Aemetis acquires license from LanzaTech with California rights for advanced bioethanol

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Aemetis, an advanced fuels and renewable chemicals company founded in 2006 and headquartered in Cupertino, California, announced last Thursday the acquisition of exclusive rights to award winning, carbon recycling company LanzaTech’s patented technology for the conversion of agricultural waste, forest waste, dairy waste and construction and demolition waste (CDW) to ethanol in California.

The LanzaTech gas-to-ethanol technology enables Aemetis to convert these local California biomass wastes to advanced ethanol.

“The 60 million gallon per year ethanol plant in California owned and operated by Aemetis currently uses approximately 20 million bushels per year of feedstock, consisting primarily of corn and milo supplied from the Midwest,” stated Eric McAfee, Chairman and CEO of Aemetis. “By utilizing wastes from forest, dairy, orchard, vineyard, corn, rice, wheat and CDW sources that are local to our plant, we plan to reduce feedstock costs from more than $150 a ton to receiving tipping fees for waste feedstocks. This technology enables Aemetis to produce advanced ethanol that is valued up to approximately $3 per gallon more than traditional ethanol.”

“As a leader in low carbon fuels, Aemetis is ideally positioned to demonstrate the benefits of utilizing cellulosic waste and residues,” said Jennifer Holmgren, CEO of LanzaTech. “This project will leverage the existing infrastructure in a 1st generation biofuel facility enabling the economic production of advanced biofuels. Upgrading traditional ethanol plants to produce advanced ethanol using the LanzaTech Process represents a major breakthrough for the biofuels industry, allowing large scale adoption of low cost, low carbon energy crops, ag wastes and MSW that would otherwise require disposal in expensive landfills. This first example will enable us to further demonstrate the breadth of LanzaTech’s carbon recycling platform and create new opportunities in California.”

Aemetis is the first licensee of the LanzaTech technology in North America. The agreement provides for 12 years of exclusive rights in California based upon achieving certain milestones.

The first phase of the adoption of the LanzaTech technology by Aemetis will be an eight million gallon per year processing unit related to the Keyes plant, which under the agreement is planned to be built by the end of 2017. The agreement provides for an expansion to 32 million gallon per year process unit, as well as licenses for units that would be installed at other existing ethanol plants. The current price of advanced ethanol in California including federal, state and tax credit incentives is approximately $4.60 per gallon, compared to corn ethanol at about $1.60 per gallon.

The ethanol industry in the US is comprised of about 210 plants producing approximately 15 billion gallons per year of traditional ethanol. Under the federal Renewable Fuel Standard (RFS), up to 16 billion gallons per year of advanced ethanol may be produced under RFS mandates enforced by the EPA.