In the United States (US), renewable natural gas (RNG) and renewable fuels company Aemetis Inc. has announced the deployment of the entire US$25 million of funding provided under the previously announced US Department of Agriculture (USDA)-guaranteed loan for its Aemetis Biogas 1 LLC (AB1) project company.
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 the California Environmental Quality Act (CEQA).
REAP loan guarantee program
In addition to the USDA-guaranteed funding, Aemetis Biogas invested US$30 million in project equity and has obtained US$23 million of grants to date.
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.
Before 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 US$150 million of 20-year loans either closed or in process.
In the past year, US$50 million of funding guaranteed by the USDA has closed to fund the Aemetis Biogas 1 and 2 project companies.
Funding of Aemetis Biogas project companies 3 through 6 is in process, for an additional US$100 million of 20-year, USDA-guaranteed funding expected to be obtained in 2024.
Increase LCFS revenues
For each operating digester, Aemetis has completed testing and verification as well as submit an application for certified carbon intensity Pathways to the California Air Resources Board (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 Low Carbon Fuel Standard (LCFS) revenues by more than 80 percent for future LCFS credit sales after the Pathways are approved, compared to the number of LCFS credits issued under the temporary Pathway carbon intensity value.
Producers utilize the temporary Pathway while CARB is processing their pathway applications.
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 biofuel 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. 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, stated Eric McAfee, Chairman and CEO of Aemetis.
