Wisconsin Corn / Soy Expo. February, 2018

Transcription

1 Wisconsin Corn / Soy Expo February,

2 Represents the biodiesel industry as the coordinating body for research and development in the United States. Founded in 1992 by state soybean commodity groups. Today, NBB is a feedstock neutral trade association whose membership is comprised of biodiesel manufacturers, feedstock producers, feedstock processor organizations, fuel marketers and distributors, and technology providers. Offices in Jefferson City, MO. and Washington D.C.

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4 3500 U.S. Biodiesel & Renewable Diesel Market (millions of gallons) Source: EPA EMTS* *Volumes reported under the RFS in the D4, D5, and D6 categories. Biodiesel and Renewable Diesel 4

5 Animal Fats 10% Recycled Oils 14% Other 3% Soybean Oil 52% Distillers Corn Oil 10% Canola Oil 11% Source: DOE-EIA Monthly Biodiesel Production Report (22M Survey) U.S. Biodiesel Production Feedstock Sources

6 Yearly Amount of Soybean Oil Used for Biodiesel Million Pounds % of all US Soybean Oil will be used for Biodiesel in Year * Forecast

7 Production Plants Wisconsin Biodiesel REG Madison DeForest, WI 20,000,000 gal. production capacity. Walsh Biofuels Mauston, WI 5 million gal. production capacity WI Biodiesel/Petroleum Distributors

8 Good for Wisconsin Soybean Farmers: Added $35 per acre. Added $68,000,000 WI soybean revenues Increased the value of the WI soybeans by 7% in Good for Livestock, too: Decreases soy protein meal prices by $20-40 per ton. Increases value of animal fat: Beef Tallow Biodiesel adds $10-$12 per head Swine Fat Biodiesel adds $1.00 to $1.25 per animal Saved livestock producers $5 billion in reduced soymeal cost from

9 Biodiesel #1 U.S #1 biodiesel producer in the world. Biodiesel #1 alternative fuel of choice for fleets. Nat. Work Truck Assoc. & American Transportation Research Institute: Biodiesel #1 in reducing carbon emissions of liquid fuels. California Air Resources Board

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11 OEMs Supporting B20 * * 11

12 Biodiesel and OEM s in 2017

13 Proposed RFS2 Volumes (in gallons) * 2019* Cellulosic Biofuel 123M 230M 311M 238M N/A Biomass-based Diesel 1.73B 1.9B 2.0B 2.1B 2.1B Advanced Biofuel 2.88B 3.61B 4.28B 4.24B N/A Conventional Ethanol 14.05B 14.5B 15.0B 15.0B N/A Total Renewable Fuel 16.93B 18.11B 19.28B 19.24B N/A * Includes proposed volumes. EPA released its proposals for the 2019 Biomassbased Diesel volume and 2018 standards July 5. 13

14 SENATE BILL S sponsors total Republicans and Democrats from across the country. 14

15 What the biodiesel tax incentive proposals would do Reinstate the expired biodiesel tax incentive Extend through 2020 to provide longer-term certainty $1-per-gallon credit, plus $.10 for small producers Change to producer s credit 15

16 Biodiesel International Trade Case International Trade Commission Case Addressing Argentina and Indonesia biodiesel imports. Argentine - Differential Export Tax Indonesia significant and varied subsidies. August decision on temporary duties.

17 State Markets: 2017 Oregon Minnesota Illinois Texas California New York, Iowa, Pennsylvania, Rhode Island. 1.4 billion gallons now. Growing at about 100 MGPY CA TX IL MN OR NY IA PA RI 17

18 California and Oregon Low Carbon Fuel Standards #1 fuel with the lowest carbon footprint according to CARB! 800 million gal. B100 by 2020 (400 million gal. market 2016) Soy biodiesel s carbon credit went from.27 per gallon to $.76 per gallon grams CO2e/MJ 0 Compression Ignition Spark Ignition Electricty Diesel Fuel Biodiesel Gasoline Ethanol Compressed Natural Gas Liquified Natural Gas Electricty

19 LCFS Volume Projections billion gallons of BMBD. Biodiesel/RD = 54% of diesel pool BMBD Volume Sources , CARB quarterly reports. CARB Biofuels Supply Module w/default input values. 19

20 Oregon Clean Fuels Program 2015 volume was approx. 25 million gallons volume was 42.9 million gallons. Biodiesel = 32% of 2016 credit generation. No RHD either quarter Credit Generation 32% Biodiesel 67% Ethanol Ethanol Biodiesel Other Other: Natural gas, diesel, gasoline, electricity. 20

21 New York State SB 5422 (Boyle-R) and A 6954 (Englebright-D) passed Senate and Assembly on June 21st. Currently await gubernatorial action. Bill would create a 5% Bioheat standard for downstate counties Nassau, Suffolk, & Westchester by July 1, Supported by NBB, oil heat associations, League of Conservation Voters, NYPIRG. Opposed by American Petroleum Institute. 70% of New York State soon to be at B5. 21

22 Illinois 2018 Priorities Tax exemption expires December 31, PASSED! July 6 th, Minnesota Requirement increases to B20 May 1, 2018.

23 5-7 billion gallon market. 350,000,000 gal. market 2015 NORA s official policy is to convert to: B50 by 2030 B100 by 2050 Top technical priority NYC has 2% mandate in place. Moving to B20. NYC 5% in October NY just extended BioHeat state income tax credit. Connecticut, Massachusetts, Vermont, Rhode Island have BioHeat mandates in place. New York state is working to pass a BioHeat mandate. B20 ASTM Spec.

24 NBB Membership The National Biodiesel Board (NBB) serves as the industry s central coordinating entity and is the single voice for its diverse membership base. As a member of NBB, you receive support and access to resources in all areas of the industry including: Opportunity to impact the future direction of the biodiesel industry by attending industry development meetings and receiving member-only communications. Opportunity to represent NBB at strategic meetings, hearings, tradeshows and other events Receive frequent updates on state & federal biodiesel legislation. Access to the Members-Only Web site. Be promoted through the NBB Communications Department (through NBB press releases and media events). Access to NBB promotional materials such as publications, information kits, signs, and tradeshow materials at cost. Marketing & technical support through expert advice. Biodiesel industry/petroleum coordination support. Discounted member rates for IT services including Web site design and hosting through NBB's IT division - NBBIT.com

25 2018 Proposals Quality Assurance Program Total budget - $375,000 WSMB - $25,000 Supports the industry s fuel quality program, BQ9000. Addresses fuel quality issues, and OEM support.

26 2018 Proposal Sustainability Awareness Total Budget - $510,000 WSMB - $25,000 Goal Prevent biodiesel sustainability misinformation form blocking market access. Maintain biodiesel favorable sustainability impression. Enhance biodiesel sustainability profile with green audiences. Influence young scientist impression of biodiesel.

27 Biodiesel Industry Goals TODAY Biodiesel production increased from about 25 million gallons in early 2000s to more than 2.9 billion gallons expected in 2016 (biodiesel and renewable hydrocarbon diesel) 3.0 plus billion gallons expected in x 22 VISION Biodiesel will comprise 10 percent of diesel fuel demand by billion gallons in next six years

28 Thank You! Questions? Scott Fenwick Technical Director NBB

29 Introduction to REG and Biodiesel February 1, 2018 Copyright 2018 Renewable Energy Group, Inc.

30 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 Copyright 2018 Renewable Energy Group, Inc.

31 REG Overview 31

32 REG converts waste fats, oils and vegetable oils into high quality renewable fuels and chemicals to meet growing global demand for cleaner products 32 Copyright 2018 Renewable Energy Group, Inc.

33 REG Biorefineries 33 Copyright 2018 Renewable Energy Group, Inc.

34 Broad Marketing & Logistics Capabilities REG STATS: 20+ YEARS REG has been producing biodiesel since MMGY Over 500 million gallons per year of total biofuel production capacity Distribution Footprint at Plants, Terminals and to Customers 50 terminal locations (plus 12 plants) Delivered biodiesel and co-products to 47 states, 5 provinces in Canada 34 Copyright 2018 Renewable Energy Group, Inc.

35 REG Business Model Business to Business Sales Model Advanced Biofuels > 50% fewer CO 2 emissions Refining Lipids (Oils & Fats) Fuel Blending Distribution Crude Oil Extraction (sequestered carbon) Crude Oil Petroleum Fuel Refining Higher CO 2 emissions 35 Copyright 2018 Renewable Energy Group, Inc.

36 REG Madison Overview 36

37 REG Madison Overview Facility built by Sanimax and co-located with a Sanimax grease facility REG acquired the facility and continued production and operations REG Madison, along with the entire company, will continue to grow into the future. Notes: Source: 37 Copyright 2018 Renewable Energy Group, Inc.

38 National Impact of Madison ,873 trucks & 134 railcars in MILLION POUNDS of FEEDSTOCK USED Purchased from 69 locations resulting in $28 MILLION added value to the nation s economy 13 MILLION GALLONS of BIODIESEL PRODUCED Delivered to 77 locations nationwide States feedstock is from States biodiesel is delivered 38 Copyright 2018 Renewable Energy Group, Inc.

39 State Impact direct jobs at Madison Madison purchased 48.2 million pounds of feedstock from Wisconsin $13 million added to the state s economy from feedstock alone Counties feedstock is from REG plants 39 Copyright 2018 Renewable Energy Group, Inc.