Aemetis Inc., a U.S. ethanol producer, idled production at its plant in Keyes, California, citing “unfavorable market conditions for corn ethanol” and will upgrade the facility to also produce fuel from grain sorghum.
The company shut down production Jan. 15 and will shift “a significant portion” of the plant’s 60 million-gallon (227 million-liter) annual production capacity to handle sorghum, Cupertino, California-based Aemetis said today in a filing.
The shift means the facility will qualify as a producer of advanced biofuels, allowing the company to generate EPA-issued credits that are trading at 46 cents a gallon, under rules approved Dec. 17. Sorghum ethanol from facilities that run on biogas fuel have less than half the total lifecycle greenhouse-gas emissions as gasoline, according to the U.S. Environmental Protection Agency.
“There’s no capital expenditure required, it’s mostly just operational configuration,” Aemetis Chief Executive Officer Eric McAfee said by telephone. The Keyes plant will run on biogas and recycle waste heat, as required by the EPA to earn the advanced biofuel designation.
“As soon as we can obtain the feedstock, we will be operating,” he said.