GROWING YOUR BUSINESS

WITH BIODIESEL
Copyright 2016 Renewable Energy Group, Inc.

BIODIESEL
DEMAND DRIVERS
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WHATS DRIVING BIODIESEL DEMAND?

RVO
Federal and state
tax incentives
Sustainability

Copyright 2016
Renewable Energy Group, Inc.

WHATS DRIVING BIODIESEL DEMAND?

RVO
Revised RVO offers longer-term
certainty and growth for
biomass-based diesel
Supports a solid, positive growth
trajectory for biomass-based
diesel over the next two years
One billion gallon industry less
than four years ago

Copyright 2016
Renewable Energy Group, Inc.

EPA RFS2 REQUIREMENTS1

Volumes Used to Determine the Final Percentage Standards2
2014

2015

2016

2017

33 mm gal

123 mm gal

230 mm gal

n/a

Biomass-based diesel 1.63 bn gal

1.73 bn gal

1.90 bn gal

2.0 bn gal

Advanced biofuel

2.88 bn gal

3.61 bn gal

n/a

16.93 bn gal

18.11 bn gal

n/a

Cellulosic biofuel

2.67 bn gal

Total renewable fuels 16.28 bn gal

Growth in Biomass Based Diesel Standard

Growth Advanced Biofuels Standard

Final Volume Standards
4.0

3.5

Final Volume Standards

3.0

Billions of Gallons

Billions of Gallons

4.0

Actual

2.5
2.0
1.5
1.0
0.5

Actual

3.5
3.0
2.5
2.0
1.5
1.0
0.5

0.0

0.0

2012

2013

2014

2015

2016

2017

Source: 1 EPA 11/30/2015

Note: 2 All volumes are ethanol-equivalent, except for biomass-based diesel which is actual.

2012

2013

2014

2015

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Renewable Energy Group, Inc.

2016

BIODIESEL ECONOMIC
CONSIDERATIONS

ECONOMICS OF SELLING BIODIESEL

State tax incentives

State grants
Potential RIN values
Biodiesel Tax Credit

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Renewable Energy Group, Inc.

STATES WITH NOTABLE BIODIESEL POLICIES

New York City

LEGEND
Low Carb Fuels Stnd
Mandate - Fuel Use or
Bioheat
Tax Incentive - Sales
Tax Incentive - Production
Fleet Requirement
Bioheat Mandate passed
Awaiting Surrounding States
Source: Data from DOE Alternative Fuels Data Center and Individual State Statues
Note: Current as of 01/08/2016

Policy currently suspended

Copyright 2016
No
major
policy
Renewable Energy
Group,
Inc.

EXAMPLES OF STATE INCENTIVES

Selling biodiesel blended fuels can
have a positive economic impact on
your business when you take
advantage of state tax incentives
Iowa: Eligible for a 3.5 cent retail tax
credit per gallon for fuel containing a
minimum of B5, and 5.5 cents per gallon
for blends of B11 or more.
Illinois: Biodiesel blends of B11 and
above are exempt from the state excise
tax of 6.25% at the retailer.
California: LCFS creating tremendous
biodiesel blending economics for
blenders.
Texas: $.20/gallon retailer incentive for
every gallon of B99 blended.
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Copyright 2016
Renewable Energy Group, Inc.

BIODIESEL RIN VALUES

RINS are the compliance mechanism utilized by EPA to track
compliance by the obligated parties.
Biodiesel customers can receive up to 1.5 RINS for each gallon of
biodiesel they purchase.
RINS currently trading at approximately $1.50/biodiesel gallon.
REG customers can purchase biodiesel with or without RINS.

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Copyright 2016
Renewable Energy Group, Inc.

BIODIESEL BLENDING ECONOMICS 10/10/16

(no state incentive)

NYMEX Heating Oil:

$1.62/gal

REG Plant Price ($.80 over)

$2.42/gal

RINS Value

$1.50/gal

Customer Biodiesel Price

$0.92/gal

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Copyright 2016
Renewable Energy Group, Inc.

BIODIESEL TAX CREDIT

Biodiesel Tax Credit
first enacted in 2005
Biodiesel and renewable
diesel blenders' tax credit
of $1.00 for each gallon
of biodiesel blended into
diesel fuel
Most recent tax credit
will expire at the end of
2016 industry is
working to extend the
tax credit

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Copyright 2016
Renewable Energy Group, Inc.

FLEET TRENDS

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EFFICIENCY
Fleets are looking for efficiencies
wherever they can be found
The need to operate efficiently
has been a trend in the fleet
industry in recent years
Largely driven by the cost of
fuel
Alternative fuels, electronic
engines, automated
transmissions are being used

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Renewable Energy Group, Inc.

SUSTAINABILITY
Pressure for fleets to be sustainable
Many fleets embrace it because
it helps improve efficiency.
Customers also expect it
What is exciting to many fleet
managers is the lower emissions
from alternative fuels
Alternative fuels also offer a
lower cost option that other
emission solutions to achieve
sustainability goals

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Renewable Energy Group, Inc.

CUSTOMER CASE STUDY

PETROLEUM WHOLESALE
Distributes fuel in 9 states, operates 40 c-store/travel centers
Began offering biodiesel blended fuel in 2013
Today, up to 95% of locations offer up to a B20 blend year
round
Economics drove decision to offer biodiesel blends
Theres no downside to biodiesel, and a lot of advantages to it. The
benefits include state incentives such as an exemption from the diesel
fuel tax in several states, price advantages over traditional diesel,
biodiesel being a renewable fuel and its clean-burning properties.
JOHN COOK

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Copyright 2016
Renewable Energy Group, Inc.

REG OVERVIEW

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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 petroleum-based fuel

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Renewable Energy Group, Inc.

BENEFITS OF BIODIESEL

78% reduction in direct lifecycle

carbon dioxide emissions
compared to petroleum diesel
fuel
Reduces lifecycle greenhouse
gas emissions by 57 86%
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%

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Copyright 2016
Renewable Energy Group, Inc.

BROAD MARKETING AND LOGISTICS CAPABILITIES

Distribution Footprint at Plants, Terminals and to Customers

38 terminal locations
(plus 12 plants)
Delivered biodiesel
and co-products to 47
states, 5 provinces in
Canada
REG markets:
B99/B100
#2 ULSD
B2-B20 Blends

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Copyright 2016
Renewable Energy Group, Inc.

QUESTIONS

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