Renewable Diesel Feedstock Perspective

REASON FOR MARGIN STABILITY RD superior cost structure floats on BD marginal volume supply; Marginal volume to satisfy mandates: soybean-fed biodiesel Renewable diesel advantages in product quality, cash operating costs, scale, logistics and greater D4 RIN generation Biodiesel utilization is highly reactive to small dips in daily margin; BD output has been seen to fall 20-40% in a week which in turn causes a rapid shortfall in D4 and LCFS balances, which promptly respond to restore the BD margin ⚫ Hence the full margin stack is self-stabilizing Renewable Diesel Industry Margin (Soybean Oil), $/gal Biodiesel Industry Margin (Soybean Oil), $/gal $3.00 $3.00 $2.50 $2.50 $2.00 $2.00 $1.50 $1.00 $0.50 $- Jan Feb Mar Apr May Jun 5yr range 2021 Jul Aug Sep 2022 Oct Nov Dec - 5yr avg Source: Platts, EIA, Bloomberg Energy, Macrotrends, Jacobsen. Note: Data as of 5/27/22. $1.50 RD advantage > $1/gal $1.00 $0.50 Jan Feb 5yr range 2021 Mar Apr May Jun Jul Aug Sep Oct Nov 5yr avg Dec 2022 - 14

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