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

SOUTHERN BIOPRODUCTS CONFERENCE

Presented by:

Pete MossVice President

Frazier, Barnes & Associates

EmissionsEmissions B100B100 B20B20

Carbon Carbon monoxidemonoxide

-43.2%-43.2% -12.6%-12.6%

HydrocarbonHydrocarbon -56.3%-56.3% -11%-11%

ParticulatesParticulates -55.4%-55.4% -18%-18%

Nitrogen OxideNitrogen Oxide +5.8%+5.8% +1.2%+1.2%

Sulfur OxideSulfur Oxide -100%-100% -20%-20%

Air ToxicsAir Toxics -60--60-90%90%

-12-20%-12-20%

Biodiesel EmissionBiodiesel EmissionBenefitsBenefits

According to the National Biodiesel Board and Bioenergy Program Registrants

U.S. Biodiesel Manufacturing Locations

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Small Scale Biodiesel Manufacturing Locations in the Southeast

(Less than 1 Million Gallons)

Decaturville

East Tennessee

Meridian

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Biodiesel Projects Under DevelopmentIn the Southeast

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Existing

Owensboro

Stuttgart

Soybean Processing PlantsIn 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

VicksburgLake 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 1st 12.5 mg, $.10 for second 12.5 mg.

Pending Laws

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Existing Laws

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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.

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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.

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The legislation provides incentives of 20 cpg for Ethanol production up to 30 mg.

Biodiesel legislation is pending.

MississippiSOUTHERN BIOPRODUCTS CONFERENCE

Federal Incentive Programs

Bioenergy Program:APP – Additional Production Payment*Last Year’s Payment - $.87 per GallonBPP – Base Production Payment*Roughly half of the APP

EPAct

EO 13149

Expires 2006

Existing

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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

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