Copyright2017RenewableEnergyGroup,Inc.

Renewable Diesel & Biodiesel

Considerations for Sustainable Fleets

Copyright 2017 Renewable Energy Group, Inc.

Fueled By Convenience !REG can make it easier to manage all your fuel needs

! !!

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•  REG-9000 biodiesel •  REG-9000/Renewable Diesel •  #2 ULSD •  Heating oil •  Blended fuels ---B2-B20 & higher ---RD/B20 ---?????

Copyright2017RenewableEnergyGroup,Inc.

What is Renewable Hydrocarbon Diesel?!•  RHD is hydrocarbons made from biological oils and

fats (triglycerides) by hydrotreating!

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H2!Paraffin!

Prop

ane!

Paraffin!

Paraffin!

Triglyceride!

Products!Raw materials!

Hydrotreating reaction!

H2!H2!

H2!H2!H2!

H2!

Copyright2017RenewableEnergyGroup,Inc.

REG Geismar, LLC !!

•  75 million gallons per year nameplate capacity!•  Utilizes high and low FFA feedstocks!

4

Copyright2017RenewableEnergyGroup,Inc.

What is Biodiesel?!•  Biodiesel is methyl esters made from biological oils and

fats (triglycerides) by transesterification!

Methanol Methyl ester

Gly

cerin

Methyl ester

Methyl ester Methanol

Methanol Triglyceride

Products Raw materials

Transesterification reaction!

Copyright2017RenewableEnergyGroup,Inc.

Benefits of RHD !!•  Paraffinic fuel, which means:!

–  Exceptional Cetane number!•  Greater than 65 (Federal diesel specification limit is 40)!•  Cetane number is an indicator of combustion quality!

–  Reduced tailpipe emissions!•  In particular, NOx and carbon monoxide!•  Also particulate matter and total hydrocarbons!•  Virtually no sulfur!

–  Pipeline approval as a blend component!

•  Desirable Cloud Point!–  Cloud Point ranges from -10 °C to -20 °C!–  Winter pipeline specs for diesel are around -10 °C!

•  Can be blended at any level with diesel and biodiesel!6

Copyright2017RenewableEnergyGroup,Inc.

Benefits of Biodiesel!•  Oxygenated fuel, which means:!

– Reduced tailpipe emissions!•  Sulfur, carbon monoxide, hydrocarbons and particulates!•  Burn fuel instead of losing it out the exhaust!•  Emission reductions increase with amount of biodiesel in blend!

–  Enhanced lubricity!•  Excellent for Ultra-Low Sulfur Diesel!•  No lubricity additives needed with B2 or higher blends!

–  Biodegradable!•  On soil, B100 degrades as fast as sugar!•  Also accelerates the biodegradation of petroleum diesel!

•  Comparable to vegetable oil for transport & handling requirements!

Copyright2017RenewableEnergyGroup,Inc.

States with Notable Biomass-Based Diesel Policies

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Note: Current as of 01/08/2016 Source: DOE Alternative Fuels Data Center and Individual State Statues

LEGEND Mandate - Fuel use or Bioheat Tax Incentive - sales Tax Incentive - production

Low Carbon Fuels Standard

Bioheat Mandate passed – Awaiting Surrounding States Fleet Requirement

No major policy Policy currently suspended

New York City

Copyright2017RenewableEnergyGroup,Inc.

Demand for Renewable Diesel and Biodiesel

LCFS California Volume Projections!

0

500

1000

1500

2000

2500

20112012201320142015201620172018201920202021202220232024202520262027202820292030

BMBDVolume

Sources. NBB---2011-1016, CARB quarterly reports. CARB Biofuels Supply Module w/default input values.

1.9 billion gallons of BMBD. Biodiesel/RD = 54% of diesel pool.

Copyright2017RenewableEnergyGroup,Inc.

Demand for Renewable Diesel and Biodiesel!Oregon Clean Fuels Program!

•  2015 volume was 25 million gallons.!

•  2016 volume was 43 million gallons.!

•  Biodiesel: 33% of 2016 credit generation (no imports).! 2016CreditGenera5on

Ethanol Biodiesel OtherSource: NBB

Copyright 2017 Renewable Energy Group, Inc.

Renewable Diesel Availability!•  ~200 million gallons of domestic production capacity of

renewable diesel in USA. !–  High demand!–  Premium markets!

•  ~1.1 billion gallons of renewable diesel available globally.!

•  Vast majority of US consumption of renewable diesel occurs in California.!

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Copyright2017RenewableEnergyGroup,Inc.

Biodiesel Product Availability!

12Source: NBB

Copyright 2017 Renewable Energy Group, Inc.

Biomass-based diesel emissions!

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Note: Allemissionsdatatakenfrom2006CumminsISM370onFederalTestProceduredrivingcycle,asreportedinDurbin,ThomasD.,etal."CARBAssessmentoftheEmissionsfromtheUseofBiodieselasaMotorVehicleFuelinCalifornia“BiodieselCharacterizaOonandNOxMiOgaOonStudy”."CaliforniaAirResourcesBoard:Sacramento,CA(2011).ComparisonswithFederalULSDwereconductedbasedonalinearcomparisonwithCARBULSDdata.Allbiodieseldatashownistakenasanaverageofthemeansofhighandlowcloudpointbiodieselemissionsresults,whereavailable.B50/R50resultsarepredicted.

B50/R50

R100

B20/R80

0%

10%

20%

30%

40%

50%

60%

70%

%Red

ucJo

nfrom

ULSD

TotalHydrocarbons(THC)

B100

0%

10%

20%

30%

40%

50%

60%

70%

%Red

ucJo

nfrom

ULSD

ParJculateMaUer(PM)

0%

5%

10%

15%

20%

25%

30%

%Red

ucJo

nfrom

ULSD

CarbonMonoxide(CO)

-15%

-10%

-5%

0%

5%

10%

15%

20%

%Red

ucJo

nfrom

ULSD

NitrogenOxides(NOx)

Copyright2017RenewableEnergyGroup,Inc.

Biodiesel/Renewable Diesel Blending Economics (April 6, 2018)

14Example only, based on approximate numbers from Q1 2017

No. 2 ULSD NYMEX = $1.95/gal

REG 80/20 Rack Price = $1.90/gal (California)

= $3.25/gal (Washington)

REG B99 Pricing = $1.35/gal (California)

= $1.85/gal (Washington)

Copyright2017RenewableEnergyGroup,Inc.

New Product: 80% RHD 20% Biodiesel!

•  REG has registered (CARB) and is currently selling an 80% Renewable Diesel, 20% Biodiesel product in California.!

•  Favorable emissions profile.!

•  Tremendous lubricity.!

•  Better economics than neat renewable diesel.!

•  Extends availability of Renewable Diesel.!

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Copyright2017RenewableEnergyGroup,Inc.

Next Product: 60% #2 ULSD---20% Renewable--- 20% Biodiesel!

•  REG could provide 50/50 blend of REG-9000 RHD/Biodiesel to be used as blendstock mixed at different blends with #2 ULSD!–  90/5/5!–  80/10/10!–  60/20/20!

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60%20%

20%

0

#2ULSD

Biodiesel

RenewableDiesel

50%50%

REG

Biodiesel

RHD

Copyright2017RenewableEnergyGroup,Inc.

Biomass-based diesel review!

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Renewable Hydrocarbon Diesel and Biodiesel!

Feedstock! Process! Product!

Animal!fat!

Vegetable!Oil!

Renewable Hydrocarbon Diesel!

•  React with hydrogen (hydrotreat & isomerize)!

•  Convert 3-carbon backbone to renewable propane!

•  Convert oxygen to H2O!

•  Meets the diesel spec, ASTM D975!

•  Molecules are familiar constituents of ULSD (petroleum diesel)!

•  Paraffinic fuel!

Specification!

•  Meets the biodiesel spec, ASTM D6751!

•  Different molecules than those in petroleum diesel!

•  Oxygenated fuel!

Biodiesel!•  React with methanol

(transesterification)!•  Convert 3-carbon

backbone to glycerol!•  Oxygen remains in

fuel molecule!

Paraffin!

FAME!

Both processes can utilize any fat

or oil.!

Copyright2017RenewableEnergyGroup,Inc.

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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

Broad Marketing & Logistics Capabilities

REG STATS:

REG has been producing biodiesel since 1996.

502 MMGY

Over 500 million gallons per year in nameplate capacity.

20+ YEARS

Copyright2017RenewableEnergyGroup,Inc.

Thank You.!•  Jon Scharingson!•  Email: jon.scharingson@regi.com!•  Phone: 515 509 1259!