Aemetis Inc., a U.S. ethanol producer, agreed to convert sorghum crops from closely held Chromatin Inc. into biofuel at a plant in California.
Farmers are expected to plant the hybrid grain sorghum on as many as 30,000 acres near Aemetis’ plant in the town of Keyes, Chicago-based Chromatin said today in a statement.
Shifting some production from corn to sorghum will enable a portion of Aemetis’s ethanol to qualify as an advanced biofuel, which has at least half the lifecycle greenhouse-gas emissions of gasoline, according to the U.S. Environmental Protection Agency. U.S. gasoline and diesel producers must blend 2.75 billion gallons (10.5 billion liters) of advanced biofuels with their products in 2013 as part of a broader 16.6 billion-gallon requirement that also includes conventional corn-based ethanol and biodiesel.
Aemetis announced plans to use sorghum at the idled 60 million-gallon a year plant last month. The agreement is Chromatin’s second with a U.S. ethanol producer this week. It said Feb. 18 that Pacific Ethanol Inc. agreed to use a similar amount of its crops to produce ethanol.
Aemetis rose about 15.4 percent to 60 cents at 2:27 p.m. in New York.
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