Diesel Exhaust Fluid & Diesel Fuel Additives

1. Diesel Exhaust Fluid &Diesel Fuel Additives New Market Potential

2. EPA Regulation • Beginning January 1, 2010, diesel engines are required to meet tough new NOx standards to help control air pollution. • The preferred method involves injecting a high purity fluid called Diesel Exhaust Fluid (DEF) into the exhaust stream.

3. EPA Regulation • Selective Catalytic Reduction (SCR) – converts nitrogen oxides to nitrogen and water vapor. • Older vehicles will not need to be retrofitted. • Users will need (2) US gallons of DEF for every 100 gallons of diesel fuel.

4. Market Size • Approximately 40 billion gallons of diesel fuel are used each year by on-road vehicles • This means that over a period of years, DEF usage will climb to approximately 800 million gallons per year • DEF demand will start slowly but will rapidly pick up speed over the next three years • Take advantage of the opportunity NOW!

5. How SCR Works Diesel Exhaust Fluid (DEF) is pumped into hot exhaust Catalytic converter reacts with DEF Nitrogen oxides are converted to pure nitrogen & water vapor

6. What is Diesel Exhaust Fluid? It is a high purity solution comprised of 32.5% urea and 67.5% DI water Stored in a separate tank on the truck Physical Properties • Clear and colorless liquid • Slight ammonia odor • 9.8-10 pH • 1.1 specific gravity Purity is critical, DEF can’t be exposed to many metals including cast iron, brass, aluminum, copper

7. Storage & Dispensing Jugs & pails Will play an important early role, but is most expensive solution Drums & totes Both will play a substantial role for both short & long term distribution. Small bulk systems Hold 1,000 – 2,000 gallons, designed for truck stops & large fleets In the first 3 years, 80% of sales is expected to be jugs, drums and totes.

8. Who Is Using DEF? Some of the companies include:

9. Who are potential customers? • Truck fleets • Bus • Municipal • Construction • Agricultural • Mining • Companies manufacturing DEF dispensing systems • Packagers of DEF (filling jugs, drums and totes)

10. What products are suitable for DEF? Many BPE products are suitable for DEF service Main focus is on Drum pumps, AODD Pumps & Self-Priming Centrifugal pumps Colder Product DrumQuik Pro is also used to a provide a “Closed System” solution

11. What is an “Open Solution” container? “Open Solution” containers are drums or totes with a standard bung opening. This allows the use of a standard drum pump. The containers are typically less expensive than “Closed Solution” containers. Concern is contamination of DEF with “Open” containers.

12. Special Sealed Solution Bung Adapter Teflon encapsulated o-ring seals pump tube • Eliminates fear of contamination • Seals the pump tube in the drum/bung opening • Filters make up air to prevent foreign contaminants like dirt & dust from entering the container Dual 80-micron vent filters prevents dust and dirt from entering container

13. “Open Solution” Components Below are “Open Solution” assemblies that have been tested and approved by DEF manufacturers & suppliers for use with DEF. Pump tubes and motors – are Finish Thompson EFP or PFM Series products with air or electric drive PFM Kit EF in DEF Drum EFP Kit

14. “Open Solution” Kit Components Bung adapter – Specifically designed for DEF. Seals pump tube in bung of drum or IBC. Dual 80 micron filters prevent dust and dirt contamination. Converts “Open” containers to “Sealed Solution”. Hose – Special Goodyear brand EPDM hose that is peroxide cured and flushed with DI water. Stainless steel auto nozzle – 19 mm spout for DEF tanks, automatically stops fluid flow when tank is full.

15. Other “Open Solution” Packages Additional features include carts, hose reels, filters,flow meters & secondary containment

16. What is a “Closed Solution” container? “Closed Solution” containers feature a special valve and a tube reaching to the bottom of the container This prevents drum pumps from being used as a solution “Closed Solution”containers require the use of a self-priming pump Valves are typically provided by Micro Matic or Colder and can be installed in drums or totes

17. DrumQuik® PRO Quick Connect Coupler System for DEF Dispensing • Colder’s DrumQuik dispensing system provides a critcal seal connection between the DEF container & the tranfer pump • This is called a “Closed Solution” • Requires the use of self-priming pumps • Eliminates fear of contamination • Protects against emitting fumes • Minimizes chemical exposure

18. “Closed Solution” Systems Systems are based on Finish Thompson’s SP10 Series self-priming mag drive pumps Many of our products are available to handle any “Closed Solution” container application If a “Closed Solution” option is needed BPE has the answer!

19. Diesel Fuel Additives • Diesel fuel additives are simply chemicals that change the properties of untreated diesel fuel. • Additives are designed to perform various functions including: • Increased performance (HP and torque) • Increase engine life by providing enhanced lubrication and corrosion protection • Remove water • Provide hot and cold weather protection.

20. Why use additives? • Starting in 2006 the EPA mandated changes to diesel fuel to reduce sulfur levels, resulting in ULSF (Ultra Low Sulfur Diesel). This was to allow the application of new emission reducing technologies. • Starting with on-road use diesel applications, these regulations have expanded in 2010 to non-road diesel as well. • The majority of railroad locomotive and marine diesel fuel will change to ULSD in 2012, and all will change by 2014.

21. Why use additives? • The guidelines follow similar standards around the world including Europe, Canada, and parts of South America and Asia. • Unfortunately, the process of removing the sulfur and removal of the sulfur itself leads to reduced lubricity of the fuel as well as reduced peak power and fuel economy. • To enhance the ULSD fuel, additives can be added to increase various performance enhancing properties.

22. Increased Performance • Additives for improved combustion and subsequent increased horsepower and torque!

23. Lubrication/Corrosion Resistance • Additives for reduced rust formation which would clog nozzles, filters, strainers, and fuel lines. (Untreated and treated test samples shown). • Additives for enhanced lubrication and decreased metal to metal wear resulting in longer engine life.

24. Cold Weather Performance • Additives for reducing diesel gelling and ice crystal formation at low temperatures. Paraffin in the fuel crystallizes (clogged bus filter shown at right) causing slow starts or complete blockage and engine stoppage.

25. Dosing Applications • Additives are put into the fuel system either manually into the tank, via onboard dosing, or automatically into the dispensing system at large fleet applications (this is where BPE opportunities arise).

26. Dosing Applications • Systems for dosing additive directly into fuel distribution systems utilize pumps, flowmeter, tanks, and controls.

27. Opportunities • Some of the companies in the additive and additive dispensing markets are already our customers. Seek them out, know what they do, and learn how we can be more involved. • There are also opportunities for BPE to be involved on an OEM basis for the supply of the dosing assembly itself.

28. Making the world a cleaner place one application at a time