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| Statement |
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| We are very pleased to have passed the operational startup phase and are now positive cash flow from operations at Aemetis Biogas |
| In our India plant having access to cheap waste, low carbon, low-cost feedstock in a country of more than 1.3 billion people is just a very unique positioning we have |
| And so being one of the few companies that's actually executed well in this space, we see really tremendous growth opportunities |
| That's a good thing for all of us |
| Third Eye Capital has been integral to our success in providing project development funding and then obtaining long-term project financing from our other lenders, enabling Aemetis to receive $50 million of 20-year financing in just the past year |
| So especially as we exit 2024, I think we're going to have an upside surprise on the pace of development in the biogas business |
| Over nearly two decades, Aemetis has built strong and productive relationships with number of top leaders at the USDA, as we share similar goals of strengthening the agricultural sector by creating new energy market for ag and ag waste products |
| And I think we'll have some upside surprises in terms of what our revenue will be out of India because capacity won't be as much of a constraint |
| Our positive relationships at the USDA are key to our confidence in USDA programs, such as the Renewable Energy for America program known as REAP that support renewable fuels projects |
| A third important point about financing at Aemetis is that we have already fully repaid our long-term debt at our India plant and have been generating strong positive cash flow from India biodiesel production operations over the past two years under cost plus pricing with oil refineries owned by the India government |
| This strong financial position has allowed the India business to internally fund expansion to 60 million gallons per year from ongoing positive operating cash flow and now has positioned our India subsidiary for a planned initial public offering onto the India Stock Exchanges |
| Our India business is highly attractive as an IPO company onto the fast-growing India Stock Exchanges since we are one of the largest biodiesel suppliers in the booming India economy |
| And certainly, we have seen consistent success of IPOs in the India market |
| And certainly, the third element is the feedstock itself that we make in India positions us just amazingly well due to the demand for waste feedstocks |
| Our strong financial foundation in India and $150 million of current biodiesel supply contract allocations is only the beginning of our planned growth |
| The markets for our new projects in dairy, renewable natural gas, sustainable aviation fuel and carbon sequestration are rapidly growing, supported by regulatory policy and uniquely positioned to generate positive margins |
| So, we are well positioned to be a leading player in just doing that business model |
| The strong demand for dairy renewable natural gas and the rapidly growing sustainable aviation fuel market are key areas of investment and project development at Aemetis |
| We started deliveries under this contract in October 2023 and have achieved excellent production performance during the four months of winter fuel specifications that require higher cost feedstocks |
| We believe that Aemetis is very well positioned to supply RNG, hydrogen and below zero carbon intensity electricity to future trucks and cars in California, enabling the transition to zero emission and below zero CI heavy and light duty vehicles |
| The positive impact of cost-plus pricing that is now being used by the India oil marketing companies to purchase biodiesel is expected to continue for the foreseeable future |
| Our India plant expanded to 60 million gallons per year of capacity during the third quarter, entirely funded by the positive cash flow from operations |
| If that continues, I think we're very well positioned for completing something this year, but we are subject to market conditions |
| Our company's values include a long-term commitment to building value for shareholders, the empowerment of and respect for our employees and business partners, and making significant and positive contributions to the communities we serve |
| This positive cash generation from operating the business is expected to continue to expand allowing us to fund future interest and principal reductions on debt as well as fund a meaningful amount of our capital expenditures from our growing operational positive cash flow |
| is making steady progress with feedstock sales to several biorefinery customers in active discussions |
| As one of the very few companies fully permitted to construct a large scale SAF production facility in the United States, Aemetis has a meaningful position as a leading supplier to the airline market that cannot currently meet their goal of transitioning to lower carbon fuel |
| This low carbon electricity from solar energy reduces the carbon intensity of our ethanol, thereby increasing revenues by generating more LCFS credits |
| market were to be extremely excited about India, today, we'd absolutely take that in consideration |
| So, we are encouraging CARB to accelerate that process because obviously, once we get the full pathway, then the number of credits and goes up significantly |
| Statement |
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| The low carbon fuel standard revenues and the Federal D3 RIN revenues are both being hampered by the need to sell through other fueling stations |
| So, I think it is combination of the things but there clearly was a realization, Manav, that the LCFS credit overhang in the market was causing a serious deterioration the ability for companies like us to make return on investment and further invest in programs, but also to encourage new investment in the entire renewable sector |
| But I would suggest that a combination of the LCFS credit situation, which is a huge overhang in the market and sort of an unanticipated, but not by us, but I think by CARB in some respects |
| The need for sustainable aviation fuel continues to increase, but the overall market supply of SAF continues to be delayed, resulting in significant supply shortages that are expected to continue for the foreseeable future as the 90 billion gallon per year aviation fuel industry seeks to reduce air pollution and carbon emissions using renewable fuel to replace petroleum jet fuel |
| It was pretty apparent as we were exiting last year that this was going to be a problem |
| For the Aemetis ethanol business, during Q1 and most of Q2 of 2023, we experienced extraordinarily high natural gas prices in California, which made ongoing operations economically unviable during that time period |
| Aemetis and other RNG producers have experienced significant delays in the CARB pathway approval process for LCFS credits, with some at 24 months and counting |
| I think there were frankly some incorrect estimates in terms of what the credit market looked like as this year would evolve and where it would end up at the end of this year and I think it became readily apparent to CARB, especially when you saw the sharp decline in the LCFS price in the earlier part of this year that those estimates were not on target |
| Up to today, we've had uncertainty around when we'd actually get the permitting |
| When these projects are completed next year, we expect that natural gas usage at the Keyes ethanol production facility will be reduced by more than 80% |
| I think they received a lot of feedback, a lot of public comment, which I think has also kind of slowed down their process a little bit |
| And so, we're trying to do that as much as we can and then obviously proximity to the pipeline, but as I said the USDA funding mechanism, the REAP loans don’t necessarily all develop in exact sequence for which dairies are assigned to each loan and that constrains our ability a little bit in terms of how we plan |
| I make this point to clarify any suggestion that our well-established financing relationship with Third Eye Capital is somehow constraining our project financing or the growth of our company |
| Gross profit for the 12 months ended December 31, 2023 was $2 million compared to a gross loss of $5.5 million during the same period in 2022 |
| And so, it's a direct feedstock arbitrage from a country that has a tremendous amount of underutilized feedstock |
| Net loss was $46.4 million for the 12 months ended December 31, 2023, compared to a net loss of $107.8 million during the same period in 2022 |
| So, the number of dairies that you'll see reported can kind of get a little clunky and confusing |
| Net loss was $25.4 million for the fourth quarter of 2023 compared to a net loss of $22.4 million for the fourth quarter of 2022 |
| So, I would expect -- I'm hoping certainly that they will come back in April with some more aggressive numbers as a result of this delay |
| Investors are cautioned that all forward-looking statements made on this call involve risks and uncertainties and that future events may differ materially from the statements made |
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