SOUTHERN BIOPRODUCTS CONFERENCE Presented by: Pete Moss Vice President Frazier, Barnes & Associates

EmissionsB100B20 Carbon monoxide -43.2%-12.6% Hydrocarbon-56.3%-11% Particulates-55.4%-18% Nitrogen Oxide +5.8%+1.2% Sulfur Oxide -100%-20% Air Toxics %-12-20% Biodiesel Emission Benefits

According to the National Biodiesel Board and Bioenergy Program Registrants U.S. Biodiesel Manufacturing Locations SOUTHERN BIOPRODUCTS CONFERENCE

Small Scale Biodiesel Manufacturing Locations in the Southeast (Less than 1 Million Gallons) Decaturville East Tennessee Meridian SOUTHERN BIOPRODUCTS CONFERENCE

Biodiesel Projects Under Development In the Southeast SOUTHERN BIOPRODUCTS CONFERENCE

Existing Owensboro Stuttgart Soybean Processing Plants In the Southeast Destrehan Marks Fayetteville Raleigh Kershaw Estill Guntersville Gainesville Valdosta SOUTHERN BIOPRODUCTS CONFERENCE

U.S. Ethanol Manufacturing Locations SOUTHERN BIOPRODUCTS CONFERENCE

U.S. Ethanol Projects Under Development SOUTHERN BIOPRODUCTS CONFERENCE

Southeastern Region Ethanol Manufacturing Locations Existing Under development Louisville Hopkinsville Loudon New Albany Greenwood Vicksburg Lake Providence SOUTHERN BIOPRODUCTS CONFERENCE

FL SB 1316 – Adds ‘biomass’ to law encouraging renewable electricity production. KY SB 3 – Producer tax credit of $1/gallon; Distributor credit of $.02; Retailer of $.01. TN – HB 3125 Sales tax exemption on AFVs – diesel vehicles qualify under the wording. SB 2438 – Same as above. AL SB 6 – Ethanol Producers Fund of $.30/gallon for 1 st 12.5 mg, $.10 for second 12.5 mg. Pending Laws SOUTHERN BIOPRODUCTS CONFERENCE

Existing Laws SOUTHERN BIOPRODUCTS CONFERENCE

The law establishes two funds, one each for biodiesel and ethanol. Producers report monthly the gallons produced, imported or blended and pay a 3.2 cents per gallon (cpg) tax on production into a fund. The state matches by a multiplier of 5.25 cpg. No less often than quarterly, the state issues grants of 20 cpg back to the plants. The net grant would equal 16.8 cpg. The producer is entitled to receive the 20 cents for 10 years after the beginning of production. Biodiesel must meet ASTM specifications (PS 121) and is feedstock neutral. Grants are limited to 18 million gallons per year per producer per registered plant ($3.6m). Grants may be lowered if the fund is insufficient for that fiscal year. Texas SOUTHERN BIOPRODUCTS CONFERENCE

The act provides an income tax credit for “facilities and equipment” for biodiesel suppliers (wholesale or retailers that sell in bulk) of 5% of the cost of facilities and equipment. It also allows a grant up to 10 cpg administered by the Alternative Fuels Commission to qualified producers (located within Arkansas). Grants are limited to the first 5 million gallons of biodiesel produced annually, not to exceed 5 years. Biodiesel is defined by the ASTM specification. Arkansas SOUTHERN BIOPRODUCTS CONFERENCE

The legislation provides incentives of 20 cpg for Ethanol production up to 30 mg. Biodiesel legislation is pending. Mississippi SOUTHERN BIOPRODUCTS CONFERENCE

Federal Incentive Programs Bioenergy Program: APP – Additional Production Payment *Last Year’s Payment - $.87 per Gallon BPP – Base Production Payment *Roughly half of the APP EPAct EO Expires 2006 Existing SOUTHERN BIOPRODUCTS CONFERENCE

Energy Bill: Biodiesel Subsidy *Funding from the General Treasury *$1.00 Per Gallon for “Agri-Biodiesel” *$.50 Per Gallon for “Non-Agri” *Renewable Fuel Standard Transportation Bill: *Same as above but no RFS Pending SOUTHERN BIOPRODUCTS CONFERENCE