Peter Behrle From: Sent: To: Subject: Attachments: Peter Behrle [[email protected]] Monday, June 09, 2014 7:22 PM Peter Behrle RBL Biodiesel Update 140609 RBL Soy vs Other Feedstocks Profitability Calcs (2) (2) (2).xlsx; 140609 Monthly EIA through March.pdf RBL Biodiesel Profitability Spreadsheet Attached* The 8th 2014 RBL biodiesel spreadsheet is attached. For those of you who just want the bottom line, go straight to Sheet 3 for a summary of B100 profitability by feedstock and to Sheet 5 for a historical summary of RBL calculated biodiesel profitability for SME and FAME since 2009. If anyone would like an explanation for anything on the spreadsheets, feel free to give me a call. • For a typical New York Harbor biodiesel plant that is able to use CDG soybean oil as feedstock, we estimate a loss of about a $0.24/gallon. This is down from the profit peak of +$0.74/gallon achieved on 8/4/2013 (see sheet 5) • Non-veg oil biodiesel (FAME) profits are still holding, but barely. Animal fats, yellow grease, ethanol derived corn oil, and RBL oil are all currently profitable biodiesel feedstocks. We estimate about $0.07/gallon in profit for yellow grease biodiesel for an efficiently run New York Harbor biodiesel plant. This is down from the profit peak of $1.31 achieved on 7/22/2013, and down from a profit of $0.34/gallon on 3/11/2014. The keys for biodiesel producers are opportunistically locking in an adequate supply of profitable feedstocks, and the ability to actually process them efficiently into ASTM quality biodiesel with minimal yield losses. Our spreadsheet reflect plants that run with maximum efficiency (as defined by the USDA). *Sheet 1 - Profit Calcs - shows assumptions, biodiesel profitability by feedstocks (soy, FOG, Brown Grease, Jatropha, Palm), glycerin refining profitability, comparative cost of MMBTU by fuel source, value of offal, value of protein Sheet 2 – Profit Summary - shows summary of current biodiesel profitability by feedstock and comparison of various commodity prices since Dec 2012 Sheet 3 – 2009-Present Commodity Summary - shows historical comparisons of heating oil, FOG, soybean oil, soy B100, FAME B100, biodiesel RINs and EU carbon credit prices Sheet 4 – Summary of Biodiesel Production 2009-Present - shows biodiesel production from 2007 to present as reported by various gov’t agencies and also shows feedstocks used by percentage to produce the biodiesel (soy vs. non-soy) Sheet 5 – Profit 2009- Present - shows yellow grease and soybean oil B100 profitability from 4/2009 to the present Sheet 6 - Feedstocks Used - shows biodiesel feedstocks used by volume and percentage 2009-present (per EIA/DOE) EIA Report through March 2014 and EPA Report through April 2014 The EIA released their biodiesel production volume and feedstocks used report through March 2014 (copy attached). The attached spreadsheet, sheets 4 and 6, have been updated to reflect this release. Soybean oil continues to be the dominating feedstock, followed by corn oil and yellow grease (see sheet 6 of the attached spreadsheet for a summary of feedstocks used by volume and by percentage). The EPA has updated their production/RIN report through April. Sheet 4 has been updated to reflect this release. Both the EIA and EPA show that biodiesel production thus far in 2014 is running ahead of production for the same period in 2013. 1 $1 Blenders Tax Credit The Senate announced last week that it has postponed any action on the tax extenders legislation, and thus the potential retroactive renewal of the $1 credit for 2014, until after the November elections. RFS2/RVO Finalization of volumes for 2014 The National Biodiesel Board's (http://www.biodiesel.org) Washington Update (released today –emphasis added): The EPA today extended the compliance deadline for the 2013 Renewable Fuel Standard (RFS). The new deadline for obligated parties to submit their annual compliance report is September 30, 2014. Additionally, EPA extended the deadline for 2013 attest engagements. These reports, submitted by any party that owns RINs during a compliance year (2013) will be due on January 30, 2015. EPA is extending these deadlines to assist industry with managing their compliance with both the 2013 and 2014 renewable fuel standards. EPA stated that they intend to issue the 2014 volume standards in the near future. However, today's announcement - and the continued delay in resubmitting the final rule to OMB - suggests that the Administration will likely miss its recently stated deadline of June 20. While this continued delay is frustrating, what is important is that the Administration gets the volumes right. The volumes previously proposed were simply devastating, and we believe our aggressive advocacy recently has been effective in getting the Administration to reconsider the final rule. REG Stock Watch – $10.45 Last week REG completed its purchase of the Dynamic Fuels 75 MMGY renewable diesel plant from Syntroleum and Tyson. REG is also the nation's largest biodiesel producer, with eight refineries and a biodiesel nameplate capacity of 257 million gal. Renewable Energy Group (REG) is the nation’s largest biodiesel producer and went public in early 2012. It is instructive to follow this company, as its stock (REGI) can be seen as a proxy for the biodiesel industry. REG went public in January 2012 with an IPO price of $10.00. REGI is currently trading at $10.45. REGI went up 25 cents today (+2.45%). The market may be indicating that the delay in 2014 RVO announcement by the EPA (see above) as a positive –indicating a potential increase in the 2014 and 2015 RVOs for biodiesel/renewable diesel. 2 FutureFuels (Stock Symbol FF) FutureFuels is a publicly traded company that generates more than half of their revenues from biodiesel. FF stock performance can also be seen as a barometer for the industry (see below). Soybean Oil/Yellow Grease/Brown Grease Prices Soybean oil futures are trading now at 39.28 cents/pound ($2.91/gallon). Jacobsen is currently reporting NY Yellow Grease at 32.5 cents/pound ($2.47/gallon) and Brown Grease at 16.5 cents/pound ($1.25/gallon). Renewable BioSystems, LLC (RBL) Update In March RBL completed funding for our JV, Fuel From Waste 2, LLC (FFW2). FFW2 is building a $8.0 million plant in Huntsville, AR to recycle poultry DAF sludge into oil and protein meal. We also have a plant in Chattanooga, TN extracting oil from trap grease waste, and we are installing a plant in Alabama to remove the oily cap from a wastewater pond. Peter Behrle CEO Renewable BioSystems, LLC 20 Spielman Rd. Fairfield, NJ 07004 [email protected] www.twitter.com/renewablebiosys 973.769.0600 973.575.5300 (Fax) Skype: peter.behrle www.rbl.us.com CONFIDENTIALITY/DISCLAIMER NOTICE: This electronic transmission (including any files attached hereto) contains confidential information that is legally privileged, confidential, and exempt from disclosure. The information is intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient or any employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any disclosure, dissemination, copying, distribution, or the taking of any action in reliance on the contents of this confidential information is strictly prohibited. If you have received 3 this communication in error, please destroy it and immediately notify us by telephone. This data and these comments are provided for information purposes only and are not intended to be used for specific trading or investing strategies. Commodity trading is risky and RBL assumes no liability for the use of any information contained herein. Although all information is believed to be reliable, we cannot guarantee its accuracy and completeness. Past financial results are not necessarily indicative of future performance. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples. 4
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