DARLING INGREDIENTS INC. Barclays 40th Annual Energy-Power Conference

Welcome. Thank you. Thank you.

You want me to take it? You want to start? Okay. Sure. Thanks, Theresa. I think it is sustainable in the near term. We have a strong RVO, a strong mandate, that really provides a backdrop for solid margins. We see it today with the replacement margins in the industry. As you said, that RVO extends through 2027. There are still some details that need to be clarified, but as we go forward, we get more and more. Recently, we learned about small refinery exemptions for 2025. There have been comments and suggestions about reallocations of those. Either way, the S&D balance for RINs is constructive and we think the margin outlook is quite positive. When you look at it, just for those, we are year 13 in the business, largest in the world. The construction investment decision was made off of $0.79 a gallon.

First five years, RIN $1.06, $1.07. Second five years, $2.26. Then we had the Biden electric vehicle confusion and not a big enough RVO. Now we are back to more historical numbers that are in those ranges. We have got everything we need to continue the location of the assets, the feedstock origination, the sales, the pathways. It is a sophisticated group of assets that is number one in the world.

Well, I think, and Bob can help me here. He is closer to it, so I get to give you the 30,000 foot view. What I can say is, we have worked diligently with our trade associations, both on the ag and the clean fuel side, to be where we are at today. What I can tell you is Lee Zeldin, Andrew Sabin, they have done exactly what they said they would do. The program works. They expanded the RVO. At the end of the day, we have cleaned up some of the SREs, and ultimately, we feel that everything that they have said in the past, they have done. So there is no reason to discount what they are doing right now. Now, we will give you two scenarios. Scenario one is, let us say, no reallocation. It is very constructive. Loosens up the S&D just a little bit, and if they fully reallocate, it tightens it up a little more.

So our expectation is that they will issue the rule here in October. Remember, it is a proposed rule. Then we have got to go have comments. Then we have got to respond. The agency has to respond back to the comments, and I think during the RVO, it was 30-something thousand comments that came in. Then they have to go to OMB, get White House to sign off on it. So by the end of the year. What is even more fascinating, though, is we talk about the 2026 rule. As long as it is not embedded into the Farm Bill, it is going to be harder to show economic hardship. So 2027 could even get tighter.

Yeah. I would just add, I think to Randy Stuewe's point, we believe that the reallocations will occur, or at least a significant percentage will occur.

If they do not, it is more harmful for the farmer and for the oil seed crusher than it is for the renewable diesel producer. The reason is, if we were to not get a reallocation, you could see a scenario where the lesser competitive biofuel producers do not make as much fuel. But ultimately, with a lack of production, you are going to tighten up the RIN S&D again, and we get back to the margins that we have today in order to incentivize sufficient production in order to meet that ultimate mandate. We hope that does not happen.

We would like to see continued demand for the benefit of the agricultural economy, but we do not think it will have a large impact either way on Diamond Green Diesel.

I think that will be fairly straightforward. It has been litigated in the past and lost every time, so there is no reason not to expect that. That will not be a surprise when it goes out on one of the medias. What is more important to Bob Day and I right now is that we engage in a discussion now about 2028 forward. Getting the narrative and getting those programs under discussion. As I said, between the EPA, and they have a goal to get that out for discussion here or proposed in November. We will see. It will be the first time that it has happened if they do that, so I am probably going to take a side bet on that one. But I suspect that that is what they are wanting to do. You think of the E15 program, what have we done? We have helped the price of corn, right? We have tightened up the S&D.

The price of soybean oil is up at $0.70. It's allowed the crusher to make a nice margin and pay more for beans. The programs are working. There's just no reason a politico is going to take a different spin on it today. Admittedly, you can't take the narrative away from the large oil companies that will make all kinds of claims, but they're having record earnings years. I think it's probably a narrative that probably falls on deaf ears a little bit right now.