Enhancing Winter Performance With Distilled Biodiesel. Copyright 2017 Renewable Energy Group, Inc.

Transcription

1 Enhancing Winter Performance With Distilled Biodiesel

2 Safe Harbor Statement This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially. Factors that could cause actual results to differ materially include, but are not limited to, potential changes in governmental programs and policies and federal and state governmental tax credits and incentives requiring or encouraging the use of biofuels, including RFS2, and biomass-based diesel production; changes in the spread between biomass-based diesel prices and feedstock costs; the future price and volatility of feedstocks; the future price and volatility of petroleum and products derived from petroleum; risks associated with fire or explosion at our facilities, including potential losses associated with the fires at our Geismar facility; the effect of excess capacity in the biomass-based diesel industry; unanticipated changes in the biomass-based diesel market from which we generate almost all of our revenues; seasonal fluctuations in our operating results; competition in the markets in which we operate; our dependence on sales to a single customer; technological advances or new methods of biomass-based diesel production or the development of energy alternatives to biomass-based diesel; our ability to successfully implement our acquisition strategy; our ability to use our development stage life sciences technologies to produce renewable chemicals, fuels and other products on a commercial scale and at a competitive cost, and customer acceptance of the products produced; the significant capital expenditures required to produce commercial quantities of renewable chemicals; and other risks and uncertainties described from time to time in REG's annual report on Form 10-K for the year ended December 31, 2015, quarterly reports on Form 10-Q and other periodic filings with the Securities and Exchange Commission. This presentation reports Adjusted EBITDA, a non-gaap financial measure. A reconciliation of Adjusted EBITDA to net income, the most comparable GAAP measure, is provided in the Appendix to this presentation. Printed

3 Agenda REG Overview Using distilled biodiesel in cold weather REG Products & Services Questions 3

4 REG Overview 4

5 Benefits of Biodiesel Drop-in diesel replacement Feedstocks are primarily fats, oils, and greases left over from protein production or restaurant use, e.g.: Inedible corn oil Animal fats Used cooking oil Soybean oil Provides lubricity to petroleumbased fuel and improves combustion 5

6 Benefits of Biodiesel Reduces lifecycle greenhouse gas emissions by 57 86% compared to petroleum diesel B20 (20% biodiesel blend) reduces hydrocarbon emissions by up to 20%, carbon monoxide emissions by up to 11% and particulate matter by up to 10% Alternative Fuels Data Center 6

7 Advanced biorefining leadership Crude Feedstock Capable 13 Biomass-Based Diesel Plants Albert Lea, MN Danville, IL Emden, Germany Geismar, LA Madison, WI Mason City, IA New Boston, TX Newton, IA Oeding, Germany Seneca, IL 502 MMGY NAMEPLATE CAPACITY Grays Harbor, WA Refined Feedstock Houston, TX Ralston, IA Partially Completed or Repairs Required Fermentation Facility Okeechobee, FL Feedstock Proc. Facility Burlo, Germany Atlanta, GA Clovis, NM Emporia, KS New Orleans

8 Broad Marketing and Logistics Capabilities Distribution Footprint at Plants, Terminals and to Customers 8 40 terminal locations (plus 12 plants) Delivered biodiesel and co-products to 47 states, 4 provinces in Canada, U.K and Peru in 2016

9 REG-9000 Product Lineup Marketing biodiesel on finished fuel attributes, not feedstock sources Provides unprecedented options for high quality biodiesel from a single supplier REG-9000 specification exceeds ASTM D6751 9

10 Distilled Biodiesel and Cold Weather 10

11 REG Distilled Biodiesel Distillation: a method for purifying liquids by a process of evaporation and condensation Petroleum distillation: produces different cuts to get gasoline, kerosene, diesel, etc. Methyl ester distillation: creates a purified biodiesel product 11

12 REG Distilled Biodiesel Benefits A more pure product that blends better with diesel Superior cold weather performance compared to undistilled biodiesel Greater feedstock flexibility Dependable supply and pricing Higher Cetane Lower Carbon Intensity 12

13 REG Distilled Biodiesel CSFBT Cold soak filter blocking tendency (CSFBT) Test of blended fuel (B20) FBT score indicates how easily fuel passes through a filter Best possible score is

14 CSFBT Score REG Distilled Biodiesel CSFBT CSFBT Comparison Neat ULSD Undistilled Soy Distilled REG- 9000/5 Actual lab results Distilled REG- 9000/10 14

15 Degrees Celsius REG Distilled Biodiesel CFPP Cold Filter Plug Point (CFPP) CFPP is a common indicator of operability limits for engines B5 blends: no increase over neat diesel B10 and B20 blends: REG-9000/10 is comparable to undistilled low Cloud Point biodiesel REG-9000/5 performs better than undistilled low Cloud Point biodiesel Impact of Biodiesel on Blended Fuel CFPP B5 B10 B20 Undistilled Soy REG Distilled 5 C REG Distilled 10 C Actual lab results 5 15

16 Cold Weather Additives Many additives have been shown to be effective at minimizing winter operability challenges with both petroleum diesel and biodiesel blends REG does not recommend any particular additives, but please... Use an additive from a reputable supplier that has been developed specifically for biodiesel blends Be aware that an additive that is successful for 100% petroleum diesel might not be effective for your biodiesel blend Diesel additives should perform more reliably with distilled biodiesel than undistilled biodiesel 16

17 Biodiesel blending Blending Rules of Thumb More agitation is better Blending is easier with warm fuel Both fuels should be at least 10 F above their respective cloud points at the time of blending 70 F or above is optimal Additive blending should be performed at the time the fuels are blended Particularly important when fuel is cold Thorough blending is important but is less critical with distilled biodiesel 17

18 Biodiesel blend storage Storage Rules of Thumb General rule: when storing fuel for more than 12 hours, keep the fuel at a temperature above its cloud point Distilled biodiesel blends and petro diesel: CP at least 5 F below lowest fuel temperature Undistilled biodiesel blends: CP at least 10 F below lowest fuel temperature Exceptions include: Tank is used frequently and consistently Tank can be mixed or recirculated Tank can be heated The fuel can be stored until spring 18

19 REG Products & Services 19

20 Choosing your biodiesel Know the quality of what you blend BQ-9000 programs provide an additional level of oversight Properly purified biodiesel reduces chances of cold weather issues Cold filtration Distillation Production skill, not feedstock, determines biodiesel quality Choose the best biodiesel for your application Biodiesel with a range of cloud points is used year round throughout North America in a range of blend levels (B2 B100) Keep in mind, petroleum diesel affects Bxx Cloud Point more than biodiesel 20

21 Monitoring your biodiesel Monitor blended fuel (Bxx) Cloud Point throughout the winter season The finished fuel s Cloud Point should be below the lowest sustained temperature the fuel itself might reach Higher Cloud Point distilled biodiesel can be used throughout the winter season REG has multiple years of successful experience to draw on 21

22 REG Services REG provides technical support to all customers Storage, handling, and blending advice Proactive testing of blended fuels, including additive evaluations Customized recommendations based on individual customer capabilities and locations Assistance in monitoring weather trends and making appropriate adjustments Lab testing of samples submitted by customers 22

23 Summary Biodiesel is a clean-burning, low carbon diesel fuel made from biological fats and oils REG sells and distributes biodiesel based on finished fuel attributes, not feedstock type Cloud Point is more predictive of cold weather performance for blends with distilled biodiesel REG provides full technical support to our customers throughout the commercial process

24 Questions 24