Aemetis Biogas Completes Construction Funding from $25 million USDA Loan for Aemetis Biogas 1 Dairy Digesters
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Insights
The deployment of the $25 million USDA-guaranteed loan for Aemetis Biogas 1 LLC represents a significant investment in renewable energy infrastructure, particularly in the renewable natural gas (RNG) sector. The economic implications of this are multifaceted. Firstly, the project aligns with broader environmental goals, such as reducing greenhouse gas emissions, which is not only beneficial for the environment but also increasingly a factor in investment decisions due to the growing emphasis on sustainability among investors.
Secondly, the increase in Low Carbon Fuel Standard (LCFS) revenues by more than 80% following the approval of certified carbon intensity Pathways suggests a strong financial incentive for Aemetis to pursue RNG production. This could have a ripple effect on the market, potentially leading to increased investment in similar projects and a rise in competition among RNG producers. The long-term, 20-year USDA-guaranteed funding also indicates a stable investment environment for biofuel projects, which could encourage further development in this sector.
Lastly, the project's expected reduction of greenhouse gas emissions equivalent to removing the emissions from approximately 150,000 cars per year provides an illustrative example of the scale at which RNG projects can contribute to state-wide emission reduction targets. This is particularly relevant to California, which has aggressive goals for reducing its carbon footprint.
The strategic move by Aemetis to invest in RNG production through dairy biomethane digesters is indicative of the company's commitment to capitalizing on the growing demand for cleaner energy sources. The investment in this infrastructure, supported by the USDA loan, is expected to enhance the company's operational capacity and revenue streams. The anticipated operational status of digesters supplied by 18 dairies by the end of 2024 suggests a rapid scale-up of production capabilities, which could position Aemetis as a significant player in the RNG market.
From a stock market perspective, the projected increase in LCFS revenues and the construction of additional digesters could be interpreted as positive signals for Aemetis' future profitability and stock performance. The RNG fueling station at Aemetis' ethanol plant represents vertical integration, potentially reducing operational costs and increasing margins. Investors may view these developments as indicators of the company's potential for long-term growth and profitability, possibly impacting the stock's attractiveness.
Furthermore, the mention of the company's plans to capture methane from the waste of over 150,000 cows to produce 1,600,000 MMBtu of RNG annually provides a tangible measure of the project's scale and its potential impact on Aemetis' production volumes and financial results.
The Aemetis Biogas project is a significant case study in the implementation of environmental policy, particularly in the context of California's aggressive carbon emissions reduction mandates. The project's alignment with the Renewable Energy for America Program (REAP) and its contribution to the LCFS program underscore the role of government incentives in promoting renewable energy initiatives. The USDA-guaranteed loans serve as a critical financial mechanism to support the development of such projects, which might otherwise struggle to obtain funding.
Additionally, the project's potential to improve local air quality and reduce methane emissions—a potent greenhouse gas—highlights the intersection of local environmental benefits and global climate change mitigation efforts. The active role of the California Air Resources Board (CARB) in processing pathway applications for RNG producers like Aemetis is indicative of the state's hands-on approach to managing its transition to a low-carbon economy.
The environmental policy implications extend beyond the immediate project, as success could lead to the replication of similar initiatives in other regions, contributing to the broader goal of reducing reliance on fossil fuels and promoting sustainable agricultural practices.
Digesters supplied by 18 dairies planned to be operational by end of Q4 2024
CUPERTINO, CA, Feb. 01, 2024 (GLOBE NEWSWIRE) -- via NewMediaWire – Aemetis, Inc. (NASDAQ: AMTX), a renewable natural gas and renewable fuels company focused on negative carbon intensity products, announced today the deployment of the entire
Aemetis Biogas produces renewable natural gas (RNG) from dairy biomethane digesters located in California’s Central Valley. Aemetis Biogas operates digesters supplied by eight dairies and has agreements with 37 dairies, operates a centralized biogas-to-RNG production facility with utility gas pipeline interconnection, and has completed 36 miles of biogas pipeline with a total of 60 miles already permitted under CEQA.
In addition to the USDA-guaranteed funding, Aemetis Biogas invested
The Aemetis AB1 loan was guaranteed by the USDA under the Renewable Energy for America (REAP) loan guarantee program that required monthly draws of funding for project construction. Prior to obtaining the loan, the AB1 project company had already invested the entire equity amount required by the REAP program.
USDA guaranteed loans are expected to be used to fund the construction of additional dairy digesters and biogas pipelines, with a total of
For each operating digester, Aemetis has completed testing and verification as well as submitted an application for certified carbon intensity Pathways to CARB at lower carbon intensity values than the temporary Pathway based on actual data from biogas production and dairy operations. The certified Pathway scores are expected to increase LCFS revenues by more than
The LCFS program is a mechanism for companies that are obligated to comply with mandates to reduce carbon emissions in California by purchasing credits from biofuels producers. The program requires oil companies and other fuel blenders to provide LCFS credits for gallons of gasoline, diesel, and other petroleum products sold in California.
“Aemetis Biogas is actively growing by constructing additional digesters with a goal of operating digesters supplied by 18 dairies by the end of 2024,” stated Eric McAfee, Chairman and CEO of Aemetis. “The funding received by Aemetis Biogas from the 20-year USDA-guaranteed financings allows us to expand the capture of biomethane at dairies to improve local air quality, reduce the global warming effects of methane emissions, and replace fossil diesel fuel in trucks in California.”
Aemetis is building its own RNG fueling station at the company’s ethanol plant in Keyes, California to fuel trucks with locally produced renewable natural gas that provides a
Approximately
About Aemetis
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 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 supplies about 80 dairies with animal feed. Aemetis also owns and operates a 60 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 the Carbon Zero sustainable aviation fuel (SAF) and renewable diesel fuel biorefineries in California to utilize renewable hydrogen, hydroelectric power, and renewable oils to produce low carbon intensity renewable jet and diesel fuel. 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 include, without limitation, statements relating to the development, construction and operation of the Aemetis Biogas RNG project, the SAF and renewable diesel plant, and the carbon capture and sequestration wells, as well as expected greenhouse gas emission reductions from the completed Aemetis Biogas RNG project, the development of biogas upgrading facilities, and our ability to promote, 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.
External Investor Relations
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Company Investor Relations/
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FAQ
How many dairies does Aemetis Biogas have agreements with?
What is the total amount of funding provided under the USDA-guaranteed loan for the Aemetis Biogas 1 LLC project?
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What is the expected impact of the LCFS program on Aemetis Biogas' revenues?
How much renewable natural gas does Aemetis Biogas plan to produce annually?
