Removing Risk from the Biomass Supply Chain: Growing a Sustainable Pathway Biofuels Law and Regulation Conference Sam Jackson May 2, 2014

Copyright 2014, Genera Energy Inc. Company Overview Privately held biomass supply solutions company based in Vonore, TN Bringing an industrial approach and experience to agricultural biomass supply -Energy crop production, biomass processing, project management The most experienced company in the country producing, handling, and processing a wide variety of biomass feedstocks -Purpose grown crops, residues Proprietary biomass feedstock processing Extensive partners up & down the value chain Tellico Port Road Vonore, TN (423) – tel. Dr. Sam Jackson accepting the 2013 Sustainable Biofuels Award for Sustainable Feedstock Innovation, Awarded at the World Biofuels Markets 2013 Congress & Exhibition, the largest international gathering of its kind. 2

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Copyright 2014, Genera Energy Inc. Land Owners & Farmers Long-term land leases & easements Biomass crop services: establish, manage, harvest, collect, store, transport Long-term biomass feedstock supply contract On-time, sustainable delivery of high quality biomass feedstock Biomass Consumers (primarily technology & project developers) Energy Crops Biomass Feedstocks What We Do 4

Copyright 2014, Genera Energy Inc. Land Accumulation & Control Model Optimized Planting & Establishment Success Multi-system Cost Analysis & Harvest Scheduling Maintain Quality & Minimize Cost Risk Management & QA/QC Data-Rich Feedstock Supply & Cost Model Preferred Input Supplier Network Full Cycle Production & Maintenance Moisture Management & Optimized Location Project-Specific System Design Genera’s Integrated Solution Delivers Energy Grange™ Management Supply ASSURE™ System BIN-SPEC™ Processing Proprietary GIS Model Planning Energy Crop Establishment & Production Harvesting, Logistics & Inventory Milling & Material Handling

Copyright 2014, Genera Energy Inc. Land recruitment – Real-world, grounded information is key – Integrated, long-term land control Achieving projected crop yields – Weather impacts – Management consistency Inventory risk – Storage degradation – Fire, other catastrophic events Things beyond our control – Commodity price swings – Oil costs – Policy changes Managing Risk

Copyright 2014, Genera Energy Inc. Land is key in biomass production Landowners will require: – Economic benefit – Long-term consistency in income through bankable contracts – Low cost or assisted cost establishment – Risk management tools – Technical assistance 7 Land Availability and Recruitment

Copyright 2014, Genera Energy Inc. Grower contracts should: – Be backed by a bankable entity – Provide adequate economic return w/adjustments – Be of long duration (10 yrs or longer) – Share risk among partners – Provide sources of technical assistance Annual crops provide flexibility Contracts will take different forms, from full supply services to simple land leases Risk elements must be addressed in contracts: – Land ownership changes Sales Death Bankruptcy – Production requirements Volume Quality – Compositional – Moisture Land Availability and Recruitment

Copyright 2014, Genera Energy Inc. Supplying biomass year round, with consistent quality is key Feedstock production risk includes – Yield Environmental impacts Management impacts Disease/Pests – Quality Variability Foreign materials Crop Production Risk

Copyright 2014, Genera Energy Inc. Long-term storage introduces risk – Quality loss/change over time Chemistry Dry matter loss BTU loss – Catastrophic loss Fire Weather Efficient industrial supply chain management required – Chain of custody – Proper handling and storage Inventory Risk

Copyright 2014, Genera Energy Inc. Commodity price swings – Can significantly change availability of land (pricing) – Changes competitiveness of biomass crops – Defines the importance of long-term contracts to protect investment in perennial crops Oil costs – Price at the pump matters to the majority of the voting public – Biofuels must be competitive and understood by the public The Unknown

Copyright 2014, Genera Energy Inc. Government Policies – Inconsistency and variability deters innovation and investment – RFS Annual evaluations on policy, whether positive or negative, do not help advance an industry The RFS will drive investment at a low cost to the Federal Government if maintained for an extended period The Unknown Government Policies – EPA Approved Pathway Process Must be streamlined and made more transparent Biomass sorghum in pipeline for over two years!

Copyright 2014, Genera Energy Inc. Land Recruitment – BCAP and similar programs Overcome high upfront costs for producers Must be implemented effectively – Alternative biomass markets – State-based incentives/programs Government Policies – Consistency! – Loan guarantee programs tailored to feedstock supply chains – State-based incentives programs Mitigating Risks

Copyright 2014, Genera Energy Inc. Crop Production – Crop insurance Expand traditional yield- based risk management programs – Continued varietal improvement Establishment Disease and pest resistance Herbicide tolerance Productivity Conversion efficiency Mitigating Risks

Copyright 2014, Genera Energy Inc. Feedstock Portfolio – Multiple feedstocks to feed one facility – Provides land recruitment flexibility (annual vs. perennials – Increases ability to do year- round delivery Reduces risk and cost associated with storage – Provides a buffer for climatic and disease/pest impacts Integrated Management – Systems matter Biomass supply is more than a collection of individual unit operations Integration of entire systems is critical – Consistency Efficient and reliable supply of a consistent quality biomass requires the high degree of coordination – Continuous Innovation Continuous improvement reduces cost significantly Addressing Risk Across the Supply Chain

Copyright 2014, Genera Energy Inc. 2.Generate more consistent quality, improving yields and lowering operating costs Genera’s Integration Improves Economics Cost Per Ton $55 1.Lower feedstock cost by as much as 33% Reduce overall cost volatility, enhancing “financability” of downstream project $85 Quality

Copyright 2014, Genera Energy Inc. Summary 17 Feedstock risks are real and must be addressed Knowledgeable Planning eliminates many risks Genera provides de- risked, scalable feedstock supply and processing solutions – Specialized in providing consistent, uniform industrial biomass feedstocks

Genera Energy Inc. 167 Tellico Port Road Vonore, TN – Phone – Fax Sam Jackson