Aemetis Inc. released second quarter 2019 financial results Aug. 8. The company reported strong growth for its biodiesel business in India, outlined improvement projects underway at its corn ethanol plant, and discussed planned renewable natural gas (RNG) and cellulosic ethanol production.

During an earnings call, Eric McAfee, chairman and CEO of Aemetis, said the company has been upgrading its Keyes, California, ethanol plant to lower input costs, reduce the carbon intensity of its biofuel and increase the value of ethanol it supplies to customers.

“In May of this year, the Keyes plant successfully reduced carbon emissions under the California Low Carbon Fuel Standard by about 3 carbon intensity points,” McAfee said. “The credits were effective as of Jan. 1, 2019, and generated about $250,000 per month of additional value from our corn ethanol sales without an increase in operating costs.

McAfee said construction is underway on a CO2 capture and reuse project adjacent to the Keyes plant. “After three years of project development, construction began this month on a project by Linde Gas to build a CO2 liquefaction plant on 5 acres owned by Aemetis adjacent to the Keyes plant,” McAfee said. “Once complete, the CO2 plant will convert 175,000 tons per year of renewable CO2 produced by our ethanol plant into liquid CO2 for sale to local food processors, beverage producers, and other users. The CO2 plant is scheduled for completion by the end of 2019 and is expected to qualify for a carbon capture and reuse tax credit of $35 per ton for more than 175,000 tons of CO2 per year. That is worth more than $6 million in tax credits in addition to more than $1 million per year of increased cash flow in CO2 sales and the land lease for the CO2 plant. We’re working on an arrangement to monetize the tax credits with a financial partner.”

The Keyes plant is also adding a $7 million membrane dehydration system financed by Mitsubishi Chemical as a strategic implementation of its Zebrex technology for the first time at a corn ethanol plant, McAfee said. “The Mitsubishi unit is scheduled for completion in Q1 2020 and commissioning in Q2 2020,” he added. “The ethanol dehydration unit is designed to reduce natural gas usage and decrease the carbon intensity of our ethanol, generating an estimated $3 million per year in increased cash flow.”

According to McAfee, additional projects are underway at the Keyes plant that aim to further reduce natural gas usage and costs, and increase the number of Low Carbon Fuel Standard credits.

During the call McAfee noted that the value of California LCFS credits has increased from approximately $62 in mid-2017 to more than $195. Aemetis plans to capitalize on the value of those credits through its planned cellulosic ethanol plant and the aggressive development of dairy RNG projects.

According to McAfee, construction of the company’s first two dairy digesters and related pipeline system is expected to be complete this year, followed by the remaining digesters and systems associated with the first phase of its RNG development plan next year.

For the Riverbank cellulosic ethanol plant, McAfee said the company is currently focused on completing engineering required for negotiations of the EPC contract that will include a bonded maximum construction cost as required by the USDA conditional commitment for a loan guarantee. He said the financial close to begin construction of the Riverbank plant is expected in late 2019 or early 2020.

McAfee also discussed operations at the company’s biodiesel plant in India. The facility achieved several key milestone during the second quarter, including a $23 million biodiesel supply contract with India state-owned oil marketing companies and a large biodiesel supply contract in the mining sector.

Aemetis reported $50.6 million in revenues for the second quarter, up from $45 million for the second quarter of 2018. Gross profit for the second quarter was $3.3 million, up from $2.8 million during the same period of last year. Operating loss was $800,000, compared to an operating loss of $900,000 for the second quarter of 2018. Net loss was $13.9 million, compared to a net loss of $6.2 million during the same period of last year.