Item 1. Business
Item 1. Business
Current Operations
Founded in 2006 and headquartered in Cupertino, California, Aemetis, Inc. (collectively with its subsidiaries on a consolidated basis referred to herein as “Aemetis,” the “Company,” “we,” “our” or “us”) is an international renewable natural gas and renewable fuels company focused on the operation, acquisition, development, and commercialization of innovative technologies to produce low and negative carbon intensity renewable fuels that lower fuel costs and reduce emissions. We do this by building a local circular bioeconomy using agricultural products and wastes to produce low carbon, advanced renewable fuels that reduce greenhouse gas ("GHG") emissions and improve air quality. Our current operations include:
► California Ethanol - We own and operate a 65 million gallon per year capacity ethanol production facility in Keyes, California (the “Keyes Plant”). In addition to low carbon renewable fuel ethanol, the Keyes Plant produces Wet Distillers Grains (“WDG”), Distillers Corn Oil (“DCO”), and Condensed Distillers Solubles (“CDS”), all of which are sold as animal feed to local dairies and feedlots. The Keyes Plant also sells CO₂ captured from the ethanol fermentation process to produce commercial grade CO₂ for the food, beverage, and other industries. We are implementing several energy efficiency initiatives at the Keyes Plant focused on reducing operating costs and lowering the carbon intensity ("CI") of our ethanol to increase revenues.
► California Dairy Renewable Natural Gas - We produce Renewable Natural Gas ("RNG") in central California. We currently have twelve anaerobic digesters that produce biogas from dairy waste, a 36-mile biogas collection pipeline leading to a central RNG production facility, and an interconnection to inject the RNG into the utility natural gas pipeline for delivery for use as transportation fuel. We are actively expanding our RNG production, with several additional dairy digesters under construction, agreements with over fifty dairies, and a completed environmental review for an additional 24 miles of biogas pipeline. We are also building our own RNG fuel dispensing station, which is planned to begin operating in 2026.
► India Biodiesel - We own and operate a plant in Kakinada, India (“Kakinada Plant”) with a capacity to produce about 80 million gallons per year of high-quality distilled biodiesel from a variety of vegetable oil and animal waste feedstocks. Our plant is one of the largest biodiesel production facilities in India. The Kakinada Plant also distills the crude glycerin byproduct from the biodiesel refining process into refined glycerin that is sold to the pharmaceutical, personal care, paint, adhesive, and other industries.
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Strategy
Key elements of our business and growth strategy include:
California Ethanol
Improve operating margins and cash flow by improving the energy efficiency of the Keyes Plant. During the last several years, we have implemented projects to improve the plant's energy efficiency, which lowers the carbon intensity and increases the value of the ethanol we produce and sell. To continue this strategy, we are in the process of procuring and installing a mechanical vapor recompression (“MVR”) system that is expected to reduce natural gas consumption at the Keyes Plant by more than 80% .
Continue to seek alternative feedstocks and improve product yields to minimize cost and carbon emissions. Over the past 12 years, we have made several improvements to the Keyes Plant that allow us to sell substantially all of our byproducts from the ethanol production process as commercial products into the local agricultural economy. We are continuing to seek out and evaluate potential feedstocks that will reduce cost and carbon intensity, with an emphasis on processes that use cellulosic feedstoc ks to augment or replace current feedstocks.
California Dairy Renewable Natural Gas
Leverage our position as an established dairy digester owner and operator to continue to build dairy digesters and connected pipeline to increase RNG production . In 2018, we benefited from our established relationship with more than 80 California Central Valley dairies to begin signing leases and raising funds to construct dairy digesters. We now have twelve operating dairy digesters that produce biomethane, additional digesters under construction, and agreements with over 50 dairies for the supply of feedstock to current and future digesters. We expect to produce 550,000 MMBtu per year of RNG from our current digester projects, and we plan to build additional digesters and expand our upgrading hub over the next several years to be able to produce about 1.6 million MMBtu of RNG annually. We are also building our own RNG dispensing station, which we plan to begin operating in 2026.
India Biodiesel
Capitalize on policy changes by the Government of India. We plan to continue to pursue sales of biodiesel to Oil Marketing Companies (“OMCs”) that are owned by the India government, as well as pursuing sales to traditional bulk, fleet, industrial, retail, and transportation biodiesel markets in India. These sales are driven in part by the India government's 2022 update to its National Biofuels Policy that targets a blend of 5% biodiesel into fossil diesel.
Diversify our feedstocks. We have designed and upgraded our Kakinada Plant to be able to produce biodiesel from multiple feedstocks and plan to continue efforts to procure and process these diversified feedstocks where and when economically feasible. We have developed proprietary technology that allows us to use lower-cost waste products as feedstock.
Develop and commercially deploy technologies to produce high-margin products. We plan to continue exploring new business opportunities to convert agricultural and waste products into higher value biofuels in addition to biodiesel, including ethanol, renewable diesel, and sustainable aviation fuels.
Expand Operations and Plan for IPO. We have hired a new executive team in India to help develop plans for additional growth of our India business and to execute on a potential public stock offering of our India subsidiary.
Other Initiatives
Sustainable Aviation Fuel and Renewable Diesel. We are developing a sustainable aviation fuel (“SAF”) and renewable diesel (“RD”) production plant to be located at the Riverbank Industrial Complex in Riverbank, CA. The plant is currently designed to produce 90 million gallons per year of RD or 78 million gallons per year of SAF from renewable vegetable and animal oils obtained from our other biofuels plants and other North American sources. The plant is designed to use low-carbon hydroelectric electricity and renewable hydrogen that will be generated from byproducts of SAF/RD production. We received the Use Permit and California Environmental Quality Act ("CEQA") approvals for the development of the plant in September 2023 and the Authority to Construct air permits in March 2024. We are continuing with engineering and other development activities for the facility.
Carbon Capture and Underground Sequestration. We are developing a Carbon Capture and Underground Sequestration (“CCUS”) facility, to be located at the Riverbank Industrial Complex, that is designed to inject carbon dioxide more than one mile underground for geologic storage to reduce greenhouse gas emissions to the atmosphere that contribute to global warming. We have completed the initial phase of drilling for the characterization well, and we are continuing permitting and other development activities for the characterization well and the permanent sequestration injection and monitoring wells.
Use carbon and tax credits to bolster our operations and fund growth. Our current and planned businesses produce renewable fuels, reduce emissions, and generate revenues from federal Renewable Fuel Standard ("RFS") credits, federal Section 45Z production tax credits (“45Z PTC”), California Low Carbon Fuel Standard (“LCFS”) credits, and other investment and production tax credits. We plan to continue our efforts to maximize credit generation.
Utilize technology for the development and production of additional advanced biofuels and renewable chemicals. We continue to conduct research and evaluate new technologies to produce low and negative carbon intensity advanced biofuels from renewable feedstocks. Our objective is to continue to commercialize our portfolio of technologies and expand the adoption of these advanced biofuels and biochemical technologies. We also intend to evaluate and pursue opportunities to acquire technologies and facilities that are accretive as financial resources and business prospects which make the acquisition of these technologies, facilities, and processes advisable. In addition, we may also seek to acquire companies, enter into licensing agreements, or form joint ventures with companies that offer prospects for the adoption of technologies that would be accretive to earnings.
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2025 Highlights
California Ethanol
We produce six products at our California Ethanol plant: denatured fuel ethanol, wet distillers grains ("WDG"), distillers corn oil ("DCO"), condensed distillers solubles ("CDS"), undenatured alcohol for beverage producers, and carbon dioxide ("CO₂"). The products reflect our primary production and also the result of our strategy over the last decade to convert substantially all of the outputs of the plant into marketable products. The following table shows our production and sales of ethanol and WDG in 2025 and 2024:
Years ended December 31,
2025 vs 2024 %
2025
2024
Change
Ethanol
Gallons Sold (in millions)
57
61
-6.6
%
Average Sales Price/Gallon
$
2.03
$
1.96
3.6
%
WDG
Tons Sold (in thousands)
374
411
-9.0
%
Average Sales Price/Ton
$
80.1
$
88.2
-9.2
%
California Dairy Renewable Natural Gas
We deliver Renewable Natural Gas ("RNG") to the market through our interconnection with the utility gas pipeline. We use contractual relationships with third-party RNG fueling stations to dispense gas for transportation use. In connection with dispensing for transportation use, we generate sellable credits under the federal Renewable Fuel Standard (referred to as "D3 RINs") and the California Low Carbon Fuel Standard ("LCFS"). In 2025, we increased RNG production by operating our previously built digesters for the entire year and by commissioning one new digester. The increase in production also increased the number of D3 RINs and LCFS credits generated and sold. In 2025, we also received our first provisional LCFS pathway approvals from the California Air Resources Board ("CARB"), which allowed us to generate 160% more LCFS credits from RNG sales based on an average carbon intensity ("CI") of negative 385 for the seven dairies with approved pathways, while continuing to use the default pathway of negative 150 for the remaining dairies while their pathways are pending approval. D3 RINs are typically available for sale about one month after gas dispensing, and LCFS credits are generated and available for sale one calendar quarter after the calendar quarter in which RNG is dispensed. We recognize revenue for D3 RINs and LCFS credits when the credits are sold, rather than when RNG is produced or dispensed. We are continuing to actively increase RNG production by constructing additional dairy digesters and pipelines and by engaging in pre-construction development efforts for the contracting, permitting and financing of additional digesters. The following table shows our production and sales from RNG in 2025 and 2024:
Years ended December 31,
2025 vs 2024 %
2025
2024
Change
Dairy Renewable Natural Gas
Gas
Gas sold (in thousand MMBtu)
399
302
32.1
%
Average price per MMBtu
$
3.34
$
3.01
11.0
%
RINs
RINs sold (in thousands)
3,459
3,030
14.2
%
Average price per RIN
$
2.50
$
3.04
-17.8
%
LCFS
LCFS credits sold (in thousands)
83
52
59.6
%
Average price per LCFS credit
$
57.1
$
56.7
0.7
%
India Biodiesel
We produce two primary products at the Kakinada Plant: biodiesel and refined glycerin manufactured by further processing of the crude glycerin that is a byproduct of biodiesel production. During 2025 and 2024, we sold biodiesel to the government Oil Marketing Companies ("OMCs") Hindustan Petroleum, Bharat Petroleum, and Indian Oil Corporation. The following table shows our production and sales of biodiesel and refined glycerin in 2025 and 2024:
Years ended December 31,
2025 vs 2024 %
2025
2024
Change
Biodiesel
Metric tons sold (in thousands) (1)
21
74
-71.6
%
Average Sales Price/Ton
$
1,117
$
1,168
-4.4
%
Refined Glycerin
Metric tons sold (in thousands) (1)
1.0
6.5
-84.6
%
Average Sales Price/Ton
$
1,093
$
645
69.5
%
(1)
1 metric ton is equal to 1,000 kilograms (approximately 2,204 pounds).
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Competition
California Ethanol – According to the U.S. Energy Information Agency (the “EIA”), on January 1, 2025, there were approximately 191 commercial ethanol production facilities in the U.S. with a combined production of approximately 18.5 billion gallons per year. The production of ethanol is a commodity-based business where producers compete on the basis of price and carbon intensity. We produce and sell ethanol in the California market. However, since there is insufficient production capacity in California to supply the state’s total fuel ethanol consumption ( approximately 1.4 billion gallons annually), we compete with ethanol transported into California principally from Midwestern producers or imported from other countries, primarily Brazil. Similarly, our co-products, principally WDG and DCO, are sold into local California markets and compete with dried distillers grains (DDG) and DCO imported into California as well as with alternative feed products.
California Dairy Renewable Natural Gas – Dairy renewable natural gas sold for transportation use currently competes with other renewable gas, fossil natural gas, and fossil-based products. The pricing for our sales of D3 RINs and LCFS credits fluctuates based on the supply and demand for those credits at any given time, and we compete with other credit producers inside and outside of California that are participating in those markets.
India Biodiesel – Biodiesel sold as fuel competes primarily with petroleum diesel produced by the three OMCs and two private oil companies in India, all of whom have significantly larger market shares for petroleum diesel than we do for biodiesel, and they control a significant share of the distribution network. These companies also purchase our product for blending with fossil diesel before further sales of blended product to their customers, and we compete with other biodiesel producers to supply blendstocks to the OMCs. We compete primarily on the basis of location, price, and quality. In addition, the Kakinada Plant has demonstrated that it is a reliable and high-quality supplier in the India fuel market. With respect to crude and refined glycerin, we compete with other glycerin producers and refiners selling products into the personal care, paints and adhesive markets primarily on the basis of price and product quality.
Customers
California Ethanol – We sell substantially all the ethanol, WDG, DCO, and CDS we produce to J.D. Heiskell under the J.D. Heiskell Purchasing Agreement, and J.D. Heiskell resells the products to marketers designated by us. We have designated a single fuel marketing company, Murex LLC ("Murex"), to purchase our ethanol and resell it to fuel blenders. We have designated A.L. Gilbert, Co., an animal feed company located adjacent to the Keyes Plant to sell and distribute our WDG. We sell the CO₂ gas from our fermenters to an industrial gas company that operates a commercial grade CO₂ production plant connected to our Keyes Plant by a dedicated pipeline.
California Dairy Renewable Natural Gas – We deliver Renewable Natural Gas into the utility gas pipeline via interconnection and sell it to transportation customers through a contractual relationship with fuel dispensing companies. We sell the environmental attributes (i.e. D3 RINs and LCFS credits) through industry brokers.
India Biodiesel – We sell biodiesel to the three Government OMCs.
Pricing
California Ethanol – The market prices of ethanol, alcohol, WDG, and DCO vary throughout the year. Ethanol pricing is influenced by local and national inventory and production levels, imported ethanol, corn prices, carbon intensity, regulatory factors, gasoline demand, and government regulations related to renewable fuel volumes and allowed fuel mixes. Our ethanol price is based on an index of daily spot prices for ethanol less an adjustment for local market conditions that is set in quarterly sales contracts entered by Murex with local fuel blenders. The price for WDG is influenced by the price of corn, the supply and price of dried distillers grains, and demand from the local dairy and feed markets, and is determined monthly pursuant to a marketing agreement with A.L. Gilbert generally in reference to the local price of dried distillers grains and other comparable feed products.
California Dairy Renewable Natural Gas – The price for sales of RNG gas molecules is based on the market price of fossil based natural gas. The price we receive for sales of D3 RINs and LCFS credits are typically based on spot markets for those credits. Each of those credit markets is driven by regulatory factors that affect the quantity of credits needed by fossil fuel producers to achieve compliance, and also by the abundance of credits generated by renewable fuel producers.
India Biodiesel – During 2025, pricing for sales to OMCs was based on a fixed price formula to increase competitiveness, whereas in 2024 the price for sales to OMCs was based on a cost-plus formula that used a trailing average of several production input factors to determine the price paid for biodiesel.
Raw Materials and Suppliers
California Ethanol – We procure corn as feedstock for the Keyes Ethanol Plant from J.D. Heiskell. The purchase price is based on spot market prices at the time we process the corn, plus transportation costs and fees.
California Dairy Renewable Natural Gas – We produce Renewable Natural Gas from biogas generated by anerobic digesters located on properties that we lease from dairy operators. We construct and own the dairy digesters and the biogas pipeline that connects the digesters to our upgrading hub located at our California Ethanol plant. Our agreements with each dairy include a land lease and an agreement by the dairy to supply their manure into our digesters, with payments from us to the dairy based primarily on herd size and the value of environmental attributes that we generate. Generally, these leases and manure supply agreements have a 25-year term with two five-year renewal options.
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India Biodiesel – The Kakinada Plant is currently capable of using a broad variety of feedstocks to produce biodiesel, which provides us with flexibility to purchase lower cost feedstocks when available in the market. In 2024, we upgraded the plant to enable biodiesel production using multiple lower-cost waste products and feedstock. We also use refined animal tallow for production of biodiesel. In addition to feedstock, the Kakinada Plant requires methanol and chemical catalysts for use in the biodiesel production process. These chemicals are also readily available and sourced from a number of suppliers surrounding the Kakinada Plant. We are not dependent on sole source or limited source suppliers for any of our raw materials or chemicals.
Commodity Risk Management Strategies
California Ethanol – The costs of corn and natural gas and the price of ethanol are volatile and the prices of these commodities relative to each other determines the margins at the Keyes Plant. We are, therefore, exposed to commodity price risk. We monitor prices daily to assess the overall impact of the pricing on profitability. We periodically explore and utilize methods to mitigate the volatility of our commodity prices through term contract purchasing at fixed prices or fixed differentials from market prices. We sold our WDG during 2025 and 2024 on a month-to-month basis; however, we monitor and periodically sell on a quarterly basis when we believe longer term contracts allow us to better manage commodity and pricing risk. In 2025 and 2024, we periodically entered longer term contracts for purchases of natural gas to obtain the benefits of favorable prices.
California Dairy Renewable Natural Gas – The prices for RNG, D3 RINs, and LCFS credits are volatile. We therefore are exposed to market price risk for our sales of RNG and associated environmental attributes. We mitigate risk by scaling our payments to dairy operators based in part on the market price for credits in order to correlate our costs to market prices.
India Biodiesel – The cost of crude or refined palm stearin and the price of biodiesel are volatile and are generally uncorrelated. We therefore are exposed to ongoing and substantial commodity price risk at our Kakinada plant. Our risk management strategies are to (i) configure the Kakinada Plant to be able to produce biodiesel from a wide variety of feedstocks and (ii) to produce biodiesel only when we believe we can generate positive gross margins and to idle the Kakinada Plant during periods of low or negative gross margins.
Research and Development
Our research and development efforts focus on evaluating and commercializing technologies for the production of biodiesel, SAF, renewable diesel, cellulosic ethanol, and other renewable biofuels from a variety of feedstocks. The objective of this research and development activity is to identify and develop efficient conversion technologies that will use waste feedstocks to produce renewable biofuels and biochemicals that have low carbon intensity on a large-scale, commercial basis.
Environmental and Regulatory Matters
California Ethanol and California Dairy Renewable Natural Gas
Our California operations are subject to federal, state and local environmental, safety, and other laws, regulations and permit conditions, including those relating to the discharge of materials into the air, water and ground, the generation, storage, handling, use, transportation and disposal of hazardous materials, and the health and safety of our employees. These laws, regulations and permits may, from time to time, require us to incur significant capital costs. These include, but are not limited to, testing and monitoring plant emissions, and where necessary, obtaining and maintaining mitigation processes to comply with regulations. They may also require us to make operational changes to limit actual or potential impacts to the environment. A significant violation of these laws, regulations, permits or license conditions could result in substantial fines, criminal sanctions, permit revocations and/or facility shutdowns. In addition, laws and regulations change over time, and any such changes, more vigorous enforcement policies, or the discovery of currently unknown conditions may require substantial additional expenditures.
We are also subject to potential liability for the investigation and cleanup of environmental contamination at each of the properties that we own or operate and at off-site locations where we arrange for the disposal of hazardous wastes. If significant contamination is identified at our properties in the future, costs to investigate and remediate this contamination as well as costs to investigate or remediate associated damage could be significant. If any of these sites are subject to investigation and/or remediation requirements, we may be responsible under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) or other environmental laws for all or part of the costs of such investigation and/or remediation, and for damage to natural resources. We may also be subject to related claims by private parties alleging property damage or personal injury due to exposure to hazardous or other materials at or from such properties. While costs to address contamination or related third-party claims could be significant, based upon currently available information, we are not aware of any such material contamination or third-party claims. Based on our current assessment of the environmental and regulatory risks, we have not accrued any amounts for environmental matters as of December 31, 2025 and 2024. The ultimate costs of any liabilities that may be identified or the discovery of additional contaminants could materially adversely impact our results of operation or financial condition.
In addition, the production and transportation of our products may result in spills or releases of hazardous substances, which could result in claims from governmental authorities or third parties relating to actual or alleged personal injury, property damage, or damage to natural resources. We maintain insurance coverage against some, but not all, potential losses caused by our operations. Our general and umbrella liability policy coverage includes, but is not limited to, physical damage to assets, employer’s liability, comprehensive general liability, automobile liability, and workers’ compensation. We believe that our insurance is adequate for our industry, but losses could occur for uninsurable or uninsured risks or in amounts in excess of existing insurance coverage. The occurrence of events which result in significant personal injury or damage to our property, natural resources or third parties that is not covered by insurance could have a material adverse impact on our results of operations and financial condition.
Our air emissions are subject to the federal Clean Air Act, and similar state laws, which generally require us to obtain and maintain air emission permits for our ongoing operations as well as for any expansion of existing facilities or any new facilities. Obtaining and maintaining those permits requires us to incur costs, and any future more stringent standards may result in increased costs and may limit or interfere with our operating flexibility. These costs could have a material adverse effect on our financial condition and results of operations. Because other ethanol manufacturers in the U.S. are and will continue to be subject to similar laws and restrictions, we do not currently believe that our costs to comply with current or future environmental laws and regulations will adversely affect our competitive position with other U.S. ethanol producers. However, because ethanol is produced and traded internationally, these costs could adversely affect us in our efforts to compete with foreign producers who are not subject to such stringent requirements.
New laws or regulations relating to the production, disposal or emission of carbon dioxide and other greenhouse gases may require us to incur significant additional costs with respect to plants that we build or acquire. We currently conduct our North American commercial activities exclusively in California. Climate change and reduction legislation is a topic of consideration by the U.S. Congress and California State Legislature, which may significantly impact the biofuels industry’s emissions regulations, as will the RFS, California’s LCFS, and other potentially significant changes in existing transportation fuels regulations.
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India Biodiesel - The Kakinada Plant is subject to national, state and local environmental laws, regulations and permits, including with respect to the generation, storage, handling, use, transportation and disposal of hazardous materials, and the health and safety of our employees. These laws may require us to make operational changes to limit actual or potential impacts to the environment. A violation of these laws, regulations or permits can result in substantial fines, natural resource damages, criminal sanctions, permit revocations and/or facility shutdowns. In addition, environmental laws and regulations (and interpretations thereof) change over time, and any such changes, more vigorous enforcement policies or the discovery of currently unknown conditions may require substantial additional environmental expenditures.
Employees
As of December 31, 2025, we had a total of 220 full-time equivalent employees, including 18 at our corporate offices, 46 at the Keyes Ethanol Plant, 22 in our California Dairy RNG operations, 4 at the Riverbank Industrial Complex, and 130 in India. We believe that our employees are highly skilled, and our success will depend in part upon our ability to retain our employees and attract new qualified employees, many of whom are in great demand. We have never had a work stoppage or strike, and no employees are presently represented by a labor union or covered by a collective bargaining agreement. We believe our relationship with our employees is positive.
Available Information
We file reports with the Securities and Exchange Commission (“SEC”). We make available on our website under the “Investors” tab, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file such materials with or furnish them to the SEC. Our website address is www.aemetis.com. Note that our website address is provided here as an inactive textual reference only, and the contents of the website are not incorporated in or otherwise to be regarded as part of this report for securities filings purposes. In addition, the SEC maintains an internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.