“This is a game-changer”John HinesFormer Deputy Secretary for Water PA Department of Environmental Protection

May 8, 2014

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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 www.sec.gov.

Clean Water

Agriculture Livestock

Agriculture consumes 70% of the water used in the US

Two Multi-Billion $ Investment Spaces

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Bion Overview

• Excess nutrients recently acknowledged by US EPA as the greatest water quality problem in the U.S. today

• Largest source in most watersheds is livestock/agriculture • Bion’s technology largely eliminates the environmental impacts of

large-scale livestock production, focused on nutrients• ONLY technology that provides proven 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

• Largest cost driver: nutrient removal• Current strategy: Sector Allocation to regulated point sources

and storm water – regardless of costs or efficiencies

• NO LONGER SUSTAINABLE

US Clean Water Spending

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Lagoon

Manureslurry

Nitrogen released as ammonia gas (NH4) [50%]

Field

Manureslurry

N Run-off [25%]

CropUptake

[25%]

Traditional ManureManagement Practice

Livestock: Largest Source of Excess Nutrients

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- 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

AquifersSurface Waters

Downstream Estuaries

75% N lost to the environment

How Big is the Problem?

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Nutrient load 30X to 100X human waste - UPSTREAM

• 9 million dairy cows (12 million w/ support)• 66 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?

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Chesapeake Bay TMDL

• Executive Order 13508 (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• Non-point sources (agriculture) are low hanging fruit• Chesapeake Bay Commission/RTI Report

– 50% to 90% savings through nutrient trading

• Verified non-point source reductions fulfill mandated reduction targets

• 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 Project

Unsustainable Cleanup Costs

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• 2013 PA Legislative Budget and Finance Committee Report- 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)- 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- Anticipate passage of 994 or similar action in 2014

PA Legislative Initiative

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Coalition for an Affordable Bay SolutionFounding Members

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www.biontech.com www.kreiderfarms.com

www.fofarms.com www.jbssa.com

www.affordablebaysolutions.org

Annual Cost of Upstream Alternatives

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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 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 1 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) should increase to 3 million pounds (target 2015/16)

Kreider Farms EconomicsPending PA SB 994

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• Customer: Pennsylvania

• 15 to 20 year guaranteed off-take agreements (per PA study recommendations)

• Comparables P/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)

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Bion has commenced discussions that may lead to installation of Bion systems onexisting and/or new dairies, beef facilities and swine farms in the Midwest and/or North Central states. The most advanced discussions currently involve an initiative by Bion in Wisconsin…The Company is actively involved in discussions with various stakeholders in Wisconsin including state and local government officials and agencies, wastewater authorities and agricultural industry entities.

Bion 10Q March 31, 2014

• Mississippi River Basin Healthy Watersheds Initiative

- Existing unmet local phosphorus TMDLs

- US EPA designates LA coastline “impaired”

- First step in MRB-wide nitrogen TMDL?

• Great Lakes Water Quality Agreement

- Great Lakes Restoration Initiative – US

- Great Lakes Nutrient Initiative – Canada

- Driving phosphorus TMDLs

40 States with Livestock Waste Problem

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• Excess phosphorus impacting Lake Michigan• New phosphorus limits established in 2010 now taking effect• WI Manufacturing & Commerce estimates $4.9B to comply

– Green Bay and Madison Municipal Sewer Districts facing unaffordable costs to upgrade plants and install storm water projects

• WI SB 547 – Clean Waters & Healthy Economy Act adopted 4/24/14– First state program to direct significant financial resources to long term

non-point source agriculture projects, like Bion’s – Bion in discussions with WI stakeholders – regulatory, county and

municipal, and point- and non-point sources – about potential large-scale projects

• Wisconsin has second largest dairy herd in the US – 1,265,000 head– Large potential market for Bion

Wisconsin

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• 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

• Future increased regulation (or incentives) for Concentrated Animal Feeding Operations (CAFOs)? – Ammonia? – Greenhouse gases? – Pathogens? – Antibiotics? – Hormones?

Market Analysis – Potential U.S. Retrofit

18*Not all farms in nutrient-impaired watersheds, overwhelming majority are; illustration only

International Initiatives

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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.

Bion 10Q March 31, 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’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

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Bion Technology: Highest and Best Use

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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)

Bion is presently involved in the very early development and pre-development activities related to its initial Integrated Project(s) in Pennsylvania. The Company is also involved in pre-development evaluations and discussions regarding opportunities for Integrated Projects in the Northeast, Midwest, and the North Central United States (dairy and/or beef). While all such discussions are still in preliminary stages, multiple meetings and discussions are ongoing with local and state level Pennsylvania officials related to the development of a Bion Integrated Project involving a major international livestock entity with existing operations in Pennsylvania. Additionally, the Company is involved in early stage discussions regarding development of Integrated Projects to meet specific needs of certain international markets (and regarding licensing our technology for use in overseas locations).

Bion 10Q March 31, 2014

If an Integrated Project with a major ag player moves forward it will validate Bion’s technology as an economic solution, not dependent on regulatory mandate

Integrated Projects

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Current Beef Supply Chain Problems

Cow calf operations

Cow calf operations

Cow calf operations

Cow calf operations

Backgrounding on grass

Further Process

Refrigerated transport

Refrigerated transportFurther Process

Refrigerated transport

Refrigerated transport

Mar

ket

MarketM

arke

t

Market

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Finishing

Finishing

Slaughter

Slaughter

Bion Integrated ProjectCompetitive Advantages from Advanced Waste Treatment

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• 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

W

aste

Nutrients Water

En

erg

y

Energy

En

erg

y

InputsMeat/MilkProcessor

Waste

Livestock

Livestock BionSystem

BionSystem

BionSystem

Biofuels

Dis

tille

r G

rain

s

Waste

<50 miles

Bion Beef Supply Chain Model

Cow calf operations

Cow calf operations

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Market

Mar

ket

Market

Market

Feeder stock

transport

Feeder stock

transport

Integrated Backgrounding

Finishing Slaughter &

Further Process

Integrated Backgrounding

Finishing Slaughter &

Further Process

Cow calf operations

Cow calf operations

• Low cost producer• Reduced risks – improved margins

• Short-term: sector validation = Bion validation– Non-point source spending

• WI adoption• PA legislation• International adoption

– Integrated Project– Up-list to national exchange– 6 to 12 months?

• Mid-term: system deployment/initial projects development – Initial Bion Services (retrofit) revenues – Research coverage; modeled growth based on project pipeline– 12 to 24 months?

• Long-term: revenue ramp– Revenues from multiple retrofit projects– Integrated project revenues– Regulation; BACT– 24 months plus

Opportunity as We See It…

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}Bion Services – Regulatory Mandate

Economic Solution