Aemetis, Inc. (Nasdaq: AMTX) has demonstrated robust growth in its Dairy Renewable Natural Gas (RNG) platform, as highlighted in the recent coverage update by Stonegate Capital Partners. The company's second quarter of 2025 results underscore a pivotal phase of expansion, driven by regulatory approvals, capacity increases, and advantageous policy shifts. With eleven digesters producing 106,400 MMBtu of RNG, generating $3.1 million in revenue, Aemetis is on a clear path to scaling its operations. The California Air Resources Board (CARB) has approved seven new Low Carbon Fuel Standard (LCFS) pathways at a blended CI score of -384, enhancing the value of LCFS credits by approximately 120%. This development, along with four additional pathways under review, signals a bright future for Aemetis in the renewable energy sector.
The company's monetization strategies have diversified, now encompassing the sale of RNG molecules, D3 RIN credits, LCFS production tax credits, and section 45Z production tax credits. Aemetis has already sold $83 million in Section 48 investment tax credits, translating to about $70 million in cash. The anticipation of 45Z monetization becoming a recurring revenue stream from the third quarter of 2025 onwards further solidifies the company's financial outlook. Commercial advancements, including agreements to construct H₂S removal and compression units for 15 digesters, are set to bolster the RNG platform's capacity to 1.0 million MMBtus by 2026.
In California, the Ethanol segment is making strides with a $30 million mechanical vapor recompression (MVR) system project, expected to reduce natural gas consumption by 80% and contribute an additional $32 million in annual cash flow starting in 2026. This initiative aims to mitigate margin-related shutdowns at the Keyes Plant, enhancing operational efficiency. Ethanol margins have benefited from the EPA's summer E15 approval across 49 states, declining corn prices, and legislative progress for year-round E15 in California. Meanwhile, the India Biodiesel segment has resumed deliveries, contributing $11.9 million in revenue, with an early 2026 IPO on the horizon for the India subsidiary. The exploration into ethanol production in India, supported by favorable government policies, marks another avenue for growth.
Aemetis reported a second-quarter revenue of $52.2 million in 2025, marking a $9.3 million increase from the first quarter but a decrease from $66.6 million in the same period last year, attributed to lower biodiesel volumes. Despite this, the operating loss improved to $10.7 million from $13.6 million year-over-year, with a sequential reduction in SG&A expenses by $4.5 million. The net loss also narrowed to $23.4 million from $29.2 million. The quarter-end cash position stood at $1.6 million, following $3.6 million in CI-reduction and RNG investments. Notably, the absence of 45Z and new LCFS credit revenues in the second quarter results hints at a potentially stronger performance in the upcoming quarters.
The company stands to benefit significantly from four major U.S. policy tailwinds: CARB's 20-year LCFS framework, Section 45Z Production Tax Credits, nationwide E15 expansion, and robust low-carbon fuel mandates and incentives. These policies are expected to accelerate demand for low-carbon fuels, with Aemetis well-positioned to capitalize on these trends. The favorable regulatory environment may also expedite the company's refinancing efforts, currently in advanced negotiations, which could substantially lower interest expenses.
Stonegate Capital Partners' valuation of Aemetis, using a Discounted Cash Flow Model, suggests a valuation range of $8.30 to $18.77, with a midpoint of $12.39. This assessment reflects the company's growth trajectory and the potential impact of its strategic initiatives and policy advantages on its financial performance. For more information, visit https://www.aemetis.com.
