U.S. Biodiesel Industry UpdateGlobal Biodiesel CongressSeptember 22-23, 2010Sao Paulo, Brazil

National Biodiesel Board• Represents the biodiesel industry as

the coordinating body for research and development in the US. 

• Founded in 1992 by soybean commodity groups.

• NBB’s membership is comprised of state, national, and international feedstock and feedstock processor organizations, biodiesel suppliers, fuel marketers and distributors, and technology providers.• More than 280 members• Headquartered in Jefferson City, MO• Office also in Washington, DC

Industry Update

U.S. Biodiesel Plants

US Biodiesel Demand

2010 Production, by month

Dec/05 Jan/06 Feb/06 Mar/06 Apr/06 May/06 Jun/06 Jul/06 Aug/06 Sep/06 Oct/06 Nov/06

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

Million G

allons

Raw Material Use, 2010

7

Inedible Tallow and Grease17%

Poultry Fat1%

Total Soybean Oil47%

Lard4%

Other Feedstocks31%

Feedstock Used in Biodiesel Production (Jan to May 2010)

Federal Landscape

9

Policy Remains Critical

• Federal Policy remains an effective catalyst for the biodiesel industry• Biodiesel Blenders Tax Credit• Renewable Fuel Standard (RFS2)

9

Biodiesel Tax Credit

• Immediate Priority – Retroactive Extension of Biodiesel Tax Incentive

• Long-term Industry Goal — Multi-Year Extension

• Barriers• PAYGO/Costs

• Process/Limited Legislative Calendar

• Policy Concerns/Opposition

Renewable Fuel Standard(RFS-2)• Energy Independence and Security Act

of 2007 signed by the President on December 19, 2007• Increased RFS to to 36 billion gallons by

2022. 

• Within the RFS, created a minimum use requirement for “biomass-based diesel” which is a technology neutral classification, and includes biodiesel • Minimum usage requirements of 500

million gallons of biodiesel in 2009 up to 1 billion gallons in 2012.

RFS-2 Requirements

EPA Definitions40 CFR 80.1401

Advanced Biofuel means renewable fuel, other than ethanol derived from cornstarch, has lifecycle greenhouse gas emissions that are at least 50 percent less than baseline lifecycle greenhouse gas emissions.

Renewable Fuel (i) fuel that is produced from renewable biomass.

Renewable Biomass

(1)Planted crops and crop residue harvested from existing agricultural land cleared or cultivated prior to December 19, 2007 and that was nonforested and either actively managed or fallow on December 19, 2007.

(3) Animal waste material and animal byproducts

(6) Algae

(7) Separated yard waste or food waste, including recycled cooking and trap grease…

EPA Definition

Renewable Biomass for Biodiesel:Soybean oil

Corn oil from ethanol plants

Animal fats

Recycled grease

Waste grease

Algae

Canola** pending adoption of lifecycle analysis

Legal Challenges

• Challenge 1 – API and NPRA (March 29th,, 2010)• 2009/10 Combined Biomass-Based Diesel

Volume Requirements

• Overall Fairness of Implementing 2010 Volumes

• Challenge II - Clean Air Task Force (Friends of the Earth) (May 25th, 2010)• Challenging the LCA Assessment Used by EPA

• Challenging the Aggregate Compliance Approach

NBB has Joined EPA as an Intervener for Both Challenges

Continued Effort

• Future Volume Obligations• Future Discussions on LCA and

ILUC• Additional Feedstock Pathways

Feedstock Sources

Near Term Feedstock

Corn Oil from DGS

Yellow Grease

Animal Fats

Brassica Juncea

Camelina Oil

Soybean Oil

Cottonseed Oil

Palm Oil

Canola Oil

What is on the Horizon?

Longer Term SourcesGaining Attention Longer Shots

Low Ricin Castor

Halophytes

AlgaeJatropha

Photo by: Joel RosePennycress Brown Grease

Looking Forward

Issues

• Food and Fuel Issues

• Market Opportunities with Bioheat

• National Infrastructure

• Consumer Confidence

Co-products of Food Production

• Protein meal for livestock feed is the primary driver for soybean production

• Better utilization of the oil coproduct can reduce the price of the protein meal.

Food Supply Security

•In 2008, 360 million gallons of biodiesel from soybeans co-produced enough soybean meal for the equivalent of 110 billion rations of protein for the hungry.

•In 2009, 247 million gallons of biodiesel from soybeans co-produced enough meal for the equivalent of 72 billion rations of protein.

Oilheat Markets, Presents

Opportunity

• In September 2009, the National Oilheat Research Alliance declared a new vision for the Oilheat industry.

• By July 2010, all heating oil will be blended with biodiesel to insure that at least 2% of the fuel is renewable.

140,000,000 gallons.

• By 2030 all Oilheat will be ULSD with a 15% inclusion of biodiesel.

• By 2050 all Oilheat will be B100 biodiesel.

National Distribution Capabilities

Available through direct shipment from over 1,459 petroleum distributors nationwide

Approximately 1,321 retail filling stations nationwide, 200 locations are semi-truck accessible

Some 1200 terminals cover the U.S. landscape, 158 handle biodiesel nationwide, 73 automated for distribution

Consumer Confidence (Fuel Quality and BQ-9000)• A voluntary quality system

certification program for the North American biodiesel industry

• Applies internationally accepted quality management principles

• Incorporates fuel specifications

• Uses a series of audits to verify adherence to the company’s own quality management system

Who and What are Certified

• Three certifications possible for companies:• BQ-9000 Producer

• BQ-9000 Marketer

• BQ-9000 Laboratory (March 31, 2009)

BQ-9000 Status

• Over 70% of the biodiesel produced in 2009 was by a BQ-9000 accredited producer

• Currently have:• 40 BQ-9000 Producers

• 19 BQ-9000 Marketers

• 1 BQ-9000 Lab (Iowa Central)

• Large refiners (i.e. RFS2 obligated parties) are making

BQ-9000 a pre-condition of purchase

• OEM’s are requiring BQ-9000 for warranty support

47 States Enforce ASTM Specification for Biodiesel

EnforceD6751

No Referenc

e to D6751

ASTM D 6751-09 B100 - ASTM D 7467-09 B6-20

www.BQ9000.com

U.S. Biodiesel Industry UpdateGlobal Biodiesel CongressSeptember 22-23, 2010Sao Paulo, Brazil