Aemetis reports progress with sanitizer products, RNG production

Eric McAfee, chairman and CEO of Aemetis Inc. discussed company’s business in the sanitizer market and provided an update of its renewable natural gas (RNG) and cellulosic ethanol projects during a third quarter earnings call, held Nov. 12.

McAfee said Aemetis began to ship large quantities of hand sanitizer alcohol from its plant in Keyes, California, during the second quarter for use in the rapidly growing health, safety and personal care market. As part of that effort, the company launched its Aemetis Health Products subsidiary to manage the development, production and marketing its sanitizer products.

During the third quarter, that subsidiary filed FDA registrations to obtain a National Drug Code for the production and marketing of over the counter (OTC) sanitizer products and began production of Aemetis branded gel hand sanitizer. McAfee said a one-gallon hand sanitizer sold under the Aemetis brand has been approved by a leading online marketplace. He said the product should be shipping soon. Additional sizes are planned for production. The product, he added, is marked with a “Made in California” label.

McAfee said Aemetis is investing approximately $15 million in production and storage upgrades needed to manufacture USP medical grade alcohol. More than $12 million of that amount has already been funded or will be reimbursed by grant funding, he said.

Also in the third quarter, Aemetis completed construction of the first two of its 18 dairy digester projects that are being developed as part of the Aemetis Biogas Central Valley dairy project. The projects included onsite dairy biogas clean up and pressurization, a four-mile pipeline and a boiler unit at the Keyes plant. “We are now generating below-zero carbon intensity renewable natural gas that is being used as our alcohol plant to displace petroleum natural gas,” McAfee said. 

The Keyes plant will utilize the biogas until a planned utility pipeline interconnection and gas upgrading is complete, McAfee added, noting that those projects are expected to be complete within the next six months. Aemetis also received a $1 million grant to install its own RNG fueling system at the Keyes plant for CNG trucks.

McAfee said that Aemetis has implanted stringent PPE and worker safety policies as a result of the COVID-19 pandemic. As a result, the company has been able to continue construction of its plant upgrades and build the RNG projects without interruption.

Several upgrades are being completed at the Keyes plant, McAfee said. The company is adding two new distillation columns and related systems to produce high purity USP-grade alcohol. Those system are expected to begin operation during the second quarter of 2021. The company is also installing five new stainless-steel tanks for USP and beverage-grade alcohol storage and loadout, increasing storage capacity by more than 250,000 gallons.

A Mitsubishi zeolite membrane dehydration unit is also being installed at the Keyes plant, along with high-efficiency heat exchangers that will reduce natural gas use at the facility. In addition, a solar panel microgrid array with battery backup is being added to the plant, along with a mechanical vapor recompression system designed to reduce natural gas use.

McAfee said the projects being completed at the Keyes plant are targeted to significantly reduce carbon intensity by reducing natural gas usage and costs, while also increasing the number of credits the company can generate under the California Low Carbon Fuel Standard.

McAfee also offered an update of the cellulosic ethanol project under development in Riverbank, California. The facility will feature LanzaTech’s gas microbe ethanol production technology. In order to close financing for the Riverbank project, McAfee said Aemetis is completing the final permitting and engineering required for negotiation of the EPC contract.

Aemetis reported revenues of $40.9 million for the third quarter, compared to $57.4 million for the third quarter of 2019. Gross profit for the third quarter of 2020 was $771,000, compared to a gross profit of $4 million during the same period of last year. Operating loss was at $3.8 million, compared to an operating loss of $600,000 reported for the third quarter of 2019. Net loss was $12.2 million, compared to a net loss of $7.2 million. Adjusted EBITDA was negative $2.5 million.