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Shanghai, July 2018

China and global low carbon demand growth

Matthew StoneManaging Director

PRIMA16 July 2018

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Shanghai, July 2018

China and global low carbon demand growth������ �����

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The international demand side ����

The Chinese supply side

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Shanghai, July 2018

The international demand side

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Shanghai, July 2018

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European demand growth is the future�������

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Shanghai, July 2018

What does RED II mean?RED II)�%$

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• Substitution of wastes for crops is official policy for market expansion

• Diesel is the natural home for wastes as ethanol waste development struggles, expanding blending headroom

• Palm is facing additional ILUC hurdles

• Demand for non-UCO, non-animal fat streams will grow

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Shanghai, July 2018

HVO supply surge & red palm flags

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2016 2017 2018 2019 2020 2021 2022

EU renewable diesel footprint (mn t)��HVO��

Neste projected capacity after debottlenecking

Neste projected capacity when second Singapore plant opens

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Shanghai, July 2018

EU will need to import more

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Shanghai, July 2018

West Coast US is also waste hungry

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• Record high prices offer $566/t in incentive to CA UCOME producer before RINs & BTC �,������UCOME,24��&8�/5��+�$566�6�7����RINs�-"24�

• CME launched PRIMA LCFS swap on 16 July1 ����%!�7'16#,$�* ��PRIMA)0.,LCFS(3�

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Shanghai, July 2018

US West Coast is outpricing ARA

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UCOME FOB LA vs UCOME FOB ARA

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Shanghai, July 2018

LCFS is worth $560+/t for generic UCOME

������ �$560

Lock-in margin with CME/PRIMA LCFS swap�����PRIMA LCFS�������

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Shanghai, July 2018

The Chinese supply side

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Shanghai, July 2018

The New Silk Road�����

550570590610630650670690710

12.7.2017 1.7.2018 2.7.2018 3.7.2018 4.7.2018 5.7.2018 6.7.2018

EU UCO price vs China UCO price $/ton

UCO FOB ARA UCO FOB North China

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Shanghai, July 2018

Scaling up$��)

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181

31 13 11

050

100150200250300350400

2015 2016 2017 2018 estimatedto all majordestination

000'

ton

China UCO export to major destinations

Netherlands Spain Portugal UK Malaysia

• Total over 252,000t in 2017, up from 42,000t in 2016. ��#����(�2016��42,000���2017��)�252,000��

• EU consumption includes vols shipped into Malaysia, then shipped with locally collected oils to EU after arriving Malaysia ports. ���� (��'���%�*�"���(�

• UCOME and HVO are joining the exodus. UCOME�HVO �&�!��

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Shanghai, July 2018

How to trade ����

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Shanghai, July 2018

Stay on top with

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EU BiodieselUS Biodiesel

Argentinian biodieselVeg Oils

International EthanolAsian Ethanol

California LCFSMonthly RIN Count

Contact: Fiona.Ribbins@prima-markets.com

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Shanghai, July 2018

PRIMA makes no warranties regarding the completeness, accuracy, or timeliness of any information or data in this communication ("Data"). PRIMA shall notbe liable for any loss or damage stemming from any parties' reliance on or use of Data. All Data is provided on an "as-is" basis. Nothing in this communicationis intended as investment advice or a solicitation of the purchase or sale of any financial or physical instrument. Copyright 2018 PRIMA. All rights reserved.No part of this publication may be copied, reproduced, distributed, or transmitted in any form without the express written consent of PRIMA

Matthew StoneManaging Director

PRIMA

Mobile&Whatsapp: +44 7762 773118matthew.stone@prima-markets

Wechat: +65 8130 2066