US-headed Aemetis, Inc., a leading producer of below zero carbon intensity (CI) dairy renewable natural gas (RNG) and developer of the “Carbon Zero” renewable jet and renewable diesel biorefineries using negative carbon intensity hydrogen, has rolled out a new five-year plan that positions the company to generate US$1.07 billion of revenues and US$325 million of adjusted EBITDA in the year 2025.
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Presented on March 1, 2021, the majority of the company’s revenue growth is expected to come from Californian dairy renewable natural gas (RNG) and the Aemetis “Carbon Zero” renewable jet/diesel plants, and other below-zero-carbon projects that Aemetis is building.
Using negative carbon intensity cellulosic hydrogen produced from waste almond orchard wood in Central California these projects seek to maximize the value of the California Low Carbon Fuel Standard (CLCFS) and federal Renewable Fuel Standard (RFS).
The Aemetis Dairy RNG project plan shows revenues growing from US$9 million in 2021 to US$175 million in 2025, while the dairy RNG project EBITDA expands from US$4 million in 2021 to US$141 million in 2025.
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.
Negative carbon intensity
The Aemetis “Carbon Zero” renewable jet/diesel plants utilizing estimated -80 negative carbon intensity cellulosic hydrogen are planned to grow to US$467 million revenues and EBITDA of US$136 million in the year 2025.
The use of negative carbon intensity waste materials as inputs to produce RNG and renewable jet/diesel is an optimization of the operations and profit margins of the existing Keyes 65 million (US) gallon ethanol plant that is operating at nearly full capacity.
To achieve growth in revenues and EBITDA, the use of byproducts from the Keyes plant as inputs for the production of renewable fuels provides a significant expansion to meet increasing market needs for LCFS, RFS, IRS 45Q, and other credits related to low carbon transportation fuels including electricity for electric trucks and other EV’s.
We are pleased with the improving external environment for the Aemetis negative carbon intensity projects that already have been in project development, engineering and permitting for several years and are now generating revenue and EBITDA growth. As a leader in the fast-growing negative carbon intensity transportation fuels industry, most of our senior management team and board members have been executing on the Aemetis mission for up to 15 years. We believe that we have the team, technology, and platform in place to execute on this five-year plan, said Eric McAfee, Chairman, and CEO of Aemetis.
Maximizing profitability at Keyes
According to the company, the Dairy RNG and renewable jet/diesel projects are the results of its focus on maximizing the profitability of its California ethanol plant. Negative carbon intensity estimated -416, dairy RNG replaces high carbon intensity petroleum natural gas in the Keyes plant, enabling significant reductions in the carbon intensity of the ethanol produced, thereby creating a larger number of LCFS credits.
The Aemetis Carbon Zero jet and diesel plant design commercialize patented technology exclusive to Aemetis for the production of renewable jet fuel and renewable diesel for aviation and commercial truck markets.
The Aemetis “Carbon Zero 1” plant has a planned capacity of 45 million gallons (≈ 170 million litres) per year and will be located at the 142-acre Riverbank Industrial Complex, a former US Army ammunition plant in Riverbank, California.
Aemetis recently announced a US$2 billion bid process to airlines and fuel blenders for the Carbon Zero 1 plant.
The Carbon Zero process converts renewable waste biomass such as waste orchard wood into renewable hydrogen, then uses the hydrogen along with zero-carbon sources of electricity – solar, hydro-electric, wind – and low carbon feedstocks to produce zero carbon and drop-in fuels.
The jet and diesel fuels may be used in today’s airplane, truck, and ship fleets without significant changes in fueling infrastructure or engines.
The Aemetis “Carbon Zero” renewable jet/diesel plant at the former Riverbank Army Ammunition facility increases the profitability of the Keyes ethanol plant in two ways: the most valuable high-volume use of corn oil from the Keyes plant is to produce renewable diesel and jet fuel.
Utilize cellulosic sugars
In addition, expensive corn brought 2 000 miles from the Midwest to produce ethanol at the Keyes plant can be replaced by local, negative carbon intensity sugars extracted from orchard waste wood.
Extracting negative carbon intensity sugars from below zero carbon intensity waste orchard wood (estimated CI of -100) from the more than 1 million acres of almonds and walnuts in the Central Valley enables valuable cellulosic ethanol to be produced at the Keyes plant as cellulosic sugars replace expensive corn sugars to feed yeast and produce ethanol.
According to Aementis, the economics of cellulosic sugars are highly compelling since every 10 percent reduction of corn use and replacement with cellulosic sugars from orchard waste wood results in more than US$30 million per year of additional EBITDA at Aemetis due to higher value cellulosic ethanol at an estimated 90 percent lower feedstock cost from waste wood.
As the sugar extraction process is commercialized, further updates to the plan will be provided, since none of the economics of the sugar extraction process and the production of cellulosic ethanol is currently included in the Five-Year Plan.
Prior to the February 2021 grant of a patent exclusively licensed to Aemetis, the sugar extraction process has not been widely adopted due to the formerly high cost of extraction and removal of sugars from orchard wood leaves 50 percent or more of the wood as a byproduct, mostly in the form of low-value lignin.
The Aemetis “Carbon Zero” renewable jet/diesel plant design takes advantage of the availability of more than 1.6 million tonnes per year of orchard waste wood in the Central Valley by first extracting the C6 and C5 cellulosic sugars, which are tanker trucked to the nearby Keyes ethanol plant to produce cellulosic ethanol.
Then, patented gasification technology exclusively licensed in California to Aemetis converts the remaining waste wood into below zero carbon intensity renewable cellulosic hydrogen, estimated -80 negative carbon intensity.
Tap into the diesel market
Renewable hydrogen is a valuable product to power Electric Vehicles, and Aemetis says that it is well-positioned to become a large producer of renewable hydrogen for transportation.
However, a 4 billion gallon (15.1 billion litre) diesel market already exists in California, and other states are adopting the Californian Low Carbon Fuels Standard (LCFS) policies to create low carbon trading markets. In the Aemetis “Carbon Zero” plants, cellulosic hydrogen is used to hydrotreat the corn oil from the Keyes plant and other sources to produce renewable jet and diesel.
Using an estimated -80 carbon intensity cellulosic hydrogen instead of +170 CI petroleum hydrogen, the profitability of renewable diesel and jet fuel produced from cellulosic hydrogen and low CI non-food corn oil from the Keyes ethanol plant is increased significantly.
By completing carbon reduction upgrades and expansions of its current operating ethanol and biodiesel plants, the company expects to generate annual revenue in ethanol and biodiesel of approximately US$426 million by 2025, up from about US$227 million of expected revenue in 2021, an increase of 87 percent.
Aemetis expects that this revenue acceleration will come from full operation and expansion of the biodiesel plant as well as completion of system upgrades currently in process at the Keyes ethanol plant.
The Keyes ethanol plant upgrades enable the plant to operate without using zero petroleum natural gas by converting the existing ethanol dehydration unit (that uses molecular sieves powered by petroleum natural gas) to electricity-based equipment by installing the Mitsubishi ZEBREX ceramic dehydration technology to separate ethanol and water.
Other upgrades include mechanical vapor recompression to re-use steam and high-efficiency heat exchangers, powered by a zero-carbon intensity solar array with battery storage.
The US$1 billion of revenues in the year 2025 represents less than one percent of the addressable market for our negative carbon intensity RNG and renewable fuels, especially considering the increasing demand for negative carbon intensity electricity from renewable natural gas to power the expected rapid growth of electric vehicles with estimated -416 carbon intensity dairy RNG from our projects, said Eric McAfee.
Aemetis has received US$16.8 million of grant funding to support its carbon reduction upgrades at the Keyes plant and US$23 million to support the estimated -416 carbon intensity Dairy RNG project.
Supporters include the US Department of Agriculture (USDA), the US Forest Service, the California Energy Commission (CEC), the California Department of Food and Agriculture, and PG&E Energy Efficiency Program.