A few weeks ago, I attended the analyst meeting for Renewable Energy Group (NASDAQ:REGI), where roughly 20 analysts listened to management discuss its long-term plan for growth as well as the company's near-term plans for dealing with the proposed Renewable Fuel Standard. While an investment in the nation's largest biodiesel producer may require you to ride out the volatility inherent to the biofuels market, there a several very real and very broad opportunities for growth that extend well beyond biodiesel. Besides, the steep discount in share price to net book value at the end of last year, which stood at a 55% premium as of Friday's closing, offers a nice cushion for any volatility in the next year or so. The growth in the pipeline will do the rest for buy-and-hold investors.

Biodiesel will continue to anchor the business
Yes, Renewable Energy Group is and will continue to rely heavily on first-generation biodiesel. Yes, the company rakes in much more money when the Blenders Tax Credit is active and records much lower income when it is not (most other producers bleed money or idle production). Yes, the biofuels market gets jostled around nearly every year by a lack of leadership and spending restraint among our elected officials.

The EPA gave advanced biofuel volumes a haircut in its proposed requirements for the Renewable Fuel Standard last November. Source: Renewable Energy Group analyst meeting.

That doesn't mean great investments don't exist, however. Far too many investors write off biofuels companies without distinguishing the types of fuels or the industry leaders from the companies just going along for the ride. What makes Renewable Energy Group different from the pack? It has the most efficient operations in the country, an envious transportation and logistics network, and has successfully grown biodiesel production along with the country's growing demand. If you still think biodiesel isn't investment worthy, then simply consult the company's production, sales, and income growth trajectory through 2013.

Source: Renewable Energy Group analyst meeting.

This year could result in a slight hiccup in the short term without the BTC, but CEO Daniel Oh admitted that while he didn't know the exact details of talks with regulators or politicians, "the discussion has become more positive lately." Whether or not it gets reinstated soon, Renewable Energy Group is focusing on its long-term plan for growth. That's where I'm focusing as a Foolish investor, too.

Dissecting a barrel of oil
Renewable Energy Group owns a few different technological platforms for producing fuels and chemicals. The first platform produces first-generation biodiesel from any number of feedstocks through a process called transesterification. The second platform is capable of producing over 1,000 different molecules through engineered E. coli bacteria (discussed below). The third platform produces next-generation renewable diesel and specialty chemicals through a variant of the Fischer-Tropsch process, although the acquisition of the platform has yet to close.

The company' two thermochemical platforms (the first and third listed above) can target roughly 38.5% of the products produced from a barrel of oil, which are broken down into two distinct groups. Distillate fuel oil represents the bulk of the group at 29.1% and is already being targeted by Renewable Energy Group with its extensive biodiesel production, although there is plenty of room for growth in the roughly 60-billion-gallon-per-year market.

Percentages represent 100% of the total distillate fuel oil group. Source: Renewable Energy Group analyst meeting.

The second group consists of a variety of higher-value petrochemicals not traditionally linked to renewable production that can be targeted by the platform in the pending acquisition.

Percentages shown as breakdown of 9.4% petrochemical group, which itself is a percentage of a total output of a barrel of oil. Source: Renewable Energy Group analyst meeting.

The second group of specialty petrochemicals would be strategically important to Renewable Energy Group and investors by diversifying the products offered. When and if the acquisition closes the company would gain access to the Dynamic Fuels Plant that can produce 75 million gallons of renewable diesel each year in addition to smaller, margin-boosting volumes of the renewable naphtha, propane, and other chemicals.

Industrial biotech platform potential
The potential production of synfuels and chemicals may be up in the air, but Renewable Energy Group is going full steam ahead with its industrial biotech ambitions. After acquiring synthetic biology pioneer LS9 in January, the company remains optimistic yet realistic about the possibilities to create value from a wide range of chemicals for a variety of industries. That's the allure of synthetic biology after all.

Source: Renewable Energy Group analyst meeting.

While I want to cover the new division of Renewable Energy Group, called REG Life Sciences, in more detail in a series of future articles (synthetic biology is my focus area), the room was filled with excitement during the analyst Q&A session -- with nearly every analyst asking a question about the new acquisition's value potential. And for good reason. The company has a strong and profitable business, as well as a formidable balance sheet, to expedite the development and commercialization of its industrial biotech platform. That's something most incumbents are lacking.

Additionally, Renewable Energy Group hinted that it will seek to co-locate fermentation facilities with its biodiesel facilities to take advantage of transportation, logistics, utilities, and waste streams. There's an exciting possibility to lower capital expenditures for new facilities by simply taking advantage of existing infrastructure. For instance, the industrial biotech platform can use low-cost glycerin, the major byproduct from biodiesel production, as a feedstock instead of sugar. There are advantages in permitting and leasing (the sites are already paid for) that will benefit long-term investors as well.

Value creation beyond platform technologies
If you walked into this article thinking Renewable Energy Group only produced or cared about biodiesel, then you are probably pretty taken aback by the plans to commercialize three separate technology platforms. That's only the beginning, however. The company's broader plan is to follow the business strategy carved out by the petroleum industry, except with a focus on renewable fuels and chemicals.

Source: Renewable Energy Group analyst meeting.

REG Energy Services distributes blended diesel ranging from 2% biodiesel to 100% biodiesel, ultra-low-sulfur diesel, and renewable heating oil throughout the country. It allows Renewable Energy Group to capture value at both ends of the value chain: upstream (production) and downstream (blending and distribution). Given a strong focus on renewable heating oil, the business has a heavy presence in the colder Northeast.

Source: Renewable Energy Group analyst meeting.

Meanwhile, REG Chemicals was established to sell and distribute non-fuel molecules created from the company's pending synfuels platform acquisition, the industrial biotech platform of REG Life Sciences, and future potential industrial biotech platform acquisitions that will be incorporated into REG Life Sciences. Renewable Energy Group also plans to continue growing organically by expanding into environmental services and international markets. Simply put, there are numerous opportunities for value creation in the company's growth plans.

Foolish bottom line
Despite a continued focus on first-generation biodiesel in the present and future, Renewable Energy Group has much more ambitious plans for growth. Are there risks to an investment? Of course, there are risks, especially considering the volatility in the biofuels market, although it's not as if shares are trading at a premium and risk getting walloped on the first hint of bad news from Washington. I think Foolish investors should consider the magnitude of the opportunities management is currently pursuing before dismissing the company as an unprofitable biodiesel producer stuck in the past. Reality paints a much different picture.