Aemetis (AMTX) Reports Initial Q2 Cost-Plus Contracts Awarded by Government Oil Companies
Aemetis, Inc. (AMTX), a renewable natural gas and renewable fuels company focused on negative carbon intensity products, announced today that its Universal Biofuels subsidiary in India has been awarded an initial $20 million of cost-plus contracts for delivery to government-owned oil companies during the third quarter. Additional cost-plus contracts with OMCs are in process for delivery during the third quarter.
An initial 18,000 kiloliters of biodiesel of cost-plus biodiesel contracts for delivery during Q3 2023 have been awarded to Aemetis. Universal Biofuels completed approximately $34 million of second quarter shipments that were sold under cost-plus contracts with government-owned oil companies, though Q2 quarterly revenues will not reflect about $1.8 million of shipments in transit at the end of the quarter.
Universal Biofuels recently hosted several India Oil Company senior executives for detailed tours of the Aemetis India biodiesel plant. The India Oil Company executives that toured the 50-million-gallon capacity Kakinada plant included the Executive Director and the Chief Operating Manager who oversee biodiesel procurement.
“The Universal Biofuels biodiesel plant has an exceptional record of timely delivery and very high quality,” stated Sanjeev Gupta, President of Aemetis International. “Approximately 50,000 kiloliters of biodiesel have been delivered to the three Government-owned Oil Companies in the last two contract periods, with only 10 kiloliters that did not pass the first acceptance test despite deliveries that often require many days of truck travel and unloading delays.”
“India Oil Company is a leader in the expansion of biodiesel and other renewable fuels in India,” stated Eric McAfee, Chairman and CEO of Aemetis, Inc. “The timely delivery of the Q3 biodiesel tender by the three Oil Marketing Companies and the timely award of initial volumes for Q3 delivery enables Universal Biofuels to maximize production volumes to meet India government biofuels blending goals.”
Built by Aemetis near the India port of Kakinada in Andhra Pradesh, the Universal Biofuels plant is the largest biodiesel production facility in India. Expanded biodiesel production supports the Indian government’s initial goal of a 1% biodiesel blend in the amount of about 250 million gallons per year, on the way to fulfilling the 5% blend (1.25 billion gallons per year) set forth in the 2022 National Biofuels Policy.
India consumes about 25 billion gallons per year of diesel, but India does not have a meaningful amount of domestic oil production and is dependent on imported crude oil to supply its petroleum refineries. The adoption of a 5% biodiesel blend target by the India government under the 2022 National Biofuels Policy is expected to reduce the amount of petroleum imported into India, reduce the export of dollars exported to purchase crude oil, strengthen domestic agricultural producers and processors, and significantly improve air quality while reducing carbon pollution.
Petroleum diesel emissions are a significant contributor to poor air quality and health issues in India. According to the Public Health Foundation of India, air pollution causes more than $36 billion of economic losses each year and about one of every six deaths in India are caused by air pollution.
Biodiesel used in heavy transportation reduces particulate emissions by more than 90% compared to petroleum diesel and creates domestic demand in India for agricultural feedstocks and waste byproducts to supply renewable fuel production facilities. Biodiesel produced from waste feedstocks reduces carbon pollution by 50% to 80% compared to petroleum diesel, directly reducing the emission of greenhouse gases that contribute to climate change.
This story originally appeared on Investing
