Assembly Select Committee on Biotechnology

Well, good morning, everybody. I would like to welcome you this Tuesday, August 13, to the Joint Hearing by the Assembly Select Committee on Biotechnology and the Assembly Select Committee on Green Innovation and Entrepreneurship. We have an exciting informational hearing today and a little bonus afterwards, a viewing for an event called, titled 'Powering the Future: Harnessing Life Sciences for Sustainable Innovation'. And today is really an appropriate day because August, of course, is Life Sciences Month recognized here in California.

So I want to thank some of our panelists in advance for being here. We really appreciate that California's the home to so many great innovative companies here that are working to provide in our educational institutions, in research and development, that are working to provide some of the advances that we see in life sciences. And we often think about those, sometimes just in the context of healthcare, but it's so much more.

And some of the innovations and the discoveries that have come out of life sciences companies right here in California are fueling a variety of other opportunities to be able to have some of the products, some of the deliverables that we're going to be able to overview here today. So some of the companies and organizations provide a lot of groundbreaking technologies which you're going to hear significantly impact a whole wide swath of our society.

Instead of some of our normal hearings that are focused, we're going to focus today on climate change and alternatives to fossil fuels and intensive products which promote sustainability. Today, we're going to have two panels. Our first panelist will discuss how their companies are part of some of these groundbreaking advances in sustainable innovation and what California will see in the future.

And our second panel will discuss how the life sciences are moving towards a sustainable future and how specific companies are taking actions to reduce or eliminate their carbon footprint. I would like to invite my fellow colleague here as well, who's a Member of our Fellow Select Committee, Gregg Hart, for any opening remarks.

Thank you, Chair Ward. I just wanted to say that California is really fortunate to have such amazing research institutions that we support publicly that have some of the best scientists in the world. And as a result, we've got spin off companies doing incredible work all around the state, solving problems that people can't even imagine are problems, which is exciting and a real opportunity for us to grow our economy and to solve really deepen vexing environmental problems. So excited to hear directly from the experts that are working in these fields and look forward to hearing your testimony. Thank you.

And with that, we'd like to welcome up our five panelists for panel one. As you get seated, I'll go ahead and introduce yourself, although we'll ask you to reintroduce yourself and advance to your presentations. From the Lawrence Berkeley National Laboratory, we have the Director of State and External Relations, Jim Hawley. The Program Manager, Doctor James Gardner.

From Mango Materials in Vacaville, we have the Chief Executive Officer, Doctor Molly Morse. From Checkerspot in Alameda, we have the Head of Strategic Relationships, Genét Garamendi. And then finally, back home in San Diego, from Geno, we have Ivanna Yang, the Head of Government Affairs. I will begin with Mister Hawley.

Thank you Chair Ward, Assemblymember Hart. Really appreciate the opportunity to be here. Am I on? Is this okay? So I'm Jim Hawley with Lawrence Berkeley National Laboratory in Berkeley, and I'll start by with this. While much of the focus on sustainability focuses on the energy sector, every day thousands of products which we use in our everyday lives are made, produced from non renewable resources using energy intensive processes, often with high toxicity. So what if we could make the same or better products in the belly of microbes?

Harnessing biotechnology. We've used these processes, like fermentation, for hundreds of years to produce beer and wine. Today's biotechnology, however, gives us the power to make many more products, many more valuable products. And instead of using carbon from deep underground and bringing it up and putting it into the atmosphere or into our oceans, we can use waste carbon, farm or low value farm or forest waste or solid waste as the feedstock for the new technology and to harnessing biology to convert low value materials into high value products. And with that, I'd like to introduce my colleague James Gardner with the lab.

Hello. Good morning, and it's a real honor to be able to speak with you today. I have just a few slides that I'd like to share with you, and I'm hailing, like my colleague Jim Holley from Lawrence Berkeley Lab, where we work in the biosciences area in a couple of different programs that I'll share with you. Let's see. With regard to today's overview, it'll be really a discussion of the bioeconomy writ large, the opportunity that biomass as well as biogas, as we'll touch on throughout the discussion that this panel will offer.

In moving from sort of strict sugars, you can think of corn ethanol in that vein, two more of this biomass, these low value materials that would otherwise really go to waste as a lost opportunity. We'll talk about how Berkeley lab is advancing the bioeconomy and how California can take advantage of all of the abundance around it.

The bioeconomy is already $1.0 trillion US sector, and it's only growing. It's projected to grow fourfold over the next 10 years, with a strong projection thereafter in terms of economic activity, as Jim pointed out, it's essentially taking materials such as sugars, but also biomass and other forms of carbon, and turning them into higher value products.

We've been doing this as a species for tens of thousands of years, if you can think of beer and winemaking. But in reality, these very same types of microbes can be utilized through biotechnology, through genetic engineering, to produce a wide variety of carbon products. It's all about pushing carbon through the various aspects of metabolism in microbes.

So it's really about utilizing the power of biotechnology, harnessing the modern capabilities of computing, and taking advantage of biomass that is available throughout the state. In terms of what biotechnology can do, there is no doubt that all of the technologies that we're referencing really have a dramatic impact on essentially every other sector of the economy.

There is little that biotechnology can't do in terms of addressing various aspects of the economy at a larger scale. And it's not just us saying this. There are a variety of different products and pursuits that are taking place now. McKinsey and Company, Boston Consulting, Schmidt Futures have all pointed to the importance of considering the power of biotechnology and its transformative impact on a variety of industries. You can think of sustainable aviation fuels, renewable plastics, and modern types of zero toxicity, pesticides, and so on and so forth. The power of biology to influence these sectors has little in the way of limit.

Of course, with the 2022 Executive Order, the White House itself has recognized the importance of biotechnology, and is looking to really leverage and support biotechnology and industrial microbiology through its efforts to bolster manufacturing, to really acknowledge the importance of biosafety and data integrity, and then to address the various aspects and facets of the infrastructure needed to really raise up biotechnology, or the bioeconomy, I should say more broadly, you can think of the various kinds of infrastructure that is needed.

You know, the steel in the ground, as they often say. You can think of workforce as well as market pull, and then the raw materials themselves, the biomass. As I referenced, from sugars to biomass, no one takes away from the importance of establishing kind of the foundation of the bioeconomy that corn ethanol has offered the United States and a wide variety of other economies around the world.

In reality, though, to really scale that, it's important to think of any kind of source of carbon, preferably those that don't necessarily compete for other important markets like food and feed. And so some 56 million tons of of waste biomass that is available in California alone can generate billions of tons or billions of gallons of jet fuel, billions of pounds of different kinds of bioproducts.

It can result in huge decreases in carbon emissions, as well as mitigate planned burns that are now being phased out, as well, of course, as wildfires that are a huge concern and only becoming more so. So all of these aspects really point to the importance of the bioeconomy as a solution that offers a variety of different kinds of ways of solving things that would otherwise be difficult to solve on their own. Coming together really results in a synergy that wouldn't otherwise be there.

Berkeley lab is advancing the bioeconomy through a variety of programs. The Joint Bioenergy Institute, the Agile BioFoundry, and the Advanced Biofuels and Bioproducts Process Development Unit has a cumulative annual budget of somewhere around $55 million, and each of these programs has a specific mission to support the bioeconomy in specific ways. The Joint Bioenergy Institute is about taking waste carbon as well as energy crops, and turning those materials into sugars that are available for producing things like performance and cost advantage jet fuel, as well as a variety of other fuels and products.

The Agile BioFoundry is really a powerhouse biofoundry of synthetic biology experts and capabilities across a multiple group of labs, and has established relationships with a variety of industry partners to again support biomanufacturing in ways that would otherwise not be available except for these public sector resources. And the ABPDU is kind of a storied pilot plant for the establishment of scaleup for a variety of companies, some of whom are in the room today. And we're really excited to tell the story that ABPDU has been able to offer the community.

I'll keep it brief, but JBEI's core mission really manifests itself, most recently in the production of so called bio-isoprenol acetate, which can be catalytically upgraded to a performance and cost advantaged jet fuel that will soon be tested in a business jet for evaluation as part of its ASTM certification path. And the ABPDU, as I mentioned, has been a jumping off point for many biomanufacturing startups and companies, some of whom are household names.

You'll see the Shell logo down there on the lower left, but many of them started out with really a small story to tell that has only grown bigger as they've been able to prove their ability to thrive in the marketplace. They come to the ABPDU to evaluate the scalability of their technology and to sort of de-risk that process so that they can go to investors and demonstrate that their technology has, in fact, met that threshold of ability in terms of scaling up and commercializing their technologies.

In addition to that, ABPDU has been involved in a wide variety of workforce development activities with both the UC's as well as various community colleges, Solano Community College and Laney College among them. We've alumed some 100 former staff and students and have been involved in producing a variety of open source resources that we publish on our website.

This is all about being able to take that knowledge in order to build that bioeconomy, build that workforce, leverage the knowledge and talent of sort of adjacent industries like food processing and so on, so that the bioeconomy can again take advantage of all of the great resources and I opportunities that are available to it in California.

And just very quickly, I'll mention that our most recent project is the Biocircular Valley.

This is a $10,000,000.05 year Schmidt sciences project through their virtual Institute of Feedstocks of the future, where we will be establishing what is essentially a minimum viable value chain of activity from the grower all the way to demonstration of new products that take advantage of a variety of data inputs from agronomics, chemometrics, lab based research that will take place through the conversion process, culminating in a publicly available bioeconomy cartography tool that the entire community can take advantage of and will support by virtue of its very design, the inclusive kind of involvement of community Members, small business owners and neighbors, and anyone who would be influenced, both in terms of potential workforce, as well as just the General impact on the bioeconomy and its influence in local communities.

So we're very, very excited about that effort alongside our UC partners beam circular in the north San Joaquin Valley and a variety of other stakeholders, as well as this very new pursuit that we are going after right now, where we will soon be applying for a $160 million NSF grant.

And we will braid those funds together with things like Bioserve, as well as other resources to again catalyze that development of the bioeconomy within the region and allow it to serve as a model more broadly across the state and across the country.

So here we are really establishing the relationship between the incredible innovations that take place in places like San Diego and the Bay Area and leveraging those for, for the development of the bioeconomy that involves farmers, that involves individuals who would be closer to the biomass, if you will, so that we can sort of build that circularity and do so with the involvement of federal dollars, as well as dollars such as what we're receiving from Schmidt sciences.

And let's see. So in terms of prospective policy levers. We're excited by the involvement of California and the commitment that California has continued to show over the decades.

It's interesting to see programs like the US Department of Agriculture's bio preferred labeling program, as well as ways in which investments that the State of California might make in the way of accelerating biomass conversion research, as well as supporting biomanufacturing infrastructure as well as workforce development in an effort to more strategically expand the economy and expand the workforce overall.

I hope I haven't taken too much time, but I'll be happy to answer any questions.

No, thank you. It's a very good overview. Next, we will look forward to Doctor Molly Morse with Mango Materials.

Thank you everyone. It's great to be here. My name is Molly Morse. I'm the CEO and co founder of Mango Materials. And we have a dream, a vision to change the plastics industry. So what we do is we transform biogas. Now, methane is a potent greenhouse gas. It's produced from wastewater treatment plants.

It's how they treat water, it's how they clean it. And we take the methane fraction that's naturally occurring in this biogas. We feed it to bacteria. The bacteria eat the biogas, they eat the methane, and they produce this biopolymer inside their cell walls. Now, this biopolymer is naturally occurring and we formulate that into specific pellets.

And now these pellets can get melted down and are a replacement for everyday conventional plastic. So what we're doing is two things. One, taking this potent greenhouse gas and converting it to biomaterials, biopolymers. And two, we are replacing existing, often polluting plastics with naturally occurring alternatives that are designed for the naturally occurring carbon cycle.

So these materials that it's called pha polyhydroxyalkanoate, that's the type of biopolymer that we make. And you might be familiar with PLA polylactic acid, which is the most widely commercialized biopolymer currently out there. But we make is phA. And the unique thing about Phas is that they can be prone to enzymatic attack.

They can biodegrade in many environments. So PLA needs, generally needs industrial compost facilities. But PhA will biodegrade in industrial compost. But unlike PLA, most plas PHA can also biodegrade in backyard composts in the marine environment if it's accidentally disposed of and littered there. And it can even biodegrade in anaerobic environments.

And anaerobic environments are like modern waste facilities. And the end product of these anaerobic biodegradation processes is methane. So we can actually use the feedstock to completely close the loop on carbon with these materials. So we've been scaling this up.

We make the formulated pellets that someone else melts down to make things like a soap dish that's currently sold in stores and online by a company called Naturae. This material can go into fabrics, it can go into film, it can go into toys, it can go into all sorts of different plastic substitute type applications.

But we need to scale this up. We need to make this bigger, to make it a reality. So we are currently located at the Vacaville wastewater treatment plant, not too far from here at easterly. We use their methane biogas that's currently being flared. We use that as our feedstock. They're on site to make our biopolymers locally.

So you can imagine that this biogas, which is often overlooked as a feedstock, but it's the carbon our civilization has. Like, it's what we're producing. It's this waste carbon. And we can use biology and biomanufacturing to transform this carbon that we already have into the carbon that we need, which is things like materials and products.

And so this is part of the local bioeconomy that we are looking to scale up in Vacaville, and then ultimately throughout the world. So we are building a bigger unit in Vacaville at Easterly, going through the permitting right now. And this has been a long term process for our company.

So our technology was originally inspired by some of my PhD research. And me and my two co founders applied for a $150,000 grant from the National Science Foundation. It was an SBIR grant, small business innovation and research. This was the first funding into our company in 2012, and it was a glorified science project.

Like me and my two co founders were like pipetting in the lab. And since that time, we now have this fully operating launch facility in Vacaville.

We have shift operators that sample the bioreactor and make our products, but we're ultimately competing with existing and petroleum based plastics that's produced really cheap at really high volumes, like at single locations. And our vision is this decentralized bioeconomy, where we use local carbon to make the materials that we need.

So it's challenging, because we're competing with this Low cost product using very different. Like, they have 100 year Head Start on us, but we are looking to completely change the way materials are made. So this is a long term dream.

We're focused on getting more products into market, changing the fate of materials, and ultimately, like, at the end of the day, any sort of thing that can incentivize either local production or using waste carbon as a feedstock, or that can help with materials that are designed for end of life or designed for the naturally occurring carbon cycle.

It's actually super tricky because this is innovative materials, it's an innovative manufacturing, and different materials can biodegrade or be industrially composted differently. And so this is sort of the wild west right now of bioproducts, which is why I'm here, because I'm trying to do education and outreach to explain that, like, there is a future there.

We're trying to build it. It's really hard. And we're up against something that's been very large and very incentivized for such a long time. But we're very fortunate to be here in California and have all the different programs that we've had that have sponsored us to get to where we are to date.

And our big vision is to transform this waste material, this waste methane, into this completely circular, closed loop process. So you can quickly see a picture of our launch facility there, where we take methane on site and we hire local people. Often we're sort of reskilling them for the biomanufacturing economy.

But that's in part why we're in Vacaville, because there's so, such a focus on next generation biomaterials and a lot of incentives to be there. So with that, I would like to thank you for your time.

Great. Thank you for the presentation. Next we have Janae Paramedy with Checkerspot.

Thank you so much. Let's see if I can get this going.

I had a hard time getting a little sticky. You might have got the last battery out of it. Yeah, seemed like it was acting strange.

No. Should I just go try again? zero, okay.

Zero, that'll do it.

Clicking before time.

I thought we got the last battery out of it.

Yeah, I blame you for using the batteries.

Yeah, we'll do Shorter slides next time.

Awesome. Well, it's so great to be here. I'm going to just pop in. My name is Janae Garmindy, and I lead strategic relationships for Checkerspot. And it is truly a pleasure to be here today. And I want to thank you, Chairman, for making this happen and for reaching out to new technology companies like Checkerspot.

And I also want to say thank you to the national labs for being here today, because without you guys, a lot of us wouldn't be here.

We, too, received a $40,000 grant SBIR that got us kicked off the ground and into the ABPDU, where we've been able to scale this kind of incredible technology that we are super excited about. But before I get into it, let.

Me ask you, too, if you can pull the microphone just a little closer for those viewing on TV.

Please, please, please. So before I get into it, I'm going to just kind of set a stage. Oil is everywhere. It's everywhere. It's not just the fuel. It's not just the airline fuel. It's everywhere. It's in the carpet, the table lacquer, the seats that you're sitting on, the. It's everywhere.

And oftentimes, people don't realize that with big oil, they've already written off fuel. They know where the world's going. They see electrification, but it's all of these other things that they have been in and have been growing into for 100 years with amazing subsidies that has made them so stuck with all of our materials.

So what I'm going to talk about today is using biotechnology to create new materials and better ingredients for a sustainable future. At checkerspot, we make oil. Our process is really simple. We use microalgae. And the reason why we use microalgae is because it is the world's original oil producer.

Every single higher plant has evolved from microalgae, and that means every single oil producing higher plant has evolved from microalgae. And we'll get into the science a little bit further. Small amount of science, but this allows us to use microalgae in fermentation, where we take sugar and we feed it to the microalgae in fermentation.

And instead of like with yeast, where you feed it sugar and it makes beer or it makes alcohol, we feed sugar to microalgae so that it gets fat with oil. So imagine, like, gazillions of little tiny microalgaes just getting completely fat and happy within the fermentation tank.

After fermentation, we take it out, we dry it, and then we extract the oil just like they do from seeds all over the world every single day. This process takes a matter of days. Super transparent, super efficient, and it allows us to produce exactly the oil that we need for the products that we're going to make.

And so we make everything from incredible food oils that are now in seven Bay Area restaurants and quickly growing into sprouts distribution.

So algae cooking club is taking it nationwide, to oils that also are used into the production of new plastics, new materials, even wicking finishes for our clothes that we wear, which are also currently finished with petroleum. Why biomanufacture? Algae oil. This is on demand production of oil.

So when we think about things like supply chain security and the ability to produce on demand, what we need, when we need it, this is what this technology does. And again, it's not just one kind of oil, it's multiple kinds of oils. So faster process, completely traceable, not reliant on water and land. Pretty easy to understand.

And it's fermentation. And guess what California is really, really good at, especially Northern California. I'm a little bit biased. I will say fermentation. We ferment a lot of things. And as we look to the future, and I wanted to give a shout out to a colleague that I see in the audience, biomade.

This is a group that California should definitely know, part of the Bioeconomy Movement on the national level. Biomade has actually looked at California and selected it as one of the six states to be able to compete for biomanufacturing plants on a large scale. So, things to look forward to in California, perhaps. So what is checkerspot?

Checkerspot is actually based in two locations. Our molecular foundry is in Alameda, California, wonderful island off the coast of Oakland that we love and adore. And also in Salt Lake City, where we do our large scale up of our materials, developments and formulations that we send to a whole bunch of other different companies.

Salt Lake City is also where we make our skis and our award winning snowboards. And we're also starting to make a whole bunch of other things as well, which I'm excited to show you in the next room after the presentation. So our process is really, really simple.

It's really vertically integrated, so we go all the way from molecules. So starting with the algae, sometimes we apply materials science and polymer chemistry. We then make things from the materials that we've created, and we take it all the way to the consumer.

And the reason why we go all the way to consumer is because you have to tell a story of what is possible. You have to make it real. And in this day and age, designers and companies, they don't want to use their grandfather's inputs. They are done with petroleum, they're done with it.

So wherever they can push it out of their formulations, of their products developments, that's what they're looking for. And they're talking about using these new materials, like Mango is making, and geno is making and checkerspot is making. And that's the exciting thing. It's a movement that is starting. Okay, this is the most science y slide I've got.

So here we go. Oil. There are three levels in natural oils that we have control of. The first is chain length. The second is functional groups where the fatty acids are based on the triglyceride backbone. And the second is unsaturation or saturation.

All this means is that microalgae is the perfect blank slate to be able to make all of these different types of oils. So, for example, we can make a palm alternative using this technology. And most recently, with the ABPDU's help and the national lab's help, we've had an incredible breakthrough in human nutrition.

We have produced mother's milk fat through microalgae. And what's amazing about this, the structure of it, is that it allows infants to metabolize nutrients more efficiently. And right now, the US doesn't have an input for this really important fat that infants need to thrive. And unfortunately, the US doesn't even mandate it in our infant formulas. China does.

So with this development, we're super excited to bring this to market. We're already partnering with a lot of infant nutrition companies who are interested in this, who see the promise around it, and we would be excited to share more with you around those nutritional developments in the future.

So this is a slide just to show all the areas that our oils go. So our high oleic is in industrial materials and food and nutrition, in personal care. And Opo, which is the mother's milk fat analog that I talked about, is also extremely valuable in these areas as well. We already have five materials on the market.

These are being developed at large scale and are going into a multitude of different products and brands. And again, next door, you'll be able to see, touch, and feel some of our products.

And of course, the pipeline coming with these new tools and new materials, including our most recent announcement with another company in the biomanufacturing space, where we're going to be developing high temperature, fire resistant PFAS free foams for a wide range of applications. So we're super excited about that in areas like construction and shipping and flight and aerospace.

And just a smattering of some of the brands that we've been excited to be working with from companies in Europe, AAK, one of the world's largest natural oil distributors, to DiC in Japan, to SWS in Dubai. That's a kite board that you see in that picture, and you'll see one next door.

Duotone is the brand that is using our materials in their kite boards, and we're super excited to share that. They actually just won the world championship on a board that had our materials in it, hand cooked skateboard wheels. You could just see the amount of places that this technology can go. Thank you so much for your time.

I appreciate it.

Great. Thank you. Very inspirational. And our last panelist for this panel is Miss Ivana Yang with Jenno.

Thank you so much, chair warden, should I wait a moment to.

Okay, ready?

Hi, everyone. My name is Ivana Yang, and I am head of government affairs for Gino, based in San Diego, California. And we want to thank chair Ward and also the California Life Sciences Association for the opportunity to share a little bit more about our company during today's important hearing.

So I just want to start off with the question, which is, where do the products that we all use every day come from? And unfortunately, the answer in a lot of cases is that we simply don't know.

At the same time that consumers are demanding greater product transparency, brand owners are telling us that it's very hard to trace down their supply chain. And we work with partners like Unilever, Lululemon, Cal, and L'Oreal, among others, and they tell us that not being able to trace down their supply chains is creating massive risks for their brand.

So just for example, Unilever, Cal, and L'Oreal are all personal care product makers that use palm oil in their products. Conventionally produced palm is often associated with child labor practices. So it's harvested using slash and burn method, which is terrible for the environment.

And the EU has actually passed legislation that would ban the import of raw materials that have been linked to deforestation. Palm is one of these raw ingredients, along with cocoa, timber, rubber. So brand owners like Unilever, like Loreal, who sell in the EU, now have to find alternative sources for these raw materials.

And this legislation is set to take effect by the end of the year. So either they need to provide auditing of their supply chain, which oftentimes they can't do, or they need to look for alternatives like Gino. So another question is, what are the products today largely made out of?

And like the other panelists have mentioned, it's largely made out of carbon. And 96% of all materials are made from carbon coming out of fossil fuels. Unfortunately, we know that fossil fuels is a driver of geopolitical instability and also a driver of the climate crisis.

Fossil fuels make up everything from household cleaning products to personal care products to our apparel, even maybe the foam in the chairs that you're all sitting in today.

So the role is actually undergoing a massive energy transition where the demand for carbon as a source of energy is coming down due to the massive growth of renewable energies, renewable materials like the ones that we all make, and electrification.

So the search is on for more sustainable sources of carbon to displace conventional hydrocarbons in a $4 trillion global industry. And doing so will De risk supply chains and bring greater transparency. So this is where geno comes in, where I think these two slides are switched.

So we buy ourselves as a sustainable source because we make the same drop in chemicals that make the materials we use every day. Not from carbon, not from fossil fuels, but from plant based feedstocks. So primarily corn. We can also use wheat, sugar cane and sugar beets.

Through the process of fermentation, we transform those raw ingredients using E. Coli into building blocks for everyday goods. And again, we're a drop in solution. And we sell our chemicals at cost, so we're no more expensive than the current incumbents. When you buy Geno's ingredients, you also gain greater supply chain transparency and visibility.

And of course, we have substantial sustainability savings. So our ingredients bring up to 90% greenhouse gas emission savings compared to their carbon alternatives.

So a few of the products that we help power, so we don't make these products, but we work with brand owners like Dermalogica. So we make an ingredient called butylene glycol. Trained name is Brontide. It's used in a ton of personal care products as a surfactant, as a kind of a cleanser.

So Dermalogica decided to use our ingredients because it provides greater carbon savings. But also just personally, I would rather use a product made from plants than from fossil fuels. And then Lululemon is another brand owner we work with, and that shirt is actually one that we worked with them to create last Earth Day.

And Lululemon has made a commitment to their consumers that they're going to be carbon neutral by 2030. Of course, the way to do that is to change where they source their raw materials. Lululemon uses a ton of nylons, probably in every single one of their pieces of apparel, and they want to transition to bionylon.

So we make an ingredient called caprolactam, or CPL, that's a precursor to bionylon. And that shirt has 38% bionylon made using Geno's technologies. And also, if you watch the Olympics opening ceremony this year, you'll see that the Canadian Olympics team is outfitted by Lululemon.

And their track suits that they wore during the opening ceremonies contained some of Geno's bionylon. Another technology that's actually commercially available now is Bio BDO. Again, that's a precursor to apparel, electronics, automotives, single use plastics. And most of the BDO in the world is made in China using coal power technologies.

But we are actually powering the first bio BDO facility in the US that's being built by Cargill out in Iowa. And that BDO is one of our ingredients that does have up to 90% greenhouse gas emission savings.

So, just to summarize, what sets Genome apart, it's our advanced bioengineering platform, using the power of fermentation to transform feedstock into everyday materials. And we scale so that we can be drop in replacements. We're not a niche product, and our sustainability impact is substantial.

So, just to provide an illustration, if we replaced all the conventional products on the market with products that genome makes currently or is in development, so that's CPL, HDO, but glycol, fatty alcohols, and others, we can reduce the emission of 85 million tons of carbon dioxide annually.

And that's the equivalent of taking 18 million cars off the road every year. So, lastly, I just want to mention a few of Gino's policy goals and they fall into largely three buckets. The first is we need to bolster us biomanufacturing infrastructure. And Janae mentioned all the work that biomade is doing and also Berkeley labs.

But we need to take greater steps to make sure that we have more fermentation facilities in the US. So Gino, like a lot of other companies, do all of our bench work in house in San Diego, California, at our innovation center. But before you commercialize, you go through a step called demonstration.

And unfortunately, there's just not the number of facilities in the US for us to be able to do it here. So we do most of it in Europe and then once we do the demo work, then we're ready to commercialize. And it's very difficult in this current economic climate to source the financing from private equity.

It can cost half $1.0 billion to build one of these facilities. And that's why we're looking for governments for, you know, for help in the form of loan guarantees, direct grants or tax credits. And there is movement on the federal level to help companies like us, which we're very grateful for.

But we do need more programs in this area. And like James mentioned, we need to also create government demand pull for bio based products as well. We do. We all have brand partners that we work with, but the government is the largest customer in the world and having government as a customer would really help validate our products.

So we're working on the federal level to revamp the bio preferred program, which is a government program that's meant to mandate bio based product purchasing where possible and to give a preference to bio based products. But unfortunately, since its inception, it's not really worked very well.

So hopefully in the farm bill this go around, we'll be able to fix that program. But we would also love to see similar procurement programs at the state level because again, Geno's products are not at a greater cost than conventional products.

So we think that procurement officers are selecting between bio based plastic utensils or utensils made from petroleum. They should choose bio based where possible.

And then lastly, we want to help create policy that moves the needle on the carbon advantage that our companies provided and that includes potentially tax credits for renewable chemicals, just so we can compete with the incumbent multinationals that have been around for a long time.

So we know that California has always been a leader in sustainability policies that are then adopted later on at the federal level. So we look forward to working with this Committee on creating these policies and to help California companies, like all of us, continue to innovate. Thank you so much.

Great. Well, thank you. And thank all of you for the presentations. I was searching for the word that kind of encapsulates what we've taken in in the last 45 minutes.

And I can't think of a better word than amazing, how amazing it is that you've had some of the foresight to think about a new approach, to be able to use materials in a different way, to produce and be able to support the commerce that we need out there, but in a way that also is simultaneously meeting climate goals.

Hopefully, just the basis of the work that you're doing, you know, will catalyze a lot more switch in what we're seeing in our approach to manufacturing and the product development. I wanted to kick it off with my co chair of the Select Committee on Green Innovation entrepreneurship, maybe for some of her thoughts and questions.

Well, thank you, chair Ward. And let me start by saying thank. Thank you for convening today's hearing and for this just incredible conversation. I'll just start by saying I was super excited coming into the hearing, and after just the past 45 minutes, my mind's totally blown by the work that you and your teams are doing.

I think when we think about the climate crisis here in California, we are doing everything possible to deliver on our climate goals, take climate action, and there's a lot of challenges, lots of challenges. But there's also so much opportunity, and I think particularly for California. Right.

California has been the birthplace for the breakthroughs and the innovations that have shaped our modern world, whether that's technology breakthroughs or biotech life sciences breakthroughs.

And there is every reason in the world that we should be the birthplace for the breakthroughs and the innovations that are going to both enable California to deliver on our climate goals, enable us to globally deliver on those goals, and also set a foundation for really the next generation of economic growth and development for the state.

So kind of writ large. This topic is so, so exciting. I think we could spend like all day. We'd spend all day here. Okay, so let me just, let me try to ask two quick questions. I know there's a ton of questions from other Members as well.

So the first, I would like to understand a little bit about the, I guess, kind of investment in financing landscape right now. And you started to touch on it a little bit. Sounds like not so good. We'd love to just understand, like are VC's investing right now, what's happening on that front?

And then we talked a little bit about the policy levers that we can pull to help your companies succeed. And I think for me it's most important. A, we want your companies to succeed, b, we want you to succeed in California.

So I guess what's like, the number one thing that in the next year you would like to see California policymakers do, a, to help you be successful, and b, to help you invest and grow in California.

Let me take the fundraising. So I just got back from a two week trip to Asia. Fundraising is really hard. First off, I want to say Mango materials is super fortunate. We have had a ton of grant, non dilutive funding from all sorts of programs. We also have venture capital backing as well.

So very happy with our current investors. However, the current climate is very, very, very rough. It's all going to AI biomanufacturing that needs some infrastructure and is competing with plastics. They're like, yeah, look, I mean, my company needs tens of millions of dollars to get to the next stage.

And the investors are like, look, I can put half a million into this app, this app, this app, this app for like just a small fraction of what your company needs. So we're investing in AI. I'm hearing that again and again. Other countries are looking at it differently.

That's why I went to Asia, where the plastics problem is very at the forefront as well. And they have a little bit of a longer term feel. So that being said, it is really hard. So anything.

To answer your second question, probably all of us would benefit from some kind of, like, bio preferred, but something like that, that can level the playing field.

Like a price on carbon, or also, and I know this can be controversial, but brand responsibilities of materials as well, like this is very specific to mango, but there's a lot of confusion around end of life of materials.

So if something is labeled industrially compostable or even like the word biodegradable, that's why I said, prone to enzymatic attack, which really means biodegradable. But this is like a controversial word and it shouldn't be. But there's so much confusion out there and challenges, whether it's with recycling, which we should totally do. We should recycle. I was so.

I've been passionate about recycling since someone visited my second grade class. That's why I'm into this. But unfortunately, we're not going to recycle our way out the plastic problem. So anything we can do to help level the playing field, to help us get offtake agreements, I would say that.

I would say thank California there's programs to keep, like, electricity prices down, at least for the first few years while you start. Those sorts of programs are so helpful for us. So I can talk for hours about this if you want to talk more.

I'll pass it over. That's so great. So I would say yes to everything you just said, and I think that California has a really unique opportunity right now. And I want to talk about the manufacturing opportunity in particular. You just said that California is the birthplace of so many incredible technologies.

But what happens time after time we develop it here and it goes somewhere else to get manufactured.

And I think in this world, where we are rethinking supply chains, where we are rethinking the inputs into the products that we are making, California has such a unique opportunity to lean into the work that our national labs are already doing, to think about how California can be a leader in biomanufacturing.

Because right now everybody looks to the Midwest, they're like, zero, they're the fermentation guys. They don't have to be like, California can show the world how to do things the most sustainable, the most advanced way here in California. So imagine we create a jewel box of a manufacturing plant, an opportunity here that takes in waste feedstocks.

I cannot wait for these to come along. Please hurry up so that we can put them into our fermentation tanks, feed them to microalgae, and make oil for food, make oil for materials, and do so many different things. And so what do we need from California? We need the open arms.

We need the enslavement incentives to pull what we're producing through into commercialization. Yes, bio preferred. But I think California can do it better and can actually show the Federal Government how a bio preferred program can work and really be super successful.

I second everything that Janae just said on the bio preferred program. On the financing side, I would say that companies like us, we don't need government support forever, and that's not our goal. It's to build these first of its kind facilities, like a first of its kind capital Actam facility.

Because once you get that first facility online, venture capital loves to be the first to be the second to Fund.

So once we get that first facility, and they see that we have, you know, optic agreements, we have purchasers, maybe government has come on as one of our customers, then they're going to be much more willing to invest in 2nd, 3rd, 4th facilities, and they're going to be cheaper to build, too.

Great. Thank you, Assemblyman Bauer-Kahan.

Thank you all for being here. I couldn't agree more with both the chairs. Thank you for convening this hearing and just the brilliance in this room and what California is capable of palpable.

I wanted to highlight, and I'm really happy Lawrence Livermore is here, because one of the things that I have seen in the Livermore Valley, which I represent, is the ecosystem of the lab, the open campus of the lab, which allows for lab genius to then sort of start to incubate into the world.

And then the city, which, working with Gobiz, opened an incubator outside the lab, where then they go next, and then they incubate. And then we see them starting companies in our communities.

And even in the six years that I've been representing Livermore, I've seen that ecosystem succeeded, and it is creating an economic growth in the region, a talent base, all of the things that we want to see in California.

But I will agree with some of what is said in the manufacturing space is we see those companies start, they sort of begin to manufacture there, and then they get big enough, and that's where we see them expand elsewhere. Right.

And so I do think, I was going to ask a question about manufacturing, but you already touched on it. I think it's critically important that we, and I want to say that the incubator in Livermore was started in partnership with Gobizd. My understanding is we are doing less of that.

And so I think it's really important that we as a state do think about how we can partner with these opportunities to build those. I mean, it's run by the city, city level incubators that allow opportunity for small businesses to really get started in our backyard because it is so hard, it is so expensive.

And so when the city gives you space to be in community, also with other brilliant startup founders, it really is the perfect environment for these companies to start. So we have a role there, then. I think we talk all the time about how we don't have manufacturing in California anymore, and we need to bring it back.

And part of the reason we need to bring it back is because those are great jobs for Californians, and we need jobs at every income level in California. And what we've seen is that people in lower income jobs have to leave California because they can't afford it.

And so the more we can build an opportunity for people to have those good jobs in our community, the better off we are. And so, you know, I think there's such opportunity here to do all the things that Assembly Member Petrie Norris mentioned.

But I do just want to reiterate the goal that we have to help this ecosystem thrive, because I think the state really needs to double down.

And I know we've had conversations about dialing back some of the incentives we have for oil companies, which I think makes a lot of sense as environmentalists, but I think there's opportunity to, instead of dial them back, shift them to the priorities that we care so deeply about. So something I would be surprised supportive of. Thank you.

Thank you. So, Member Boerner.

Yes, I want to echo my colleague's statement. Thank you to the chairs for convening us, and thank you for these great presentations. Always inspiring to see what we're able to do when we want to solve a problem.

And touching on what somebody, Member Bauer Kane just mentioned, is there a difference in the workforce you need in order to be successful in California, and what training do they require, and how are you working with community colleges to achieve that?

I'm happy to jump in on that. So it's a super exciting time right now within our systems, within the community college systems in particular. So there are biomanufacturing programs that are amazing, that are popping up right now.

We have one at Miracosta. You're welcome.

Love this Vacaville. Thank you. And in Vacaville, but I represent Maricosta, so it's cool because Solano county and Laney College, we have actually hired directly from the community college into our biomanufacturing fermentation processes. 100%. And these students are actually getting snapped up before they even graduate. Like it's that that needed. So 100% more on all of that.

I would just say the diverse workforce and just the type of workers here in California is one of the biggest pros to companies like us staying here and doing manufacturing here. We're in your district, assuming bird borner.

And we hire, I know we hire a lot of our scientists from UCSD, and it's a really great pool to choose from for Fortranet.

We are wonderful. Thank you, Miss Porter. Senator Papan.

We're on the subject of wonderful. First of all, welcome. I apologize for being late. I think touching just a little bit on this idea of manufacturing. What I've observed as things escalate along is that it takes up less of a footprint.

And I come out of local government, the Bay Area in particular, I represent South San Francisco, got a lot of biotech, same thing with Foster City. And it has been difficult on the manufacturing part because of the footprint it takes up in a rather thin peninsula with water on many sides. Et cetera.

You got a little more out in Livermore where you are. So I would just say if we can, as you go along in your. And by the way, thank you so much for the emphasis on where the financing comes from and what your tricks are and AI getting more than what you're getting.

And believe me, that was not lost on me. So I appreciate that bird's eye view and that venture capitalists are very brave when it comes to second investment. I love that.

But anyway, I don't mean to get off on that tangent, but nonetheless, I feel like if there's one more selling point to keeping manufacturing here and enhancing manufacturing here, it is a smaller footprint. And I'm very excited. I mean, we have, one of the major things that's being actually manufactured in the Bay Area right now are drones.

And they don't take up a lot, but it's, you know, gangbusters. And it's great to have drone manufacturing here because of safety reasons and security reasons and all that. So I would just encourage.

Because land is such a commodity in California and we're trying so much to do with our land, what we can for housing, but jobs have got to come with it. So anyway, I would just. You're looking to me for. I know, tremendous advice.

But I would say as we go down the path, if that footprint remains small, it is certainly more doable in some of these communities. So thank you for all you do. I've followed some of it with great anticipation. Charm is one that's based in San Francisco.

I know some of them were Ting left us, but similar with biofuels and whatnot. So I applaud you and all your recycling. It makes my heart go pitter patter. Thanks for being here.

Thank you, Miss Papan. Senator Gregg Hart.

Yeah. I just want to add to the enthusiasm and the excitement about the innovative things that you're doing and fully understand how a bio preferred policy purchasing strategy in California would be really helpful to the industry.

But it also occurs to me that the legislation that we passed last year that talked about disclosure of greenhouse gas emissions in the supply chains of companies might also be something that would be helpful to you. And I wanted to know your thoughts about that.

We've been struggling a little bit with the governor's office and implementing that visionary legislation, but in talking about the transparency of the product supply chain that you provide and offer versus fossil fuel companies seems like a big advantage strategically for you if that were in effect.

That's brilliant. Thank you.

I'll take that as a yes. Thank you, Mister Hart. Yes.

I also had SB 253 kind of noted, as well as the very intense discussion that we have in the trend setting place that California is trying to find itself in policy making, to be able to make sure that we're being accountable, we're monitoring, we are committed to reducing our totality of corporate greenhouse gas emissions. That any partnership.

Right. They wonder how can we do this, especially as we go down to the next tier and we're trying to calculate supply chain based emissions. And you have options, right.

And there might be an opportunity there, as much as we're trying to think about government subsidy and the ability to maybe fine tune some of our work, to be able to go right back to the private sector and be able to find that partnership there that gets maybe even above and around vc opportunities, but working directly with companies to help accelerate your work back in house.

Yes, we had a very difficult budget year, and so we are working really hard to be able to support the tax credits and the incentives that we need out there. And hopefully, if we've turned a corner, if things kind of stay better, we've done a lot of hard work this year.

We can think about bio preferred options as well as, you know, maybe some set subset or carve out. This has been enlightening. So that can definitely help inform us as we're thinking about future.

But I would invite you to stay engaged with us as well as you're seeing us approach those next, you know, both policymaking years in 2025, as well as budget conversations for these kind of elements that we might be missing.

I wonder if there's existing funds out there like the Greenhouse gas reduction Fund or other programs that are out there. Do you find that you might qualify for maybe some of these emerging funds that are, that are getting pretty robust here in California, if I might add?

I think there's a lot of concern about biomass combustion, but this is biomass to products. It's a totally different process. And it would be really important, I think, to distinguish that. I also want to assure you we are going, we've got the Schmidt foundation funding, we're going after federal funding.

And I would say this really needs to be an all California strategy. We have Southern California, San Diego, La. We have Northern California, and we have areas all throughout California have a ton of biomass, the mountain communities with the forest treatment and all of that. And we are all working together.

And I think what you can do to encourage us to work together and to build an all state strategy, I think would be extremely helpful. And because we were a lab that is a man. We love manufacturing. We're materials scientists. We're bioscientists.

The idea of watching these companies start at the lab and we top out at our 300 liter facility. And then when they went their 100,000 unit facility that they have to go to the Midwest.

We are working on trying to get a unit in, working with Merced and beam circular in north San Joaquin, get a manufacturing facility here. If we can do that. That's a huge step forward for California. And that might not even be any state money at this point, if we can get the federal money.

So there's a lot of opportunities. We would love to stay engaged with you because I think there will be some. Let's see how some of these applications play out. But we're, you know, there will be areas for sure where we very much need your help and partnership to move forward.

But I think an all state strategy here we have. We have assets and smart people and companies across the state. This is one that we can win.

Thank you. And I'm wondering, getting off of financing and subsidy need that's out there on the regulatory side of things, is there any disadvantages that you're seeing there that maybe are not afforded to petroleum based industries?

But do we have any additional barriers that you've had run into that we should be aware of to take a closer look at that would help you grow?

Yeah. We have concerns with the end of life legislation that's happening, specifically surrounding compostable materials that are really best intentioned to decrease single use plastics. But in that process of trying to do that, it also makes investors nervous that that market is limiting and single use materials which, like, that's actually not what we're doing right now.

Things like straws and cutlery. But you could imagine our material could be great for that. But we're staying away from that because there's so much concern surrounding end of life in the State of California. And it's actually really sad because it makes investors nervous. And that wasn't the intention.

Like, yeah, we shouldn't be using ancient petroleum polluting plastic to make a single use straw, but our material would be great for that.

And so that's a huge problem right now that, like, all the PHA companies are trying to figure out what to do, and it goes back to the, like, composting as end of life or like, what we're proponents of is like, anaerobic digestion.

Can you imagine if we could take all our trash bags and all our food packaging with our waste food and, like, grind it up and put it in an anaerobic digester where we actually have extra landing capacity. That's the one place we have it, is at wastewater treatment plants. Make more carbon and use it on site.

So, yeah, a lot of concerns around compostability.

Got it. And I know this isn't in the state's purview, but FDA, is that something that you run into as well? Maybe above and beyond what competition would run into?

We do. It's not a challenge. Like, we need FDA food compliance for food contact, but it's not a challenge for us.

Okay. I think I had one more question on my mix of notes here, because it's been fascinating. And I'm kind of, like, just trying to sort of map out a lot of different areas to be able to explore here. zero. In the innovations that you're talking about. And I'm thinking carbon capture came to mind. Right.

Instead of releasing methane through a flare, you're actually using it. We've had ongoing debate and strategy about using carbon capture, sequestering it, possibly even getting into the ground or otherwise somehow storing it. You're repurposing it. Right. You're actually using it towards the product. So how do you see this?

Maybe something that can compete with some of those strategies.

So some of the strategies are actually really specifically geared for using biogas to electricity. And so that actually ends up being hard for us. So some waste methane producers are like, zero, no, no. Like, you don't meet all the. You don't get the incentives for the State of California. We can only use it for electricity.

And so it actually ends up long term being a concern. But actually, there's so many places right now just flaring the methane. So that's why we ended up in Vacaville. But it is a concern because no one's looking at going methane into molecules, they're going methane into electrons, like, into electricity.

And so that is something that could just be, like, tailored and cleaned up also kind of why I'm here, to be like, this is the future. We're working on it, and we want to make sure that those incentives can benefit us as well.

Well, thank you very much. And I think on that note, we have another panel. Yes, Missouris, hopefully.

Quick question. So a lot of fossil fuel companies, I think, recognize that there's an eventual end to the fossil fuel economy. They're investing a lot in green energy, clean energy, and trying to figure out, I think, ways to deploy their existing resources, technologies, capabilities.

Are they at all engaged kind of in this arena or with companies like you?

I would say yes. And unfortunately, one area in which, I guess they engage not with us, but we, like I mentioned, are looking for federal grants to help us commercialize, for example.

And these incumbent companies, ones that we've all heard of, are also very attracted by grants coming out of legislation like inflation Reduction act, like bipartisan infrastructure law, huge amounts of funding for the energy transition. And we've seen that these companies are more successful at gaining these large programs.

For first of its kind plants that went to them.

Yeah, got it. Okay.

One thing I will say, though, is they are investing in companies like ours and our competitors, and sometimes the oil companies are the easiest ones to talk to. They see the problem. They have the infrastructure. They have the balance sheet. They are incentivized in different ways. But, yeah, we're having those conversations.

Okay. All right, great. Thank you again so much. And I think we all really look forward to continuing the conversation.

Thank you so much.

Thank you. Well, we'll go ahead and relieve the panel. Appreciate your willingness, travel to the Capitol and your testimony today. I look forward to staying engaged. Next, we have our second panel with two panelists. This is titled how our life sciences are moving towards a sustainable future.

And when they are ready to get situated, I will welcome Margo Parks, the senior associate Director of Beringer Engelheim, and Amy Patton, the Executive Director for global facilities operation for Bristol Myerscrib.

Great. Thank you so much. Good morning, Members of the Committee. Thank you for coming this morning and hearing about all the really fascinating and amazing things that our partners in biotechnology are doing. It's super exciting. So, as the Chairman said, my name is Margo Parks.

He did an excellent pronunciation of the company's name, better than I could do. But with Beringer Engelheim. And it's a pleasure to be here this morning to talk a little bit about our initiatives and what we're doing to reduce our carbon footprint and make our company as environmentally and generationally sustainable as possible.

So as a leading healthcare company, we serve and help millions of people and animals live longer and healthier lives. Sustainability is firmly rooted in our DNA. And every day we are working to improve our practices to make sure that they are better for our patients and people and the planet.

But this is a huge challenge, and there's a lot to do, and we work to improve that every day. Our sustainability framework, which is called sustainability for generations, focuses on health equity and environmental equity for the planet. And our pillars are designed in alignment with the UN Sustainable development goals and the Paris climate accord.

So, science is guiding everything we do in terms of our environmental goals as well as our health equity goals. So we have been independent since our founding in 1885.

And consequently, we take a very long term perspective on deciding how we are going to commit to a variety of goals and how we implement those along our entire value chain. So Beringer is proud to have over 53,000 employees worldwide serving.

And so it's critically important to us that we are committed, not only globally, but locally, in the communities in which we serve, and not only have operations, but serve patients. As I mentioned, we're a global company, but we are proud to say that our only us manufacturing, human manufacturing site is in Fremont, California.

And we have been there since 2011. And since. Since that time, we have expanded our footprint and grown our employee base to over 650 people. So we're very proud to be here in the State of California and are currently actually growing as we speak, doing some big projects.

So, as I mentioned, we have a lot of really big goals, and we're fortunately very well on our way to achieving many of them. You know, primarily, we want to bring the world more health. We're a global health company.

By 2030, our goal is to have invested over $35 billion in health innovations that are tackling infectious diseases and non communicable diseases. And we're also working to help 50 million people globally in underserved communities through a variety of initiatives that are directly targeted at health, but maybe less conventional than you might think.

So, delivering water to communities that don't have access to clean water. And across the globe, we are very committed to our green objectives and environmental targets by 2030, we are committed to reducing our natural resource use by 50% and becoming a carbon neutral country at all of our sites.

Over the last several years, as I mentioned, we've made tremendous progress towards these goals. We've reduced emissions by 36% just since 2019. We've increased our use of renewables globally to 70% by 70%. And we've decreased our landfill waste by 62% and certified seven of our sites as carbon neutral.

So, still a ways to go, but we are really excited about where we are and how we anticipate meeting these 2030 goals. So you may be curious about what that looks like.

I think it's really important that when we're talking about our goals, that they are their goals, but we're meeting them to give a few examples of how we're talking about everything from the very small to the very large.

So now I'm going to excuse myself here for my liberal arts degree here while I talk about something a little sciencey, and I hope no one has any questions. But at a fundamental level, at a very basic level, we are looking at how we make medicine and how we reduce the environmental impacts of making that medicine.

So we're investigating how we implement what is called ecodesign, and those principles apply to all of our research and development. And eco design looks at all aspects of the lifecycle of medicine.

And it starts from the very basics of the raw materials used to make the medicine, all the way through the production of that medicine, the package, the device, and then to end of life. How it's delivered, how the consumer uses it, and finally, how they dispose of it.

So, by way of example, we have recently been able to synthesize one of the chemical building blocks for our cancer medications in a way that reduced our water use by 76% and our waste and carbon footprint by 98 and 99%, respectively. So, huge developments on how we're actually making the medicine.

And the great thing about this was that this also resulted in decreasing the production time of this molecule by one year, which is huge when you're talking about getting access for patients.

In Fremont, we have invested in technology that takes the same amount of product at scale, but uses 50% less resources to make that same amount of medicine.

We think by combining these, what I sort of call Low carbon medications, with this technology to manufacture them at scale, we're able to make huge impacts just on the medicine side alone of our portfolios. So this is really exciting.

And this eco design is now mandated through every product design that we go through for all of our medications. But of course, all this manufacturing, research and development takes power. And globally, 70% of our electricity is from renewable sources. At Fremont, we are excited to get to 100% renewables here very, very quickly.

But of course, there are those processes which are hard to electrify. And in those segments, we are looking at future technologies, how we can build on fuels that either reduce or eliminate our carbon footprint.

And in the meantime, really taking seriously the audit and analysis of our current natural gas and the H Vac systems, our computers, our servers, everything that uses power, how we can make those as efficient as possible.

So we do regular, you know, I think, once every six months, audits of all of those systems to make sure that they are operating as efficiently as possible.

We're also really excited that Fremont was one of our first sites to be certified by the alliance for Water Stewardship, which means that not only are we reducing our water use and ensuring that the water that leaves our site is as clean as possible, but this program also requires that we are working very closely with stakeholders in the basin to make sure that there's water adequacy for everyone who is a user of that resource.

So that program certifies us annually. We work with them on an ongoing basis to ensure our continued certification. So our goal is to have all of our sites certified in this manner by 2030.

And, of course, we're not just looking at how we are reducing our own emissions through our medication, through our facilities, but also working with our supply chain partners to make sure that they are able to reduce emissions where possible. That means we're being very selective about who we work with.

We have to date made a list of our largest vendors and have had conversations with them in our contracts and in our procurement process to ensure that their values match ours in terms of our reduction goals and trying to figure out how we can partner with them, where they may have challenges, some of these smaller suppliers, how we can work together to help support them in reducing their emissions.

And I think it's important to say that, as I mentioned, these goals are not just goals and talking points, but these are real emissions reductions that we're talking about, true to our scientific roots.

We are auditing, we are measuring, and we are third party certified on all of our reductions to make sure that these are real and valid. And we take a very focused approach on this that is not an offsets based approach. This is really a reductions, emissions first approach, because we believe that we can reduce our emissions.

And that's the important thing to do for the communities in which we serve and to the long term sustainability of the company, our patients, and the planet. So thank you very much.

Thank you. And our last panelist is Miss Patton with BMS.

All right, well, good morning. Good morning, distinguished Committee Members. It is an honor and a pleasure to be here today. I am Amy Patton, a proud California resident and the Executive Director of facility operations for Bristol Myers Squibb.

I have the pleasure of leading a team responsible for the daily operations of our facilities and R and D and mixed use facilities, some of which are located right here in California. While I'm currently an operations leader, the foundation of my career was in environment, health and safety.

So Bristol Mars Squibb's commitments and actions in the environmental realm are very important to me. Today, I plan to share with you some information about BMS's commitments and accomplishments as an example of how a Member of the biotech industry, is helping to advance environmental sustainability in our communities.

Bristol Mars Squibbs has a robust presence here in the State of California with, as of January this year, roughly 800 employees in our three research and development facilities located in Brisbane, Redwood City and San Diego.

At these innovation hubs across California, scientists and researchers work across teams, functions and sites to investigate molecules in the therapeutic areas of oncology, hemology, immunology, neuroscience, and cardiovascular disease. One day, their work may have a significant impact for patients.

In August of 2023, our expansion in Brisbane, California, at 1200 Sierra Point added 27,000 lab and offices space to our existing site at 1000 Sierra Point. This expansion featured a lead gold compliant design and installed six additional electric vehicle chargers at the site.

San Diego in San Diego, BMS is going to bring together four of our current R and D facilities into a newly constructed standalone building at campus Point. This facility, which is currently under construction, will offer over 430,000 sqft dedicated to advancing new medicines for patients, and we expect to occupy this facility in 2026.

This new facility incorporates several sustainable features that will further us in our commitment to the environment. Some of those features are a water treatment system that uses fresh water in our cooling towers with an anticipated savings of about 4 million gallons a year.

Innovative energy solutions, such as a high efficiency chiller system, which reduces our electric consumption and an energy efficient exterior finish that limits heat intrusion into the building, enables us to save electricity.

The use of a weather station, which allows exhaust fans to work at a reduced speed an electrical infrastructure that will allow complete electrification of that building in a future time the use of heat pumps instead of natural gas heaters for our laboratory hot water systems and over 40 ev charging stations for our employees.

At BMS, our environmental strategy focuses on taking actions and driving change to improve our environmental footprint. We have a set of public goals now through 2050 which support our longstanding commitment to environmental stewardship.

Amongst these public goals is a recently achieved 2024 goal to validate our emission reduction targets by the Science Based Target Initiative, otherwise known as SBTI. This recent achievement was attained for both our near term and our net zero greenhouse gas emission reduction targets. SBTI is considered the gold standard for emission reduction strategies and verification.

Targets are considered science-based if they are in line with what the climate science deems necessary to meet the goals in the Paris Agreement limiting global warming to one and a half degrees celsius above pre-industrial levels. By having science based targets, BMS is held accountable through clear targets that are well defined and publicly available.

BMS's SBTI validation reinforces the company's commitment to advancing its long term strategy to minimize its environmental footprint. We publish our progress annually in our ESG report and some of the highlights include, in 2023, over 70 projects aimed at reducing energy use and scope 1 and 2 greenhouse emissions.

These solutions were implemented across our buildings, labs and fleet, as well as our commercial product and development processes. By 2030, we expect to achieve 100% purchase electricity from renewable resources. We will accomplish this building on our current renewable energy portfolio using virtual power purchase agreements, VPPAs, as an important part of our strategy.

To date, BMS has executed 2 15-year VPPAs for about 200 megawatts collectively. These propelled BMS another step closer to realizing our goal of 100% purchased electricity from renewable resources.

I want to thank you for the time you've given me today to share a little bit about Bristol Myers Squibb and our environmental commitments and accomplishments here in the State of California.

I hope the information I share will serve as a positive example of how BMS and the rest of our industry are helping to advance environmental initiatives in our communities. Thank you.

Thank you both for the testimony here today. I want to see if there's any Committee Member, questions or comments. I can certainly kick it off if that helps to spur a few ideas. Ms. Waldron.

I just realized that microphone doesn't work. No, I just a comment, maybe a general question. Years ago, when I served in local government, we did land use planning and things.

We used to say what's good for the environment can be good for business, and we're seeing that as we reduce the use of resources and the impacts that we have on the environment, we can also create efficiencies for business, which reduces costs as well. We see that in growing industry, in the agriculture also.

And both of you talked about renewables, using renewables. What specifically type of renewables do you use? I'm trying to learn what all of these are. And what types? Are they replacing hydro or gas? I'm just curious about that.

Well, one example might be converting electricity to wind powered electricity through the VPPA's and other sustainable and renewable resources would be an example.

Yeah, I would second that. It also depends. So in Fremont, specifically in California, we are the energy that we're procuring. We're working with our power provider to ensure that they are qualified renewables under California law, depending on other jurisdictions in which we operate, that renewable mix looks a little bit different.

It may be biogas, it may be geothermal. So it just depends on where the site is located and what those renewables are and what is considered to be valid under that jurisdiction. But here in California, it's, you know, primarily wind and solar, whatever that mix is. A little bit of, I think, hydro from Northern California, Oregon, but whatever that allowable mix is.

Thank you. I appreciate you. Earlier, we're talking about some of the needs for water, critical that it is to facility operations. One thing we are proud of in my home community in San Diego was working closely with industry to ensure we had a guaranteed water for industry GWI program.

Knowing that were we to expand and become the cluster that we are, the significant cluster that we are in the San Diego region, that was a guarantee that was necessary. But we are at the end of the pipeline and we are, you know, projected forward in more of a risky environment where water is a little bit more tenuous.

And so the idea that that's one of your first go-tos, in addition to energy consumption, for finding ways to conserve and really try to think more about transforming your own kind of facility operations in a way that's going to reduce that consumption is certainly commendable.

And I'm wondering, I know you're two great companies that don't speak for the entire industry, but is there a little bit of conversation that you're aware of, you know, within the broader umbrella of organizations where you might be sharing information about best practices or innovations that you're finding to be able to help reduce any of these environmental goals that you're having for your company?

I'm sure everybody else is trying to achieve or I would hope that they are trying to achieve the same goals. How is that conversation going between--across the industry?

So I think several things. So it was mentioned that BMS is using SBTI, scientific based target initiative, as are we. And so I think you see some of these best practices emerge in the industry. And people take note that this is an organization, for example, that is well respected, that is global.

And because we are all global companies, I think there are many different points across the globe in which we are seeing what our partners are doing. And certainly while there are a lot of people in biotech, it is sort of a small world.

And I think the people who work in this space specifically sort of likely know who the other players are and know what other companies are doing. And I think for all of the publicly traded companies and even those that aren't like, like Boehringer, all of this is sort of public information.

It's public data that's produced and shared annually. And so I think there's a lot of commitment and perhaps a little bit of competition in the industry to see who's doing what and how you can really make those strides along with your competitors for the planet and for our patients.

And I'd agree this is one of those areas where sharing is often encouraged. What is good for our communities is going to be good for our business, is going to be good for our patients. So I do believe there's a bit more freedom in discussing some of the advances we're making in and around environmental progress.

Yeah, fortunately, I think a lot of this stuff is, you know, less on the, on the trade secret side and more best practice of what you can do to reduce your emissions in your facility. So certainly gives more opportunity for collaboration there.

Thank you. Well, if there's no other questions, I appreciate the overview and more importantly, I appreciate your own commitments to be able to work with us and our neighbors on reducing some of these environmental footprints. At this time we are moving to our public comment portion.

If there are any members of the public here that may want to take one to two minutes to some of these topics, you can line up over here to my left. And if you want to name an organization and state your comments.

Mr. Chair, Members of the Select Committee, Jeffrey Roth with California Life Sciences. California Life Sciences represents over 1,200 companies of all sizes, from early startups to established industry leaders in the biotechnology, pharmaceutical, and medical technology space.

And on behalf, and as well as many of the state's top research universities and institutions, on behalf of CLS, I would like to thank both Chairs and Members of the Select Committee as well as staff for convening this informational hearing.

Mr. Chair, in your opening comments, you mentioned that we often don't think about the work that many of these companies are doing when we speak about the life sciences, often focusing on the human health side of things.

And so that really underscores, I think, why this hearing is so important today, to be able to uplift and showcase the work that these incredible companies are doing here in the State of California. So we look forward to continued partnership with the Select Committee and Members of the Legislature. Thank you.

Thank you.

Hi, I'm Katherine Brink with BioMADE. Thank you so much for convening this hearing today. And thank you to all the panelists for sharing your stories with the Committee here.

BioMADE is a nonprofit public private partnership launched in 2021, and we work with our 300 plus member organizations, including some of the panelists here today, to propel biomanufactured chemicals and materials from the lab to commercial scale.

I know BioMADE was mentioned in a few of the testimonies that we heard today, and I wanted to share that we really do see an opportunity in California to be able to build the pilot and demonstration scale infrastructure that companies really need to scale up their production here in the United States rather than in Europe or in Asia.

BioMADE has been fortunate to receive a $300 million investment from the Federal Government to be able to catalyze the creation of a network of pilot and demonstration scale facilities across the United States.

And as was mentioned earlier by Janae, California is one of the six states that we are working with to explore opportunities to be able to build out these facilities, which we see as being very important for being able to create the well paying jobs, the supply chain resilience, and the national and economic security that can come from bioindustrial manufacturing. So, just to share that, I'm looking forward to continued conversations with the folks here in this room to be able to explore what's possible in California. Thank you.

Thank you. And it appears that will conclude our public comments. So I really do appreciate everybody that was involved in helping to develop today's agenda, and especially my Chief of Staff, Bethany Westfall, for being able to help our Select Committee.

I know that would be shared as well by my co-Chair here for the Select Committee on Green Innovation and Entrepreneurship. We've covered a lot of ground this session, as well as to be our last hearing at the capital. We hope to do some more activity out in the fall during our recess to be able to engage many of our companies and other elements that sort of interface with biotechnology.

But I hope that today's hearing has helped to elucidate a little bit more about the breadth. It's not just about one specific outcome, but really a lot of touch points the life sciences industry has across some of our shared goals here in California.

And I wanted to invite you again, and the room will be open to 1:00 after this hearing concludes. But in room 125, across the hall here, we still have some of the products that we discussed today. If you want to see a snowboard, I think there's a set of skis, actually, maybe some athletic shirts and other personal care products as well. So you can touch and feel and realize that the future is right in front of us and something we should celebrate right here as California.

California made the innovation leading the way for a more sustainable future. Again. 1:00. The room will be available to anybody watching the hearing today, and we welcome you to do that. And with that, I'd like to invite my co-Chair to close with any comments.

Thank you, Chair Ward. Just in conclusion, I want to thank everyone who joined us today, offering your insight and a little window, I think, into what is really the limitless opportunity in this area for California. So, as I said in my opening comments, super excited.

I think everyone here today, super excited about these possibilities and really want to do everything that we can as policymakers to help create fertile ground in California for these innovations really to take root and to flourish.

So please consider this an invitation to continue this conversation and really look forward to working with all of you as we move forward and excited to check out the products next door. Thanks, everybody.

Thank you. I would echo that. And with that, I appreciate everyone's time this morning. And we are adjourned.