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Copyright 2017 Renewable Energy Group, Inc. Enhancing Winter Performance With Distilled Biodiesel
Copyright 2017 Renewable Energy Group, Inc.
Enhancing Winter Performance With Distilled Biodiesel
Copyright 2017Renewable Energy Group, Inc.
Source:
Notes:
Safe Harbor Statement
2Printed 1-11-2017
This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially. Factors that could cause actual results to differ materially include, but are not limited to, potential changes in governmental programs and policies and federal and state governmental tax credits and incentives requiring or encouraging the use of biofuels, including RFS2, and biomass-based diesel production; changes in the spread between biomass-based diesel prices and feedstock costs; the future price and volatility of feedstocks; the future price and volatility of petroleum and products derived from petroleum;risks associated with fire or explosion at our facilities, including potential losses associated with the fires at our Geismar facility; the effect of excess capacity in the biomass-based diesel industry; unanticipated changes in the biomass-based diesel market from which we generate almost all of our revenues; seasonal fluctuations in our operating results; competition in the markets in which we operate; our dependence on sales to a single customer; technological advances or new methods of biomass-based diesel production or the development of energy alternatives to biomass-based diesel; our ability to successfully implement our acquisition strategy; our ability to use our development stage life sciences technologies to produce renewable chemicals, fuels and other products on a commercial scale and at a competitive cost, and customer acceptance of the products produced; the significant capital expenditures required to produce commercial quantities of renewable chemicals; and other risks and uncertainties described from time to time in REG's annual report on Form 10-K for the year ended December 31, 2015, quarterly reports on Form 10-Q and other periodic filings with the Securities and Exchange Commission.
This presentation reports Adjusted EBITDA, a non-GAAP financial measure. A reconciliation of Adjusted EBITDA to net income, the most comparable GAAP measure, is provided in the Appendix to this presentation.
Copyright 2017Renewable Energy Group, Inc.
Agenda
• REG Overview
• Using distilled biodiesel in cold weather
• REG Products & Services
• Questions
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REG Overview
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Copyright 2017Renewable Energy Group, Inc.
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Benefits of Biodiesel
Drop-in diesel replacement
Feedstocks are primarily fats,oils, and greases left over fromprotein production or restaurantuse, e.g.:
• Inedible corn oil
• Animal fats
• Used cooking oil
• Soybean oil
Provides lubricity to petroleum-based fuel and improves combustion
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Copyright 2017Renewable Energy Group, Inc.
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Benefits of Biodiesel
• Reduces lifecycle greenhouse gas emissions by 57 – 86% compared to petroleum diesel
• B20 (20% biodiesel blend) reduces hydrocarbon emissions by up to 20%, carbon monoxide emissions by up to 11% and particulate matter by up to 10%
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Source: Alternative Fuels Data Center http://www.afdc.energy.gov/fuels/bodiesel_benefits.html
Copyright 2017Renewable Energy Group, Inc.
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Advanced biorefining leadership
Grays Harbor, WA
Newton, IA
Houston, TX
Albert Lea, MN
Mason City, IA
Danville, IL
New Boston, TX Oeding, Germany
Ralston, IA Okeechobee, FL
Emden, Germany
Atlanta, GA Clovis, NM Emporia, KS New Orleans
Crude Feedstock Capable
Refined Feedstock
Partially Completed or Repairs Required
502MMGY
NAMEPLATE CAPACITY
13Biomass-Based
Diesel Plants
Fermentation Facility
Seneca, IL
Madison, WIGeismar, LA
Burlo, Germany
Feedstock Proc. Facility
Copyright 2017Renewable Energy Group, Inc.
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Broad Marketing and Logistics Capabilities
• 40 terminal locations (plus 12 plants)
• Delivered biodiesel and co-products to 47 states, 4 provinces in Canada, U.K and Peru in 2016
Distribution Footprint at Plants, Terminals and to Customers
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Copyright 2017Renewable Energy Group, Inc.
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REG-9000 Product Lineup
• Marketing biodiesel on finished fuel attributes, not feedstock sources
• Provides unprecedented options for high quality biodiesel from a single supplier
• REG-9000 specification exceeds ASTM D6751
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Distilled Biodiesel and Cold Weather
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Copyright 2017Renewable Energy Group, Inc.
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REG Distilled Biodiesel
• Distillation: a method for purifying liquids by a process of evaporation and condensation– Petroleum distillation: produces different “cuts” to get
gasoline, kerosene, diesel, etc.
– Methyl ester distillation: creates a purified biodiesel product
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Copyright 2017Renewable Energy Group, Inc.
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REG Distilled Biodiesel Benefits
• A more pure product that blends better with diesel
• Superior cold weather performance compared to undistilled biodiesel
• Greater feedstock flexibility
– Dependable supply and pricing
– Higher Cetane
– Lower Carbon Intensity
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Copyright 2017Renewable Energy Group, Inc.
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REG Distilled Biodiesel –CSFBT
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• Cold soak filter blocking tendency (CSFBT)− Test of blended fuel
(B20)
− FBT score indicates how easily fuel passes through a filter
− Best possible score is 1.00
Copyright 2017Renewable Energy Group, Inc.
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REG Distilled Biodiesel –CSFBT
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0.50
1.00
1.50
2.00
2.50
3.00
3.50
Neat ULSD Undistilled Soy Distilled REG-9000/5
Distilled REG-9000/10
CSF
BT
Sco
re
CSFBT Comparison
Actual lab results
Copyright 2017Renewable Energy Group, Inc.
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REG Distilled Biodiesel –CFPP
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• Cold Filter Plug Point (CFPP)– CFPP is a common
indicator of operability
limits for engines
– B5 blends: no increase over neat diesel
– B10 and B20 blends:• REG-9000/10 is
comparable to undistilled low Cloud Point biodiesel
• REG-9000/5 performs better than undistilled low Cloud Point biodiesel
Actual lab results
0
2
4
0
1
2
0
1
5
0
1
2
3
4
5
6
Deg
ree
s C
elsi
us
Impact of Biodiesel on Blended Fuel CFPP
Undistilled Soy REG Distilled 5°C REG Distilled 10°C
B5 B10 B20
Copyright 2017Renewable Energy Group, Inc.
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Cold Weather Additives
• Many additives have been shown to be effective at
minimizing winter operability challenges with both
petroleum diesel and biodiesel blends
• REG does not recommend any particular additives, but
please...
– Use an additive from a reputable supplier that has been developed
specifically for biodiesel blends
– Be aware that an additive that is successful for 100% petroleum
diesel might not be effective for your biodiesel blend
• Diesel additives should perform more reliably with distilled biodiesel than undistilled biodiesel
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Copyright 2017Renewable Energy Group, Inc.
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Biodiesel blending
Blending Rules of Thumb
• More agitation is better
• Blending is easier with warm fuel
– Both fuels should be at least 10 °F above their respective cloud points
at the time of blending
– 70 °F or above is optimal
• Additive blending should be performed at the time the fuels
are blended
– Particularly important when fuel is cold
• Thorough blending is important but is less critical with distilled
biodiesel
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Copyright 2017Renewable Energy Group, Inc.
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Biodiesel blend storage
Storage Rules of Thumb• General rule: when storing fuel for more than 12 hours, keep
the fuel at a temperature above its cloud point
– Distilled biodiesel blends and petro diesel: CP at least 5 °F below lowest
fuel temperature
– Undistilled biodiesel blends: CP at least 10 °F below lowest fuel
temperature
• Exceptions include:
– Tank is used frequently and consistently
– Tank can be mixed or recirculated
– Tank can be heated
– The fuel can be stored until spring
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REG Products & Services
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Copyright 2017Renewable Energy Group, Inc.
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Choosing your biodiesel
• Know the quality of what you blend
– BQ-9000 programs provide an additional level of oversight
– Properly purified biodiesel reduces chances of cold weather issues
• Cold filtration
• Distillation
– Production skill, not feedstock, determines biodiesel quality
• Choose the best biodiesel for your application
– Biodiesel with a range of cloud points is used year ‘round
throughout North America in a range of blend levels (B2 – B100)
– Keep in mind, petroleum diesel affects Bxx Cloud Point more than
biodiesel
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Copyright 2017Renewable Energy Group, Inc.
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Monitoring your biodiesel
• Monitor blended fuel (Bxx) Cloud Point throughout the
winter season
– The finished fuel’s Cloud Point should be below the lowest
sustained temperature the fuel itself might reach
• Higher Cloud Point distilled biodiesel can be used
throughout the winter season
• REG has multiple years of successful experience to draw
on
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Copyright 2017Renewable Energy Group, Inc.
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REG Services
REG provides technical support to all customers
– Storage, handling, and blending advice
– Proactive testing of blended fuels, including additive
evaluations
– Customized recommendations based on individual customer
capabilities and locations
– Assistance in monitoring weather trends and making
appropriate adjustments
– Lab testing of samples submitted by customers
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Copyright 2017Renewable Energy Group, Inc.
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Summary
• Biodiesel is a clean-burning, low carbon diesel fuel made
from biological fats and oils
• REG sells and distributes biodiesel based on finished fuel
attributes, not feedstock type
• Cloud Point is more predictive of cold weather
performance for blends with distilled biodiesel
• REG provides full technical support to our customers
throughout the commercial process
Questions
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