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

2. Copyright 2009 Renewable Energy Group 2 Presentation Outline REGs Overview Producing and Marketing Quality Biodiesel RFS 2 Update Biodiesel Economics 3. Copyright 2009 Renewable Energy Group 3 About Renewable Energy Group, Inc. 4. Copyright 2009 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 5. Copyright 2009 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. 5 6. Copyright 2009 Renewable Energy Group Biodiesel industry leadership 2002: REG builds nations 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. 6 7. Copyright 2009 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 USs leading terminal-operators REGs 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. 8. Copyright 2009 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 9. Copyright 2009 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 10. Copyright 2009 Renewable Energy Group National Distribution Infrastructure 10 11. Copyright 2009 Renewable Energy Group 11 Which one of these doesnt belong? Canola Oil Soybean Oil Corn Oil Recycled GreaseAlgaeJatropha Oil Beef Tallow 12. Copyright 2009 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. 13. Copyright 2009 Renewable Energy Group 13 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 14. Copyright 2009 Renewable Energy Group 14 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. 15. Copyright 2009 Renewable Energy Group 15 16. Copyright 2009 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 products fuel attributes including cloud point, Cetane value, oxidative stability, etc.; not the feedstock source 16 17. Copyright 2009 Renewable Energy Group 17 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 challengesexperience required! 18. Copyright 2009 Renewable Energy Group Birmingham Average Temperature Range and Biodiesel Product Recommendations Month Low High Jan 32.3F 52.8F Feb 35.4F 58.3F Mar 42.4F 66.5F Apr 48.4F 74.1F May 57.6F 81.0F Jun 65.4F 87.5F Jul 69.7F 90.6F Aug 68.9F 90.2F Sept 63.0F 84.6F Oct 50.9F 74.9F Nov 41.8F 64.5F Dec 35.2F 56.0F 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. 19. Copyright 2009 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. 19 20. Copyright 2009 Renewable Energy Group RINS Background Information In 2005, Congress passed Energy Policy Act of 2005, legislation focusing on Americas 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 (RINs) is central to RFS program administration. RINs is the basic currency for the RFS program for credits, trading and use by obligated parties to track the volumes of renewable fuels. 20 21. Copyright 2009 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 22. Copyright 2009 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. 22 23. Copyright 2009 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. 23 24. Copyright 2009 Renewable Energy Group RINs value hierarchy 24 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 25. Copyright 2009 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) 25 26. Copyright 2009 Renewable Energy Group RINs 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 REGs 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. 26 27. Copyright 2009 Renewable Energy Group RINs Resources What is a RIN and what do I do with it? NBB EPAs Renewable Fuels Standard website EPA Moderated Transaction System (RFS2 RIN tracking proposal) RINs compliance tools link 27 28. Copyright 2009 Renewable Energy Group Biodiesel Challenges Distribution Competitive Pricing Quality RFS Implementation RINs valuation Pipeline access Feedstock mix Tight credit markets 28 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