Aemetis, Inc. Price & Performance (AMTX)

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 For additional information, please refer to the company's Securities and Exchange Commission filings, which are posted on the SEC EDGAR system and our on our own company website. Our discussions on this call will include a review of non GAAP measures, as a supplement to the financial results based on GAAP, because we believe these non GAAP measures serve as proxy for our company's sources and uses of cash. A reconciliation of the non GAAP measures to the most directly comparable GAAP measures included in today's earnings release.

Adjusted EBITDA is defined as net income or loss plus to the extent deducted in calculating such net income interest, amortization expense, gain on debt extinguishment, USDA cash grants, income tax benefit, or expense intangible and other amortization expense accretion expense, depreciation expense, loss on ASH disposal and share based compensation expense. Let's review the financial results for the year ended 12/31/2024. [indiscernible] Revenues were $268,000,000 for the twelve months ended 12/31/2024, compared to $187,000,000 for 2023 with all three segments reporting increases. Specifically, California ethanol increased by $57,700,000 from operating during the full year. India biodiesel increased $15,700,000 from stronger oil marketing company tender delivery volumes and California renewable natural gas increased $7,600,000 from increased production stronger sales of RINs and sales of LCFS credits. Cost of goods sold increased from $184,700,000 during the twelve months ended December 31, 2023, to 268,200,000.0 during the same period in 2024, in keeping with the change in revenue for each of the segments. Gross loss for the twelve months ended December $31.20 $24,580,000 dollars compared to gross profit of $2,000,000 during the same period in 2023. Our dairy, renewable natural gas segment accounted for $5,400,000 of gross profit principally from the sale of environmental attributes for the year Selling, general and administrative expenses remained constant at $339,800,000.0 during the twelve month ended 12/31/2024, compared to $39,400,000 during the same period in 2023.

Operating loss was $40,400,000 for the twelve months ended 12/31/2024, $7,400,000 for the same period in 2023. Interest expense was $59,300,000 during the year ended 12/31/2024, which was a $5,500,000 increase from interest expense of $64,800,000 during the year ended 12/31/2023. [indiscernible] Income tax benefit of $10,800,000 during 2024 and $53,700,000 during 2023, represent tax credit sales. Of $12,300,000 and $55,000,000 respectively. Net loss was $87,500,000 for compared to a net loss of $46,400,000 during the same period in 2023. Cash at the end of the fourth quarter of twenty twenty four was $898,000 compared to $2,700,000 on 12/31/2023. Capital expenditures for carbon intensity reduction projects and the expansion of bio biogas production capacity were $20,300,000 for 2024, as our engineering and construction teams move forward with low carbon production capacity and energy efficiency projects. Now, I'd like to introduce the Founder, Chairman and Chief Executive Officer of Aemetis. Eric McAfee for a business update. Thanks, Todd. Aemetis benefits from public policy that supports domestic energy producers that grow markets for agricultural and waste products. The strong year over year growth that we achieved in 2024 in each of our businesses in biogas, ethanol and biodiesel is expected to be further supported by federal and state policies that are being implemented this year.

The President has repeatedly stated his strong support of ethanol and agricultural based biofuels in executive orders and public statements we are hopeful that the new administration will continue to support domestically produced renewable fuels that support energy independence. Let's review some of the key government policy issues that had a and we expect we'll be strongly supportive of our continued growth. First, the California LCFS credits. After four years of policy development, amendment to California's low carbon fuel standard were approved by the California Resources Board on November 8, 2024, setting twenty years of increasing mandates for low carbon fuels in California. The LCFS amendments mandate a 9% decrease in carbon intensity for fuels in 2025 and have an ongoing automatic adjustment mechanism provide confidence in a higher price for LCFS credits in order to attract debt and equity investments in low emission transportation fuels infrastructure, and vehicles. In anticipation of the implementation of the new mandates, the price of LCFS credits increased from $44 last year to $75 by February 2025 A surprise delay occurred, however. Recently, the implementation of the amended LCFS was delayed by the California Office of Administrative Law due to a request to CARB to provide clarity in certain new language in the LCFS amendments.

This unexpected delay in implementation of the LCFS amendment caused a rapid 30% decrease in the price of LCFS credits as the market waits for final adoption of the LCFS amendments to occur. We expect that the process of final adoption of the LCFF LCFS amendments will occur later this year LCFS prices should increase thereafter. As the 9% reduction in 2025 will take effect as will a 20% limitation on the use of crop based feedstocks for renewable diesel. Additionally, slower than expected hydrogen truck and electric vehicle adoption anticipated by CARB is expected to result in a rapid decline in the LCFS credit bank during 2025 and 2026. By 2027, the implementation of the LCFS amendments is designed to reduce the 32,000,000 credits currently in the LCFS credit bank to zero. And according to CARB's own S eventually approaching $200 per ton. Aemetis biogas, ethanol, carbon sequestration and other businesses are designed to benefit from an increased LCFS credit price as we produce LCFS credits to through the production of low carbon intensity renewable fuels.

To quantify the impact, Aemetis Renewable Natural Gas generates about 40% of the price of an LCFS credit per MMBtu of production. So $200 LCFS price per ton equals about $80 of LCFS credit value per MMBtu, At an average LCFS price of $150 per ton, Aemetis Biogas would generate credits worth $60,000,000 per year from the sale of 1,000,000 MMBtus of dairy RNG. Second, the Federal Renewable Fuel Standard, In addition to LCFS credits, the sale of renewable natural gas generates D3 RINs with a value from $28 to $40 per MMBtu. Combined with the LCFS credit, this represents up to $120 per MMBtu from just these two credits alone. Third, the Federal Section 45 production tax credit which started on 01/01/2025. The U. S. Treasury released tax guidance in January 2025 that we are now using for the planned sale of tax credits for both our Keys Ethanol plant and our renewable natural gas businesses. We expect further guidance from Treasury will be issued this year, Fourth, Federal Section 48 investment tax credits. After selling $63,000,000 of investment tax credits in September 2023, we completed the sale of additional investment tax credits generated by the Aemetis Biogas projects and our Keys plant solar project in December 2024 and February of this year.

We received net cash proceeds of about $11,000,000 in January $6,000,000 in February 2025. For a total of $17,000,000 of cash received from investment tax credits so far this year.

We expect the same buyer to purchase additional federal investment tax credits this year and potentially also purchase production tax credits. Fifth, 15% ethanol blend approvals. Two weeks ago, the of gasoline containing up to 15% ethanol known as E15, for eight Midwestern states with an indication that all forty eight forty nine states other than California should be approved this year. Broad use of E15 would increase the size of The U. S. S. Ethanol market by up to 50%. California is the only state that sets its own fuel blends. And currently E15 is not authorized. However, California Governor Newsom issued a letter instructing CARB to complete the necessary regulatory work to be able to approve E15 in California as soon as possible thereby reducing the state's current 90% petroleum gasoline mandate that drives higher gasoline prices for consumers and businesses. A 15% ethanol blend in California is projected to decrease gasoline prices by $0.2 per gallon saving drivers about $400 per year in fuel costs equal to $2,700,000,000 per year statewide. According to a UC Berkeley Enable Academy study. E15 approval in California would increase the market for ethanol by more than 600,000,000 gallons per year.

And a 15% ethanol blend nationwide would enable the ethanol industry to grow revenues by up to 50% to more than 20,000,000,000 gallons per year. Combined the ongoing implementation of these five policies, directly and positively impact our business by significantly increasing the value of our fuels and by expanding the markets that we supply. Let's review each of our businesses. In the India biofuels business, we completed deliveries of 112,000,000 during the one year period ending September 2024. Driven by biodiesel sales to the three government owned oil marketing companies or OMCs under a cost plus contract structure. We completed these contracts with excellent production and delivery performance. The positive impact of cost plus pricing that has been used by the OMC's to purchase biodiesel is expected to continue for the foreseeable future. Our India business has generated positive EBITDA in the past and has funded its own operations and capacity growth from these O and C contracts. Unfortunately, the price of feedstock used in the O and pricing formula increased significantly Q4 twenty twenty four. And OMC's delayed ticking deliveries of biodiesel. After a six month period of negotiations, OMCs are expected to issue a new tender biodiesel and begin taking deliveries in Q2 twenty twenty five.

This past July, our new Managing Director of the India business joined the company after serving as the Chief Executive Officer of the GE joint venture in India to build renewable power plants. We have signed an employment agreement with an outstanding professional with recent IPO agreement experience who will serve as our Chief Financial Officer beginning in June 2025. We have signed a lease to move our India headquarters into a newly built office team for the operation of multiple plant sites of new products. The timing of the planned IPO is currently estimated for late twenty twenty five or the first half of twenty twenty six, due to the delay in OMC deliveries. But we expect to benefit from a renewed government commitment to biodiesel blending and new OMC orders, supporting renewed retail and institutional investor interest renewable biodiesel later this year. Andy Foster, President of Amelous Advanced Fuels, will now review our North American businesses. Andy? Thanks, Herb. In the Aemetis Biogas business, we continue to grow the number of dairies and digesters to reach an expected five fifty thousand MMBtu per year of production capacity in 2025. Aemetis Biogas plans to expand our footprint to 26 dairy's operating or under construction by the end of twenty twenty five increasing production capacity to 1,000,000 MMBtu per year in 2026.

Our existing projects are funded by twenty year loans guaranteed by the USDA Rural Energy for America or REAP program. We have received the draft USDA conditional commitment for the next $25,000,000 Rural Energy for America loan an additional $50,000,000 of USDA guaranteed funding is in process for a total of $75,000,000 of new USDA guaranteed long term financing for biogas digester construction. Our LCFS provisional pathways for seven dairies have been completed and have completed the third party verification process and are now in the final review and approval stage at CARB.

We expect these pathways to be approved in March or April. In the event that the final approval is received in April instead of this month, we would begin to show the increased revenues and cash receipts from LCFS pathway approval in Q3 of twenty twenty five. For the Aemetis ethanol business, the eventual approval of an E15 blend in California as well as at the federal level is expected to have a positive impact on ethanol industry margins as retailers seek to provide lower cost fuel to consumers and to significantly expand the market A major step in improving our cash flow and energy efficiency at the Keys plant is the installation a mechanical vapor recompression system or MVR. We have completed detailed engineering and have begun equipment procurement and fabrication off-site. Over the past year, we have also completed tie ins and other plant minimizing plant operation interruptions during the construction period. The MDR system is designed to reduce fossil fossil natural gas use by 80% at the Keyes plant and increased cash flow up to $35,000,000 annually depending on the LCFS credit price and 45Z tax credits. When we begin operating the system in 2026. The MVR energy efficiency project is expected to cost approximately $30,000,000 has been awarded about $20,000,000 in grants and tax credits from the CEC, PG and E, and the U. S. Department of Energy and Treasury.

Our Aemetis carbon capture subsidiary has received California state approval to drill a characterization well. The first phase of drilling installation of the conductor pipe for the characterization well was completed late last year.

We plan to use the data from the characterization well to obtain a federal Class six sequestration well permit and then construct a CO2 injection well to sequester approximately 1,400,000 tons of CO2 per year. CO2 sequestration has strong support from the oil and gas into we expect the final 45 Q federal tax credit to be supported this year and the EPA Class six well approval process to be faster to obtain than under the prior administration. In the development of our Aemetis Sustainable Aviation Fuel and Renewable Diesel business during 2024, we received authority to construct air permits for our planned 90,000,000 gallon per year SAF and RD plant to be built in Riverbank, California. When operated to produce only sustainable aviation fuel, the design capacity of the plant is about 78,000,000 gallons per year of SAF. With the expanding demand for SAF and with the limited supply, we continue to discuss the use of innovative pricing structures with our airline customers and to accelerate the financing construction and operation of our SAF plan. A key issue for SAF production is the Federal 45Z production tax credit which replaces the former Blenders Tax Credit. Further clarification and confirmation of the calculation of the 45Z revenues will needed be needed to support the financing of the SA SAFRD plan.

Additionally, California regulators need to step up their efforts to enact strong SAFE mandates by including this fuel in the LCFS and setting volumetric requirements. Most major airlines have expressed support for adopting SAF and are looking for additional regulatory support from the EPA and states to move investments forward to expand production capacity.

Eric?

Thanks, Andy. Appreciate that. In summary, all five Aemetis business segments are synergistic and create what we refer to as a circular bio economy. We are very pleased with the approval of the updated low carbon fuel standard in California and look forward to its formal implementation. As well as the expected approval of 15% ethanol blends to reduce gasoline prices at the pump and to expand domestic markets for agricultural agricultural and waste products. Continued progress on implementing Federal 45 Q and 45 Z tax credits will drive new investment and job creation as we continue to build new production of natural gas from dairy waste ethanol from agricultural products, SCF and R and D, renewable diesel as well as the sequestration of CO2. We continue to work toward an an IPO of the growing India biodiesel business, though our pace was slowed by the delay in biodiesel deliveries to oil marketing companies and now is expected to benefit from renewed commitment to biodiesel blending by the India government and OMCs. Our company's values include a long term commitment to building value for our stockholders, the empowerment of and respect for our employees and business partners, and making significant and positive contributions to the communities we serve.

Now let's take some questions from our call participants.

Thank you, Mr. McAfee. We will now be conducting a question and answer session. And the first question today is coming from Jordan Levi from Truist Securities. Jordan, your line is live. Please go ahead.

Thanks for all the details. Eric, maybe if you could just talk to your confidence levels or around specifically the refinancing going forward given some of the pauses and reductions in government spending under this new administration? We have a high degree of confidence in REAP. We've been very close to the USDA staff and we expect approvals this month for their next phase. And then we have two right behind it. So there has been a freezing of grants and loans that was throughout the entire government. And as they have gone through and looked at every program and then frankly looked at every [indiscernible] been informed that the REIT program, the business and industry program and the 9,003 program have all been released for further transactional activity and we've received direct information that we're moving forward forward this month on our next $25,000,000 repo.

Got it. Thanks for that. And then just as a follow-up over to Riverbank. I recognize 45 gs clarification for SAF is pretty critical to getting financing on that plant and the economics more broadly. But just wanted to get a sense of how you're thinking about one, how much has been spent from a CapEx per perspective there thus far? And then two, if we do get to kind of the end of the year or beginning of next year or however long and we haven't gotten that clarification from from the federal administrations. What's the plan kind of going forward as it relates to that project? Because of the way that the accounting is recognized for the capitalization, there's two different capitalization numbers. One is for project financing and the other is that our internal accounting is very conservative. So we expense our investments there largely. So the GAAP recognition and the project financing recognition are rather significant. Significantly different. So we do not expect that we're going to be reflecting the entire amount on our GAAP books. Of what we've invested. About $43,000,000 of what we show in our project financing. And then our GAAP books are more conservative because we have to be within a certain short period of time of construction before we can start capitalizing for these assets.

The 45Z plus as Andy mentioned, California's LCFS including jet fuel, would be two significant drivers The inclusion of jet fuel in the LCFS would cause an increase in obligated party amounts. And so there was actually a 2% goal put in the LCFS amendment last year. It came out late in the process and they've discussed the process of putting it back in. So we think there are several different market drivers mandates for the physical volumes plus mandates at the federal level for the 45Z production tax credit to be adopted and clarified and the calculation come out in treasury guidance. And we think it will take most of this year for that kind of clarification to occur. And we don't think most SAF projects are moving forward certainly at this at the pace that we were seeing in twenty twenty one, 2022 and 2023. As we go through this transition.

Thank you, Eric.

Sure. Thank you.

Thank you. Thank you. Your next question is from Sameer Joshi with H. C. Wainwright. Please proceed with your question.

Hey, guys. Thanks for taking my questions.

Eric, do you have any insight into why the OAL asked for revisions late in the game and not earlier on? Like what was the process like and what are their concerns? And it feels like there's at least going to be one hundred and twenty day delay because of this. Just wanted to see what your view is. [indiscernible] office of administrative laws. Administrative law. The LCFS is a complicated piece of legislation. And the surprise wasn't that it's complicated and needs some clarification surprise is that wasn't resolved prior to the date in which the OAL had to consent to the publishing of the amendment. And since that delay could take another common period actually, I would say, at this point, we expect it to include another fifteen to thirty day comment period. It is not something that's going to get fixed next week. This will probably be a couple of months of internal process to get this fixed. Lastly, there is no endpoint. They could take three, four, five, six months. And that's one of the things that caused the LCFS product prices to go down as there is no guaranteed time period in which this this gets fixed.

That being said, we know from personal experience, there's a tremendous amount of staff time being invested at CARB to move this along and get it done as quickly as possible. You have any other comments? No, I would just this is Andy. I would just add to that that I think this is an opportunity for the governor to show some leadership stepping in. This is sort of I think an embarrassing handoff between two two state agencies that should have been sort of result. Before it happened. I'm being a little harsh, but the stakes are high for the stakeholders in all of this. So we're hopeful. I know in my communication with CARB, it seems that that's all the staff is working on instead of processing applications for pathways. So we're hoping that the governor will step in and the governor's office at least will step in and provide some strong leadership to get this resolved because it's this has been going on many years and probably is something that should have been worked out in the conference room before it got public. So our hope is that the heat is on and they realize the stakes that are involved in getting this resolved.

Understood. Thanks for that color. On the India biodiesel are we I know there was some air quality permits that were received late February, which have allowed you to restart the plants. But are you restarting and building inventory or are you waiting for the OMCs to renew or have a new round of cost plus awards for you. Like, are you operating with or waiting I'll separate that into two parts. One is our production, the second was the OMC tender process.

Today, news in India indicates that they will be issuing a new tender that the new tender actually was papered today. So it's in the public domain today. The time period for the allocation is very short. It's May is the end of the tendering process. And they're expecting shipments in April of this new tender. Regarding our production, we queued up production under the previous tender. And so we're sitting on a significant amount of inventory. We'll will not require that we have to operate the plant in order to get initial shipments started. On the third point about local pollution control district, this has happened to us in the past. This cycle is very similar to the previous cycle and we engage with a wide variety of government leaders in resolving their concerns about emissions. I can state that I do not believe our emissions were actually what led to the shutdown notice because we had shut down our plant a month earlier. We shut down in December, the notice was in mid January. And we believe it was other producers in the local area where there's a wide variety of edible oil and other businesses that use similar feedstocks.

And so that was a part of resolving the issue was that we've been shut down for thirty days when they gave us a notice of shutdown. So it was one of those ironic government issues that we got resolved and we because of the OMC delivery schedule, it had virtually no impact on our production. Understood. Thanks for that. And just one more I know you did touch upon it in your prepared remarks. Of the India IPO Do you expect this to happen during 2025 or should we think of this as early twenty twenty six event?

It's an IPO. So we know the market actually controls it. We expect to have our process completed we can complete it in 2025. And as every IPO is discussed, it's always discussed subject to market conditions. So we'll be ready to go. We'll be then looking at the market conditions. If we see strong support for biodiesel blending, even in a otherwise not attractive market, we can get a very solid IPO done because of the size of this growth industry.

And I think that our job is to get the paperwork done and be ready to go. And if we delay it for a quarter or two, will be purely because we see better market conditions ahead.

Understood. Thanks Eric for taking my questions.

Sure. Thank you. Thank you. Your next question is from Derek Whitfield from Texas Capital. Please proceed with your question.

Good afternoon and thanks for taking my questions. Hey, Derik, Good.

Thanks.

Bigger picture, could you speak to your expected spending plans for twenty twenty five? Given the turbulence in the regulatory markets and the lack of clarity and or value with 45 gs? We are on course with a $75,000,000 capital budget from USDA Renewable Energy of America program loans. We also have a variety of grants. I think our total grants are in the $5,000,000 range. And of course, we have ongoing investment tax credits already netted about $17,000,000 in cash proceeds. In January, February this year. We expect additional cash proceeds from that. And so our capital spending on Aemetis Biogas is going to be and we have some vendor support that's helped us in the past. We built our pipeline with very strong financial support from a vendor. We expect to expand that vendor support [indiscernible] and then pay them off through USDA and other funds that come in including revenues. So we are looking to continue to accelerate biogas. We have 50 signed dairies We have 16 of them on operating or finishing steps of operations. And so we have 34 dairies to go and we have more dairies coming on board. So we have gone to the USDA lenders as well as our vendors and laid out a plan that enables us to accelerate in 2025 and 2026.

And as you know, with 45C, probably taking most of this year to get final treasury guidance out, we actually are running the numbers based upon low carbon fuel standard credits and D3 RINs. As well as selling the actual fuel itself, the molecule. And that's supporting all of our expansion plans at the current time.

Great. And then maybe shifting over to ethanol. As you think about the progression of E15 approvals across the remaining 41 states this year, What's your view on what this will do for ethanol margins for a medicine industry?

I think it's going to be a slow megatrend. When people look back on it, it'll seem as if it really happened quickly. But looking forward from where we're sitting, it's going to look like a melting ice cream or not, because it's going to take most of this year for the convenience stores and others to finally realize yes, I guess we could make more money for competitive factors to kick in that the guy across the street is already doing it, and his fuel is cheaper.

And I think we'll see acceleration in 2026. As more states come online. It's a commodity marketplace. So the absorption of the gallons that are currently out of the market will be all that's necessary for us to recapture probably $0.5 per gallon and still have a very significant margin available. Here in California, we sell our product for about $1.8 net of discounts and marketing fees and like.

And at the pump, certainly it's more than $4 So fundamentally, our molecule goes to the blending rack then gets trucked to a gas station. And $2 a gallon times 65,000,000 gallons is $130,000,000 a year of margin. To the oil company for trucking our product around and then dispensing it. And I think that there's definitely $0.5 a gallon of that leaving them with over $1 to profit on the thing. So if we get into strong adoption of E15 by probably 2027, I would expect we'd be above $0.5 a gallon and it would drive new cited Entire capacity in The U. S. Is 18,000,000,000 gallons, 2,000,000,000 gallons being exported and we're using about 14,000,000,000 gallons a little more than that domestically. So have 1,500,000,000 gallons of capacity that's offline due to maintenance cycles and other things. When that gets absorbed, the only solution is quite frankly new capacity. And so we would exceed 20,000,000,000 gallons of demand with only even an ideal scenario everybody running 18,000,000,000 gallons of capacity. So you're going to see new investment start to kick in driven by higher margins. Same cycle we saw in 02/2004, 02/2005 as the renewable fuel standard was adopted should happen in 'twenty six, 'twenty seven and 'twenty eight.

As people realized we're short of ethanol in The United States One last, if I could, just to put a kind of a bow on car policy. When would that likely go into effect in your opinion? And will the obligations be backdated to cover 2025? I personally think we're probably two to three months away and we have no facts to back that up at all. It's the pace of the internal CARB staff and the internal OAL staff. And frankly, as Andy mentioned, it's the amount of encouragement offered by Governor Newsom for them to work extra hours to get this done.

We do know that CARB is working very, very hard on this We just have no idea about how long that's going to happen. But I think with the political tea leaves here, it's going to be sooner rather than later.

Thank you.

Thank you. Your next question is coming from Matthew Blair with TPH. Please proceed with your question. Thank you and good morning. Eric, could you provide any more color on what drove the negative EBITDA results in the fourth quarter? Was that mostly due to ethanol? And could you also talk about ethanol fundamentals in the first quarter? We're seeing pretty high utilization, very high inventories. Do you think FML is on track for an even weaker Q1 than it was in Q4?

Q4 was oversupply. And [indiscernible] high corn prices, corn jumped the dollar I think in Q4. And Q1 for us is a little better than Q4. We've adjusted some operations to reflect the oversupply of ethanol and the corn prices as you know have moved both up at as well as down the first quarter, but they had some downward moves as well. So think our performance in first quarter will probably prove to be a little better than fourth quarter. We did I should make note that it's the operational changes that I think led to the improvement. I don't think it was a market. We slowed down our grind and I think what we're seeing certainly from yesterday's EIA numbers is that others are responding similarly. There was EIA numbers yesterday were the first first time we've seen this year that were relatively positive. And the folks that we work with from a marketing perspective are sort of seeing light at the end of the tunnel as we get through this period. The other thing I think influenced some of the the price of gas, while not historically high from a use perspective, I just saw a chart that showed that this is the strongest demand for gas maybe on record So natural gas pricing went up a little bit.

Obviously, corn price went up a little bit. Or a lot. But we've adjusted our grind as have I think other Midwestern plants. In April, you'll start to see some of those plants go into their annual turnaround. Which will help us get rid of some of this inventory So we're kind of feeling like, hopefully there's some light here at the end of the tunnel as we head into Q2.

Sounds good.

Then could you share any expectations on the D3 RVO going forward? Last time around, we had a three year RVO I think the average increase was about 30% a year. In the blending obligation. Do you have any expectations on on just what that might look like? Should we expect a new two or three year RBO this spring? And and how much would the blending obligations go up by Two items on that. One was historical back into 2024, the EPA a couple of days ago said that they had extended the compliance period because they were intending to adopt the new lower number of D3 rents mandate for 2024. So that's an indirect signal to the market that the proposal the EPA made to the White House under previous administration is actually being fall through. So that there is not a mandate that's any higher than the actual production in 2024. And actually, I'd say it's a very indirect way of saying, oh, by the way, guys, you're never going to be short because this is after the year was done, all the investments have made, all the products have been shipped and then they changed the rules of the game, which was that the obligated parties didn't have to worry about being short.

If that becomes the pattern, then it won't matter what the RBO is. I'm just being frank with you, might as well just skip the RBO let the oil companies buy whatever they want and then end the year just set the RBO to whatever the oil companies actually did. Now why do I say that? That's what they did with ethanol for eight years. Starting in 2014, they just didn't issue an RVO and then you later had couple of federal court cases lost by the EPA, they were in violation of federal law. And they set the RVO with whatever was actually consumed. So it's not a great commentary on the management of the program by the EPA. But let's just face the facts that that's what's going on. The price of the credits was approximately $3.5 prior to this proposal by the EPA to remove excess requirements for D3 RINs and has settled around $2.45. After this news has hit the market, there are some reasons why that is the case. And my personal view is we're probably at $2.45 until the President decides he wants more investment in domestic renewable energy driven by waste. And when he decides that, then I think we'll be at four or even higher because the entire system structured to attract new investment.

And when you destroy excess demand, then nobody should make new investment. And that's what the signal is from the EPA is don't go put more investment into D3 written creation because is no market for the product. And so we're we're extremely cynical about the behavior of the last administration on particular topic I'm not surprised at all in the current administration. But there is going to be some backlash in which people point out that if the market is not growing, then farmers aren't getting any additional revenue and there's no new investment, no new job creation in domestic energy. And that violates the unleashing America Energy executive order. So I think we're all kind of watching the new administration see where the priorities are and I think eventually D3RIN RVO will come back into being relevant to new investment growth. The question is whether it's going to be this year or next year.

Great. Thanks for your comments.

Sure.

Thank you, Matthew.

Thank you. Your next question is coming from Dave Storms from Stonegate. Hey, Please proceed with your question.

Good morning and thank you for taking my question. First one, I wanted to start with a modeling question with seven digesters on the cusp of CARB approval.

Can you break out maybe the MMB2 contribution from those digesters it as easy as being roughly 45% of your yearly MMBTUs or is there another way we should think about this?

It's approximately 350,000 per year. It's about 25,000 average per dairy for a modeling perspective. We do have larger and we have smaller dairies We have some digesters that actually have multiple dairies feeding them.

But from the perspective of modeling 25,000 millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters mill is probably a decent number to use currently.

Understood. That's very helpful. Thank you. And then just wanted to ask about the market for the sale of investment tax credits. How has that changed over the last year? It looks like roughly quarter lag and a 10% discount when you go to sell those credits. Is that market anticipated to maybe have condensed spreads over 2025 or anything else that you're expecting in that market?

I think the market has settled on a bid ask spread that as you've seen in now our multiple transactions is closed. For a total about $70,000,000 of net proceeds.

It's about a 15% total discount between the discount the lawyers the insurance policy the brokers, everybody in the whole process. Ends up being a little bit less than 15% discount.

Understood. Thank you for taking my questions. Good luck in Q1.

Yes. Thank you, Dave.

Thank you. Your next question is from Ed Woo from Ascendiant Capital. Please proceed with your question. Yes.

Thank you for taking my question. The India IPO, have you thought further about what you may possibly do with the proceeds either invest it in India or bring it back to The U. S? The NDI IPO process has a very disciplined use of funds component that is not the way it works in The United States. So we are being diligent about disclosing our use of funds until we get through the India IPO process. But you will see in other IPOs in India, funds that are repaying debt from from offshore investors or even private equity firms that are getting funds from their IPO. Actual calculation is actually a part of sizing the IPO and even looking at market acceptance of the IPO will determine the amount of funds that could be repaid to the parent company for funds that were invested in the subsidiary. So it's going to be a while before we'll come up with a number that's definitive. Great. And previously, you disclosed that India was pretty much self sufficient Is that still the case? And you think it will be that way until the after the IPO is completed?

It is still the case and we do have a lot of investment in the inventory and operations and the like So beginning shipments to OMCs will free up liquidity in India. But it is as in the long term debt, it is it's investing in inventory to be well positioned for timely delivery. And that's been our highest priority and the good news is the India team is well positioned positioned to do that again on multiple OMC contracts that we expect to see this year.

Great. Well, thank you, Lana. Wish you guys good luck.

Thank you, Ed.

Appreciate it.

There are no further questions at this time. I would like to turn the floor back to management for closing comments.

Thank you to Aemetis stockholders analysts and others for joining us today. We look forward to talking with you about participating in the growth opportunities at Aemetis. Thank you for attending today's Aemetis earnings conference call. Please visit the Investors section of the Aemetis website where we'll post a written version and an audio version of this Aemetis earnings review and business update. Tom?

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. [indiscernible] [indiscernible] [indiscernible]