Industry Update

Industry Update

Scott HughesDirector, Governmental Affairs

National Biodiesel Board

Dramatic Growth Biodiesel production has doubled year

over year for the past two years.

Anticipate seeing continued strong growth into the foreseeable future.

Estimated US Biodiesel Production

0.5 2 515

2025

75

0

10

20

30

40

50

60

70

80

Mill

ion

s o

f G

allo

ns

1999 2000 2001 2002 2003 2004 2005

Estimated US Biodiesel Production

0.5 2 515 20 25

75

150

0

20

40

60

80

100

120

140

160

Mill

ion

s o

f G

allo

ns

1999 2000 2001 2002 2003 2004 2005 2006

2006 est.

Production Locations (4/28/06)

BQ-9000 Accredited Producers

65 Plants

Biodiesel Plants Under Construction & Expansion (4/28/06)

No Window

Plant Status

Construction (50)Expansion (8)

Industry Growth Drivers Public Policy

Tax Incentive (or others) ULSD RFS State Policies

Crude oil price Feedstock prices Economies of Scale Distribution Costs

Federal Tax Incentives Federal volumetric tax credit has

been the primary stimulant for industry growth.

Set to sunset in 2008. Extension is our top priority. Industry is working with stakeholders

& members of Congress to extend the credit for at least 2 years.

Summary Strong interest in biofuels to enhance

energy security, economic benefits, and environmental benefits.

Anticipate continued strong interest & growth.

A vibrant biofuels industry will have a direct positive impact on our national energy security, economy, and environment.

For more information about biodiesel, visit the NBB’s

website:

www.biodiesel.org