1. Biodiesel A renewable fuel to meet today’s and tomorrow’s energy needs in a clean and sustainable manner presentation to: American Seed Trade Association Chicago, Illinois December 7, 2005 presentation by: Richard Nelson Kansas State University/National Biodiesel Board This presentation is funded in part by the Cooperative State Research, Education and Extension Service, USDA

2. Biodiesel – General Definitions Biodiesel is a domestic, renewable fuel for diesel engines derived from fats and oils such as soybeans and animal fats. Biodiesel can be used in any concentration with petroleum- based diesel fuel in existing diesel engines with little or no modification. Biodiesel is not raw vegetable oil! Biodiesel must be produced by a chemical process that removes glycerin from the oil. Biodiesel blend, n. -- a blend of biodiesel fuel meeting ASTM D 6751 with petroleum-based diesel fuel designated BXX, where XX is the volume percent of biodiesel.

3. Petroleum (Liquid Fuel) Picture We currently import over 50% of our petroleum needs - 70% by 2025. Once roughly half the oil has been extracted, it becomes harder – and more expensive – to get at the remainder. The key date is not when the oil runs out, but when production peaks, meaning supplies decline. The peak may come by about 2020. Proved Oil Reserves 2003

4. Biodiesel Properties & Attributes B100 - Energy content of #1, 8% less than #2 High Cetane (avg. over 50) Sulfur free Cold flow - B2 the same as #2 petroleum diesel Energy Balance (3.24 to 1) Biodegradable and Non-Toxic

5. Emissions Reductions with Biodiesel Blends Emission Type B100 B20 B2 Total Unburned Hydrocarbons -67%-20%-2.2% Carbon Monoxide -48%-12%-1.3% Particulate Matter -47%-12%-1.3% Oxides of Nitrogen (NO X ) +10%+ 2%***+0.2% “When considering the combined benefit of all these reductions, the small increase in nitrogen oxides (NOx) should not overshadow the net environmental gain with biodiesel use in North Carolina. Biodiesel is a viable part of the overall effort to improve our air quality.” B. Keith Overcash, PE, NC DE&NR, DAQ

6. Biodiesel Production 100 lbs. of fat or oil + 10 lbs. methanol  catalyst  100 lbs. biodiesel (B100) + 10 lbs. of glycerin Soybeans (90-95% of current market), Waste Greases, Edible & Inedible Tallow, Cottonseed, Sunflower, Canola/Rapeseed B100 Fuel Survey Results

7. Distribution Outlets, June 2005

8. ASTM D 6751 – Biodiesel Fuel Specification Fuel quality is of the utmost concern and importance to the biodiesel industry. ASTM D 6751 is the specification for biodiesel fuels irrespective of the feedstock source and/or processing method. Standard ensures safe operation in a compression ignition engine.

9. Biodiesel & Original Equipment Manufacturers (OEMs) Many Engine Manufacturers Support Biodiesel Blends: John Deere Caterpillar Cummins Detroit Diesel International Testimonials for each of these companies available on the NBB website - www.biodiesel.org B100 Must Meet ASTM D6751 !!! Most OEM HQ’s have B20 experience: Won’t void warranty, but remember OEM’s don’t make fuel and therefore they won’t warranty fuel. Problems caused by the fuel are the responsibility of the fuel supplier.

10. Federal Biodiesel Tax Incentive American Jobs Creation Act 2004 (Biodiesel Tax Exemption) Federal Excise Tax Credit through 12/31/2008 1¢ per percent of “agri- biodiesel” blended into diesel fuel Applies to first-use vegetable oils and animal fats ½ ¢ per percent of other biodiesel blended into diesel fuel Credit taken at the blender level

11. Biodiesel: Looking Forward Current Potential: 1.7 Billion gal/year 5.5% of national on-hwy. Demand Near-Term Potential: (2015): 3.5 Billion 6.8% of national on-hwy. demand in 2015 Long-Term Potential: (2030): 10 Billion

12. Educational Resources for Biodiesel BEN: “Biodiesel Education Network” Web-based resource specifically for petroleum marketers Partnership between NBB/PMAA www.pmaa.org www.biodiesel.org