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SHOW 2013
NATSO
THE
1/29/13
This presentation includes Financial Projections that are managements estimates of the expected results of future operations of Renewable Energy Group, Inc. (REG). Management believes that the assumptions concerning future events and circumstances outlined herein are some of the signicant factors upon which the results of REG will depend. The Financial Projections represent a prediction of future events based on assumptions, which may or may not occur, and may not be relied upon to indicate the actual results which will be obtained. Actual results may vary materially from the Financial Projections. Accordingly, management does not guarantee or warrant the results of REG. The unaudited, historical, pro forma nancials are derived from audited nancial results of West Central, InterWest, and REG LLC, all predecessor companies of REG. In some cases, you can identify forward-looking statements by terms such as "may," "might, "objective," "intend," "should," "could," "can," "would," "expect," "believe," "estimate," "predict," "potential," "plan, or the negative of these terms, and similar expressions intended to identify forward-looking statements. These statements reect current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forwardlooking statements.!
Presentation Outline!
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Biodiesel Market Development! National! State! Biodiesel Economic Opportunity for Travel Centers! RINS! REG Update!
1/29/13
Biodiesel Today
Drop-In Diesel Replacement Promotes Energy Security
Feedstock Flexibility
RFS2 Driver
RFS-2!
2013 RVO = 1.28 Billion Gallons! 2014 RVO = To Be Determined!
1/29/13
Its Been A Roller Coaster, But U.S. Now Has a Growing Biodiesel Domestic Market!
Growing domestic market through RFS2 starting in 2011
1,280
1,000
506 309
2010
2011
Blenders Tax credit reinstated
2012
2013
Blenders Tax credit reinstated
RFS2 Effective
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121.19
120
118.24 108.72
Millins of Gallons
100 80 60
70.56
35.69
40
20
0
January
33.47
41.97
34.39
36.29
32.44
32.02 25.34
34.86
30.79
36.46
February
March
April
May
June
9
July
August
September
October
November December
Source Data: EPA EMTS, Census Bureau and DMN EsUmate for Dec
2010 Supply
2011 Supply
2012 Supply
1.6000
1.4000
1.2000
1.0000
0.8000
0.6000
0.4000
Midvalue RINS
Dec-11
Jun-10
Jun-11
Apr-10
Apr-11
Aug-10
Aug-11
Apr-12
Jun-12
Jul-11
Aug-12
Oct-10
Oct-11
May-10
Mar-11
May-11
May-12
Feb-11
Nov-10
Sep-11
Nov-11
Oct-12
Jan-11
Nov-12
Dec-10
Mar-10
Mar-12
Dec-12
Jan-10
Feb-10
Sep-10
Jan-12
Feb-12
Sep-12
Jul-10
Jul-12
0.0000
10
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Source: REG
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Iowa!
The tax credit now applies to all biodiesel gallons sold at retail! 2013-2017!
For biodiesel classied as B5 or higher, the (credit) rate is $.045 per gallon!
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Illinois!
Incentives! Biodiesel blends between B1 and B10 are given a 20% exemption of on sales tax between July 1, 2003 and December 31, 2013. B100 and blends above B10 are totally exempted on sales between July 1, 2003 and December 31, 2013. All exemptions on all fuels end December 31, 2013. Value of tax exemption is 6.25%.....extended in December until 2018.!
Fleet Mandate! The following entities are required to use a minimum blend of B5 when fueling at a bulk central fueling facility! Diesel powered vehicles owned or operated by state, county or local governments! School districts, community colleges, public colleges or universities! Mass transit agencies!
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Renewable Energy Group
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Texas!
Incentives! Grants are available for projects improving air quality including heavy-duty vehicle replacement, alternative fuel dispensing stations, and alternative fuel use ! Grants are available for alternative fuel and advanced technology demonstration and infrastructure projects to encourage and support development and commercialization of technologies reducing pollution! $.20/gallon excise tax abatement per gallon of B100.! The biodiesel or ethanol portion of blended fuel containing taxable diesel is exempt from the diesel fuel tax. ! Fleet Mandate! State eets greater than 15 vehicles, may not purchase or lease a motor vehicle unless the vehicle uses compressed natural gas, liqueed natural gas, propane, ethanol E85 or greater blends, biodiesel B20 or greater blends or electricity.! Labeling Laws/Additive Requirements! No longer required to additize biodiesel blends up to B50 in Texas.! Labeling laws simplied: no longer required labeling to 1/10 of 1 percent.!
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Minnesota ! Illinois ! Iowa ! Oregon ! Washington ! Pennsylvania ! Texas ! Louisiana ! New York ! Rhode Island! South Dakota Kentucky ! North Carolina North Dakota!
!B5 Mandate effective May 2009! !Tax abatement on B11 biodiesel blends 6.25%! !$0.045/gallon tax income tax credit for B5! !B5 Mandate effective April 1st 2011! !B2 Mandate effective December 2008! !B2 mandate effective January 2010 ! !$0.20/gallon tax abatement on B100! !B2 Mandate once 15 mgy of production capacity! !B2 Heating Oil mandate !! !Biodiesel is exempt from excise taxes! !Reduced road tax rate for biodiesel blends! !Income tax credit of $ 1.00/gall of biodiesel blends! !Biodiesel is exempt form state sales and use tax! !Fuel suppliers entitled to a $0.05/gal credit for B5 !
Texas Rack Price #2 ULSD ! Texas Excise Tax Abatement (B20) REG Houston FOB Price ! Transportation! ! ! FOB Travel Center Cost ! RINS Value ($0.50/RIN) ! FOB Travel Center Less RINS ! Blending Economics ! !
!$3.05! !$0.04/B20 Gallon Sold! !$3.35/gallon! !$0.10/gallon! !$3.45/gallon! !$0.75/biodiesel gallon! !$2.70/biodiesel gallon! !$0.35/biodiesel gallon! B20 Biodiesel Blend
Texas Excise Abatement (.04/gal of B20) RINS Value/B100 Gallon Biodiesel Blending Value/Month
1/29/13
Rack Price #2 ULSD! ! REG FOB Plant Price (10C) ! Transportation ! ! FOB Travel Center Biodiesel Price RINS Value ($0.50) ! ! FOB Biodiesel Price Less RINS Diesel gallons/month! !
! ! !
! ! !
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National Distribution!
REG Plants (in production) REG Plants (partially constructed) REG Terminals Headquarters San Francisco office
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Copyright 2012
Renewable Energy Group
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RINS values and state Incentives have acted as economic engine to incent Travel Centers to blend biodiesel! Travel Centers supporting RFS-2 Federal compliance by serving as an additional source supplying RINS to obligated parties!
Copyright 2012
Renewable Energy Group
REG owns and operates a network of stateof-the-art, commercial-scale biodiesel production facilities
24 24
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15 MMGY 40% complete Acquired: 09/2010 Startup: TBD (Currently operating as terminal)
High
Low
25 25
PC
Partially completed
Doesnt guarantee that the product being marketed meets product specications because the entities may not be following BQ 9000 requirements all the time.!
! www.bq-9000.org! !
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REG-9000 Biodiesel !
REG-9000 Biodiesel Advantages Marketed based on fuel characteristics, not the type of feedstock
Ability to produce from a wide range of lower cost raw materials enables pricing flexibility Reliability as an off-take customer for key suppliers of contract-manufactured fuel Ability to meet stringent customer specifications Preferred supplier to key customers and trading partners
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Contact Information!
REG Biodiesel Sales Representatives! ! Brian Wierson! Brian.Wierson@REGI.com! 515-239-8075! ! Tom Schroeder! Tom.Schroeder@REGI.com! 515-239-8144!
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