Alto Ingredients : Sustainability Report 2023

Published: 2024-11-06 19:25:37 ET ALTO

SUSTAINABILITY REPORT

2023

TABLE OF CONTENTS

pg 2 Alto Ingredients

pg 7 Sustainability at Alto Ingredients

pg 11 Environment

pg 17 Social Responsibility

pg 22 Products

Management c. Food vs. Fuel

pg 25 Governance

pg 33 Appendix

ABOUT THIS REPORT

This Sustainability Report reflects Alto Ingredients' ongoing commitment to sustainability and provides all stakeholders with insight into our programs and performance. This summary contains data for the 2023 calendar year, covering January 1, 2023, to December 31, 2023, unless otherwise noted.

For more information or to get in touch with our team, please visit our Investor Relations website at https://ir.altoingredients.com/ or please contact us at [email protected].

LETTER FROM THE CEO AND BOARD OF DIRECTORS

Bryon McGregor,

Michael Kandris,

President, CEO and

Sustainability Board

Director

Chair and Director

Reflecting on Alto Ingredients' history, it's remarkable to see several of our facilities with a legacy of over 120 years in the communities in which we operate and live. Generations

of employees have worked tirelessly to improve efficiency, adopt new technologies, and transform each site to safely meet the evolving needs of our customers, business partners, and industries. From specialty alcohol and essential ingredients to renewable fuels and plant-based proteins, we proudly offer 100% bio-based renewable products.

By implementing sustainable best practices, we aim to reduce emissions and benefit our business and all stakeholders.

Over the past decade, Alto has integrated various facilities with unique capabilities and strategic locations. Our highly efficient dry grind facilities are striving for carbon intensity scores below 50 by optimizing efficiency, upgrading energy infrastructure, and selecting sustainable feedstocks. At our specialty alcohol and wet mill essential ingredients facilities, we continue to modernize equipment, improve reliability and efficiencies, and lower the environmental impact of our operations. Most recently, we have engaged highly regarded, third-party engineering services to aid us in our strategic planning to further identify activities to improve our position both today and well into the future to succeed and build a long- term, sustainable and consistently profitable company.

Environmental health and safety are at the core of our operations. We are committed to maintaining safety standards and proactively managing environmental impacts. Our health and safety programs are designed to protect our employees, communities, and the environment. By implementing comprehensive safety protocols and continuously monitoring our environmental footprint, we aim to ensure

a safe working environment and minimize our ecological impact, aligning with our broader sustainability goals.

We remain committed to our core values of responsibility, integrity, and quality, and our mission to produce the highest quality, sustainable ingredients that make everyday products better. Our dedication to sustainability and social responsibility extends to our customers, employees, investors, partners, and consumers, along with a focus on product quality and safety. We believe this commitment will enable us to serve our customers for many years to come.

ABOUT ALTO INGREDIENTS

Alto Ingredients, Inc. (NASDAQ: ALTO) is a leading producer and distributor of specialty alcohols, renewable fuel and essential ingredients. Leveraging the unique qualities of its facilities, the company serves customers in a wide range of consumer and commercial products in the Health, Home & Beauty; Food & Beverage; Industry & Agriculture; Essential Ingredients; and Renewable Fuels markets. Our alcohol products are used in food, beverage, pharmaceutical, dietary supplement, and cosmetic products, in addition to industrial applications and renewable fuel. Kinergy Marketing and Alto Nutrients market the company's alcohol and essential ingredients, including Alto Yeast™, corn protein meal, corn germ, corn oil, distillers grains, including Alto Corn Protein™, and CO2. They offer consistent product quality in logistically preferred locations as well as provide reliable service and delivery. Alto sells its products in domestic and international markets.

Alto operates five alcohol production facilities and a food-grade yeast plant. The yeast plant and three alcohol production facilities are located in Illinois, and the two additional alcohol facilities are located in Oregon and Idaho. Wholly owned subsidiary Eagle Alcohol Company is located in Missouri and specializes in break bulk distribution of specialty alcohols. Alto's manufacturing and distribution combine to provide a strong product portfolio.

Alto Central,

Kinergy

Alto West, LLC

LLC

Marketing LLC

Alto Pekin, LLC

Alto ICP, LLC

Alto

Eagle Alcohol

Alto Magic

Alto Columbia,

Nutrients, LLC

Company LLC

Valley, LLC

LLC

140 MMGPY of Renewable Fuel

60 MMGPY Renewable Fuel

40 MMGPY Renewable Fuel

110 MMGPY of Specialty Alcohol

MMGPY = million gallons per year

* as of 10/10/2024

Wet Mill facility producing high

Distillery producing high quality

GFSI-certified food-grade

Efficient renewable fuel

quality alcohol, including beverage

alcohol, including beverage and

yeast plant

dry grind facilities

grade and low-moisture 200-proof

pharmaceutical grades

SOLD IN 2023

1.5

million gallons

thousand tons

million tons

of specialty alcohol

of plant-based yeast

of renewable corn oil

of (dry basis) essential

protein

and corn germ

ingredients

99.7 million bushels

1 newly commissioned

203 million gallons

455 employees

of corn processed in

high protein distillers

of renewable fuel

across the US2

2023

grains system

produced in 2023

100% U.S. domestic

103 million third-party

214 thousand

corn as a grain

gallons sold in 2023

metric tons of CO2

feedstock1

utilization in 2023

100% of high-quality alcohol and food production third-party certified for applicable quality, food safety, environmental, and social responsibility programs, including: ISO 9001, ICH Q7, EXCiPACT, FSSC 22000, FSC 36, EcoVadis, and ACD Responsible Distribution®

1Complies with Renewable Fuel Standard regulations 40 CFR 80 Subpart M

2As of April 22, 2024

COMPANY TIMELINE

Alto Ingredients' facilities date back to 1861 with the founding of Hamburg Distillery. The timeline below shows the history of company name changes through the years along with a selection of key product and system changes.

1899

1998

2005

Illinois Sugar Refining

Company (now Alto Pekin)

Yeast Plant

MGP Ingredients

Began producing

Constructed and

Began producing fuel

2021-

sugar from beets

1995

began producing yeast

ethanol May 2005

November 1998

2007

1981

Williams

Present

Bio-

Pekin Dry Mill

Alto Ingredients

1904

Pekin

Energy

2003

Constructed

2015

(ICP, Pekin, Magic

Energy

and began

Valley, Columbia,

Corn Products

Began

Aventine

producing fuel

Pacific

Eagle Alcohol)

Company

producing

Renewable

ethanol

Ethanol

fuel

Energy

Pekin

ethanol

1890

1980

1991

Distilling and

Midwest

Cattle Feeding

Solvents

Grain

Products

1861

1908

Hamburg Distillery

American Distilling

(now Alto ICP)

Several facilities from

Began producing

New York to California

alcohol; fire destroyed

with branded gins,

the facility in 1887, but

whiskeys, liquors,

it was soon rebuilt

and more

2002

MGP

Ingredients

1996

GNS system added at Pekin Wet Mill System was taken offline and later expanded and upgraded in 2021

2003

2014

2017

Pacific Ethanol was

Eagle

ICP/

founded

Alcohol Co.

Pacific

Columbia & Magic

Incorporated

Ethanol

Valley constructed

and began

distribution and

producing fuel

packaging later

ethanol in 2007 &

purchased in

2008

2021 by Alto

Ingredients

2009

Previously-owned facilities:

Illinois Corn Processing

2010-2024: Pacific Ethanol Canton (IL) 37 MMGPY

2008-2021: Pacific Ethanol Stockton (CA) 60 MMGPY

2006-2021: Pacific Ethanol Madera (CA) 40 MMGPY

2008-2020: Aurora West (NE) 110 MMGPY

1994-2020: Nebraska Energy LLC "NELLC"/Aurora East (NE) 45 MMGPY

2010-2014: Aventine Renewable Energy Mount Vernon (IN) 110 MMGPY

OUR LOCATIONS

ALTO Columbia, LLC

Dry Mill

Boardman, Oregon

ALTO Pekin, LLC

Headquarters

Dry Mill

Wet Mill & Distillery

Yeast Plant

Pekin, Illinois

ALTO Magic Valley, LLC

Dry Mill

Burley, Idaho

Sacramento Office

100% of our employees and facility

Administration

Sacramento, California

locations are within the United States.

ALTO ICP, LLC

Dry Mill & Distillery

Pekin, Illinois

Eagle Alcohol Company

Break Bulk Packaging & Distribution

St. Louis, Missouri

SUSTAINABILITY

AT ALTO INGREDIENTS

OUR APPROACH

Founded in 2003, Alto Ingredients is proud to be a leading producer of a wide range of premium products, which are incorporated into a myriad of vital finished goods that touch people's lives from cleaning solutions to pharmaceuticals. Alto's mission is to produce the highest quality, sustainable ingredients from renewable resources that make everyday life better. Our business is built on trust and an unwavering commitment to our employees,

investors, partners, consumers,

✓ Climate Change and GHG

and the planet we all share. Our

Emissions

approach is informed by these values

✓ Environmental Management

and represented by our dedication

✓ Employee Health & Safety

to responsibility, integrity, quality,

✓ Protection of Human Rights

and managing the impacts of our

✓ Sustainable Sourcing & Supply

operations.

Chain Management

✓ Product Quality & Safety

Alto has conducted several materiality

✓ Opportunities in Clean Technology

assessments with internal and

✓ Toxic Emissions & Waste

external stakeholders, and our priority

✓ Corporate Governance

topics follow:

CLIMATE-RELATED RISKS

Risks

Type1

Feedstock

• commodity prices, including cost of corn

Chronic

• supply of raw materials, including corn, water, electricity, and natural gas

Chronic

• prices of alcohols and essential ingredients we sell

Chronic

• dependence on surface river water and well water resources at the Pekin campus, lack of con-

Chronic

sistent supply of clean water for both the process and for cooling may negatively impact the site

Chronic

Water

• higher water temperatures due to increased global or regional temperatures may negatively

affect production efficiencies and capacities

Chronic2

• water resource limitations may result from drought and other inclement weather and may also

result from rationing and other governmental regulations limiting water use

GHG Emissions

• costs and regulatory burdens associated with governmental regulations that limit or tax green-

Chronic2

house gas emissions, such as CO2, from alcohol production and distribution, or from truck

transport and packaging associated with Eagle Alcohol's business and use of drums and totes,

will negatively impact us

Chronic2

• regulatory and market transition away from combustion fuels and fuel-grade ethanol blending

may threaten the viability of our renewable fuels business

Chronic

• electricity and natural gas, consistent availability and pricing; an overall increase in energy costs

will negatively impact our production costs generally and may critically impact certain high

energy-intensive production technologies, such as our wet milling and multiple distillation pro-

cesses for high-quality alcohol

Energy Transition

•

price of gasoline and petroleum, output by OPEC and their allies

Chronic

•

other climate-related supply chain disruptions caused by dependence on rail and port storage

Acute

and distribution infrastructure

Physical Risks Due to Climate/Temperature

•

equipment failures, fires, explosions, abnormal pressures, blowouts, ruptures, accidents

Acute

•

natural disasters such as earthquakes, floods and storms; flooding and other inclement weather

Acute

may negatively impact incoming corn quality and volumes, river access, other transportation

logistics and costs, and storage requirements

Safety

• heat-related risks for personnel

Acute

1 Acute risks are short-term and event-driven and chronic risks are due to long-term shifts in climate patterns.

2This is also a transitional risk. Transitional risks are associated with adaptation to climate change, reduction of greenhouse gas emissions, or transition to

renewable energy.

OPPORTUNITIES

NEW MARKETS

RESOURCE EFFICIENCY

1 ISCC is a globally applicable sustainability certification system and covers all sustainable feedstocks, including agricultural and forestry biomass, biogenic wastes and residues, circular materials and renewables.

Disclaimer

Alto Ingredients Inc. published this content on November 06, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on November 07, 2024 at 00:20:51.834.