Aemetis, Inc. received Authority to Construct air permits from the San Joaquin Valley Air Pollution Control District on December 2 2025 for a Mechanical Vapor Recompression (MVR) upgrade at its 65‑million‑gallon‑per‑year ethanol facility in Keyes, California. The permits clear the company to begin construction of a system that will capture and reuse vapor from the fermentation process, a technology that can dramatically cut energy use.
The MVR system is designed to reduce the plant’s natural‑gas consumption by roughly 80%, lower the carbon intensity of its ethanol, and generate additional Low Carbon Fuel Standard (LCFS) credits. The upgrade is expected to be operational in the second quarter of 2026, at which point it will add about $32 million in annual operating cash flow to Aemetis’ bottom line. The total project cost is estimated at $30 million, and the company has secured approximately $19.7 million in grants and tax credits from the California Energy Commission, Pacific Gas & Electric, and the IRS Section 48C investment tax credit program.
CEO Eric McAfee said the MVR project “represents a high‑return, high‑impact energy‑efficiency upgrade to our California ethanol facility.” He added that the system will not only cut operating costs but also enhance the plant’s eligibility for Section 45Z tax credits and increase LCFS credit revenue, positioning Aemetis to capture more value from California’s low‑carbon fuel mandates.
Aemetis’ recent financials underscore the importance of the upgrade. The company reported a net loss of $87.5 million and negative EBITDA of $42.5 million in the twelve months ended September 30 2025, while carrying significant debt and cash burn. Revenue in Q3 2025 was $59.2 million, down from $81.4 million in Q3 2024, reflecting a challenging market for ethanol. The projected $32 million annual cash‑flow boost from the MVR upgrade represents a substantial improvement in operating margins and a critical step toward turning the company’s financial performance around.
Investors reacted positively to the permit approval, with analysts noting that the project’s expected cash‑flow benefits and regulatory compliance signal a turning point for Aemetis’ profitability trajectory. The approval removes a key regulatory hurdle and demonstrates the company’s ability to secure support for low‑carbon initiatives, which is increasingly valued in the renewable fuels market.
Aemetis operates across several renewable energy segments, including renewable natural gas, ethanol, biodiesel (in India), and emerging sustainable aviation fuel (SAF) and carbon capture and sequestration (CCS) projects. The MVR upgrade aligns with the company’s broader strategy to reduce carbon intensity and capture additional revenue streams from LCFS and federal tax credits. However, the company still faces headwinds such as high debt levels, cash burn, and volatility in government contracts for its Indian biodiesel business. The MVR project, therefore, is a critical operational milestone that could help mitigate these risks by improving margins and strengthening cash flow.
In summary, the Authority to Construct air permits for the MVR upgrade marks a significant regulatory and operational milestone for Aemetis. The project’s expected 80 % reduction in natural‑gas use, increased LCFS credit generation, and $32 million annual cash‑flow benefit position the company to improve its financial health and capitalize on California’s low‑carbon fuel incentives. The approval also signals investor confidence in Aemetis’ ability to execute large‑scale efficiency projects that enhance both profitability and sustainability.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.