wood and fungal pairs for ultra-rapid biopulping  Novel biosynthesis of alternative polymers in secondary wall that promote bonding