In the United States (US), Aemetis, Inc., a leading producer of below zero carbon intensity advanced biofuels producer dairy has released an updated Five Year Plan that provides insights into the company’s plans to generate US$2.0 billion in revenues, US$496 million of net income and US$682 million adjusted EBITDA in the year 2027.
The Five Year Plan reflects a projected revenues compound annual growth rate of 43 percent and a projected Adjusted EBITDA compound annual growth rate of 77 percent between 2023 and 2027.
It includes the expansion of the company by the production of negative carbon intensity biomethane aka renewable natural gas (RNG); sustainable aviation fuel (SAF); renewable diesel fuel; sequestration of carbon dioxide (CO2); and other low-and below-zero-carbon products produced from the Aemetis’ ecosystem of renewable projects.
With the passage of the Inflation Reduction Act, Congress provided a clear incentive to support the meaningful reduction of air and carbon pollution which we expect to achieve in this Five Year Plan which grows the Company to revenues of US$2 billion in 2027, said Eric McAfee, Chairman and CEO of Aemetis.
The Plan profiles the capital expenditures for the projects, as well as the positive financial impact of the Inflation Reduction Act (IRA).
Significant milestones were achieved in the past year by Aemetis, including: completing 40 miles of biogas pipeline; completing construction of the biogas-to-RNG upgrading facility; completing construction of the PG&E gas pipeline interconnection unit; bringing four additional dairy digesters with H2S removal and compression units into service by the end of January of this year; progressing with permitting and engineering for the Carbon Zero renewable jet/diesel plant and carbon sequestration facilities; progressing with construction of the 1.9 megawatt solar microgrid with battery backup; commissioning the Mitsubishi ZEBREX electric ethanol/water separation facility; achieving detailed engineering, procurement, and phase one construction for the Mechanical Vapor Recompression (MVR) unit at the Keyes plant to displace our use of petroleum natural gas with low carbon intensity solar and grid electricity; and securing the first cost-plus biodiesel purchase agreement in India, which we expect to develop into an ongoing fuel supply relationship with the Oil Marketing Companies in India, Eric McAfee recounted.
Under the Five Year Plan, the Company plans revenue growth in all of its product lines and includes:
- expansion of pipeline and digester construction within its dairy RNG business;
- construction of the 90 million (US) gallon (≈ 340.2 million litre) per year Aemetis renewable jet/diesel plant;
- drilling two characterization and injection wells for storage of captured CO2 installed near its California biofuel plant sites;
- improving energy efficiencies and electrification projects at its Keyes biofuels plant; and
- expected changes to Indian government policies that allow the India plant to operate closer to its full capacity due to a new tax on unblended diesel starting in April 2023.
The provisions of the Inflation Reduction Act provide for the transfer of tax credits from incentives connected to the production of products, as well as investment tax credits and other credits.
In total, these tax credits improve Net Income by a projected US$341 million in the year 2027.
Rapid RNG revenue growth
The plan for the Aemetis Dairy RNG business shows revenues growing from US$2.0 million in 2023 to US$302 million in 2027, with Adjusted EBITDA expected to expand from US$29.2 million in 2023 (including IRA investment tax credits shown as Other Income) to US$264.1 million in 2027.
The plan includes the delays related to the regulatory process to obtain Low Carbon Fuel Standard (LCFS) credit pathway approvals for each dairy digester.
Aemetis has been awarded US$23 million of grants related to dairy RNG and related gas cleanup and utility pipeline interconnection units, including a US$1 million grant to install an RNG dispensing station to fuel RNG trucks at the Keyes plant.
The projected US$302 million of dairy RNG revenues in the year 2027 is sourced from the construction and operation of digesters representing 127,942 wet cow equivalents and generating 1.5 million MMBtu’s at Aemetis at an estimated -400 carbon intensity RNG.
Revenue growth from biorefineries
The projected Aemetis Carbon Zero SAF/renewable diesel revenues of US$701 million with US$192 million of Adjusted EBITDA in 2027, are expected to be generated from the biorefinery being developed at the 125-acre Riverbank Industrial Complex.
The Riverbank biorefinery is designed to utilize the Riverbank site’s access to 100 percent renewable hydroelectricity; a rail line with storage for 120 railcars; 710,000 square feet of buildings; and 50 acres of open land that already has received key environmental and zoning approvals.
Based on the completion of carbon reduction upgrades at the Keyes plant, which is expected by 2024, expansions of the India biodiesel plant, and expansion in market opportunities resulting from changes to governmental policies, the company expects to generate annual revenue from ethanol and biodiesel of approximately US$700 million by 2027, up from approximately US$340 million of expected revenue in 2023, an increase of 106 percent.
The Keyes ethanol plant upgrades include the Mitsubishi ZEBREX ceramic membrane ethanol/water separation unit and MVR utilizing electric turbo fans to reduce natural gas use powered with zero-carbon intensity solar microgrid with battery storage.
