Aemetis negotiating supply of CO2 for carbon sequestration

By Aemetis Inc. | June 23, 2021

Aemetis Inc., a renewable natural gas and renewable fuels company focused on negative carbon intensity products, announced today that it has opened negotiations for the supply of 1.6 million metric tonnes (MT) per year of CO2 for carbon capture and sequestration (CCS) to be located at or near the two Aemetis renewable fuels plant sites in Central California near Modesto.   It is anticipated that the capacity of each injection well site will be approximately 1 million metric tons per year, for a combined total of 2 million MT of CO2 sequestration per year.

“The existing California LCFS and IRS 45Q carbon capture and sequestration programs could potentially generate approximately $500 million per year of revenues from injecting a combined 2 million metric tons of CO2 per year at these two plant sites,” said Eric McAfee, chairman and CEO of Aemetis.  “The Aemetis Carbon Capture projects are expected to benefit producers of traditional and renewable fuels that supply California by offsetting carbon emissions with carbon sequestration.”

According to the EPA, approximately 1 metric ton of CO2 is emitted for every 2,500 miles driven in a passenger car.  Capturing and sequestering 2 million metric tons of CO2 can offset the CO2 emissions from up to 5 billion passenger car miles each year, equal to the annual carbon emissions from approximately 350,000 cars.

Recently, the Aemetis Carbon Capture Inc. subsidiary was established to build carbon sequestration projects to generate LCFS and IRS 45Q credits by injecting CO2 into wells which are monitored for emissions to ensure the long-term sequestration of carbon underground. California’s Central Valley is well established as a major region for large-scale natural gas production and CO2 injection projects due to the subsurface geologic formation that retains gases.

When related to transportation fuels produced for sale in the California market, CO2 sequestered underground is estimated to generate revenue of approximately $200 per metric ton under the California Low Carbon Fuel Standard.  The IRS 45Q tax credit value for sequestered CO2 is approximately $50 per metric ton.  The combined $250 per metric ton of revenues from the capture and storage of CO2 is expected to increase significantly due to pending Congressional legislation to support CCS.

A Stanford University Center for Carbon Storage study issued in October 2020 cited ethanol plants in Central California as the most economic sites for CCS in California, comparing 61 carbon emission facilities in the state.  The other emission sources in the study that produce transportation fuels, primarily oil refineries, are the primary potential suppliers of CO2 to the Aemetis carbon storage injection wells and monitoring facilities.

The planned 52 dairies in the Aemetis Biogas project are expected to produce approximately 50,000 metric tons of CO2 each year.  The renewable jet/diesel plant under development is expected to produce more than 200,000 metric tons per year of CO2.  The remaining 1.6 million metric tons of annual CO2 injection capacity are expected to be filled by compressed CO2 delivered via truck or rail to the two Aemetis CCS sites from renewable diesel plants and refineries that supply fuels to the California market.

The Aemetis Carbon Zero project, the Aemetis Biogas renewable natural gas project, and energy efficiency upgrades to the Aemetis Keyes plant include $57 million of grant funding and other support from the USDA, the US Forest Service, the California Energy Commission, the California Department of Food and Agriculture, CAEFTA, and PG&E’s energy efficiency program.