May 18, 2023
Aemetis RNG Production Facility Receives EPA Approval for D3 RIN Generation; LCFS Data Collection Completed and Pathway Review In Process at CARB; Six Dairy Digesters Fully Operational
Operating 40-mile Biogas Pipeline, Central RNG Facility and Utility Interconnect Processes Waste Methane from California Dairy Farms into Renewable Natural Gas for Use as Carbon Negative Transportation Fuel
CUPERTINO, Calif. – May 18, 2023 – Aemetis, Inc. (NASDAQ: AMTX), a renewable natural gas and renewable fuels company focused on negative carbon intensity products, announced today that the Environmental Protection Agency (EPA) has approved the Aemetis Biogas Services subsidiary’s renewable natural gas (RNG) production facility for the generation of D3 Renewable Identification Numbers (RINs) under the federal Renewable Fuel Standard (RFS). Six dairy biogas digesters are fully operational and a seventh dairy digester is scheduled to be operational in early June 2023.
The renewable natural gas produced by Aemetis is expected to generate several revenue streams including: sale of RNG for transportation use to replace petroleum diesel; sale of the California Low Carbon Fuel Standard (LCFS) credits that are used by fuel blenders to meet California carbon reduction and pollution offset mandates; sale of the RINs generated under the federal RFS; and sale of Inflation Reduction Act (IRA) Production Tax Credits, beginning in 2025.
In addition, the construction and placed in-service of qualified biogas property, under Section 48 of the Inflation Reduction Act, generates Investment Tax Credits (ITC’s) that are expected to be equal to 40% of the project costs. The ITC’s are expected to be transferable when the IRS issues guidance for the transfer forms.
Six dairy digesters, more than 40 miles of biogas pipeline, the central biogas-to-RNG upgrading facility, and the utility pipeline interconnection unit are now fully operational. RNG is being injected into the utility gas system and will be stored underground until Aemetis Biogas receives carbon intensity (CI) pathway approvals from the California Air Resources Board (CARB) for the sale of credits under the LCFS.
The 90 days of RNG production and data collection required for the CARB approval process has been completed. A temporary CI pathway of -150 is expected to become available to use while the final pathway is under review by CARB, allowing Aemetis to begin revenues in Q3 2023 using the temporary pathway.
“The approval of Aemetis Biogas for the generation of D3 RINs is a major step towards full product revenue,” said Andy Foster, President of Aemetis Biogas, Inc. “The significant investments made by Aemetis since 2019 directly reduce greenhouse gas pollution and improve local air quality in Central Valley communities, while creating jobs. Aemetis continues to rapidly deploy the infrastructure necessary to connect our network of dairy digesters and increase the production of carbon negative dairy renewable natural gas to replace petroleum diesel,” Foster stated.
The dairy digesters, pipeline project and biogas-to-RNG facility are funded in part by grants from the California Department of Food and Agriculture and the California Energy Commission. Last Fall, Aemetis announced the closing of its first $25 million of long-term financing with Greater Commercial Lending (GCL) supported by a US Department of Agriculture (USDA) loan guarantee. The long-term, low interest rate, 20-year project financing was guaranteed by the USDA using the REAP loan program and carries a fixed interest rate for the first five years.
Aemetis has filed or is preparing to file for an additional $100 million of REAP loans to fund the 31 additional dairies that are in engineering, permitting or already under construction. The maximum loan amount is $25 million, so the Aemetis loan applications are a series of $25 million loans, all with 20-year repayment terms.
Headquartered in Cupertino, California, Aemetis is a renewable natural gas, renewable fuel and biochemicals company focused on the acquisition, development and commercialization of innovative technologies that replace petroleum-based products and reduce greenhouse gas emissions. Founded in 2006, Aemetis is expanding a California dairy biogas digester network and pipeline system to convert dairy waste gas into Renewable Natural Gas. Aemetis owns and operates a 65 million gallon per year ethanol production facility in California’s Central Valley near Modesto that has supplied about 80 dairies with animal feed. Aemetis also owns and operates a 50 million gallon per year production facility on the East Coast of India producing high quality distilled biodiesel and refined glycerin for customers in India and Europe. Aemetis is developing sustainable aviation fuel (SAF) and renewable diesel fuel biorefineries in California to utilize distillers corn oil, refined tallow and other renewable oils to produce low carbon intensity renewable jet and diesel fuel using renewable hydrogen from waste orchard and forest wood, while pre-extracting cellulosic sugars from the waste wood to be processed into high value cellulosic ethanol at the Keyes plant. Aemetis holds a portfolio of patents and exclusive technology licenses to produce renewable fuels and biochemicals. For additional information about Aemetis, please visit www.aemetis.com.
Safe Harbor Statement
This news release contains forward-looking statements, including statements regarding assumptions, projections, expectations, targets, intentions or beliefs about future events or other statements that are not historical facts. Forward-looking statements in this news release include, without limitation, statements relating to the development and construction of the Aemetis biogas project, expected greenhouse gas emission reductions from the Aemetis biogas project, and our ability to finance, permit, develop and deploy technologies to produce renewable fuels and biochemicals. Words or phrases such as “anticipates,” “may,” “will,” “should,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “showing signs,” “targets,” “view,” “will likely result,” “will continue” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on current assumptions and predictions and are subject to numerous risks and uncertainties. Actual results or events could differ materially from those set forth or implied by such forward-looking statements and related assumptions due to certain factors, including, without limitation, competition in the ethanol, biodiesel and other industries in which we operate, commodity market risks including those that may result from current weather conditions, financial market risks, customer adoption, counter-party risks, risks associated with changes to federal policy or regulation, and other risks detailed in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2022 and in our subsequent filings with the SEC. We are not obligated, and do not intend, to update any of these forward-looking statements at any time unless an update is required by applicable securities laws.