MATC’s 10th Annual Green Vehicles Workshop

April 24th, 2013 * Milwaukee, WI

Vehicle & Fuel Trends – Biodiesel Update Tony Hartmann, Great Lakes Ag’ & Most Energy Past President - Wisconsin Biodiesel Association

Wisconsin Biodiesel Producers • SunPower, Cumberland 2-3 Mmgy (nameplate) • Bio-Blends, Manitowoc 2-3 Mmgy “ • Sanimax, Deforest 10-20 Mmgy “ • Cashton Biodiesel 8-12 Mmgy “

Biodiesel Bottom Line

Source: www. seekingalpha.com, Margin Update, Robert Wagner, 4/17/13

‘RFS-2’ Mandate • RFS-2 caps starch-ethanol & requires use

of 1 B gals of advanced biofuels in 2012 & like amount of biodiesel, increasing to 21 B gals by 2022 –> 16 B gals. of which is cellulosic*

*Defined as Renewable fuel produced from cellulose, hemicellulose, lignin, or waste organics, w/ 60% GHG reduction (cellulosic ethanol, BTL diesel, green gasoline, methane, etc.)

RFS2 Fuel Volumes & Type

Billion Ton Study

Question – Is there enough biomass feedstock to replace 30% of annual U.S. petroleum

consumption (6 M barrels/day, 90 B gals/yr.)?

Answer – Yes (136%)

Feedstock Type & Distribution

Annual Ag’ Land Resources

• Crop Residuals (75%)……….………….……..428 M • Perennial Crops (55M acres)………...……377 M • Food Grain…………………………………….…….87 M • Manure/Animal & Process Waste...……106 M 998 M

(dry tons)

DOE/USDA (4/05)

The RIN deal

• RINs begin at the biofuel refinery. • For each gal. of corn-starch ethanol produced,

one RIN is issued; for agri-biodiesel, 1.5 RINs • Cellulose ethanol receives 2.5 RINs/gal • Energy Independence & Security Act of 2007

provides RINs for unspecified advanced biofuels • RIN types; ‘D1-D7’ (Biodiesel = D4)

Renewable Identification Numbers – ‘RINs’

• Biodiesel = D4 RIN • Advanced Biofuel = D5 RIN

RINs & U.S. Biodiesel Production

• Obligated parties in the fossil fuel industry must purchase RINs or biofuel directly

• 2013 biodiesel production figures: Feb. < 78 M gals; (150 M gals for Jan./Feb.) • In Feb. (D4) RIN prices jumped to 86 cents • By April 9, D4 RIN prices approached $1

Volatile RIN Prices

• U.S. biodiesel production, and therefore RIN generation, are low relative to the new 2013 increased mandate of 1.28 billion gallons

• Imports currently high • RINs not generated = shortage of RINs • Biodiesel blenders are happy for now… • Obligated parties not so much

Current Policy Benefits

• U.S. biodiesel tax credit revived through 2013 by Congress (Retro-active to 1/1/12)

• Cost > $2 billion under a provision passed by Congress to avoid the "fiscal cliff.”

• Iowa Senator Grassley expects the credit will be phased out ‘at some point’ (About 1/4 of U.S. soy oil goes to biodiesel - 750 Mmgy)

• RIN credits at all-time high in 2013

Prime-time Industry? .

Economic competitiveness of a billion-ton bioenergy and bioproducts industry

Bioenergy Research Centers

• Great Lks. BioEnergy Research Ctr. (GLBRC) * UW – Madison

• Joint BioEnergy Institute (JBEI) * Lawrence Berkley Nat’l Lab

• BioEnergy Science Center (BESC) * Oak Ridge National Lab (ORNL)

For Now… • Biodiesel good! • Just bring me some in Madison

Longer Term… •Biodiesel good! •Waste/recycled oil feedstock •B2 blend •Distributed production •Support lipid R&D

MATC’s 10th Annual Green Vehicles Workshop April 24th, 2013 * Milwaukee, WI

Vehicle & Fuel Trends – Biodiesel Update Tony Hartmann, Great Lakes Ag’ & Most Energy

608-215-4446