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.
Former U.S. Secretary of Agriculture
See our Executive Summary – Opportunity
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 – dairy, meat and egg producers. Bion is a technology and policy leader in this new ‘space’ that is developing at the intersection of the $200B animal-protein industry and the $100B clean water sector. The opportunity is to clean up livestock production, the ‘dirtiest’ part of the food supply chain…and the largest unregulated source of pollution in the U.S.
Large-scale livestock production facilities – CAFOs (Concentrated Animal Feeding Operations) – deal with their waste today much as farmers did 150 years ago. They spread it on the ground, untreated, for it’s fertilizer value. There is tremendous waste and inefficiency in this antiquated practice, in addition to completely unsustainable environmental and public health impacts. The industry is under attack for these impacts from a wide range of detractors and competitors and they are losing customers at an alarming rate. Cleanup is inevitable, but complicated; the industry is not regulated under the Clean Water Act and its margins are thin – the money is just not there.
Bion’s technology platform provides low-cost high-impact solutions to the industry’s environmental and public health issues AND delivers substantially better efficiencies and economics simultaneously. In other words, the benefits/ value from treatment, more than offset the cost. That’s the key: how to pay for cleanup. The industry knows it needs to clean up. An increasing circle of stakeholders understand this need, as well: federal and state policies are evolving to encourage and support/ fund livestock waste cleanup. The industry is ready to be engaged and supports these changes. Bion is a recognized leader in both technology and policy development in this transformation and stands to be a central player as it unfolds.
Bion’s technology provides a ‘cleantech makeover’ for large-scale livestock production, with dramatic reductions in environmental impacts and significant improvements to resource and operational efficiencies. Bion’s business model, coupled with the policy change it supports, provides the industry a pathway to sustainability, without bankrupting it. Bion’s verified results will back both a USDA-certified sustainable brand that will regain and hold the confidence and trust of its consumers, as well as water quality improvements that will save taxpayers billions of dollars.
Bion’s technology platform creates value from the waste stream in several ways. Assets that have traditionally been wasted or underutilized – renewable energy and nutrients – are recovered and converted into high-value coproducts. Verifying the removal of these coproducts (formerly pollutants) from the waste stream produces additional revenues from the sale of renewable energy and carbon credits, as well as nutrient credits described below. These credits, coupled with the pipeline-quality natural gas, high-value fertilizer, and feed products, represent the recurring revenues needed to offset technology adoption costs. Perhaps the greatest value Bion’s technology brings, is that the verification of the environmental benefits also forms the basis for a sustainable brand that will communicate the steps taken to reduce environmental impacts to the consumer.
Bion’s technology produces a number of additional benefits, at no additional cost. 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 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 the greatest water quality problem 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 foodborne illnesses 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, Dairy Farmers of America, JBS (the largest beef/pork producer in the world), Pennsylvania Farm Bureau, and others have recently joined Bion in support of such a strategy.
Bion is confident that these policy reforms will be achieved in Pennsylvania in the near future, as they face significant sanctions and costs related to the Chesapeake Bay, as well as their own water quality issues. 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; in February 2018, the bill passed in the Senate 47-2, but was not considered in the House. SB575, the bill’s successor was introduced in the Senate in June 2019 and is strongly supported by a PA legislative leadership on both sides of the aisle. Bion expects it to be adopted and signed by the Governor in 2019.
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 in 2018. The bottom line is that Bion can provide verified nitrogen reductions at $10 to $12 per pound per year, at scale, where the state is facing costs starting at $30 per pound and climbing into the hundreds. And while today Pennsylvania is in the spotlight, many other agricultural states now face similar problems and decisions, and more will 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 national 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 Focus on Market-Driven Strategies Could Provide Much-Needed Change
It is anticipated that an Administration 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. Since late in 2018, the US EPA and USDA have signaled several times that they support market-driven strategies, such as ‘reverse auctions’ (competitive procurement) and trading. In February 2019, EPA issued a memorandum updating its water quality trading policy to support market-based approaches to reduce nutrient pollution in the nation’s waterways. The announcement stated, “EPA efforts seek to modernize the agency’s water quality trading policies to leverage emerging technologies and facilitate broader adoption of market-based programs.”
While policy change is taking place, recent improvements to Bion’s technology platform – our recently patented Third Generation (3G) technology platform – will enable the recovery of much higher-value coproducts 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 coproduct 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.
CEO and president, Kreider Farms
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