“This is a game-changer”John HinesFormer Deputy Secretary for Water PA Department of Environmental Protection

October 15, 2014

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Forward Looking Statements

This presentation contains, in addition to historical information, forward-looking statements regarding Bion Environmental Technologies, Inc. (the "Company"), which represent the Company's expectations or beliefs including, but not limited to, statements concerning the Company's operations, performance, financial condition, business strategies, and other information and that involve substantial risks and uncertainties. The Company's actual results of operations, most of which are beyond the Company's control, could differ materially. For this purpose, any statements contained in this presentation that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate," “projected" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. Factors that could cause or contribute to such difference include, but are not limited to, limited operating history; uncertain nature of environmental regulation and operations; uncertain pace and form of development of nutrient (N&P) reduction market; risks of development of first of their kind Integrated Projects; need for substantial additional financing; competition; dependence on management; and other factors. Investors are urged to also consider closely the disclosures and risk factors in the Company’s current Form 10-K, filed with the Securities and Exchange Commission, available at www.sec.gov.

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Bion Overview

• Bion’s technology largely eliminates the environmental impacts of large-scale livestock production- Nutrients (nitrogen and phosphorus)- Ammonia, greenhouse gas, hydrogen sulfide emissions- Pathogens, hormones, antibiotics

• Reclaims renewable energy and nutrients from the waste stream

• ONLY technology that provides proven comprehensive treatment for ‘wet waste’ stream (dairy, beef cattle and swine)

• Proven; scalable; commercially-tested; 7 US, 6 international patents

• Trade on OTCQB: BNET

• Largest cost driver: NUTRIENT (N & P) removal

• NO LONGER SUSTAINABLE or necessary

US Clean Water Spending

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• Primary federal law in the United States governing water pollution• Passed in 1972• Applies to “point sources”

- Smokestack or discharge pipe- Municipal wastewater treatment, power plant, industrial/manufacturing

• “Non-point sources” - Diffuse pollution source not from a specific location- Urban/suburban runoff, agriculture- Agriculture consumes 70% of the water in the US- Agriculture is essentially EXEMPT from the CWA

Clean Water Act

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Agriculture accounts for 70% to 90% of nutrients in most major watersheds

• Aug 31, 2014 – Washington Post – Large ‘dead zone’ signals more problems for Chesapeake Bay

• Aug 5, 2014 – MSNNews – 'Dead zone' in the Gulf of Mexico is the size of Connecticut

• Aug 4, 2014 – NPR – Toledo Water Ban Persists After New Test Results Cause Concerns

Headlines

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Lagoon

Manureslurry

Nitrogen released as ammonia gas (NH4) [50%]

Field

Manureslurry

N Run-off [25%]

CropUptake

[25%]

Traditional ManureManagement Practice

Livestock: Largest Source of Nutrients

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- Chesapeake Bay, GOM, Great Lakes, etc, etc, etc.- Hypoxia from algae/phytoplankton blooms from excess nitrogen- Pathogens, toxic blooms- Very expensive to treat water downstream now that

nitrogen is diluted with millions of gallons of water

AquifersSurface Waters

Downstream Estuaries

75% N lost to the environment

How Big is the Problem?

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Nutrient load 30X to 100X human waste - UPSTREAM

• 9 million dairy cows• 92 million beef cattle/calves• 64 million swine• 2 billion poultry

US EPA now acknowledges that excess nutrients are the greatest water quality

problem in the US today

How Bad is the Problem?

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• Ammonia emissions• Greenhouse gas emissions• Pathogens • Antibiotics • Hormones

Other Livestock Waste Impacts

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Chesapeake Bay TMDL

• Executive Order 13508 (May 12, 2009)• US EPA TMDL: first watershed-wide

TMDL• Reduce 78M lbs of Nitrogen by 2025

with two-year milestones• Six states, DC• Estimated cost (Bay-wide):

- 2009: $15B to $28B- 2012: $30B to $50B

• Substantial penalties for non-compliance

Annual Cost of Upstream Alternatives

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Bion can begin delivery of up to 2 million pounds based on full operation of Kreider 1 and 2 systems (target 2015)

Source: PA LBFC Report; CB Commission Report

PA spent $2 billion to upgrade 12 municipal wastewater treatment plants to achieve 3 million lbs of nitrogen reduction

Heavily vested (and invested) interests that like the status quo- Municipal Authorities- Construction firms- Engineering firms- Banking interests- Certain “conservation” groups

Why? Follow the Money…

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National Association of Clean Water Agencies (NACWA) began to support non-point source nutrient trading in 2013

• 2013 PA Legislative Budget and Finance Committee Report- Upstream non-point source strategy (large agriculture projects) can cut

costs up to 80% of previous estimates: $1.5 billion annually (by 2025)- “Pennsylvania’s compliance with the CB TMDL standard is at risk as

there is insufficient funding available to comply under today’s existing cost structure.”

• PA defaulted on TMDL nitrogen mandate by 2M lbs for 2013 Water Year- Projected to default by 6M lbs for the 2017 Water Year

• EPA began to object to municipal permit renewals in April 2014• PA Senate Bill 994 (Major Watershed Improvement Act)

- Introduced June 2013- Competitive procurement program for nutrient reductions- Equal access to public funding – all solutions based on cost and benefits- Now supported by National Milk, PA Farm Bureau, PennAg, et al- Anticipate passage of 994 in Q1 2015

Pennsylvania

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• Excess phosphorus impacting Lake Michigan• New phosphorus limits established in 2010 now taking effect• WI Manufacturing & Commerce estimates $4.9B to comply

– Green Bay and Madison Municipal Sewer Districts facing unaffordable costs to upgrade plants and install storm water projects

• WI SB 547 – Clean Waters & Healthy Economy Act adopted 4/24/14– First state program to direct significant financial resources to long term

non-point source agriculture projects, like Bion’s – Bion in discussions with WI stakeholders – regulatory, county and

municipal, and point- and non-point sources – about potential large-scale projects

– DNR working with USEPA (Reg 5) to develop baseline/credit protocols

• Wisconsin has second largest dairy herd in the US – 1,265,000 head– Largest source of unregulated nutrients in the state– Large potential market for Bion

Wisconsin

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• Scientific studies are in – all say the same thing• Chesapeake Bay TMDL established and enforcement has begun

- Model for Great Lakes, Mississippi River Basin

• Chesapeake Bay economic studies- Chesapeake Bay Commission (RTI International)- PA Legislative Budget and Finance Committee

• Nutrient credit trading programs now in 40 states• Models being established

Policy Change - Milestones

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Credits now have to be VERIFIED…creates a standardized “commodity”. State and federal statutes require low-cost

solution for publicly-funded projects.

• Technology platform is effective, cost-effective, accepted- 24 years; $80M in development- Seven US patents (two pending); six international (several pending)

• 30 first generation systems installed four states (dairy, swine) by 2003

• Second generation platform deployed in PA in 2011- Funded by PENNVEST (PA Infrastructure Investment Authority)- Credit verification in 2012- Full water quality permit issued 2012 (only one in US)- 2014 USDA Technical Assessment: “This project is deemed to be

functional, verifiable, and sufficiently advanced to qualify for USDA programmatic funding. An official full application is encouraged by USDA.”

• Third generation platform- Asset recovery – increased by-product values- Patent filed September 2014

Technology

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• Kreider 1: 2,000 dairy cows (system operating)

• Kreider 1 financed by PENNVEST - $7.8 million, non-recourse, low interest, 10 yr

- Today’s cost: $3.2 million

• Kreider 2: 5 million chickens (develop 2014/15) - Phase 2: capex approx $8 million

• Kreider 1 & 2: ~2 million pounds annually at $8 to $10 per pound per year when in full operation (anticipate 2015)

• Anticipate $7M to $10M annual EBITDA from credits alone

• Additional revenues from by-product sales, other credits

Kreider Farms Economics

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• $7M to $10M annual EBITDA

• Customer: Pennsylvania

• 10 to 20 year guaranteed off-take agreements (per PA study recommendations)

• Comparables P/E- York Water (YORW) 25.5 - Aqua America (WTR) 22.7- American Water Works (AWK) 20.5

• Implied valuation of Kreider Project (20 P/E)- Phase 1 & 2 (2M pounds) $140M to $200M- Higher with by-products- Total investment (today) $12M

Utility Revenue Model (Kreider Only)

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How Big is Bion’s U.S. Opportunity?

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• Thousands of farms that meet Bion’s minimum scale thresholds

• No competitors to date

• Dairy- 44% of US dairy cows on farms over 1,000 head- 5,280,000 head (including support herd)

• Swine- 61% of US swine on farms over 5,000 head- 40,260,000 head

• 9 million dairy cows• 92 million beef cattle/calves• 64 million swine• 2 billion poultry

International Initiatives

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The Company has been pursuing these opportunities [project development] within the United States during the later stages of technology redevelopment and has recently begun activities to pursue such opportunities internationally.

Bion 10Q March 31, 2014

• 540 dead zones worldwide

• Nutrients focus of international concern

• Ed Schafer, Bion’s Exec Vice Chairman, is former US Secretary of Agriculture and former two-term Governor of North Dakota

• Livestock waste now a national security issue in China- Sep 5, 2014 – ECNS (China) – China develops rules on curbing world's

highest ammonia emission levels- May 20, 2014 – Scientific American – China's Appetite for Meat Swells,

along with Climate Changing Pollution- Apr 18, 2014 – NPR – China Admits That One-Fifth Of Its Farmland Is

Contaminated- Mar 4, 2014 - Reuters - China to 'declare war' on pollution, premier says

Bion’s technology is proven and accepted

but…

the SECTOR – clean water spending on non-point sources – has not yet been validated

• Evolving opportunity• No research/no comparables/no qualified analysts• No institutional knowledge

Little or No Value for Technology

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Near Term UpsideSector/Technology Valuation

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Kreider Farms: $15M capex; estimate at least $7 to $10M annual EBITDA

ONE FARM

What will Bion’s technology be worth if/when the sector is “validated” and

institutional investment begins?