Aemetis provides update of advanced biofuel, CCS projects

By Erin Voegele | August 16, 2021

Aemetis Inc. released second quarter financial results on Aug. 12, providing updates on its renewable natural gas (RNG) and carbon capture and storage (CCS) initiatives and discussing ongoing improvements at its Keyes, California, ethanol plant.

Any Foster, president of Aemetis Advanced Fuels, discussed the company’s RNG and ethanol operations during a second quarter earnings call.

According to Foster, Aemetis began construction of the RNG biogas upgrading facility that is collocated at the Keyes plant during the second quarter. The foundation is now complete on that project, he said, noting the company will begin mechanical installation of the gas processing equipment near the end of August. The biogas upgrading facility is expected to be complete during the fourth quarter of this year. The Aemetis RNG fueling station, also collocated at the Keyes plant, has been fully engineered. Production of the major equipment for the station began during the second quarter, Foster added. “We expect to complete the installation and commissioning of the RNG fueling station at approximately the same time as the centralized biogas upgrading facility,” he said.

Foster also noted that Aemetis expects to complete a PG&E gas pipeline interconnection during the fourth quarter of 2021. That interconnection will allow the company to supply RNG to customers throughout California. Foster said Aemetis is currently engaged with several potential biogas offtake partners and expects to have contracts in place during the third quarter.

Foster referenced the permit Aemetis was granted earlier this month that will allow the company to begin construction of its Phase 2 biogas pipeline, which will connect the next series of dairy digesters with the RNG upgrading facility. “We are planning to build an additional 15 dairy digesters and 32 miles of pipeline in the next four quarters—to be operational in 2022,” Foster said.  

According to Foster, five of the 15 planned additional digester projects will begin construction this year. Three of those projects have been fully permitted, with the remaining two expected to be permitted by the end of August, he said.

Aemetis has selected a contractor to complete the 32-mile biogas pipeline extension. The company on Aug. 13 announced it has awarded a construction services contract for the 32-mile biogas pipeline extension to Machado & Sons Construction Inc., which previously constructed the CO2 pipeline that connects the Keyes ethanol plant to the adjacent CO2 liquification gas plant built in 2019.

Regarding the Keyes plant, Foster said the facility saw a 16 percent increase in revenue sales for the second quarter. Despite robust demand for ethanol during the first half of 2021 and favorable ethanol pricing, Foster said corn pricing remains a drag on higher profitability. Strong demand and favorable pricing for wet distillers grains and distillers corn oil remain bright spots in the overall product mix, Foster said, noting that the company expects that trend to continue.

Foster also discussed ongoing improvement projects underway at the Keyes plant. He said installation and commissioning of the Mitsubishi Zebrex membrane dehydration system is expected to be complete in September. The system is expected to reduce natural gas use at the plant, further improving the carbon intensity (CI) score of ethanol produced at the facility.

Work is also continuing on a project to add a solar panel and micro-grid array system with battery backup to the Keyes plant, which will further reduce natural gas consumption at the facility. “We are in the final engineering stages of the PV microgrid system and expect to make an announcement shortly regarding our solar construction partner,” Foster said, noting the company expects to begin construction on the solar project during the third quarter of this year.

Eric McAfee provided an update on the new Aemetis Carbon Capture subsidiary. He said the Keyes plant was identified in a study issued by the Stanford University Center for Carbon Capture as a facility that has a high potential return on investment for CCS. He said the company is currently completing a two-month confirmation review of the underground CO2 sequestration formations that were cited in that Stanford study.

In phase one of the proposed Aemetis CCS project, the company would inject up to 400,000 metric tons per year of CO2 emissions from its biogas, ethanol and jet diesel plants into two sequestration wells that would be drilled near the company’s biofuel plant sites in California, McAfee said. The company expects to construct injection wells that have a minimum of 1 million metric tons per year of injection capacity per well and is in active discussions with other sources of CO2 emissions sources, such as oil refineries and direct air capture companies for phase two, he added.  

According to McAfee, the company is currently working on engineering and permitting for two characterization wells. The first of those two wells could be drilled as soon as Q1 2022.

McAfee also provided an update of the proposed Riverbank biorefinery, which will initially produce 45 MMgy of cellulosic jet and diesel fuels. The facility would later be expanded to 90 MMgy. According to McAfee, the company is currently in the engineering phase of the jet diesel plant to support the closing of 20-year USDA debt financing.

Aemetis reported revenues of $54.9 million for the second quarter, up from $47.8 million reported for the same period of last year. Gross project was $3.6 million, compared to $14.1 million. Operating loss was $2.1 million for the second quarter, compared to an operating income of $10 million reported for the second quarter of last year. Net loss was $10.6 million, compared to a net income of $2.2 million.