Renewable identificayion number concept business opportunities

1. 416 S. Bell Ave.
Ames, IA 50010
888-REG-8686
www.regfuel.com1
Alabama
Clean Cities Workshop
September 2009
Don Nelson-National Sales Director
Renewable Energy Group

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Renewable Energy Group® 2
Presentation Outline
• REG’s Overview
• Producing and Marketing Quality Biodiesel
• RFS 2 Update
• Biodiesel Economics

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Renewable Energy Group® 3
About Renewable Energy Group, Inc.

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Renewable Energy Group® 4
Partnerships with Industry Leaders
Crown Iron Works
Todd & Sargent
NGP Energy Technology
Partners
Natural Gas Partners
Bunge (NYSE:BG)
•Feedstock
•Export
ED&F Man
•Export
•Glycerin marketing
West Central Cooperative
•Feedstock

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Renewable Energy Group®
Strong history for soy biodiesel
• 1940s: West Central, farmer owned coop, began crushing
soybeans for food and feed
• 1996: First biodiesel plant built in Ralston, Iowa as a way
to add value to co-op members’ soybeans.
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Renewable Energy Group®
Biodiesel industry leadership
• 2002: REG builds nation’s largest biodiesel plant adjacent
to soy crush facility (12 million gallons)
• 2004-2008: Five 30 million gallon per year plants built
60, 35 and 45 mgy plants added to network
• Growing demand prompts feedstock commercialization
• 2008: REG rebrands biodiesel to be marketed based on
fuel characteristics.
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Renewable Energy Group® 7
Renewable Energy Group®
Overview
• The most experienced sellers of biodiesel in the US - since 1996. Currently
marketing approximately 25% of all biodiesel marketed in USA.
• Sold 110 million gallons in 2007, expect sales of >200 million
gallons in 2009.
• Distribution through some of US’s leading terminal-operators
• REG’s commercial scale facilities, production expertise and BQ-9000
Accreditation meet customers’ demands for consistent quality, quantity and
supply assurance
• REG distribution advantages
• Lower transportation costs than other producers
• Long-term contracts and high volume allowed REG to negotiate
advantageous turns
• In a tight market, REG established itself as a reliable supplier
• Current production capacity at 9 plants of 300 million gallons.

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Renewable Energy Group® 8
REG Production & Operations
(USA)
• REG Network: REG owned and managed
• Nine biodiesel plants fully constructed and
operational (302 MGY)
Ralston, IA 12 MGY
Albert Lea, MN 30 MGY
Wall Lake, IA 30 MGY
Newton, IA 30 MGY
Washington, IA 30 MGY
Dubuque, IA 30 MGY
Algona, IA 60 MGY
Houston, TX 35 MGY
Danville, Ill 45 MGY
• Most plants can run on multiple feedstocks
• All plants are either BQ-9000 certified or
slated to become BQ-9000 Producers
• REG Marketing and Logistics is a BQ-9000
Marketer.
Tank Farm
Production
Facility
Office/Lab
Loadout &
Receiving

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Renewable Energy Group® 99
REG Network
SoyMor Biodiesel
Glenville, MN
Western Iowa Energy
Wall Lake, IA
Central Iowa Energy
Newton, IA
Iowa Renewable Energy
Washington, IA
East Fork Biodiesel
Algona, IA
Western Dubuque Biodiesel
Farley, IA
REG Ralston
Ralston, IA
Blackhawk Biofuels
Danville, IL
REG Houston
Seabrook, TX

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Renewable Energy Group®
National Distribution Infrastructure
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Renewable Energy Group® 11
Which one of these doesn’t belong?
Canola Oil
Soybean Oil Corn Oil
Recycled GreaseAlgaeJatropha Oil
Beef Tallow

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Renewable Energy Group® 12
Feedstock overview
• Biodiesel can be made from many feedstocks (collectively called
triglycerides)
• Vegetable oils (soy, rapeseed/canola, palm, etc.)
• Animal fats (pork CWG, beef tallow, poultry fat)
• Used oils (yellow and brown grease)
• Feedstock should only affect fuel properties if biodiesel is made well:
• Cloud point / CFPP
• Oxidation stability
• Cetane number
• Production skill and plant technology, not feedstock, determines
biodiesel quality.

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Renewable Energy Group®
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What it biodiesel?
• REG Biodiesel is methyl esters made from vegetable oils and fats
(triglycerides) by transesterification
• REG biodiesel exceeds industrial specifications (ASTM D 6751)
• Used in modern diesel engines without modification in blends up to
100% biodiesel (B100)
ProductsRaw materials
Methanol Methyl ester
Glycerin
Methyl ester
Methyl esterMethanol
Methanol Triglyceride
Biodiesel

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Renewable Energy Group®
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The National Biodiesel Accreditation Program is a cooperative and voluntary program
for the accreditation of producers and marketers of biodiesel fuel called BQ-9000®
.
The program is a unique combination of the ASTM standard for biodiesel, ASTM
D6751, and a quality systems program that includes storage, sampling, testing,
blending, shipping, distribution, and fuel management practices. BQ-9000®
is open to
any biodiesel manufacturer, marketer or distributor of biodiesel and biodiesel blends
in the United States and Canada.
BQ-9000 GOALS...
•To promote the commercial success and public acceptance of biodiesel.
•To help assure that biodiesel fuel is produced to and maintained at the industry
standard, ASTM D6751.

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Renewable Energy Group®
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Renewable Energy Group®
Utilizing multiple feedstock
• REG network plants utilize a multiple feedstock strategy that
currently includes soybean oil, choice white grease, beef tallow,
poultry fats, canola oil, corn oil from ethanol production and other
virgin fats and oils.
• REG is also currently researching other alternative feedstocks
• REG markets biodiesel based on the finished product’s fuel attributes
including cloud point, Cetane value, oxidative stability, etc.; not the
feedstock source
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Renewable Energy Group®
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Soy vs. Animal Fat
• Advantages of animal fat
methyl esters
• Higher Cetane
• Better oxidation stability
• No sterol glucosides
• Lower iodine value (under
the EN 14214 limit)
Specification 100% SME 100% AME
Cetane 48 > 53
Oxidation stability 3 - 6 hr > 6 hr
Sulfur
< 1 ppm 5 -12 ppm
Cloud Point
0 - 1 °C 6 -15 °C
• Disadvantages of animal fat methyl esters
• Higher cloud point than soy methyl esters
• Unique processing challenges—experience required!

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Renewable Energy Group®
Birmingham Average Temperature Range
and
Biodiesel Product Recommendations
Month Low High
Jan 32.3°F 52.8°F
Feb 35.4°F 58.3°F
Mar 42.4°F 66.5°F
Apr 48.4°F 74.1°F
May 57.6°F 81.0°F
Jun 65.4°F 87.5°F
Jul 69.7°F 90.6°F
Aug 68.9°F 90.2°F
Sept 63.0°F 84.6°F
Oct 50.9°F 74.9°F
Nov 41.8°F 64.5°F
Dec 35.2°F 56.0°F
REG 9000-1 (5) Last Half Nov – First Half March
REG 9000-10 Last Half March – First Half Nov
This information is based on B100 stored in above
ground un-heated tanks. If pre-blending B5 with
ULSD winter grade REG 9000-10 could work year
round. It is highly recommended that you consult
your fuel supplier and Biodiesel supplier for your
specific operation and usage.

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Renewable Energy Group®
Stated Scope of RFS-2
Rulemaking
• “This action proposes regulations designed to ensure that
refiners, blenders, and importers of gasoline and diesel
would use enough renewable fuel each year so that the
four volume requirements of the Energy Independence
and Security Act would be met with renewable fuels that
also meet the required lifecycle greenhouse gas
emissions performance standards.”
74 Fed. Reg. at 24,904.
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Renewable Energy Group®
RINS Background Information
• In 2005, Congress passed Energy Policy Act of 2005, legislation
focusing on America’s energy needs and enhancing our energy
security.
• Renewable Fuels Standard (RFS) was a significant component of
that legislation.
• Environmental Protection Agency responsible for implementation of
RFS and ensuring compliance requirements are met.
• One of the key requirements, Renewable Identification Number
(RIN’s) is central to RFS program administration.
• RIN’s is the basic currency for the RFS program for credits, trading
and use by obligated parties to track the volumes of renewable fuels.
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Renewable Energy Group®
Renewable Fuel Volume Requirements for RFS2 (billion gallons)
Year
Cellulosic
biofuel
requirement
Biomass-based
diesel
requirement
Advanced
biofuel
requirement
Total renewable
fuel requirement
2008 n/a n/a n/a 9.0
2009 n/a 0.5 0.6 11.1
2010 0.1 0.65 0.95 12.95
2011 0.25 0.80 1.35 13.95
2012 0.5 1.0 2.0 15.2
2013 1.0 1.0 min 2.75 16.55
2014 1.75 1.0 min 3.75 18.15
2015 3.0 1.0 min 5.5 20.5
2016 4.25 1.0 min 7.25 22.25
2017 5.5 1.0 min 9.0 24.0
2018 7.0 1.0 min 11.0 26.0
2019 8.5 1.0 min 13.0 28.0
2020 10.5 1.0 min 15.0 30.0
2021 13.5 1.0 min 18.0 33.0
2022 16.0 1.0 min 21.0 36.0
Biodiesel Consumption
Million of Gallons

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Renewable Energy Group®
RINS Overview Continued
• A RIN is a 38 character numeric code that is generated
by the producer or importer of renewable fuel
representing gallons of renewable fuel produced/imported
and assigned to batches of renewable fuel that are
transferred upon change of ownership to others.
• Biodiesel producers are required to transfer all RINS
attached to a batch of biodiesel along with the fuel.
• Assigned RINS are transferred when ownership of a
batch of fuel occurs.
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Renewable Energy Group®
RINS Background Information
• RINS remains with the biodiesel until it is blended into a finished
product by the renewable blender.
• An obligated party that purchases biodiesel must separate the RINS
from the biodiesel when they take ownership.
• Obligated party may keep or sell the RIN.
• Obligated party may either blend or resell the biodiesel without
the RIN.
• When biodiesel with RIN is blended into finished product by non-
obligated parties, the RINS can be separated from the biodiesel
and then becomes a tradable commodity.
• Biodiesel must be blended at 80% or less into diesel fuel before
RINS can be separated.
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Renewable Energy Group®
RINs value hierarchy
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Every gallon of biodiesel creates 1.5 RIN.
Obligated party required to collect X number of RINs
per year/quarter. When obligated parties have to
purchase RIN on open market, your fuel supplier has
opportunity to sell their RINs and profit.
RIN value to fleets: awareness allows you to better
negotiate bids and fuel prices

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Renewable Energy Group®
Biodiesel RINS Economics (example)
• RINS price 07/21/2009 = $.17---$.18
• 1 biodiesel gallon = 1.5 RINS
• Current value = $.255 to $.27/gallon
• Chicago Rack #2 ULSD $1.72
• B99.9 REG Iowa/Illinois Plant $1.80
• RINS $0.26
• Total $1.54
• Gross Margin Opportunity $0.18
+ State Incentives (IL, IA, TX, SC)
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Renewable Energy Group®
RIN’s Marketing Service
• REG and Bunge North America have entered into a co-marketing agreement
on RINS.
• REG would post an indicative price for RINS on its pricing sheet distributed
daily.
• If they choose, the customer has the opportunity to sell back their RINS
(once detached) to REG marketing partner at agreed upon price.
• Allow customer to quickly make liquid their RINS once they become
detached.
• REG customers are under no obligation to sell their RINS to REG’s
marketing partner.
• REG will have no knowledge of any trading activity between its customers
and the marketing partner.
• Customers participating in the program will be required to comply with all
EPA regulations concerning RINS transactions.
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Renewable Energy Group®
RINs Resources
• What is a RIN and what do I do with it? NBB
• EPA’s Renewable Fuels Standard website
• EPA Moderated Transaction System (RFS2 RIN tracking
proposal)
• RINs compliance tools link
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Renewable Energy Group®
Biodiesel Challenges
• Distribution
• Competitive Pricing
• Quality
• RFS Implementation
• RIN’s valuation
• Pipeline access
• Feedstock mix
• Tight credit markets
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29. 416 S. Bell Ave.
Ames, IA 50010
888-REG-8686
www.regfuel.com29
Don Nelson-National Sales Director
Renewable Energy Group
(w) 515-239-8140
(c) 515-231-1817
don.nelson@regfuel.com
www.regfuel.com