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Aemetis completes Kakinada biodiesel plant upgrade and capacity expansion

US-headed advanced renewable fuels and biochemicals company Aemetis Inc. has announced that Universal Biofuels, its subsidiary in India, has completed a two-year upgrade of the Kakinada biodiesel and glycerin plant in Andhra Pradesh. The completed upgrade enables a biodiesel production capacity expansion to 50 million (US) gallons (≈ 189 million litres) per annum.

Aemetis subsidiary in India, Universal Biofuels operates a 50 million US gallon (≈190 million litres) per annum biodiesel plant in Kakinada, Andhra Pradesh (photo courtesy Aemetis).

Aemetis subsidiary in India, Universal Biofuels operates a 50 million US gallon (≈190 million litres) per annum biodiesel plant in Kakinada, Andhra Pradesh (photo courtesy Aemetis).

According to Aemetis, the upgrades to the Kakinada plant included the installation of a pre-treatment unit to process lower-cost and waste feedstock into bio-oil; expansion of boiler and other utility capacities; and implementation of environmental systems to enable full production of 50 million (US) gallons (≈ 189 million litres) per annum of biodiesel and bio-oil while simultaneously operating the biodiesel, pretreatment and glycerin refining units.

The Aemetis team in India is executing on a rapid increase in production and revenues this year to meet growing domestic market demand for biofuels in a fast-growing economy. As the only US company producing biofuels in India, Aemetis built and has now fully upgraded our India biodiesel and refined glycerin plant to use low-cost feedstocks to become a leader in the rapidly expanding India biofuels market stated Eric McAfee, Chairman and CEO of Aemetis.

Expanding demand and government support

The 2018 India National Policy on Biofuels issued by the Government of India increased the target for domestic biodiesel consumption to 5 percent of the approximately 25 billion gallons of petroleum diesel consumed in India each year from currently less than a 1 percent biodiesel blend.

In mid-2018, the Goods & Services Tax on biodiesel was reduced by six percentage points, from 18 percent to 12 percent, to support an expansion of biodiesel. In late 2018, the India Supreme Court determined that biodiesel may be sold at retail fueling stations, significantly expanding the market for biodiesel in India.

Furthermore, the government has recently issued a purchase requisition for approximately 260 million gallons (≈ 984 million litres) of biodiesel for the year 2019 to be supplied by domestic biodiesel producers.

The innovative feedstock pre-treatment unit developed and installed at the Kakinada plant provides a sustainable cost advantage and produces lower carbon biofuels to supply the growing India domestic market for biodiesel and refined glycerin, as well as export markets. Expanding our steam and power requirements to enable the full operation of the new feedstock pretreatment unit along with our existing biodiesel and glycerin refining units required a substantial investment of time and specialized technical expertise.  The entire plant is now capable of operating at 50 million gallons per year of biodiesel capacity using valuable lower cost, lower carbon and waste feedstocks, stated Sanjeev Gupta, Managing Director of Universal Biofuels.

In the first three quarters of 2018, the Kakinada biodiesel plant produced about 15 200 tonnes of biodiesel during the plant upgrade construction. After the announced expansion, current plant capacity is approximately 50 million gallons (about 165 000 tonnes) of biodiesel and bio-oil production capacity per year, and approximately 5 million gallons (18 000 tonnes) of glycerin refining capacity per year.

Importantly, this extensive upgrade to the Kakinada plant was achieved without issuing additional stock or otherwise diluting existing shareholders of Aemetis. Aemetis continues to execute on funding and building projects that generate highly valued, low carbon biofuels primarily from waste or reused materials, McAfee noted.

The average price of biodiesel sold at the India plant in 2018 was about US$3.00 per gallon (US$900 per tonne) and glycerin was about US$1 000 per tonne.

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