Aemetis, Inc. (NASDAQ:AMTX) Q2 2025 Earnings Call Transcript

Aemetis, Inc. (NASDAQ:AMTX) Q2 2025 Earnings Call Transcript August 7, 2025

Aemetis, Inc. misses on earnings expectations. Reported EPS is $-0.41 EPS, expectations were $-0.35.

Operator: Welcome to the Aemetis Second Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. Joining us on today’s call is Eric McAfee, the Chairman and CEO of Aemetis; Andy Foster, the President of Aemetis Advanced Fuels; and Todd Waltz, the Chief Financial Officer of Aemetis. It is now my pleasure to introduce your host, Mr. Todd Waltz, the Executive Vice President and Chief Financial Officer of Aemetis, Inc. Mr. Waltz, you may begin.

Todd Waltz: Thank you, Matthew, and welcome, everyone. Before we begin, I’d like to remind everyone that during this call, we’ll be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, but are not limited to, those factors discussed in our earnings release issued today and in our most recent Form 10-K and Form 10-Q filings with the Securities and Exchange Commission under the caption Risk Factors and Management Discussion and Analysis of Financial Condition and Results of Operations as well as in our other filings with the SEC.

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law. Please refer to our earnings release and our SEC filings for a more detailed discussion of these risks and uncertainties. Full financial details can be found in our second quarter 2025 earnings release and Form 10-Q available on the Aemetis website and EDGAR. I’ll briefly highlight the key items. Revenues were $52.2 million, up by $9.3 million from the first quarter revenue, primarily due to the fulfillment of biodiesel orders with oil marketing companies in India. California Ethanol saw a slightly lower production rate of 13.8 million gallons to maximize margins during the quarter.

California Dairy Renewable Natural Gas recognized $3.1 million of revenue from 11 operating digesters during Q2 using the CARB-approved LCFS pathway for 7 of the digesters. As we will discuss later, Section 45Z tax credit revenue from the production of dairy renewable natural gas were not included in the second quarter since we recognize revenue when credits are sold. Operating loss improved by $4.9 million from the first quarter of 2025, reflecting reduced SG&A in the second quarter of 2025. Interest expense, excluding the Series A preferred unit accretion, rose to $12.3 million, in line with our capital structure and investment phase. We reported a net loss of $23.4 million, roughly flat versus Q2 last year after adjusting for the nonrecurring charge during the prior quarter of last year.

Cash at year-end was $1.6 million following $3.6 million of investment in carbon intensity reduction and dairy renewable natural gas production expansion. As Eric will describe shortly, we expect multiple revenue streams from India, LCFS credits and federal tax incentives to ramp up as the year progresses, positioning us for a stronger second half of 2025. Further, we remain focused on improving our capital structure. With cash flow expected to increase in the second half of this year, we anticipate further progress on debt reduction and are actively pursuing low-cost financing and refinancing alternatives. Now Eric McAfee, our Chairman and CEO, will review our businesses.

Eric A. McAfee: Thanks, Todd. I’ll start with the business segment update, followed by updates on future projects and supportive regulations. In our dairy RNG business, we are steadily scaling up gas production with a new multi-dairy digester coming online this month that is expected to increase RNG production by 30%. As planned, we expect to reach 550,000 MMBtus of renewable natural gas production capacity this year and grow to a 1 million MMBtu annual run rate by the end of 2026. We are now operating or building digesters at 18 dairies funded by equity and $50 million of USDA guaranteed financing with 20- year repayment terms and attractive interest rates. 7 of our dairy pathways were approved by CARB during the second quarter at a blended negative 384 carbon intensity score, unlocking about 120% more LCFS credit revenue for those dairies starting this quarter compared to digesters with the negative 150 default pathway score.

Four more pathways are currently under review with CARB and are expected to be approved under the faster Tier 1 pathway process that was adopted by CARB last month. Additionally, these dairy RNG facilities qualify for federal Section 48 investment tax credits. To date, we have sold $83 million in investment tax credits related to our RNG facilities and received approximately $70 million in cash. We monetize the production of dairy RNG in multiple ways. Until this year, we have generated revenues primarily through the sale of the gas molecule, the sale of California low carbon fuel standard credits and the sale of federal D3 renewable identification numbers. Since January 1, 2025, we’ve been generating transferable Section 45Z production tax credits, which we are working to sell and generate additional income this quarter.

In July 1 — or to say, on July 1, 2025, the California Air Resources Board amendments to the LCFS program that will apply for the next 20 years became effective, resulting in an increase in LCFS credit prices from about $42 to about $60 in the past month or so. The current cap on the price of LCFS credits is $268 for the year 2025. The LCFS program is expected to incur deficits this year that would reduce the inventory of available LCFS credits and be expected to continue to increase credit prices. Collectively, molecule revenues, LCFS credit sales, D3 RIN sales and the sale of 45Z production tax credits are expected to generate strong positive cash flow from operations this year, and expanding operating cash flow in 2026 as new production comes online.

At our ethanol plant, our key vendors are fabricating equipment for the $30 million mechanical vapor recompression system. The MVR project is expected to reduce natural gas use by 80% and add an estimated $32 million in annual cash flow starting in 2026. We have been awarded $20 million in grants and tax credits to help fund the MVR system. Ethanol pricing has improved since earlier this year and the recent EPA approval of summer E15 blending and lower corn prices have improved margins. We decreased production during the spring in order to optimize margins, but recently increased ethanol production to support market demand and participate in the higher-margin environment. California legislation to approve E15 year-round passed the assembly with a unanimous vote and now is advancing through the state Senate for approval that is expected later this year.

In India, we resumed biodiesel deliveries to government oil marketing companies in April following a 6-month pause on in OMC purchasing, shipping $11.9 million of biodiesel and co-products in the second quarter. We are targeting an IPO of our India subsidiary in early 2026 and recently appointed a new Chief Financial Officer at our India subsidiary to lead the process. We are also actively seeking to expand into ethanol production in India, which is strongly supported by government policies and pricing. Let’s look at our future projects. For our sustainable aviation fuel and renewable diesel project, we have received the authority to construct air permits and conditional use permit for our 90 million gallon per year SAF and renewable diesel facility at the Riverbank site in California.

When operated solely for sustainable aviation fuel, capacity will be approximately 78 million gallons per year. We are in active discussions on financing structures and are awaiting further clarity on the 45Z production tax credit and biofuel mandates to support project financing. For our carbon capture project at the Riverbank site, we have completed initial site work and conductor installation for our geologic characterization well. The data we obtained from the next phase of drilling will support our Class 6 CO2 sequestration permit application with the EPA. Once permitted, the site is expected to sequester up to 1.4 million tons of CO2 annually. Let’s review some regulatory events that support a strong growth outlook for Aemetis and the biofuels and biogas industries.

Aemetis is positioned to benefit from a range of federal and state policies that directly enhance the value of its low-carbon biofuel and biogas operations. The California Low Carbon Fuel Standard. Amendments adopted by CARB to establish a 20-year framework for reducing transportation fuel emissions became effective on July 1. In response, LCFS credit prices rose by nearly 50% and are expected to continue to increase as credit supply tightens and credit demand increases. We expect further strengthening during the second half of 2025 and for the foreseeable future. The Federal Renewable Fuel Standard. The sale of renewable natural gas qualifies for D3 RINs, currently adding $19 per MMBtu in value at today’s prices. Section 45Z production tax credits.

Effective January 1, 2025, the new federal Section 45Z transferable tax credits support low-emission ethanol and RNG production. Aemetis is currently applying treasury guidance to calculate and market these credits for both our Keyes plant ethanol production and our RNG sales, with additional clarification expected later this year. In addition to any further clarification in 2025, the Section 45Z credits will increase in 2026 under the recent one big, beautiful bill, which removes indirect land use from the ethanol plant calculation and requires dairy-specific CI scores for renewable natural gas. We estimate this will double the 45Z credits in 2026 for each business, even with no further changes to the current treasury guidance. Section 48 investment tax credits.

Aemetis received $19 million in cash proceeds in Q1 2025 from the sale of solar and biogas-related investment tax credits. We expect additional sales of both investment and production tax credits in Q3 2025 and in Q1 2026 for the balance of 2025 production tax credits, plus additional sales of both PTCs and ITCs later in 2026. E15 ethanol blend expansion. The U.S. EPA has approved temporary summer use of 15% ethanol in 49 states and new legislation is advancing to allow year-round use, including in California. E15 approval in all 50 states would expand the potential U.S. ethanol market by more than 5 billion gallons per year from the current 14 billion gallons per year, while lowering fuel prices for consumers. In California, E15 should decrease fuel prices at the pump by $2.7 billion per year according to a recent UC Berkeley study, while increasing the ethanol market by an estimated 600 million gallons per year.

In California, Governor Newsom has directed CARB to expedite the process for allowing the sale of E15 gasoline in the state. And as previously mentioned, the state House unanimously approved legislation that would allow for E15. California is currently the only U.S. state that does not allow the sale of gasoline with higher than a 10% ethanol blend. These aligned policy developments in the U.S. are expected to significantly strengthen Aemetis’ revenue, cash flow and project economics across its RNG, ethanol, carbon capture and SAF, RD businesses. Our India business is expected to grow with support from the India government for the benefits of biodiesel, ethanol and other biofuels to farmers, consumers and the environment. With aligned regulatory support and milestone execution underway, Aemetis is positioned for growth and improved cash flow through year- end and throughout 2026.

Now let’s take some questions from our call participants.

Q&A Session

Operator: [Operator Instructions] Your first question is coming from Matthew Blair from TPH.

Matthew Robert Lovseth Blair: Congrats on getting the CARB approval for the 7 dairies at the end of the second quarter. I think you mentioned that, that did not flow into your financial results. Could you talk about at current LCFS prices around $60, what kind of EBITDA impact that might have for Aemetis? And are you currently waiting any other LCFS pathway approvals?

Eric A. McAfee: Sure. Thanks, Matt. We have 7 dairies already effective. We have 4 more pending right now, and then have additional ones that we’ll be filing in the fourth quarter that are currently in the 90-day testing period. So we would be expected to exit the year with a total of 7-plus another 5 minimum. So at least 12 dairies either granted or soon to be granted. The new process, by the way, Tier 1 is significantly shorter than the 2-year process we went with Tier 2. So the financial impact, I think I’m going to get back to you on that one because it’s highly correlated with the price of the credits. So when we were at 42, it was 1/3 less revenue than it is at $60. I think we cited it’s roughly $19 per MMBtu, if I recall correctly.

But we — let’s get back to you with a memo on this. The formula is well known, but the price is moving quickly. So we’re trying to give investors a range of values per MMBtu for the LCFS. So we’ll also endeavor to see if we can include that in some press releases, so people can see the impact as those prices change.

Matthew Robert Lovseth Blair: Sounds good. And then could I get your view on the D3 RIN supply-demand outlook? This year, I think we’re tracking for around like 1.6 billion D3 RINs generated. You’re looking at RVO for 2025 around 1.1 billion for ’26 and ’27, I think the proposal is around like 1.3 billion, 1.4 billion. Do you have any hope that the EPA may revise up those initial 2026 and 2027 D3 RVOs?

Eric A. McAfee: As you know, we’re in a comment period that ends tomorrow, and there is a universal opinion in biofuels that the D3 RIN is being understated. There was a mistake by the EPA, and it was filed in the Federal Register, so it was printed for everybody to read that through no fault of their own, the oil industry is being forced to buy DJ RINs. As I think everybody knows, that’s exactly opposite of what the renewable fuel standard was written to do. As George Bush, the President, who signed the Renewable Fuel Standard said, if you left up to the oil companies, we would all just be buying oil from the Middle East. So the point of the entire Renewable Fuel Standard is to cause the adoption and to be focused on the availability of production, not on the amount of consumption.

So those comments, which you can read as public filings, you’ll see ours as well are focusing on what the actual renewable fuel standard regulation requires. Andy, do you want to make a comment on that?

Andrew B. Foster: No, I think that’s — you hit it exactly right, Eric. I think the — it’s a — maybe not quite a mistake by some forces within the industry to skew in that direction, but the law is the law, and we’re going to emphasize that in our comments as well as many other biofuel producers around the country.

Operator: Your next question is coming from Derrick Whitfield from Texas Capital.

Derrick Lee Whitfield: Eric, could you update us on the progress of 45Z as you understand it, with respect to timing of final rules from treasury and the GREET model that will be used for the provisional emission rate calculations?

Eric A. McAfee: We are in the thick of it right now. And there is an update to the GREET model that has been presented to the DOE. And if accepted and adopted, it could matter — be a matter of a few weeks at most, maybe even a 1-week span that they could update the GREET model. They’ve already updated twice a year after the initial filing in January. So this would be a third update. That update would allow us to then generate 45Z credits in the month of August and sell them in August or September. So the quick and easy way forward is for industry is for the Department of Energy to simply add a few cells. I think it’s 6 or 7 cells to the foreground of the GREET model. The 45Z final rules, which in your — there’s proposed guidance and then final guidance.

We currently have guidance. It’s a January 2025 guidance. It’s called intention to propose guidance, but it says on its face, this guidance can be used for transactions. So we do have guidance. And frankly, that guidance is sufficient for us to transact 45Zs if the GREET model is updated and we’re happy with the calculations. The reason why industry has to do this effort is that they were in a hurry. They admit they were in a hurry. And so, they took all of the methane emissions and divided by — from all the animals in the United States and divided by all the estimated animals and said, okay, if you’re going to make RNG, this is your average number. And whether your project is better or worse doesn’t matter, here’s your number. And they acknowledge that’s not correct.

We are working to fix that. And the OBBB signed on July 4 helped clarify for the regulators exactly how the 45Z is going to work starting January 1, 2026, which helped clarify for them what 2025 should look like. So we’re working to get that implemented. I would tell you that it’s largely down to 1 or 2 people at this point in time, and our company has been very proactive in getting those formulas in front of the DOE, so we don’t have to delay in terms of what kind of work needs to be done on the GREET model itself.

Derrick Lee Whitfield: And not to belabor the point, Eric, and we’ve had conversations on it because it could be a material number for you guys for your dairy business. But as you kind of think about where you stand or Aemetis stands today as it relates to attending the registrations and tax ID numbers, and whether you would expect the credit to be retroactive for first half sales, I’d love your perspective on that. And again, we’re still thinking about this as potentially a $60 to $80 per MMBtu type metric that we could see. Is that a reasonable range as well?

Eric A. McAfee: The current calculation should be about $82 per MMBtu. And what we’re missing is the DOE GREET model that allows the foreground cells to be input to site to put in what state you’re in, et cetera, if you’re an anaerobic digester in order to put out the emissions rate that would generate that number. So we expect that the DOE will put out a model for 2025. That is not their current process. Currently, they’re focusing on January 2026. Industry in general is having to motivate them to see the value of putting out an amended model for 2025. But the values when we’re done with it, between the combination of the model plus the provisional emissions rate process, which is an opportunity for us to say, we’re not happy with the total numbers come out of the model, let’s go ahead and get some project-specific information from them.

Between the 2 of them, we should end up at roughly $82. That goes up, by the way, by the rate of inflation. So next year, it will be actually larger in the year after that, larger. But current target is in the $82 per MMBtu range.

Derrick Lee Whitfield: And Eric, just one part of that question I wanted to have you comment on too, is just where you or Aemetis stands in attaining the registrations and tax ID numbers?

Eric A. McAfee: We’re fully registered. Andy, do you have any comment on this? Ethanol plant is fully registered. Our RNG production facility. I would disclose to people that you don’t have to register each one of the digesters because they’re not producers of renewable natural gas, they produce biogas. So it’s just our RNG production facility that’s required to be registered. So we’re fully registered and have acknowledgments from IRS of that registration. That was also done on a timely basis. So we don’t have any issues there.

Operator: Your next question is coming from Amit Dayal from H.C. Wainwright.

Amit Dayal: Just a question on the monetization strategy for your production tax credits going forward. It’s been a little lumpy in the past. But going forward, with this regulatory backdrop, do you think we can see a little bit more consistent monetization going forward?

Eric A. McAfee: Yes. The Section 48 investment tax credits, as we, I think, commented probably a year ago, were expected to be lumpy as we do investments, and we go through a several quarter cycle of putting them all together and then selling them. And we are in the process of doing another Section 48 tax credit sale, which we would hope to close this quarter. But 45Z is more akin to revenue. And so, we’ve already done a transaction in which a single customer signed up to multiple closings of tax credit purchases. We would anticipate that, that’s the format we’re going to use for 45Z with the expectation in the worst-case scenario of one sale every quarter, probably the most optimistic scenario would be a sale every 45 days, but certainly every quarter.

So 45Z should become a recurring quarterly revenue item. Somewhat harkening back to what Derrick Whitfield just said, we’ve been generating 45Z since January. We have not reflected any of the revenue because our revenue recognition policy is that upon the sale and receipt of cash, then we recognize the revenue. So if you look at our Q1 and Q2 revenues, you’re not actually seeing any 45Z revenues and frankly, not seeing any LCFS revenues in those quarters. Those — both those types of credits, we recognize when they’re sold. And so our dairy pathways approved in the second quarter are actually credits received literally in the last few days of the second quarter, and then are sold in the third quarter. So third quarter is going to be one of those quarters, which we would expect would have some of the catch-up on the LCFS, certainly catch-up for the first half of the year on the 45Z if the Department of Energy files the amended a GREET model.

And so that you’ll see this onetime lumpiness on quite a lot of cash and a lot of profit showing up, and then it will become more of a quarterly correlated with production.

Amit Dayal: Understood. With respect to the India IPO, is there — I’m just trying to see if there’s an official process that has already begun? Or is this just preparation on your end that you will soon sort of get into sort of a formal mode of going public for that business over there?

Eric A. McAfee: We have our new CFO on site. He joined us in July. So we’re not even, I think, a month into having him on board. I think it was about July 15. And so we’re well into the process. There’s not a public filing early in the process. The public filing comes after some review of documentation by the investment banking firm and some other parties. So we would expect to see sometime this fall that there would be public filing documents that people would be able to read. I don’t think we’re going to press release that, but it will certainly become known. We’ll mention it on our earnings calls, et cetera. But it will be an administrative process with SEBI, which is the regulator in India.

Amit Dayal: Understood. And then the use of proceeds, if this comes through within that time line, like what are you thinking, Eric? Is it to pay down debt or any other strategic initiatives?

Eric A. McAfee: We definitely have an ability to transfer money to the parent company. The exact amount will be determined largely at market conditions. But we are in a scenario in which some amount of money would be transferred to the parent. I do expect that probably would be invested in debt repayment. But as Todd mentioned at the end of his conversation, we are working on significant refinancing. So it’s possible we won’t actually have any obligations for current pay because we’re reamortizing our senior debt in these refinancings over quite a long period of time, 20 and 30 years. So if that were to be the case, it would just be — it’s basically strengthening the cash position of the parent company and giving us a little more flexibility for development some of these projects.

But I would not anticipate that we’re talking about the majority of the funds, I would anticipate probably 25% of the IPO proceeds would be for the parent company and the balance will be for development of the India assets. I should mention because we did talk about it a bit, the ethanol industry in India is very rapidly growing. It’s increasing by another 50% over the next 60 months. And we’re in the middle of what the India government is looking to implement to strengthen their agricultural sector, while at the same time, lowering cost of the pump and having environmental benefits. So the ethanol industry in India is just very strongly supported. They set the price of the ethanol. They set the price of the corn. It is a very attractive business.

And so we are very actively involved with the development of 2 sites for ethanol production and a core part of our IPO in India is that we have a base biodiesel business that’s expanding, but frankly, we are aggressively moving into ethanol. Even the recent news about heavy tariffs on India is being interpreted by Bloomberg and others as a negotiating tool to bring India to the table. And one of the open doors that India has talked about is India does not allow genetically modified corn. And therefore, their yields are about 3.3 per acre and American yields are in the 11 bushels per acre. So they’re less than 1/3 of the yield per acre, which means that U.S. corn is frankly less expensive. And so we’ll see how these trade negotiations go. It’s a very uncertain environment for a lot of parties.

But one of the outcomes very possibly could be that India becomes a market for U.S. corn, but restricted to ethanol use. Very big issue was they do not want the population there eating genetically modified corn. So restricting it just to ethanol use would be of great value to Aemetis. We would be uniquely positioned to have an excellent ethanol business supplied, frankly, by U.S. corn, but then providing distilled grain and low-cost fuel and environmental benefits to the Indian economy. So we’ll see how that plays out, but that was kind of an upside. The domestic environment for ethanol in India is very attractive.

Amit Dayal: I really appreciate that additional color, Eric. It looks like you guys are positioned well on multiple fronts from this point.

Operator: Your next question is coming from Dave Storms from Stonegate.

David Joseph Storms: I just want to — could you remind us with your RNGs that are expected to get approval by the end of this year, are those approvals backwards looking? Will you be able to take advantage of those higher credits?

Eric A. McAfee: No. We have 7 that are already approved, the 4 that are pending would be expected to be approved next year and pack back to best case scenario is probably the fourth quarter of this year.

Todd Waltz: Yes.

Eric A. McAfee: Yes, probably the fourth quarter this year. So we might have some impact this year. The way they do it is sort of a 6-month look back kind of a situation. So if we get approved by March of next year, then it could be effective in the fourth quarter of this year. So currently, though, I would say we’ve taken a conservative view, which is probably first quarter next year is the first time we’d see those 4 additional pathways have an impact. We hope to see an upside, but I think that would be our projection right now.

David Joseph Storms: Understood. And then maybe just a little more commentary about — around the refinancing. How far along in that process are you? Maybe if you’re looking at any unique options and maybe an anticipated time line to getting that completed? Anything like that would be very helpful.

Eric A. McAfee: We are very deep in a refinancing process with a counterparty. And I would say by the end of August, we’ll be through most of the due diligence and documentation work. The dependence we have on that refinancing, and I would say almost all refinancings will be for us to prove out our 45Z production tax credit revenue. Not that it won’t happen, it’s federal law. It’s the calculation for renewable natural gas and the calculation for ethanol plant. If the DOE model is done properly, then we’re able to show the DOE model. We sell tax credits. We’ll get, frankly, tens of millions of dollars from that in the first transaction, and we’ll be showing that to our lender, and they would be able to plug it into their formulas.

Currently, the formulas work okay. But with that number included in revenues, it actually becomes a very, very attractive 5-year stream of after-tax cash flow to the company. So we need to prove that out. And I say prove it out as in everybody knows what the math is, but do we have the cash? Not yet. So let’s get the cash in and then the conversation can lead to final documentation and closing.

Operator: Your next question is coming from Ed Woo from Ascendiant Capital.

Edward Moon Woo: Congratulations on all your progress. Thanks for the update in terms of California and possibly allowing usage of E15 gasoline. If it gets passed, how quickly do you think it will get implemented? And how quickly will you see the increase in demand for your ethanol?

Eric A. McAfee: The implementation will not be immediate at every one of the stations in California. But because we’re selling a commodity, it’s that last gallon that really prices everything. So 600 million gallons of additional demand is actually enough to push the entire country from oversupply to a sort of a more balanced environment. And then with E15 and 49 other states, there is certainly the expectation that we’re just going to be short ethanol. We currently export almost 2 billion gallons of ethanol to foreign countries. And if E15 becomes adopted in California this year, which is a better than 75% chance that’s going to happen. And if Congress picks it up and gets approved this year, which is better than 50% chance, you’re just going to be short.

It’s going to end up getting the value it should be getting, which is more on par with gasoline. And since we’re replacing aromatics, and aromatics are typically $0.20 to $0.50 a gallon more expensive than gasoline, and we’re doing 113 octane versus 84 octane, which is gasoline-based octane. We have a very valuable molecule that’s been undervalued because of this 10% limitation, too much supply, not enough demand. That is expected to move to the opposite, which would be excessive demand because of how valuable the molecule is, and that should generate additional value per gallon for us. I do think it’s a gradual trend, though. It’s probably an 18-month cycle before you’re going to see significant need for additional construction of facilities, but that’s certainly what’s coming.

If we add 5 billion gallons of demand to the U.S. ethanol industry, that’s far in excess of capacity in the industry. The entire industry’s production capacity today is about 17 billion gallons, and that’s going to increase to over 20 billion in rather short order with E15. So it’s just a question of when. Does it happen earlier or later, but sometime over the next — by the end of 2026, I think you’re going to see people proposing new facilities because of how profitable the industry is and a need for more of the molecule. Andy, do you have any comments on that?

Andrew B. Foster: No. I think from an implementation perspective, it’s really up to the blenders, how fast they want to go with this in terms of putting it out. There’s no physical change that needs to take place. It’s just a question of what they — how fast they want to implement it. And I believe that the CEQA reform also allows for an expedited price process on building additional storage facilities, which has been a big issue in California. California does not have enough fuel storage facilities. And so a lot of times, it’s the trade-offs between things like ethanol and RD and sort of what’s driving the demand for those things. But I believe that the CEQA reform that the governor just recently signed will help streamline the process of building some additional tankage in California, which is desperately needed. So that should help as well.

Operator: Thank you. That concludes our Q&A session. I will now hand the conference back to Eric McAfee, Chairman and CEO, for closing remarks. Please go ahead.

Eric A. McAfee: Thank you to Aemetis stockholders, analysts and others for joining us today. We look forward to talking with you about participating in the growth opportunities at Aemetis.

Todd Waltz: Thank you for attending today’s Aemetis earnings conference call. Please visit the Investors section of the Aemetis website where we’ll post a written version and audio version of this Aemetis earnings review and business update. Matthew?

Operator: Thank you. Everyone, this concludes today’s event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.