“This is a game-changer” John Hines Former Deputy Secretary for Water

1. “This is a game-changer” John Hines Former Deputy Secretary for Water PA Department of Environmental Protection March 5, 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 www.sec.gov.

3. Bion Overview • Excess nutrients from livestock waste recently acknowledged by US EPA as one of the greatest environmental problems in the U.S. today • Bion’s technology largely eliminates the environmental impacts of large-scale livestock production, producing clean water and air • Next-generation technology: 22 years and approx $65 million • ONLY technology that provides comprehensive treatment • Reclaims renewable energy and nutrients from the waste stream • Proven, scalable, commercially-tested, extensive IP coverage ____________________________________________________________________ • Cleantech agriculture solution • Increased scale – reduced acreage; integrated operations in strategic locations; reduced transportation costs; improved conditions/production; reduced risk – increased margins • Clean water solution • Substantially lower-cost alternative to downstream infrastructure and treatment

4. Clean Water Spending • $60+ Billion annual US spending for wastewater treatment - federal, state, local ratepayer • $841 Billion total non-federal spending • 1991 to 2005 • $255 Billion estimated 5-year funding need 2009 ASCE, US EPA • Largest cost driver: nitrogen removal • Current strategy: Sector Allocation to regulated point sources and storm water – regardless of costs or efficiencies

5. Nutrient Sources – Treatment Efficiency • Urban centers: 20% to 30% of load • Regulated since 1972: point source • Currently removing high levels of N • Increased removal rates = last mile cost • Upstream: 70% to 80% of load • Mostly agriculture and livestock • Unregulated non-point source (NPS) • Significantly lower removal costs • Result: we discharge very clean (and very expensive) water into already polluted water – Ches Bay, GOM, Great Lakes

6. Upstream Load: Problem with Livestock Production Traditional Manure Management Practice Nitrogen released as ammonia gas (NH4) [50%] Manure slurry Lagoon 75% N lost to the environment Manure slurry Field N Run-off [25%] Crop Uptake [25%] Aquifers Surface Waters Downstream Estuaries • 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

7. How Big is the Problem? • 12 million dairy cows • 66 million swine • 100 million cattle/calves • 2 billion chickens and turkeys • Organic load approximately 28X human waste • Task group made up of U.S. EPA staff and state regulators: nitrogen and phosphorus pollution has the potential to become “one of the costliest, most difficult environmental problems we face in the 21st century.”

8. Liability to Asset: Separate and Aggregate Traditional Manure Management Practice Manure slurry Nitrogen released as ammonia gas (NH4) [50%] Lagoon Manure slurry 75% N lost to the environment Field N Run-off [25%] Crop Uptake [25%] Aquifers Surface Waters Downstream Estuaries • 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

9. Chesapeake Bay TMDL • Executive Order 13508 (May 12, 2009) • US EPA TMDL: Total Maximum Daily Load • Reduce~75M lbs of nitrogen per year by 2025 • Estimated cost (Bay-wide): • 2009: $15B to $28B • 2012: $30B to $50B

10. Bion in Pennsylvania (six years) • Two years of technology evaluation through Penn State • Credit certification by PA DEP • Kreider agreement • PENNVEST financing: $7.8 million (Kreider #1) • Demonstration permit from PA DEP (one year) • Construction and startup • Monitoring and testing (one year +) • Verification and full Water Quality Management Permit (August, 2012)

11. Pennsylvania Fiscal Code Study Report • Released January 22, 2013 by PA Legislative Budget and Finance Committee • Access lower-cost upstream solutions (livestock) through a competitively-bid RFP program • Cost savings up to 80% of previous estimates = several $billion in tax payer savings • Greater value in upstream benefits to interior PA waters and communities • Reduced impacts to local freshwater resources – lower long term compliance costs and future cost-avoidance of nitrate-contaminated aquifers • Environmental, economic, quality of life and health benefits to upstream rural communities • Increased agricultural investment and economic activity in rural communities

12. PA Report continued • “Absent the implementation of cost-cutting measures, 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.” • CB TMDL milestone reporting date: June 30, 2013 • Pennsylvania WILL BE in default – already on “enhanced oversight” with US EPA • Potential ramifications: • US EPA sanctions include forced ENR for muni’s; withhold clean water funding; no NPDES permits = no growth • Lawsuits from MD, VA, DC, Chesapeake Bay Foundation, River Keeper’s Alliance, EDF, etc, etc, etc. • Bion can begin delivery of up to 2 million pounds based on full operation of Kreider #1 and #2 systems (target 2014)

13. Historic Timeline 1972-83 1987-2007 2008 2009 2010 2011 2012 2013 Studies/reports by Nat’l Academy of Sciences, NAWQA, Nat’l Science & Tech Council, Enviro Law & Policy Center, Nati’l Geographic highly critical of livestock Growing public awareness leads to the Clean Water Act (CWA) Chesapeake Bay Exec Council targets 40% reduction by 2000 – FAILED GAO Report critical of EPA re livestock EPA and 6 states begin study of pathogens in Ohio River Studies/reports by Enviro Integrity Fund, Food & Water Watch highly critical of livestock PEW Report – Industrial Farm Animal Production The Chesapeake Bay Agreement signed to restore the Bay Clean Water State Revolving Fund created USDA signs agreement with dairy industry re greenhouse gases US EPA sends clear signal that nutrient strategy being developed for Ches Bay and other US watersheds UNESCO, UNEP Report – Livestock Waste CB 2000 for 2010 reductions – FAILED Chesapeake Bay TMDL established – reduce approx 60M lbs of nitrogen by 2025 CA begins to focus on groundwater nitrate contamination Metcalf & Eddy Report – PA Ches Bay compliance cost study Bion develops, installs, operates, improves 1GEN systems for dairy and swine – 30 commercial systems thru 2003 New 2 yr milestone set for 2011-13 Landmark Executive Order signed by President Obama putting EPA in charge of Bay Cleanup PA’s TMDL requires 30M lbs reduction – 5M from Muni; 25M from Ag 12 PA WWTP upgrades: ~$435M; 1.7M # N reduction; ~$249/# PA DEP certifies Bion dairy system protocols Bion concludes 2GEN commercial scale testing at DeVries Dairy States & DC submit Watershed Implementation Plans (WIP) Bion executes Kreider agreement PA argues to EPA that Ag reductions have occurred – but no credit received * US EPA sets 2 year milestones for 2011 with restoration by 2025 Bion technology eval/approval by CAL EPA PA DEP encourages manure hauling to generate credits Bion-Kreider dairy project completed – testing initiated PA begins WWTP upgrades using Stimulus money PA DEP looks at nutrient trading as alternative strategy PA continues WWTP upgrades – larger cities first Bion submits Kreider plan to PA DEP and PENNVEST Bion begins work with PA DEP on PA livestock project – technology eval by Penn State PA DEP issues demonstration permit for Bion-Kreider project – construction begins PENNVEST approves Bion-Kreider project financing

14. 2012/Future Timeline Maryland projected TMDL cost: $5B+ PA establishes verified credit standard *** US EPA expands and promotes Water Quality Trading in Miss River Basin and Great Lakes watersheds Virginia projected TMDL cost: $8B+ PA Fiscal Code Amendment study: competitive procurement strategy thru RFP RTI International study – substantial savings through nutrient trading 2012 2013 and beyond (anticipated) CA, ID, TX and other states address livestock industry-related nitrogen and nitrate issues Studies and reports from National Assn of Clean Water Agencies, Enviro Working Group, Stockholm International Water Institute, Ecological Society of America all highly critical of livestock and waste Bion-Kreider system exceeds operating expectations June 30: first TMDL Milestone report date PA Fiscal Code Amendment Study Release Bion submits bid to PA to provide approx 2M lbs of verified nitrogen reduction from Kreider PA – EPA Baseline Settlement: added 15M+ lbs; no manure hauling, no paper credits EPA and PA DEP settlement re PA baseline, etc Bion-Kreider system nutrient reductions VERIFIED by PA DEP PA Legislative action to establish funded RFP program US EPA and states tackle other enviro issues related to livestock – GG E, ammonia, antibiotics, pathogens, etc PA DEP now on enhanced oversight with US EPA Bion funds and develops Kreider Phase 2 Full Water Quality Management Permit issued by PA DEP PA DEP re-certifies Bion-Kreider project Phase 2 – approx 2M lbs Bion initiates development of next Ches Bay retrofit projects Antibiotic overuse at livestock operations in national spotlight Initial success in Advanced Separation Trials at Kreider – ongoing – improved nutrient recapture PA will be in default of Ches Bay TMDL as of June 30 report date – potential sanctions from EPA, lawsuits from MD, VA – no more delays Bion begins development of retrofit projects in Miss River Basin EPA holds inaugural Water Quality Trading Workshop – national outreach for Clean Water Act compliance EPA tours Bion-Kreider system multiple times Bion initiates development of first Integrated Project in NE US CERCLA ammonia reporting moratorium for livestock industry expires 2015 TMDL-mandated reductions are 4M lbs higher Bion panelist on EPA’s Water Quality Trading Workshop – ONLY private sector representative US EPA expands regulation of large scale livestock facilities Anticipated authorization of interstate nutrient credit trading

15. Kreider Farms Projects #1 and #2 • Kreider #1: expansion up to 2,000 dairy cows • Kreider #2: 7 million chickens (four locations) • Kreider #1 financed by PENNVEST (PA Infrastructure Investment Authority) - $7.8 million, non-recourse, low interest, 10 yr • Kreider Projects #1 and #2 will produce 2 million pounds annually at $8+ per pound per year when in full operation (target 2014) • PA Legislative Study recommends 15 to 20 year contracts • Anticipate $7M to $10M positive operating cash flow (EBITDA) when Kreider #1 and #2 in full operation • Future Kreider expansion anticipated to increase reductions up to 3 million pounds • Kreider projects only

16. U.S. Watershed Model • US EPA has made it clear that the Chesapeake Bay will be a model for watershed nutrient management in US • Great Lakes: cut at least 300 million pounds of nitrogen • Mississippi River Basin: approximately 1 billion pounds • Bion is US EPA’s “poster child” for private-sector solutions • Bion’s Kreider Farms nitrogen reductions verified under US EPA-approved nutrient trading program • Bion was a panelist on US EPA’s inaugural national water quality trading workshop – only representative of private sector solutions

17. Market Analysis – Potential U.S. Retrofit • Thousands of scale-suitable farms* • 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 • International opportunities • No competitors to date • Increased future regulation of Concentrated Animal Feeding Operations (CAFOs)? Ammonia? Greenhouse gases? Pathogens? Antibiotics? Hormones? *Not all farms in nutrient-impaired watersheds; illustration only

18. Economic Benefits to Agriculture • Livestock/protein production is the top of the agriculture ‘food chain’ • New revenue source – environmental incentives • Asset recovery: by-products • Renewable energy • High-quality stable fertilizer • Single-cell protein product – animal feed • Aqueous soluble nutrient stream • Clean water • “Sustainable” branding • Relocation or expansion absent land acquisition • Reduced CAPEX for new projects – 90% less acreage required • Economic development and jobs in rural America

19. Best Use: Integrated Projects • New state-of-the-art, large scale, highly-efficient livestock production facilities integrated with dedicated food processing (and in some locations biofuels production) • Integrated livestock production • Increased herd size, density • Small enviro/physical footprint • Non-traditional strategic locations • Co-located with processing/biofuels • Greatly reduced transportation costs • Increased energy/resource efficiencies • Onsite production and use of renewable energy • Enhanced nutrient recovery • Branding, food security • Low cost producer • Reduced risks – improved margins <20 miles

20. Bion’s Integrated Projects • Industry generally unable to obtain permits since 2000 for new large-scale facilities or expansion of existing operations due to environmental issues • Kreider full Water Quality Management Permit has the industry’s attention – Bion has the key to gate • Increase annual EBITDA returns by five percentage points (or more) over existing industry metrics • IP’s with scale and attributes described are only possible today utilizing Bion’s patented and proprietary technology • Preliminary and on-going discussions with several regionally-, nationally- and internationally-known food producers, processors, and distributors

21. Investment Criteria • Disruptive technology – nitrogen reductions 50% to 90% cheaper; Integrated Projects the logical next step in protein-production efficiencies • Strong IP portfolio • Very large, addressable market with substantial barriers to entry • Recognized industry thought leader • Technology validated – third generation, scalable, proven, accepted • Strong management team – Exec Vice Chrmn: Ed Schafer, former US Sec. of Agriculture and two-term Governor of North Dakota • At the technology and business inflection point – heavy lifting done (tech accepted, policies evolving, etc.); anticipate revenues and onset of commercial rollout in 2013 • Valuation: $34M @ $2.00 ($55M FD) – Kreider projects alone anticipated to produce $7M to $10M operating cash flow (EBITDA) • Trades OTC BB/QB: BNET