In the United States (US), renewable fuels company Aemetis, Inc. has announced that it has closed on the company's first Inflation Reduction Act (IRA) investment tax credit transaction. US$53 million in tax credits generated by its subsidiary Aemetis Biogas LLC were sold to a corporate purchaser on September 29, 2023.
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Signed into law in August 2022, the Inflation Reduction Act (IRA) provides for the issuance of transferable federal income tax credits for certain renewable fuel projects and products.
The Section 48 investment tax credits were generated from biogas projects built by Aemetis Biogas, including six dairy digesters, a biogas pipeline, and a renewable natural gas (RNG) production facility.
We believe that this US$53 million tax credit sale is the largest IRA tax credit transaction in the dairy biogas industry, demonstrating the transferability of tax credits under the federal Inflation Reduction Act and the ability of renewable fuels projects to generate funding from IRA tax credits to support investments, stated Eric McAfee, Chairman and CEO of Aemetis.
Gas-to-grid
Aemetis Biogas is building anaerobic digesters at California dairies to capture biomethane from animal waste. Aemetis has seven operating digesters and is actively growing with an additional five digesters under construction and a total of 37 dairies under contract to supply animal waste.
After the removal of contaminants and pressurization of gas at the dairy, a biogas pipeline connects the dairies to a centralized facility located at the Aemetis Keyes ethanol plant where the biogas is upgraded into below-zero carbon intensity RNG.
The RNG is injected into Pacific Gas & Electric Co’s (PG&E’s) natural gas pipeline for delivery to transportation fuel customers in California.
Aemetis is also building its own RNG fueling station at its Keyes ethanol plant to fuel trucks with locally produced RNG that provides a 90 percent reduction in emissions compared to petroleum diesel fuel.
Reduce dairy methane emissions
Approximately 25 percent of the methane (CH4) emissions in California are emitted from dairy waste lagoons.
When fully built, the Aemetis biogas project plans to capture methane from the waste produced by more than 150,000 cows at dairy farms in California, producing 1,650,000 MMBtu of renewable natural gas from captured dairy methane each year.
The project is designed to reduce greenhouse gas (GHG) emissions equivalent to an estimated 6.8 million tonnes of carbon dioxide (CO2) over ten years.
The Aemetis Five Year Plan is expected to qualify for more than US$800 million of IRA investment and production tax credits during the next four years to support our biogas projects, CO2 re-use by our ethanol plant, the construction of our sustainable aviation fuel plant and CO2 sequestration, ended Eric McAfee.
