Aemetis, Inc. announced that its Universal Biofuels subsidiary in India, owner and operator of a biodiesel plant located near the Port of Kakinada on India's east coast, was selected by the three government-controlled oil marketing companies (OMC’s) and a major oil refiner to supply approximately 8,000,000 gallons of biodiesel over the next two months. The combined revenues from the shipments are expected to be about $41 million and are scheduled to require the Aemetis biodiesel/glycerin production plant to operate near 100% capacity.
About 70% of the diesel and gasoline in India is supplied by the OMC’s, with the remaining fuel supplied by large non-government refineries. This volume of biodiesel to be supplied by Aemetis is expected to continue to occur in two-month bidding tenders on an ongoing basis to meet the requirements of the recently updated India National Biofuels Policy.
“We are pleased to see the 2022 National Biofuels Policy and related OMC purchasing processes are resulting in increased demand for biodiesel in India,” stated Eric McAfee, Chairman and CEO of Aemetis. “We built our 50 million gallon per year capacity biodiesel plant on the East Coast of India to convert agricultural products and byproducts into high quality biodiesel that can reduce air pollution while creating new agricultural and manufacturing jobs in India. The Aemetis Universal Biofuels plant delivers high quality biodiesel fuel and has built a reputation as a proven large-scale producer in India.”
The total volume tendered by the India OMC’s was approximately 360 million gallons for the two month delivery period, which equals more than 2 billion gallons of ongoing biodiesel demand on an annual basis from the OMC’s. Additionally, with limited domestic biodiesel production capacity to meet the goals of the India National Biofuels Policy, the private oil refineries in India have actively moved forward with biodiesel purchases and have begun to develop long-term biodiesel supply relationships. As one of India’s largest domestic biodiesel producers, Aemetis Universal Biofuels is well positioned to help meet this growing domestic demand.
India consumes about 25 billion gallons of petroleum diesel each year. A 5% minimum blend of biodiesel was adopted as a goal under the 2022 National Biofuels Policy to reduce the importation of crude oil into India. The biofuels policy seeks to improve the environment through lower air pollution from diesel vehicles and an improved economy by increasing the domestic production of biodiesel feedstocks. Biodiesel feedstocks include renewable oils that are byproducts from food production, which can lower the overall cost of food and improve the environment by creating new markets for these byproducts.
The non-OMC refinery purchase order is immediately in effect and biodiesel deliveries are scheduled to commence in early September. The OMC’s are in the process of final documentation and product testing before deliveries are expected to begin in September. The Aemetis Universal Biofuels biodiesel sample successfully exceeded the specifications in the first independent test for biodiesel quality that was required by the OMC purchase order process.