“This is a game-changer” John Hines Former Deputy Secretary for Water PA Department of Environmental Protection September 24, 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

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

Established 1972 TMDL – Total Maximum Daily Load Point Sources – REGULATED Smoke stack or discharge pipe Sector Allocation to municipal wastewater treatment, power generation, industrial facility, etc. (regardless of cost) Currently removing high levels of nutrients Incremental improvements = last-mile costs Storm Water Runoff – REGULATED Very expensive Non-point Sources – NOT REGULATED Diffuse over a wide area Agriculture More than 70% of the problem Clean Water Act 4

Largest cost driver: nitrogen removal Sector Allocation NO LONGER SUSTAINABLE US Clean Water Spending 5

6 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, 6 international patents ____________________________________________________________________ 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

Lagoon Manure slurry Nitrogen released as ammonia gas (NH 4 ) [50%] Field Manure slurry N Run-off [25%] Crop Uptake [25%] Traditional Manure Management Practice Livestock: Largest Source of Excess Nutrients 7  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 Aquifers Surface Waters Downstream Estuaries 75% N lost to the environment

How Big is the Problem? 8 Nutrient load is 130X human waste - UPSTREAM 9 million dairy cows (12 million w/ support) 67 million swine 100 million cattle/calves 2 billion chickens and turkeys

US EPA now acknowledges that excess nutrients are the greatest water quality problem in the US today Increasing scrutiny of ammonia and greenhouse gas emissions, pathogens, antibiotics and hormones How Bad is the Problem? 9

10 Chesapeake Bay TMDL Executive Order (May 12, 2009) US EPA TMDL: first watershed-wide TMDL Reduce 63M lbs of Nitrogen by 2025 Six states, DC Estimated cost (Bay-wide):  2009: $15B to $28B  2012: $30B to $50B Substantial penalties for non-compliance

$30 to $50 billion Sector allocation strategy is obsolete/unsustainable 2012 Chesapeake Bay Commission/RTI ReportReport –50% to 90% savings through nutrient trading Distributed treatment approach Verified non-point source reductions fulfill mandated reduction targets LAST STEP: Mechanism to fund non-point source treatment –Public-Private-Partnerships (PPP) – private sector competes for public funding through an RFP that funds lowest cost solutions –Highly successful precedent: Colorado River Basin Salinity Control ProjectColorado River Basin Salinity Control Project Unsustainable Cleanup Costs 11

2013 PA Legislative Budget and Finance Committee ReportReport  Upstream non-point source strategy (large agriculture projects) can cut costs up to 80% of previous estimates = $1.5 billion annually  “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.” PA Senate Bill 994 ( Major Watershed Improvement Act) Major Watershed Improvement Act  Introduced June 5, 2013  Competitive procurement program for nutrient reductions  Equal access to public funding – all solutions based on cost  15 to 20 year off-take agreements with PA  Passed Senate Agriculture and Rural Affairs Committee June 11  Not considered in June session due to extended budget debate  Fall session begins September 23, 2013  Anticipate passage by full Assembly by Dec 2013 PA Legislative Initiative 12

Coalition for an Affordable Bay Solution Founding Members

Annual Cost of Upstream Alternatives 14 Bion can begin delivery of up to 2 million pounds based on full operation of Kreider 1 and 2 systems (target 2015) Source: PA LBFC Report; CB Commission ReportPA LBFC ReportCB Commission Report

Kreider 1: 2,000 dairy cows (system operating) Kreider 1 financed by PENNVEST (PA Infrastructure Investment Authority) - $7.8 million, non-recourse, low interest, 10 yr Anticipate Kreider 2 long-term rev agreements for 2015 Kreider 2: 7 million chickens (target development 2014/15) Kreider 1 & 2: ~2 million pounds annually at $8+ per pound per year when in full operation (anticipate 2015) Anticipate $7M to $10M annual EBITDA when Kreider 1 & 2 in full operation at 2M pounds Future Kreider expansion (Phase 3) could increase to 3 million pounds (target 2016) Kreider Farms Economics Pending PA SB

Customer: Pennsylvania 15 to 20 year guaranteed off-take agreements (per PA study recommendations) ComparablesP/E  York Water (YORW) 25.5  Aqua America (WTR) 22.7  American Water Works (AWK) 20.5 Implied valuation of Kreider Project (20 P/E)  Phase 1 & 2 (2M pounds) $140M to $200M Utility Revenue Model (Kreider Only) 16

The Company has commenced activities related to marketing and potential use of its technology in relation to expansion and/or development of CAFO’s in the Great Lakes watersheds and the Midwest states with current efforts being most advanced in Wisconsin…June K Mississippi River Basin Healthy Watersheds Initiative  Existing unmet local phosphorus TMDLs  US EPA designates LA coastline “impaired” US EPA designates LA coastline “impaired”  First step in MRB-wide nitrogen TMDL? Great Lakes Water Quality Agreement  International treaty  Great Lakes Restoration Initiative – US Great Lakes Restoration Initiative  Great Lakes Nutrient Initiative – Canada Great Lakes Nutrient Initiative  Driving phosphorus TMDLs National Watershed Model 17

Lake Michigan Canada-US treaty driving phosphorus TMDLs Green Bay and Madison Municipal Sewer Districts facing unaffordable costs to upgrade plants and install storm water projects Bion in discussions with both cities and several large upstream dairies regarding waste treatment at the dairies No other options except $billons in municipal plant upgrades and storm water projects Adoption by any other state will validate the national strategy, which will validate the entire regulatory mandated-space as well as Bion’s technology as a solution Wisconsin 18

Thousands of farms that meet Bion’s minimum scale thresholds* No competitors to date 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 Increased future regulation of Concentrated Animal Feeding Operations (CAFOs)? Ammonia? Greenhouse gases? Pathogens? Antibiotics? Hormones? Market Analysis – Potential U.S. Retrofit 19 *Not all farms in nutrient-impaired watersheds, overwhelming majority are; illustration only

American Farm Bureau (et al) challenge to US EPA and CB TMDL filed Mar 13, 2011 US District Court rejected arguments that the “EPA overstepped its bounds under the federal Clean Water Act, created an unfair process and used standards that were flawed or unlawfully complicated” “…US EPA within its authority…to set and enforce standards to reduce nitrogen, phosphorus…” Subject to appeal Federal Court Ruling – Sep 13,

International Initiatives 21 “The Company has been pursuing these opportunities [project development] within the United States during the later stages of technology redevelopment and has recently begun activities to pursue such opportunities internationally”…10Q March 2013  540 dead zones worldwide  Nutrients focus of international concern  Livestock waste now a national security issue in China  Ed Schafer, Bion’s Exec Vice Chairman, is former US Secretary of Agriculture and former two-term Governor of North Dakota

Bion Technology: Highest and Best Use 22 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)

Current Beef Supply Chain Problems Cow calf operations Backgrounding on grass Further Process Refrigerated transport Further Process Refrigerated transport Market 23 Finishing Slaughter

Bion Integrated Project Competitive Advantages from Advanced Waste Treatment 24 Small physical footprint – reduced acreage/CAPEX Increased scale/density Co-locate processing Co-locate biofuels Non-traditional strategic locations Single-sourcing –Branding –Food safety/security Energy/resource efficiencies –Onsite production and use of renewable energy –By-products Substantially reduced transportation costs Livestock Waste Nutrients Water Energy Inputs Meat/Milk Processor Waste Livestock Bion System Bion System Bion System Biofuels Distiller Grains Waste <50 miles

Bion Beef Supply Chain Model Cow calf operations 25 Market Feeder stock transport Integrated Backgrounding Finishing Slaughter & Further Process Integrated Backgrounding Finishing Slaughter & Further Process Cow calf operations Low cost producer Reduced risks – improved margins

Bion’s technology is proven and accepted but… the SECTOR – clean water spending on non- point sources – has not yet been validated Evolving opportunity No comparables – no research Little or No Value for Technology 26

Short-term: sector validation = Bion validation –Non-point source spending PA legislation Adoption in another state International adoption –Integrated Project –Up-list to national exchange –Six months? Mid-term: system deployment/initial projects development –Initial Bion Services (retrofit) revenues –Research; modeled growth based on project pipeline –6 to 24 months? Long-term: revenue ramp –Revenues from multiple Services projects –Integrated project revenues –Future regulation? –24 months plus Opportunities as We See Them… 27 } Bion Services – Regulatory Mandate Economic Solution