Proven Comprehensive Treatment and Resource Recovery for Livestock Waste

Cleaner farms…Cleaner water…Cleaner air…Better economics

Investors

Bion Environmental Technologies, Inc., is publicly-traded on the OTC Markets QB: BNET

Production agriculture, environmental necessities and raw economics are coming together like never before. Companies on the cutting edge of these efforts, like Bion, can change the entire way that farming and natural resource management have been done throughout our history.

Dan Glickman
Former U.S. Secretary of Agriculture

Multiple Drivers for Success

Bion Environmental Technologies’ (OTC QB: BNET) patented and proven technology provides advanced waste treatment and resource recovery for large-scale livestock production facilities. The modular technology platform dramatically reduces the environmental impacts of production and delivers better economics to the $180 billion animal-protein business. Direct treatment of livestock waste at scale can provide low-cost high-impact solutions in the $100 billion clean water sector and to several other pressing environmental and public health issues. Federal and state policies are evolving to encourage livestock waste cleanup and the industry is ready to be engaged.

Bion’s technology provides a ‘cleantech makeover’ for large-scale livestock production, so that environmental impacts are dramatically reduced, while resource and operational efficiencies are significantly improved.

Bion’s technology platform creates value simultaneously by monetizing air and water quality improvements, while recovering resources that have traditionally been wasted or underutilized. Verification of pollution reductions generates new revenues from renewable energy and carbon credits, as well as nutrient credits described below. Production of pipeline-quality natural gas and high-value organic fertilizer products also represents substantial new revenue sources. Bion’s technology is capable of supporting the scale needed to exploit these business opportunities, as well as maximize the environmental benefits that can be achieved through livestock waste cleanup.

The technology produces a number of additional benefits. Water is treated sufficiently (including pathogen kill) for re-use by the herd, irrigation or aquifer recharge. Greenhouse gas, ammonia, hydrogen sulfide and odor emissions are dramatically reduced. Current manure handling/spreading expenses can be eliminated. Because land is no longer required to spread waste on, divesting acreage or expansion on existing acreage can be considered. Expansion without corresponding environmental impact is the kind of agricultural growth needed to provide jobs and opportunities in rural America.

The livestock industry has struggled for the last decade to deal with rising fuel costs and drought conditions that have exposed critical weaknesses in its supply chain. An unintended consequence of siting large-scale facilities in ‘out of the way’ locations has been a significant increase in transportation costs and impacts. For the most part, the industry has been unable to relocate or consolidate to mitigate these effects because of the environmental impacts of production. Margins across the supply chain have suffered. Bion’s technology platform enables clean state-of-the-art livestock facilities to be developed in new strategic locations that substantially reduce logistics costs, improve economics and reduce carbon footprint.

Ultimately, the greatest ‘driver’ for Bion may be America’s and the world’s buying habits, that are undergoing a fundamental shift. Food safety, corporate social responsibility and improved sustainability in production are increasingly demanded by the consumer. Ceres and other large activist institutional investors are taking an increasing interest in socially responsible investing, and have already expressed concerns about carbon footprint, water quality, antibiotic usage and animal welfare to many in the food production industry.

Whole Foods, Walmart, Costco, McDonalds, and most other large meat and dairy product retailers have recently announced sustainability initiatives. We believe that as these initiatives move forward, ‘sustainability’ on the production side will look a lot like what Bion can provide today. Bion’s technology platform can provide measurable and verifiable sustainability metrics – carbon and nutrient footprint; impacts to water, soil and air; pathogen destruction –  that are unmatched in the industry today.

U.S. clean water costs – $114 billion in 2010 – are escalating while overall water quality continues to decline.

Excess nutrients – nitrogen and phosphorus – cause toxic algal blooms and dead zones that the EPA now calls one of the greatest water quality problems in the U.S. today. Livestock production is recognized as one of the largest sources of excess nutrients in most major watersheds; Bion’s direct treatment of livestock waste can provide large-scale verifiable nutrient reductions at significantly lower cost than current agricultural and downstream treatment strategies. Bion’s platform also provides dramatic reductions of greenhouse gas, ammonia and hydrogen sulfide emissions, as well as pathogens in the waste stream that have been linked to food-borne illness and antibiotic resistance.

The re-allocation of significantly more funding to non-point source pollution sources, particularly agriculture, is inevitable if we are to maintain the integrity of the environment and our water resources. Policies are now changing to support market-based strategies that engage the private sector to provide lower cost solutions. National livestock interests, including National Milk Producers Federation, Land O’Lakes, JBS (the largest beef/pork producer in the world) and others have recently joined Bion in support of such a strategy.

Bion is strongly confident that these policy reforms will be achieved in Pennsylvania in the near future, as they face significant sanctions related to the Chesapeake Bay in 2017, as well as their own water quality issues. Change has come slowly to Pennsylvania’s (and our country’s) clean water strategy, which is controlled by government agencies and large NGOs that represent powerful stakeholders in the ‘business’ of clean water. Especially at the state level, entrenched interests have opposed changes that might reallocate spending, regardless of the obvious failure of current policies or the promise of innovative alternatives. However, faced with steeply rising costs and the threat of reduced federal funding, policies are now evolving to engage the private sector to provide cost-effective alternatives to these traditional high-cost solutions. The costs associated with our current strategy vs. the costs of alternatives are now well-understood and the differences too great to ignore.

Legislation to establish a competitively-bid procurement program in Pennsylvania, which will allow Bion and other private-sector providers to sell low-cost nutrient credits to the state, was introduced in the PA Senate in June 2017; it is sponsored by Republican leadership. In a recent Letter of Expectation (click for highlighted version), US EPA made it clear to Pennsylvania that the agency supports and encourages the use of credit trading, competitive procurement and other market-driven strategies to comply with the Commonwealth’s Bay mandates. Bion expects a competitive procurement program to be implemented in Pennsylvania this year. And while today Pennsylvania is in the spotlight, many other agricultural states will face similar problems and decisions over the coming years.

Legislation to apply the federal energy tax credit to nutrient recovery was recently introduced in the U.S. House and Senate and enjoys bipartisan support. Some of the largest producers in the livestock industry are at the table with Bion, ready and willing to be engaged. Bion’s proven solution, coupled with an experienced and dedicated management team that has a deep understanding of the issues, positions the company to succeed as this opportunity continues to unfold. To learn more about this evolving opportunity, which is poised to receive billions in federal, state, local and private funding, please visit Excess Nutrients – the Challenge, Bion’s Technology, Benefits, and Policy Change.

A Republican Administration Could Provide Much-Needed Change

The Trump Administration has recently announced cutbacks in federal environmental and conservation spending, but no corresponding rollback of regulations. Consequently, with less money to spend it will be even more important that state spending decisions be made with greater emphasis on cost-effectiveness of solutions. Further, it is anticipated that a Republican mandate that is focused on reducing the scale and cost of government will embrace market-driven solutions, such as Bion provides, that can deliver much lower-cost results to the taxpayer, while providing substantially greater certainty and less risk.


While policy change is taking place, recent improvements to Bion’s technology platform enable the recovery of much higher-value byproducts and renewable energy than previous generations. Pilot studies indicate that under certain conditions and locations, more fully described in the current Company Overview and SEC filings, projects can be developed that can be supported by byproduct and renewable energy production alone. While the policy changes we support are still a major focus of our business, we are no longer entirely dependent on them. This is a true game-changer for Bion.

The U.S. livestock industry must reduce its footprint and simultaneously improve its efficiencies if it is to remain environmentally and economically sustainable in the modern world. Further, the industry has now recognized that it will need to verify and communicate this improved sustainability to the consumer. Bion’s technology addresses both of these inescapable challenges that will require significant investment over the coming years. And Bion’s expertise, coupled with its technology solutions that have been proven over many years, place it far ahead of future competitors in this evolving space.

Many of us here in Pennsylvania have taken our role as protectors of our land, our environment and the Chesapeake Bay very seriously and that’s why our partnership with Bion made sense from day one.

Ron Kreider
CEO and president, Kreider Farms

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