Aemetis, Inc., a leader in renewable natural gas (RNG) and renewable fuels, announced today that its ethanol and RNG production facilities have received approval from the Internal Revenue Service (IRS) for Excise Tax Registration under Section 45Z of the federal Inflation Reduction Act (IRA). This registration enables Aemetis to claim Section 45Z Production Tax Credits (PTCs), which provide tax incentives for producing renewable fuels with lower carbon intensity than petroleum-based alternatives.
Section 45Z Tax Credits Incentivize Low-Carbon Renewable Fuel Production
The Aemetis Advanced Fuels Keyes, Inc. and Aemetis Biogas production entities are now officially registered as producers of clean transportation fuel under the Section 45Z Production Tax Credit. This program, set to begin on January 1, 2025, incentivizes the production of low-carbon fuels by offering tax credits based on a fuel’s carbon intensity. Aemetis, which anticipates generating significant tax credit revenues from its dairy RNG projects, could qualify for up to $8.50 per gallon equivalent, given its estimated negative carbon intensity of 380 under the GREET model.
“The 45Z Production Tax Credit replaces the previous blenders tax credit, focusing on renewable, low-carbon fuels,” said Eric McAfee, Chairman and CEO of Aemetis. “The scale of the tax credit increases as carbon intensity decreases, offering $1.00 per gallon or gallon equivalent for every 50-point reduction below a carbon intensity of positive 50.”
Expansion of Aemetis Biogas Operations to Boost RNG Production
Aemetis is also expanding its Biogas division, with ten digesters already operational and two more nearing completion. The company expects this expansion to significantly boost its RNG production capacity, aiming for 550,000 MMBtu annually by 2025 — an 80% increase from its current output of 300,000 MMBtu per year. The expansion of Aemetis Biogas is projected to generate substantial revenues, with the Central Dairy Project expected to produce over 1.6 million MMBtu per year and generate $250 million in annual revenue when fully operational.
Strong Financial Backing for Aemetis Biogas Growth
The growth of Aemetis Biogas operations has been supported by $50 million in USDA-guaranteed loans under the Rural Energy for America Program (REAP), with an additional $75 million in loans currently in process. The company’s previous success in tax credit sales, including $63 million of investment tax credits under the IRA in 2023, further demonstrates its capacity for generating substantial cash flow and scaling operations.
Aemetis Builds on Proven Track Record to Lead Clean Fuel Industry
Aemetis’ successful registration under the IRA and its ongoing efforts to expand RNG production highlight the company’s strong position to benefit from the growing demand for renewable fuels. With continued investment in infrastructure and expansion projects, Aemetis is well-positioned to be a leading player in the renewable natural gas and clean fuel sectors.
