Aemetis, the publicly listed RNG producer and developer of renewable jet and diesel biorefineries, released an updated five-year plan including plans to generate $2bn of revenues, $496m of net income, and $682m adjusted EBITDA in 2027.
The plan reflects a projected revenues compound annual growth rate of 43% and a projected Adjusted EBITDA compound annual growth rate of 77% between 2023 and 2027.
A presentation describing the plan was filed with the SEC. It includes expansion of the company by the production of RNG, SAF, renewable diesel, and carbon sequestration.
“With the passage of the Inflation Reduction Act, Congress provided a clear incentive to support the meaningful reduction of air and carbon pollution which we expect to achieve in this Five Year Plan which grows the Company to revenues of $2 billion in 2027,” Eric McAfee, Chairman and CEO of Aemeti, said in the release. “Significant milestones were achieved in the past year by Aemetis, including: completing 40 miles of biogas pipeline; completing construction of the biogas-to-RNG upgrading facility; completing construction of the PG&E gas pipeline interconnection unit; bringing four additional dairy digesters with H2S removal and compression units into service by the end of January of this year; progressing with permitting and engineering for the Carbon Zero renewable jet/diesel plant and carbon sequestration facilities; progressing with construction of the 1.9 megawatt solar microgrid with battery backup; commissioning the Mitsubishi ZEBREX electric ethanol/water separation facility; achieving detailed engineering, procurement, and phase one construction for the Mechanical Vapor Recompression (MVR) unit at the Keyes plant to displace our use of petroleum natural gas with low carbon intensity solar and grid electricity; and securing the first cost-plus biodiesel purchase agreement in India, which we expect to develop into an ongoing fuel supply relationship with the Oil Marketing Companies in India.”
The company plans revenue growth in all product lines, including: expansion of pipeline and digester construction within the dairy RNG business; construction of the 90 million gallon per year renewable jet/diesel plant; drilling two CO2 carbon sequestration and underground storage (CCUS) characterization and injection wells installed near the California biofuels plant sites; improving energy efficiencies and electrification projects at the Keyes biofuels plant; and expected changes to India government policies that allow the India plant to operate closer to its full capacity due to a new tax on unblended diesel starting in April 2023.
The provisions of the Inflation Reduction Act provide for the transfer of tax credits from incentives connected to the production of product, as well as investment tax credits and other credits. In total, these tax credits improve Net Income by a projected $341 million in year 2027.
The plan for the dairy RNG business shows revenues growing from $2m in 2023 to $302m in 2027, with Adjusted EBITDA expected to expand from $29.2m in 2023 (including IRA investment tax credits) to $264.1m in 2027.
The plan includes the delays related to the regulatory process to obtain LCFS credit pathway approvals for each dairy digester. Aemetis has been awarded $23m of grants related to dairy RNG and related gas cleanup and utility pipeline interconnection units, including a $1m grant to install an RNG dispensing station to fuel RNG trucks at the Keyes plant.
The projected $302 million of dairy RNG revenues in year 2027 is sourced from the construction and operation of digesters representing 127,942 wet cow equivalents and generating 1.5 million MMBtu’s at Aemetis at an estimated -400 carbon intensity RNG.
The projected SAF/RD revenues of $701m with $192m of adjusted EBITDA in 2027 is expected to be generated from the 90 million gallon per year plant being developed at the 125-acre Riverbank Industrial Complex in California.
Based on the completion of carbon reduction upgrades at the Keyes plant, which is expected by 2024, expansions of the India biodiesel plant, and expansion in our market opportunities resulting from changes to governmental policies, the company expects to generate annual revenue from ethanol and biodiesel of approximately $700m by 2027, up from approximately $340m of expected revenue in 2023, an increase of 106%.
