OAKHURST, N.J. (DTN) -- Aemetis Inc. on Thursday announced the Environmental Protection Agency approved Aemetis Biogas Services subsidiary's renewable natural gas production facility for the generation of D3 Renewable Identification Numbers under the Renewable Fuel Standard.
Six dairy biogas digesters are fully operational, and a seventh dairy digester is scheduled to be operational in early June.
The RNG produced by Aemetis is expected to generate several revenue streams including:
-- Sale to RNG for transportation use to replace petroleum diesel.
-- Sale of the California Low Carbon Fuel Standard credits that are used by fuel blenders to meet California carbon reduction and pollution offset mandates.
-- Sale of the RINs generated under the federal RFS.
-- Sale of Inflation Reduction Act Production Tax Credits, beginning in 2025.
In addition, the construction and placed in-service of qualified biogas property, under Section 48 of the IRA, generates Investment Tax Credits that are expected to be equal to 40% of the project costs. The ITCs are expected to be transferable when the Internal Revenue Service issues guidance for transfer forms.
Six dairy digesters, more than 40 miles of biogas pipeline, the central biogas-to-RNG upgrading facility, and the utility pipeline interconnection unit are now fully operational. RNG is being injected into the utility gas system and will be stored underground until Aemetis Biogas receives carbon intensity pathway approval from the California Air Resources Board for the sale of credits under the LCFS.
The 90 days of RNG production and data collection required for the CARB approval process has been completed. A temporary CI pathway of -150 is expected to become available to use while the final pathway is under review by CARB, allowing Aemetis to begin revenues in the third quarter using the temporary pathway.
"The approval of Aemetis Biogas for the generation of D3 RINs is a major step towards full product revenue," said Andy Foster, president of Aemetis Biogas Inc.
The dairy digesters, pipeline projects and biogas-to-RNG facility are funded, in part, by grants from the California Department of Food and Agriculture and the California Energy Commission.
Last fall, Aemetis announced the closing of its first $25 million of long-term financing with Greater Commercial Lending supported by a USDA loan guarantee. The long-term, low-interest rate, 20-year project financing was guaranteed by USDA using the REAP loan program and carries a fixed interest rate for the first five years.
Aemetis has filed or is preparing to file for an additional $100 million of REAP loans to fund the 31 additional dairies that are in engineering, permitting or already under construction. The maximum load amount is $25 million, so the Aemetis loan applications are a series of $25 million loans, all with 20-year repayment terms.
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