CEC grants wishes to some for biofuels projects

Wishes are coming true for some California bioenergy projects. Aemetis, Oberon Fuels and others will receive millions from the California Energy Commission for their bioenergy projects, from DME to advanced ethanol. As Walt Disney once said, “All our dreams can come true if we have the courage to pursue them.” One thing he forgot to add though, was funding…money…without that, it’s hard to get bioenergy dreams to come true, isn’t it?

The background

Back in August 2018, the California Energy Commission released a solicitation (GFO-18-602) called “Demonstration-Scale Advanced Biofuels Production Facilities” under the Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP). This grant solicitation was an offer to fund low carbon biofuel production projects that scale-up, scale-out, and prove a technology or process at the first demonstration-scale biofuels production facilities at a site-specific location. The grant solicitation offered the availability of up to a nice $6 million to fund such projects.

The second solicitation, GFO-18-601 called “Community-Scale and Commercial-Scale Advanced Biofuels Production Facilities” is also under the ARFVTP. This grant solicitation was an offer to fund low carbon biofuel production projects at new and existing biofuel production facilities. The grant solicitation announced the availability of up to a whopping $16.9 million to fund such projects.

Why is the CEC offering up all this dough? Well, the state of California is trying to encourage the production of alternative and renewable transportation fuels in California that can significantly reduce greenhouse gas (GHG) emissions, displace petroleum fuel demand, and stimulate economic development.

It looks like their wish is coming true, as are the wishes of several projects that were approved. CEC came to a decision and published a proposed awards table that identifies which applicants got their wish to come true and which got a ‘nope’ or ‘maybe next time.’

Of course, the CEC made it clear in their disclaimer that funding of the proposed projects is contingent upon the approval of these projects at a publicly noticed Energy Commission Business Meeting and execution of a grant agreement.

The projects

The GFO-18-602 proposed awardees are an interesting lot. The one with the highest “score” that the CEC gives each applicant based on various criteria, is California Grinding, Inc. for their Thermophilic Bacterial Pretreatment of Organic Feedstocks Demonstration. They are receiving the full $3 million they requested.

The Southern California Gas Company is receiving $3 million for its Hydrothermal Processing of Wastewater Solids (HYPOWERS Demonstration Facility).

Technikon LLC is getting a little over $1 million for its Hyper-Philic AD Demonstration of Green Waste Conversion to Renewable Natural Gas for fueling station.

Technology and Investment Solutions is getting $2 million for its In-situ Biomethanation in Food Waste Digesters Using CO2 and Catalytically Derived Hydrogen from Biogas.

Another interesting project is Oberon Fuels, Inc., #7 in The Digest’s 2017 Hottest Company list. Oberon is receiving nearly $3 million for its “Renewable DME: Pathway to Zero Emission Vehicles” project. Oberon Fuels converts biogas, methane, CO2 and other hydrocarbon rich waste streams to higher valued commodities such as DME and methanol. In 2013, their pilot plant, in Brawley, California, produced the first fuel-grade renewable DME in North America. This ASTM D7901 compliant fuel is currently being used in North American demonstrations of DME-powered, heavy-duty trucks. Check out The Digest’s Multi-Slide Guide to Oberon Fuels here.

For the GFO-18-601 proposed awardees, an interesting commercial-scale proposed project is Aemetis’ low carbon advanced ethanol project. They are receiving a decent $5 million – the exact amount they requested. On the other hand, Aemetis’ biomethane cluster community-scale project was passed but not funded, as was a biomethane plant from Quantitative BioSciences, Inc.

Other commercial-scale projects that were passed but not funded include Rialto Bioenergy’s biomethane for waste management refueling project, a POM Wonderful biogas project from pomegranate residue (quite an interesting concept), WIE-AGRON Bioenergy’s biodiesel modernization project, and Imperial Western Products used cooking oil (UCO) to biodiesel, and a few others.

Aemetis

A little more on Aemetis as that project caught our attention since they have been in the news quite a bit lately and is definitely one to watch.

First, some background – Aemetis owns and operates 110 million gallons per year of ethanol and biodiesel facilities in the US and India, and is upgrading the plants using patented technology to produce lower carbon, higher value advanced biofuels and chemicals using lower cost, non-food energy sources and feedstocks. Of special interest is the Aemetis cellulosic refinery using agricultural waste to generate cellulosic ethanol in a technology partnership with LanzaTech among others. Check out The Digest’s Multi-Slide Guide to Aemetis here.

Aemetis was just in The Digest in January for scoring I-924 Exemplar Approval from the US Customs and Immigration Service (USCIS) for its $50 million EB-5 Phase II funding related to the Aemetis Riverbank cellulosic biorefinery project in California. Three EB-5 investors filed with the USCIS and funded $1.5 million to the Aemetis project in December 2018 to launch the $50 million EB-5 Phase II funding round. With the I-924 Exemplar Approval of the Aemetis project by the USCIS, EB-5 investors receive faster processing of their EB-5 investor documents.

Just a week before that, Aemetis announced a huge tax break from California – the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) awarded the Aemetis Riverbank Advanced Biofuels Project an exclusion from the payment of California sales and use taxes valued at $12.7 million. The CAEATFA financial assistance program provides for up to $100 million per year of California state funding support for projects that enhance job creation and advance other state goals, including reducing air pollution, improving the environment and lowering carbon emissions.

Also in January as reported in The Digest, Aemetis announced that its Universal Biofuels subsidiary has completed a two-year upgrade of the Kakinada, India biodiesel and glycerin plant. While that is beyond the California scope, it’s still pretty exciting since the upgrades included installation of a pre-treatment unit to process lower-cost and waste feedstock into oil; expansion of boiler and other utility capacities; and implementation of environmental systems to enable full production of 50 million gallons per year of biodiesel and bio-oil while simultaneously operating the biodiesel, pretreatment and glycerin refining units.

In December 2018, The Digest reported that Aemetis’ subsidiary, Aemetis Biogas LLC, closed a $30 million equity investment without any dilutive stock issuances by Aemetis, Inc. and funded the first $8.3 million tranche to subsidiary Aemetis Biogas to build, own and operate dairy biomethane digesters, pipelines and gas cleanup/compression facilities primarily under 20-year agreements with dairy farms in California.

The project will initially connect about a dozen dairies to Aemetis’ ethanol plant in Keyes, California, with expansion plans to more than three dozen dairies in the local area. The Aemetis plant supplies Wet Distillers Grain feed to about 100 dairies.

Bottom Line

Even a quick look at some of these projects show the way of the future is quite fascinating and hopeful – much like Walt Disney may have felt when he said, “We keep moving forward, opening new doors, and doing new things, because we are curious and curiosity keeps leading us down new paths.”

Aemetis and Oberon Fuels in particular are super interesting stories indeed, full of hope and new doors. This additional funding and support from CEC is helping to move things forward for them and the others on the awardee list. It seems that CEC gets Disney’s mindset – after all “The way to get started is to quit talking and begin doing.” And with this additional money, those projects can begin doing.