1. “This is a game-changer”
John Hines
Former Deputy Secretary for Water
PA Department of Environmental Protection
April 26, 2013

2. Forward Looking Statements
This presentation contains, in addition to historical information, forward-looking statements regarding Bion Environmental Technologies, Inc. (the "Company"), which represent the Company's expectations or beliefs including, but not limited to, statements concerning the Company's operations, performance, financial condition, business strategies, and other information and that involve substantial risks and uncertainties. The Company's actual results of operations, most of which are beyond the Company's control, could differ materially. For this purpose, any statements contained in this presentation that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate," “projected" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. Factors that could cause or contribute to such difference include, but are not limited to, limited operating history; uncertain nature of environmental regulation and operations; uncertain pace and form of development of nutrient (N&P) reduction market; risks of development of first of their kind Integrated Projects; need for substantial additional financing; competition; dependence on management; and other factors. Investors are urged to also consider closely the disclosures and risk factors in the Company’s current Form 10-K, filed with the Securities and Exchange Commission, available at

3. Agriculture consumes 70% of the water used in the US
Two Multi-Billion $ Investment Spaces
Agriculture Livestock
Water
Agriculture consumes 70% of the water used in the US

4. ____________________________________________________________________
Bion Overview
Excess nutrients recently acknowledged by US EPA as the greatest water quality problem in the U.S. today – livestock/agriculture
Bion’s technology largely eliminates the environmental impacts of large-scale livestock production, focused on nutrients
ONLY technology that provides comprehensive treatment for ‘wet waste’ stream (dairy, beef cattle and swine)
Reclaims renewable energy and nutrients from the waste stream
Proven, scalable, commercially-tested, 7 US patents + international
____________________________________________________________________
New Integrated Projects
Increased scale – reduced acreage; strategic locations – reduced transportation costs; resource and operational efficiencies
Existing operations
On-site treatment with scale/central processing facilities
Substantially lower-cost alternative to publicly-funded downstream wastewater treatment

5. US Clean Water Spending
Largest cost driver: nitrogen removal
Current strategy: Sector Allocation to regulated point sources and storm water – regardless of costs or efficiencies
NO LONGER SUSTAINABLE

6. Sector Allocation Ignores Largest Source
Point-Source: 20 to 30% of load
Regulated since 1972
Currently removing high levels of N
Increased removal rates = last mile cost
Non Point-Source: 70 to 80% of load
Livestock is largest contributor
Largely unregulated
Significantly lower removal costs
Result: we discharge very clean (and very expensive) water into already polluted water – Chesapeake Bay, GOM, Great Lakes

7. 75% N lost to the environment
Livestock Largest Source of Excess Nutrients
Traditional Manure
Management Practice
Chesapeake Bay, GOM, Great Lakes, etc, etc, etc.
Hypoxia from algae/phytoplankton blooms from excess nitrogen
Pathogens, toxic blooms
Very expensive to treat water downstream now that nitrogen is diluted with millions of gallons of water
Nitrogen released as ammonia gas (NH4) [50%]
Manure
slurry
75% N lost to the environment
Lagoon
Manure
slurry
Field
N Run-off [25%]
Aquifers
Surface Waters
Downstream Estuaries
Crop
Uptake
[25%]

8. How Big is the Problem?
12 million dairy cows
66 million swine
100 million cattle/calves
2 billion chickens and turkeys
Nutrient load 30 to 100X human waste
US EPA: Excess nutrients are the greatest water quality problem in the US today
Increased scrutiny of ammonia and greenhouse gas emissions, pathogens, antibiotics and hormones

9. 75% N lost to the environment
Liability to Asset: Separate and Aggregate
Traditional Manure
Management Practice
Lagoon
Manure
slurry
Field
Crop
Uptake
[25%]
Chesapeake Bay, GOM, Great Lakes, etc, etc, etc.
Hypoxia from algae/phytoplankton blooms from excess nitrogen
Pathogens, toxic blooms
Very expensive to treat water downstream now that nitrogen is diluted with millions of gallons of water
N Run-off [25%]
Nitrogen released as ammonia gas (NH4) [50%]
Aquifers
Surface Waters
Downstream Estuaries
75% N lost to the environment

10. Chesapeake Bay TMDL Executive Order 13508 (May 12, 2009)
US EPA TMDL: Total Maximum Daily Load
Reduce ~75M lbs of nitrogen per year by 2025
Estimated cost (Bay-wide):
2009: $15B to $28B
2012: $30B to $50B

11. 28 million pounds short PA’s TMDL Compliance
31 million pounds of nitrogen annually by 2025
Tier 1 municipal treatment plant upgrades completed
3 million pounds of nitrogen
$1 billion CAPEX
$15 million annual O&M
$35 per pound annual cost
28 million pounds short

12. PA Legislative Study Report (Jan 2013)
PA Legislative Budget and Finance Committee
Access lower-cost upstream solutions (primarily livestock) through a competitively-bid RFP program
Cost savings up to 80% of previous estimates = several $billion in tax payer savings
Greater value in upstream benefits to interior PA waters and communities AT NO ADDITIONAL COST
“Absent the implementation of cost-cutting measures, Pennsylvania’s compliance with the CB TMDL standard is at risk as there is insufficient funding available to comply under today’s existing cost structure.”

13. Annual Cost of Upstream Alternatives
Bion can begin delivery of up to 2 million pounds based on full operation of Kreider 1 and 2 systems (target 2014)

14. Coalition for an Affordable Bay Solution
Support the creation of a competitively-bid nitrogen procurement program in Pennsylvania
Capture benefits outlined in PA Legislative Study
Open to all sources: public and private; regulated and unregulated
Chesapeake Bay Total Maximum Daily Load (TMDL) compliance cost can be reduced by as much as 80%
Upstream treatment strategy benefits
Reduced cost for freshwater compliance
Cost-avoidance of future treatment of nitrate-contaminated aquifers
Improved public health and safety
Local economic activity – recreation, agriculture, property values
Bids will be ‘scored’ to reflect value of upstream benefits
Coalition head: Ed Schafer, former Secretary of the USDA and two-term Governor of North Dakota, currently Bion Vice Chairman
Introduction of enabling legislation expected in one to two weeks

15. Coalition Founding Members

16. Kreider Farms Economics
Kreider 1: 2,000 dairy cows (operating)
Kreider 1 financed by PENNVEST (PA Infrastructure Investment Authority) - $7.8 million, non-recourse, low interest, 10 yr
Anticipate Kreider 1 revenues Q3/Q4 2013
Kreider 2: 7 million chickens (target 2013/2014)
Kreider 1 & 2 – 2 million pounds annually at $8+ per pound per year when in full operation
Anticipate $7M to $10M annual EBITDA when Kreider 1 & 2 in full operation at 2M pounds
Future Kreider expansion (Phase 3) should increase to 3 million pounds (target 2015)

17. Utility Revenue Model (Kreider Only)
Customer: Pennsylvania
15 to 20 year guaranteed off-take agreements (per PA study recommendations)
Comparables P/E
York Water (YORW)
Aqua America (WTR)
American Water Works (AWK)
Implied valuation of Kreider Project (20 P/E)
Phase 1 & 2 (2M pounds) $140M to $200M
Phase 1,2,3 (3M pounds) $260M to $320M
Kreider CAPEX (Bion) $15M
PA opportunity 15M to 20M pounds

18. U.S. Watershed Model
US EPA: Chesapeake Bay will be a model for watershed nutrient management in US
Great Lakes: ~300 million pounds of nitrogen
Mississippi River Basin: ~1 billion pounds
Bion is “poster child” for Public-Private Partnership strategy supported by US EPA
Bion’s Kreider Farms nitrogen reductions verified under US EPA-approved nutrient trading program
Bion was a panelist on US EPA’s inaugural national water quality trading workshop – only representative of private sector solutions

19. Market Analysis – Potential U.S. Retrofit
Thousands of scale-suitable farms*
Dairy
44% of US dairy cows on farms over 1,000 head
5,280,000 head (including support herd)
Swine
61% of US swine on farms over 5,000 head
40,260,000 head
International opportunities
No competitors to date
Increased future regulation of Concentrated Animal Feeding Operations (CAFOs)? Ammonia? Greenhouse gases? Pathogens? Antibiotics? Hormones?
*Not all farms in nutrient-impaired watersheds; illustration only

20. Economic Benefits to Agriculture
New revenue sources – environmental incentives
Asset recovery: by-products
Renewable energy
High-quality stable fertilizer
Single-cell protein product – animal feed
Aqueous soluble nutrient stream
Clean water for reuse
“Sustainable” branding
Reduced acreage requirements
Relocation or expansion absent land acquisition
Environment wins; taxpayers win; farmers win

21. Bion Technology: Highest and Best Use
New state-of-the-art, large scale, highly-efficient livestock production facilities in strategic locations, with a minimal environmental and physical footprint, that can be integrated with dedicated food processing (and in some locations biofuels production)

22. Current Beef Supply Chain Problems
Market
Cow calf operations
Finishing
Slaughter
Further Process
Refrigerated transport
Backgrounding on grass
Cow calf operations
Cow calf operations
Cow calf operations

23. Competitive Advantages
Small physical footprint
Increased scale/density
Co-locate processing
Co-locate biofuels
Non-traditional strategic locations
Bion
System
Biofuels
Distiller Grains
Waste
Livestock
Energy
Inputs
Meat/Milk
Processor
Waste
<50 miles
Single-sourcing
Branding
Food safety/security
Energy/resource efficiencies
Onsite production and use of renewable energy
By-products
Reduced transportation costs
Livestock
Waste
Bion
System
Bion
System
Livestock
Nutrients
Water

24. Bion Beef Supply Chain Model
Market
Cow calf operations
Market
Cow calf operations
Integrated Backgrounding
Finishing Slaughter & Further Process
Feeder stock transport
Feeder stock transport
Integrated Backgrounding Finishing Slaughter & Further Process
Cow calf operations
Market
Cow calf operations
Market
Low cost producer
Reduced risks – improved margins

25. Bion’s Integrated Projects
Industry generally unable to obtain permits since 2000
Kreider full Water Quality Management Permit has the industry’s attention – Bion now has the key to gate
Increase annual EBITDA returns by five percentage points (or more) over existing industry metrics
IP’s with scale and attributes described are only possible today utilizing Bion’s patented and proprietary technology
Preliminary and on-going discussions with several regionally-, nationally- and internationally-known food producers, processors, and distributors

26. Investment Criteria
Paradigm Shift – nitrogen reductions 50% to 90% cheaper; Integrated Projects the logical next step in production efficiencies
Technology validated – third generation, scalable, proven, accepted
Strong IP portfolio
Very large, addressable market with substantial barriers to entry
Recognized industry thought leader
Strong management team – Exec Vice Chrmn: Ed Schafer, former US Sec. of Agriculture and two-term Gov of North Dakota
At the technology and business inflection point – heavy lifting done (tech accepted, policies evolving); anticipate revenues in 2013
Valuation: $2.00 ($55M FD) – Kreider projects alone anticipated to produce $7M to $10M operating cash flow (EBITDA)
Primary risk: timing
Trades OTC BB/QB: BNET (seek up-list this summer)