Aemetis Strengthens Dairy RNG Platform and Expands Monetization Amid Favorable Policy Momentum

Stonegate Capital Partners updated its coverage of Aemetis, Inc. following the company's third-quarter 2025 results, emphasizing a strengthening Dairy RNG platform supported by California Air Resources Board pathway approvals, incremental digesters, and favorable policy momentum. The company's twelve operating digesters produced 114,000 MMBtu during the quarter, generating approximately $4.0 million in revenue while fully monetizing seven newly approved Low Carbon Fuel Standard pathways. Total revenue reached $59.2 million, representing a $7 million sequential increase driven by India Oil Marketing Company orders and improved California ethanol pricing and volumes. Aemetis has signed equipment and installation contracts totaling $57 million year-to-date across its dairy RNG and Mechanical Vapor Recompression projects. Production capacity is currently expected to reach 550,000 MMBtus by year-end and further increase to 1.0 million MMBtus by fiscal year 2027.

The company has established multiple monetization avenues for energy production, including sales of RNG molecules, D3 Renewable Identification Numbers, and Section 45Z production tax credits, providing several levers for recurring cash generation. Through its dairy RNG business, Aemetis is planning an initial sale of approximately $20 million in Section 45Z and Section 48 credits following the September completion of the multi-dairy biogas digester. Management expects 45Z monetization to become a recurring quarterly revenue item beginning in the fourth quarter of 2025. In the California Ethanol segment, Aemetis executed an Engineering, Procurement and Construction agreement with NPL to install a $30 million Mechanical Vapor Recompression system at the Keyes plant. The project is scheduled for completion in the second quarter of 2026, with management projecting $32 million of incremental annual cash flow due to approximately 80% lower natural-gas usage, higher LCFS revenues from a double-digit Carbon Intensity reduction, and increased transferable 45Z credits.

California policy developments strengthened further as Governor Newsom signed AB30, immediately allowing statewide E15 and expanding the potential ethanol market by more than 600 million gallons annually. India biodiesel operations delivered $14.5 million in revenue on resumed OMC allocations, with the subsidiary continuing to target an initial public offering in 2026. The third quarter operating loss was $8.5 million compared to $3.9 million year-over-year, while selling, general and administrative expenses increased 15.5% sequentially. Net loss expanded to $23.7 million from $18.0 million, though cash increased to $5.6 million at quarter-end. Aemetis appears well-positioned to benefit from four major U.S. policy tailwinds accelerating demand for low-carbon fuels: CARB's long-duration LCFS framework with improving pricing, Section 45Z production tax credits, California's adoption of E15 via AB30, and ongoing state and federal clean-fuel mandates and incentives.

These factors, combined with the signed EPC for MVR and fully monetized RNG pathways, support the company's focus on margin expansion, recurring credit monetization, and disciplined project financing through 2026. Stonegate Capital Partners' valuation model returns a range of $9.93 to $20.48 with a midpoint of $14.06 for AMTX stock. The company's strategic positioning within evolving regulatory frameworks, such as those detailed at https://ww2.arb.ca.gov, underscores its potential to capitalize on the growing demand for renewable energy solutions. The expansion of production capacity and diversification of revenue streams through mechanisms like the Section 45Z credits highlight Aemetis's transition toward sustainable profitability in the renewable fuels sector.