Green Plains, Inc. · NASDAQ:GPRE
Green Plains — Investor Presentation (June 2023)
28 slides from Green Plains's investor presentation, Jun 15, 2023
Slide 1: Inflation Reduction Act Teach-In
Inflation Reduction Act Teach-In June 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements that reflect management’s current views of company performance, industry conditions and future economic environment. These statements are based on assumptions and various factors that are subject to risks and uncertaint
Slide 3: Agenda
Agenda 1. Speaker Introductions 2. Green Plains 2.0 Overview 3. Inflation Reduction Act (IRA) Deep Dive 4. Decarbonization Strategies 5. Sustainable Aviation Fuel (SAF) Update 6. Overall Impact to Green Plains 3 GREEN PLAINS INC.
Slide 4: Introductions & Bios
Introductions & Bios Todd Phil Anthony Devin Jordan Becker Boggs Reed Mogler Sunderman, CFA President & CEO EVP, Partner, SVP, Director, Investor Relations FGS Global Government Relations Strategy & Development • CEO of Green Plains • Joined Green Plains • Joined FGS Global • Joined Green Plains • J
Slide 5: Green Plains 2.0
Green Plains 2.0 5 GREEN PLAINS INC. Option 1
Slide 6: We are transforming our assets for a low-carbon future
We are transforming our assets for a low-carbon future UNDER OUR GREEN PLAINS 2.0 TRANSFORMATION, WE ARE: Executing across four strategic areas of growth — value-added ingredients, renewable corn oil, clean sugar and carbon capture — to achieve our long–term goals and lead the way to a low-carbon fu
Slide 7: The IRA accelerates our transformation to Green Plains 2.0
The IRA accelerates our transformation to Green Plains 2.0 Oil Low-Carbon Ethanol Carbon Route to Program Incentives Corn Oil Sustainable Surface Sequestration Utilization Renewable diesel, SAF Aviation Fuel Transport Carbon-Related LCFS Markets: CA, OR, LCFS Markets: CA, OR, LCFS Markets: CA, OR, V
Slide 8: Our assets are able to achieve carbon neutrality and beyond
Our assets are able to achieve carbon neutrality and beyond... and every point of Carbon Intensity (CI) reduction now has a definitive value Breakdown of 60 CI Ethanol and Carbon Reduction Strategy • Investing in the decarbonization of our platform is good for the planet and gives our shareholders r
Slide 9: We are pursuing a diverse set of opportunities to reduce CI
We are pursuing a diverse set of opportunities to reduce CI and add value to each of our assets Our existing platform represents ~3 million tons of biogenic carbon capture opportunities between pipeline commitments, direct injection and commercial utilization, which is equivalent to: ~ 668 thousand
Slide 10: 45Q, 45Z and LCFS programs present significant upside per gallon
45Q, 45Z and LCFS programs present significant upside for every gallon of ethanol we produce $2.50 Incremental Opportunity $2.08 $0.58 by Program under $2.00 $0.20 50 CI points $0.12 Mutually Exclusive ($ per gallon) $0.05 $0.70 $1.50 $0.21 $1.50 Future projects value = $1.12 $0.50 $0.42 $1.00 $0.30
Slide 11: IRA Deep Dive
IRA Deep Dive 11 GREEN PLAINS INC. Option 1
Slide 12: Inflation Reduction Act Overview
Inflation Reduction Act Overview Signed into law on August 16, 2022 The IRA has game- changing potential Directs new federal spending toward reducing carbon emissions, lowering healthcare costs, funding the Internal Revenue Service and improving taxpayer compliance for Green Plains’ decarbonization
Slide 13: Opportunities For Green Plains Under Inflation Reduction Act
Opportunities For Green Plains Under Inflation Reduction Act • Biodiesel tax credit ensures continued growth of biodiesel and renewable diesel industries • Advanced biofuels credit benefits cellulosic ethanol • 45Q provides an $85 per-ton tax credit for carbon capture utilization and sequestration (
Slide 14: Expectations for Regulatory Action
Expectations for Regulatory Action Timing and outcomes/implications Actions To Date 2022 Jan. 1, 2022 40A Biodiesel Tax Credit Extension Effective Date Until 2025 • Treasury requested comments on 45Q, 45Z and 40B Tax Credits Nov. 3, 2022 • Guidance issued on SAF Tax Credit, except for alternative GH
Slide 15: Tax Credit Extension / Permanence Scenarios
Tax Credit Extension / Permanence Scenarios Likelihood of future action 2023–2024 Expiring Tax Provisions Which Could Provide “Extender” • IRA clean energy credits very unlikely to be modified Opportunities – Debt ceiling debate • Treasury regulations more “permanent” than guidance December 31, 2021
Slide 16: Decarbonization Strategies
Decarbonization Strategies 16 GREEN PLAINS INC. Option 1
Slide 17: Green Plains' carbon strategy is complemented by federal and state programs
Green Plains’ carbon strategy is complemented by federal and state programs $2.50 Near-Term Opportunities Incremental $0.70 $2.08 Opportunity $2.00 $0.20 by Strategy $0.58 ($ per gallon $0.50 under 50 CI points) $1.50 $0.42 $0.12 $0.30 $0.17 $0.96 $1.00 $0.05 $0.79 $0.12 $1.26 Full value of 45Z $0.2
Slide 18: CCUS is the single largest opportunity for CI reduction
Carbon Capture, Utilization and Storage (CCUS) is the single largest opportunity for CI reduction • Our biorefineries generate a pure stream of biogenic CO2 emissions from fermentation that we plan to capture • Carbon capture and storage reduces the carbon footprint of our biorefinery by ~50% or ~29
Slide 19: Our partnership with Summit Carbon Solutions allows us to rapidly execute
Our partnership with Summit Carbon Solutions allows us to rapidly execute on our carbon strategy across multiple assets 2023 2024 2025 3rd Quarter 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter 2nd Quarter Permitting Receipt of Critical State & Corps of Engineers Permits Dev
Slide 20: Cogeneration offers an opportunity to further reduce CI
Cogeneration offers an opportunity to further reduce CI • Ability for our biorefineries to reach high levels of energy efficiency • Increases our energy reliability and resilience • Estimated to lower carbon intensity by ~6 CI points • Potential to use alternative fuel types (hydrogen, biogas) to fu
Slide 21: Potential for farmers to adopt regenerative agriculture practices
Potential for farmers to adopt regenerative agriculture practices and further lower our CI is another "capital light" opportunity • Regenerative agriculture and sustainable on-farm practices can lower the carbon intensity of biofuel production • Requires coordination and co-operation with farmers pr
Slide 22: Alcohol to Jet SAF
Alcohol to Jet SAF 22 GREEN PLAINS INC. Option 1
Slide 23: Massive Potential for Sustainable Aviation Fuel (SAF)
Massive Potential for Sustainable Aviation Fuel (SAF) Domestic SAF Demand & Ethanol Feedstock Required to Meet the Grand Challenge • Grand Challenge SAF targets 3 billion gallons 70 of production per year by 2030 and ~35 Billions billion gallons per year by 20501 60 • Global demand for aviation fuel
Slide 24: Ethanol & DCO to SAF
Ethanol & DCO to SAF Our renewable corn oil (DCO) is advantaged vs soybean oil (SBO) under 45Z • ~30 CI RD feedstock vs ~50 CI for SBO translates to $0.70/gal or $0.09/lb of DCO • Additional value from LCFS programs — low-CI value further advantaged Decarbonized corn ethanol could qualify for conver
Slide 25: Our platform has significant upside
Our platform has significant upside . . . Investment Opportunities Capital Investment Potential Annualized Uplift Anticipated In-Service Pursuing capital-light options $50 million – $75 million 2025 – 2026 Cogeneration $35 million – $45 million per site ~$40 million 2027 Direct CCUS $135 million – $
Slide 26: Substantial EBITDA Growth Opportunities Beyond 2025
. . . With Substantial EBITDA Growth Opportunities Beyond 2025 $1,000 2027 Blue Sky Opportunity Assumptions • Assets operate at 95% of capacity $900 • Excludes fuel ethanol, specialty alcohol, ancillary businesses and corporate overhead $800 MSC Sustainable Ultra-High Protein and Turnkey Initiatives
Slide 27: Q&A
Q&A 27 GREEN PLAINS INC. Option 2
Slide 28: Thank you!
Thank you! gpreinc.com