Welcome to the Aemetis Fourth Quarter and Year 2021 Earnings Review Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Todd Waltz, Executive Vice President and Chief Financial Officer of Aemetis Inc. Mr. Waltz, you may begin.

Thank you, Kate. Welcome to the Aemetis fourth quarter and year 2021 earnings review conference call. Joining us today for the call is Eric McAfee, Founder, Chairman and CEO of Aemetis; and Andy Foster, President of Aemetis Advanced Fuels and Aemetis Biogas. We suggest visiting our website at aemetis.com to review today’s earnings press release. The Aemetis Corporate and Investor Presentations, filing with the Securities and Exchange Commission, recent press releases, and previous earnings conference calls. The presentation for today’s call is available for review or download on the Investors section of the aemetis.com website. Before we begin our discussion today, I’d like to read the following disclaimer statement. During today’s call we’ll be making forward-looking statements, including without limitation, statements with respect to our future stock performance, plans, opportunities, and expectations with respect to financing activities and the execution of our business plan. These statements must be considered in conjunction with the disclosures and cautionary warnings that appear in our SEC filings. Investors are cautioned that all forward-looking statements made on this call involve risks and uncertainties, and that future events may differ materially from the statements made. For additional information, please refer to the Company’s Security and exchange Commission’s filings which are posted on our website and are available from the Company without charge. Our discussion on the call will include a review of non-GAAP measures as a supplement to financial results based on GAAP. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is included in our earnings release for the quarter ended on December 31, 2021, which is available on our website. Adjusted EBITDA is defined as net income or loss plus to the extent deducted and calculating such net income, interest expense, gain on extinguishment, income tax expense, intangible, and other…

Thank you, Todd. Aemetis is focused on producing below-zero carbon intensity products, including the production of negative carbon intensity, renewable natural gas and renewable fuels. Our projects maximize the value of carbon credits under the California Low Carbon Fuel Standard, the federal renewable fuel standard, IRS 45Q carbon sequestration tax credits and blender tax credits. While reducing operating costs by using waste materials as feed stock. In early 2021, we announced a five-year plan to grow to more than $1 billion of revenues and $325 million of annual EBITDA cash flow by year 2025. Last month, we updated the five-year plan projecting revenues to grow to $1.5 billion and annual EBIDA to increase to $460 million by year 2026. We are on track with last year’s five-year plan. In the past year and this year we have paid $79 million to reduce the higher interest rate bridge loans from Third Eye Capital with only about $90 million of high interest rate loans remaining outstanding to Third Eye. We are also on track with financing growth using long-term, 20-year, low interest rate project financing from the United States Department of Agriculture, including a $50 million funding for our biogas subsidiary that is expected to close in the next couple of months. Importantly, our 2021 fourth quarter cash flow and our 2021 annual revenues we’re on track with the five-year plan. The positive regulatory trends for renewable fuels have continued to improve driven by initiatives to decarbonize transportation, the need to reduce the cost of fuels as petroleum prices increase and a renewed interest in energy security. California, and much of the rest of the country currently enforces a 90% petroleum-gasoline mandate, which is commonly known as a 10% ethanol blending limit. With record high gasoline prices in California the fact that Aemetis sells ethanol for more than $2 per gallon, less than gasoline, creates a direct cost to California consumers. By the California Air Resources Board’s slow progress toward adoption of E15. E15 allows a 15% blend of ethanol in the gasoline, directly decreasing fuel costs to California drivers and expanding the use of renewable fuels in the state. We’re hopeful that this year, especially with consumers getting squeezed by high prices at the pump, car will move forward with the 15% ethanol blending requirement in California. During the fourth quarter and year of 2021 Aemetis, achieved important milestones toward revenue growth and sustained profitability in each of our four lines of business. Now Andy Foster, the President of the Aemetis Biogas and Aemetis Advanced Fuels businesses we’ll review highlights of our renewable natural gas and ethanol business. Andy?

Thanks, Eric. The Dairy Renewable Natural Gas business has been producing biogas since of September of 2020, and we received a negative 426 carbon intensity pathway from CARB in 2021 for our first two dairy digesters. RNG is a negative, carbon intensity, renewable fuel that exemplifies the circular bio economy that Aemetis is creating by using waste products and byproducts of our production facilities as feed stocks to produce sustainable below-zero carbon intensity transportation fuels. Let me take a moment to update you on some key milestones achieved as we build out our network of dairy digesters and the supporting infrastructure that will deliver RNG to the California market. In addition to the two dairy digesters and four miles of gas pipeline currently in operation since September of 2020, we have completed the construction and are currently commissioning the main biogas cleanup facility and utility pipeline interconnection unit. We are also currently permitting, procuring equipment and/or constructing an additional 15 dairy digesters and 32 miles of biogas pipeline. We now have executed participation or lease agreements with 24 dairies to install digesters. We are in advanced discussions with more than a dozen additional dairies. As the pipeline and digesters are built, we are receiving additional inquiries from other dairies in the local area who would like to participate in the Aemetis Biogas project. Aemetis was granted an encroachment permit to use the public right of way in local roads, county roads, for the construction of the 21-mile Stanislaus County segment of our pressurized biogas pipeline and the 11-mile Merced County segment of the pipeline. About 16 miles of the 36 miles – 36-mile biogas pipeline, nearly 50% has been completed, with expected completion of the entire biogas pipeline construction before the end of 2022. Five additional digester projects are now…

Thank you, Andy. Let’s discuss our carbon zero renewable jet and diesel fuel project with carbon sequestration in Riverbank, California. We’re pleased that the Aemetis carbon zero biorefinery under-development in Riverbank, California near Modesto continues to achieve major milestones. In December 2021 after three years in negotiations with the City of Riverbank and the U.S. army, Aemetis signed the acquisition of the 125 acre Riverbank Industrial Complex. This site is a former U.S. army ammunition production facility with 710,000 square feet of existing buildings laid out as eight production lines, 120 rail cars and a rail line on the site, a 20 megawatt electricity substation and 100% zero carbon intensity renewable power with a direct power line connection to a hydroelectric dam. The terms of the agreement provide for a payment of about $145,000 per year to the City of Riverbank along with ongoing investments in building our sustainable aviation fuel and renewable diesel plant at the site. But Aemetis receives all of the lease revenue from more than 30 existing tenants at the facility. We expect to transfer ownership to about 50 acres of the Riverbank site to Aemetis during 2023 for a total of $2.6 million, actually correction during 2022 for a total of $2.6 million, including the jet diesel plant site and the carbon sequestration project site. The remaining 75 acre parcel will be under the low cost lease for about 15 years, and then will be purchased by Aemetis for $8.8 million. In the past two quarters, we have announced $2.5 billion of sales contracts with Delta Airlines, American Airlines, and Japan Airlines for blended sustainable aviation fuel for flight operations at San Francisco airport. Additional memorandums of understanding have been signed with other airlines for more than $1 billion of sales contracts. These additional agreements…

Thank you. Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] And our first question today is coming from men of Manav Gupta at Credit Suisse. Your line is live. You may begin.

So Eric, year ago, the pushback we primarily got on Aemetis was if the story is so good, why aren’t other people associating with it? Now, a year ahead, you see Delta American, some Japanese airlines all collaborating with you. So I think that overhang on the stock is kind of gone in my opinion. There are some people who still push a negative thesis on Aemetis and there are two reasons, they say they’re still negative on this company is one. They say there are so many projects coming on that LCFS tries to go to $80 and stay there in perpetuity and CARB, but not do anything to help out. And B, they say there’s a probability that RNG might get kicked out by CARB. Now you talk to higher officials at CARB versus some of these other people. So help us understand how CARB is thinking about LCFS prices and the probability of RNG not being part of the LCFS program.

You are correct. There is wide concern about the response CARB has had to a roughly 38% decrease the price of LCFS credits. We deal directly with the staff at carbon, we can confirm that they have a very strong commitment to low carbon fuel standard, and actually have expressed confusion about why institutional investors have not seen a strong commitment to reducing carbon emissions in California. As you know, January 2024 is the next scheduled adoption of LCFS credit demand criteria. But in the meantime, we have completed a study by August, it was a part of a federal financing process we go through and that study brought a very interesting point to light. And that is the roughly 8 billion gallons of renewable diesel that’s been announced largely will not be at the same carbon intensity of current renewable diesel, because of a lack of use cooking oil and other low carbon intensity feed stocks that currently drive the low CI scores. So if the CI score is much higher, then the number of LCFS generates, it’s much lower. And so the Argus report concluded that the market is basically unfortunately, expecting too much of future renewable diesel production and that the amount of LCFS credits generated could be 50% to 75% less than what the market is expecting and describe the LCFS market as being structurally in a deficit. In other words, under any circumstance, it’s reasonable, it will be running at a maximum level, which is $200 plus the cost of living index. And we are our projection in our five-year plan at the lowest number that the Argus projection had, which is $155 per LCFS credit, but their own most probable outcome actually got to $242 by the year 2026. So our five-year plan model…

Yes. Eric, I had just 1 quick follow-up. Some of your peers who are also in RNG and even in CNG are very excited about this Cummins 15-liter engine. Can you talk a little bit about it? And if you think that could be a game changer? And I’ll leave it there. Thank you so much Eric.

Thank you so much, Manav, and thank you for the opportunity to be with you at the Vail Energy Conference last week in Colorado. The Vail’s – the Cummins 15-liter engine is a game changer because this is a long-haul heavy cargo truck engine that’s widely adopted throughout the trucking industry, and Cummins bringing an RNG or I should say, a natural gas version of that engine to market, does substantially increase the demand for dairy RNG, which is the world’s lowest carbon-intensity fuel and is a very large contributor to two things. Number one, decarbonize diesel fuel for long-haul trucking, but also, frankly, lowering the cost. RNG is a great opportunity for operators to reduce our fuel costs in light of $120 or so crude oil prices.

Thank you for taking my questions.

Thank you.

Our next question today is coming from Amit Dayal at H.C. Wainwright. Your line is live. You may begin.

Thank you. Good afternoon everyone. Eric, just to begin with, in terms of RNG deployments and revenue expectations against those deployments, could you give us any update on how we should think about contributions from the dairy digesters that are probably online for you guys? .

On our five-year plan, it’s on our website on the homepage, we lay out the number of digesters per year. We define two different rows, one of the road is capacity. The other on e is actually the number of MMBTUs being delivered, which is what drives revenue. And the reason why there’s a gap there as we complete construction, then we have an approval process of the pathway with the State of California CARB Group. And so we felt it was important that investors had insight that we have capacity in place, it’s completed, we can’t start actual revenue generation until those approvals have occurred. So there’s a slight delay there, and we disclosed that in our five-year plan. We are in our sixth year scheduled now to go to 66 dairy digesters and currently, we’re on track. And frankly, I think we’ll see some nice acceleration during the middle of the year due to the weather and other things, winter tends to be a little bit slower in construction. – but we should have a great spring and summer. And so I expect us to see that we’re continuing to just be on track with our five-year plan.

Okay. And with respect to your CapEx needs for this year, just from the presentation, it looks like you have all the funding you need to make all these investments. Could you give us any color on sort of what your needs going into 2023 are going to be? And whether some of those needs are already in place for you guys?

What we’ve structured the company to do is to use the parent company, which has significant value of its existing assets as the source of the equity for our subsidiaries. So the $100 million of financing that we announced here in the last week or so is broken into a $50 million carbon reduction bucket. And that is funding the activities of the subsidiary, Andy, mentioned the ZEBREX unit and solar units and other things we’re doing mechanical vapor compression, but also our carbon sequestration subsidiary, our Jet diesel subsidiary, the initial project development of each on e of those subsidiaries is actually paid for by the credit facility of the parent company. Separately from that, we have a $50 million credit facility has availability calculations in it, but it’s working capital. So it could be used for any sort of things that we need to do in the course of development, of course. So those – that $100 million credit facility is set up to fully fund all of the development activities of subsidiaries, which provide the equity capital such that when we get to project financing, and we really are pretty much down only a couple of them, it’s jet and diesel. We already have $32 million of total investment there. We’ll put in another roughly $8 million this year. So about $40 million in the common equity of our jet and diesel project. We’ll do a project financing, which will fully fund that project. And then in about year and a half or so, we’ll have our EPA Class 6 licenses, and we’ll be doing some smaller financings, which are project financings. But the development work is all funded from our $100 million credit line. So we’re really funded for 18 months on our carbon sequestration business. So the Keyes plant largely has all the money it needs between the $16.7 million of grants that we’ve been awarded and the credit lines were pretty much wrapping up all those projects, except for one here in the next 12 months. And so basically, we’re just fully funded for all these miscellaneous items, and then we just do one project financing on jet fuel, and then in year and a half or so, do on project financing on carbon sequestration, and we’re done. And none of these require any equity investment by the parent company. We’re able to use our credit facilities to fund these projects.

Thank you. Just one [Technical Difficulty]. Could you clarify at what utilization levels the plant in India is operating at right now? And where do you expect that to be maybe by the end of the year or in year 2023?

Our India plant is ramping up out of the winter, typically about two months in the wintertime biodiesel plants in India don’t operate, because it’s a little bit cold. But as I mentioned, this new government tax is a big driver for scale up in India and the existing three oil marketing companies, again, are an opportunity in India. We do have high feedstock costs, but this INR2 per liter, there’s 3.7854 liters per gallon, so it’s a very, very significant government tax per gallon that is driving the rapid adoption of biodiesel blending in India, and that’s occurring over the next two quarters. October of 2022 is when that tax comes in play. So, we’re dealing specifically with the private refiners in India because their desire to avoid this government tax is extremely high, even though it applies to all the refineries in India. So, we expect to scale up over the next two quarters. And if we can get an export approval to export it to California, we’ll be getting that process as fast as possible. So we have two very, very exciting expansion opportunities in India, one to California and one domestically in India, that all appeared really in the last couple of months. So, we’re looking to see that ramp-up occur this year.

Thank you, Eric. That’s all I have.

Thank you. Our next question today is coming from Nate Pendleton at Stifel. Your line is live. Your may begin.

Good morning all and thanks for taking my question. For my first question, regarding the potential use of tallow from India in your Riverbank plant, could you, at a high level, speak to the difference in costs in CI potential compared to using vegetable oil?

The tallow India that we acquire is a crude product. So it actually is not a biofuel feedstock at the point in which we acquire it. We announced recently that we’re building a crude refining program. So, what comes out of that that plant is now a biofuels feedstock. So, we take what is essentially a nonviable product and turning into a feedstock product. And we can use that in India at our biodiesel plant. We are already one of the largest users of tallow in the biodiesel business in India. And of course, because of our need in California, we can also export tallow, which is allowed in India to the United States and specifically to our California plant. So the core of our operational activity in India is taking this really literally waste product and converting it into a low or no odor clean feedstock that can be used for renewable fuels production. So in terms of cost differential, there is a meaningful cost differential. It is – it’s more than 20% that today and potentially even more than 30% today, less expensive to buy that crude product than it is to buy a refined vegetable oil or animal oil feed stock.

Great. Thanks. And for my second question, regarding your CCS business, could you provide an update on how conversations are progressing regarding third party CO2 volumes? Also, could you comment on the logistics involved to move those potential third party volumes? Thank you.

We have spoken to every California-San Francisco bay area oil refiner. We are actively in negotiations on actual terms with two of those refiners. It would comprise frankly all of the 2 million metric tons per year if we included [indiscernible] gas, there’s two major sources. One is the steam methane reformer that produces hydrogen, it’s very concentrated source of CO2 and if we just go with SMR we could probably include a third oil refinery. But we are having a very solid discussions with several of the oil refiners and they’re located roughly 100 miles from our facility. So our approach is as a producer of Dairy Renewable Natural Gas, we’re seeking to have trucks that can be very, very low emission, of course, negative carbon intensity RNG as a fuel instead diesel. And so driving roughly 100 miles to pick up CO2 at oil refineries is actually probably the lowest carbon transportation tool available in terms of vehicular transport. And so we see ourselves being uniquely positioned to provide the roughly 100 trucks per well, we are doing two wells and that’s only about five trucks an hour. We just kind of do the math a 100 trucks divided by 20 hours and so we’re well positioned to have a low cost, low carbon emission, five trucks an hour is not much. One truck every 10 minutes is just not a big deal. So we’re seeing that as a value out of our system – situation because the alternative of course is building a CO2 pipeline. It’s high pressure, very difficult to see how that could get permitted in constructing California of that significant litigation or barging, which is enormous and actually problematic because CO2 evaporates or railing, which is even worse. You lose about 10% of your CO2 every day. It sits in a rail car. So in a $500 million business, two days in a rail car can easily reduce revenues by $100 million and reduce earnings by $100 million. So we think we’re very well positioned to add value to that business. And I think our oil refiner partners I guess would be a big term to use. See it the same way. We have a unique value proposition there.

Thanks for your time and congrats on the strong quarter.

Thank you so much.

Thank you. Our next question today is coming from Matthew Blair at Tudor, Pickering, Holt. You’re law is live. You may begin.

Hey good afternoon, Eric and Todd. Congrats on the quarter. I think your progress on the Dairy RNG side has been pretty impressive. I think you mentioned that you signed agreements with additional 24 or 25 dairies. Could you talk about the factors that are helping you win these contracts and what we’re hearing is a pretty competitive market? And then could you also talk about your market opportunity outside of the 80 dairies that that you currently supply the wet distillers grains to? Have you signed any contracts with dairies outside of that existing network?

Andy, you want to take this.

Sure. Thanks for the question. I think the – you’re correct that it is a competitive marketplace. We’ve been in this business since early 2018 and at that time there were really in addition to a meta couple other significant developers CalBio and MOS Energy works and a lot more have come to the party since that time. I think one of the things that has helped us tremendously in terms of securing the dairy participation agreements releases are poor. The ongoing discussions we have with multiple parties is the fact that we are located in the neighborhood if you will. We have a long operating history at the Keyes plant for we’ve been operating the ethanol plant for since 2011. And so we come to the party with some outlook or knowledge and obviously those that are currently customers of our distillers grains know who we are. So I think starting with that foundation and building upon it, one of the other things I think that that has helped us, and this is one of the real, when Eric and when we talked about getting into this business, it was let’s get busy and let’s execute quick. Let’s move to demonstrate how serious we are in the marketplace. Some of the other developers had some fits and starts with how they’ve delivered in the marketplace. We said we were going to build two dairies in a year, commission them, get them operating, get a CI score and we did it. We stayed right on track. We got four miles of pipeline built. We did all of that, literally in the, space of a year and I think from a credibility perspective that’s helped us a lot with the dairymen. If you spend any time around farmers and dairymen in…

I should mention on the contracts with RNG customers. We’re actually the number one initial RNG customer. We have trucks that carry distiller’s grain and ethanol, and variety of other things that can be supplied from the RNG station that we’re putting up at our facility. And so in addition to a medic being a customer, we have other customers in the marketplace, which we expect to announce here in the next month or two. So you’ll see some other names start to pop up, but we’re our own customer sort of like what we did when we initially launched Biogas and we used it in our ethanol plan.

Great. Thanks for all the color. I also want to follow-up on your Dairy RNG volumes and the guidance for 2022. So thanks for providing the quarterly number, looks like it was $13.4 million MMBtu in the fourth quarter. And so if I annualize, I get to run for $53 million. And then your 2022 guidance is around, I think its 49.9 million, even though you’re adding eight digesters. So I’m not sure if I’m missing something here, but could you just walk us through that bridge on, on the Q4 run rate versus the 2022 guidance for your or RNG volumes?

The simplify matters; we have a slide on the February 28th presentation which I actually gave at credit suite and energy conference in Vail, Colorado last week. And that slide breaks down production capacity per year, and also breaks down actual deliver production for the year. And so if those are the numbers you’re referring to, the delivered production number has that delay of the California resources board pathway approval built into that production number. So that’s where you see a bit of a gap is that we initially next month we’re putting gas into the pipeline and we would be generating revenue and D3 runs in everything next month. If that were available, but unfortunately we have this regulatory delay as we’re getting our approval in place. So it’s on Slide 8 of the company presentation at the bottom of the homepage of aemetis.com. It’s the title is aemetis expansion plans, and we have RNG digester capacity. And then the revenue line is the RNG production. So that production number is what drives actual revenue. But you’ll notice that our capacity is significantly larger at 272,000 MMBtu per year. By exiting this year whereas our actual production’s only 49. So you go into 2023 with a very large actual production happening. We’re putting it into underground storage for conservatively speaking. It could be as much as nine months. We’re not projecting that or we’re projecting to be in the two quarter kind of situation. But we put production starting next month into the ground store it and then when we have the pathway, we pull it out of the ground and are able to generate D3 federal RINs and also LCFS credits when it comes out of storage.

And Eric, the numbers on Slide 8 of that presentation, are they - so it shows 10 dairy digesters for 2022. Is that an annual average for the year or are these like kind of year-end exit run rates?

Those are year-end exit numbers. And there’s a little bit of – there’s a couple digesters that’ll be in under construction or completed construction being filled. So take it as a – it really is a 12 number at the end of the year, but 10 was a service number we put in there. We’ll be filling digesters and doing other things. There’s a gap in the as capacity as you fill the digester, it takes a 1.5 months or so to fill it up. So you’ll see on this slide that our concerned number of 10 drives the production capacity numbers. So all those numbers correlate. But I would expect we’d probably exceed that by one or two.

Great. Thank you so much.

Yes, thank you Matthew.

Thank you. Our next question today is coming from Jordan Levy at Truist. Your line is now live. You may begin.

Thanks for all the details. Just one for me. Going back to the CCS business, you gave us a lot of good detail there. Maybe just a little more on that side of things. I’m just curious to get your thoughts after you said that first characterization wells coming up after that’s drilled, maybe just kind of a general path to getting that first injection well drilled and so forth and so on? And then maybe even taking a step back on that side of things. Is there an even larger potential you see for that business beyond these two wells, which obviously have huge potential for growth?

Certainly. Thank you, Jordan. Let’s talk about money, first of all. Each characterization well and related permitting is about $6 million. We’re doing one under our Riverbank site, and we’re doing one at near our ethanol plant side. They’re about 15 miles away. So it’s the same people, same crews, same everybody just doing it at twice the Riverbank sites Q2 of this year, we’re expecting that the Keyes plant site because of permitting delays, be closer to Q4 this year. Riverbank is already zoned correctly, et cetera. So we’re literally within a month or two of rolling the drilling rig out there. That combination of $6 million plus $6 million is about $12 million. Add another $3 million for just ongoing consultants and lawyers and everything else over about an 18-month cycle, and that puts us at the end of 2023, end of next year, with approved Class 6 licenses potentially for both sites. There was a site up in South Dakota approved in nine months in 2021. So projecting 18 months, I think, is certainly a reasonable projection. So by the end of 2023, we’ll have about $15 million plus some real estate acquisitions, about $18 million of total investment. All this comes off of our carbon capture credit line of $50 million that’s already there. And if we need working capital, we have another $50 million available with that. At that point in time, we then complete a project financing. Renewable Energy for America program certainly is a very attractive opportunity for us. tax-free municipal bonds, private activity bonds in California are attractive for us. But we get to build it in two phases. So with the hole in the ground, you actually only have to build about 20% of the compression equipment above ground in order…

That’s right. Thanks so much guys. Nice quarter.

Thanks.

Our next question today is coming from Ed Woo at Ascendiant Capital. Your line is live. You may begin.

Yes. I was just curious, obviously, there’s a lot of volatility with gasoline and oil. What’s your outlook on ore oil prices and how it’s going to affect the ethanol market in California?

My view is that we’re under sort of a worldwide case of uncertainty in oil prices. And so today alone, I think we saw a $10 increase in the West Texas Intermediate as traders were betting on what’s happening in the Ukraine. My personal view is that we have a fundamental $80 West Texas Intermediate, $85 Brent price, Brent, of course, is Brent England, because that’s how much it takes for the Saudi Arabians to pay for what essentially is a wealth for economy that they’re trying to transition. And 70% of people under the age of 35 in Saudi Arabia are unemployed. They have free housing, free education and basically are awards of the state. And you can’t run that country with that $85 Brent crude oil. So I think we’re structurally an $80 global economy. And the fact it’s $120, I think, is relatively temporary. That’s my view. So I think we have high oil gas prices as long as there’s a Ukraine and Russian problem. When that gets resolved, we probably are in the $80 range, which was double what we were about 18 months ago and that, that $80 is probably going to sustain for quite a long time.

And do you think that’s going to keep up ethanol prices?

Ethanol prices, frankly, have continued to be a discount of gasoline at every price of discount ethanol is discounted below that. And ethanol is more about how committed we all are as a society to having cleaner domestic lower-cost fuels. And as we become more committed to that, ethanol just becomes playing more and more of a solution. Nebraska did a five-year study with 30% biofuels running in the regular old engines and regular old cars and found that 30% ethanol actually provided significantly better emissions and lower costs and all the other benefits job creation as well that you get from using ethanol. So I think we’re headed towards 30%, and it’s just a matter of how fast we get there.

Great. Thanks and wish you guys a good luck.

Thank you so much, Ed.

Thank you. Our final question today is coming from Marco Rodriguez at Stonegate Capital Partners. Your line is live. You may begin.

Good afternoon everybody. Thank you for taking the questions. Most of my questions have already been asked and answered. Just a real quick modeling question. Just kind of wondering how you guys are thinking about the cadence of gross margin in fiscal 2022? Thanks.

We are in a pattern of uncertainty, which ethanol sold by our company is about $2 a gallon less than what you pay at the pump in California. If you take the price we sell plus about $0.70 of taxes, you’re actually a little below the pump. So when you’re selling a commodity molecule at $2 per gallon less than the market, and we do about 60-plus million gallons of that per year, that’s $120 million a year of subsidy essentially of the oil industry. So we’re very, very good at subsidizing the oil industry right now. I do not think that’s a sustainable gap. I think the policymakers are going to want to have some of that discount available to consumers. And all you have to do in California is have a 15% ethanol blend, and you have a pretty significant direct impact on the price of the pump. Hopefully, at the federal level, the enforcement of the renewable fuel standard likewise is an opportunity to tap into the roughly 1 billion gallons of ethanol is currently in storage in the U.S., unlike petroleum gasoline, which is not in shortage – I’m sorry, which has a shortage. Ethanol is not in shortage. And so this is an immediate opportunity to decrease the price at the pump by both federal as well as state policy supporting ethanol and renewable fuels in general.

Got it. Appreciate your time. Thank you.

Thank you, Marco.

We have no further questions in queue at this time. I’d now like to turn it back to management for closing remarks.

Thank you, Kate. Thank you to meta shareholders, analysts and others for joining us today. We review this – please review the Aemetis company presentation and the Aemetis investor presentation that’s posted on the homepage at the Aemetis website. We also look forward to talking with you or even touring our facilities as we invite you to participate in the growth opportunities at Aemetis.

Thank you for attending today’s Aemetis earnings conference call. Please visit the Investors section of the Aemetis website, where we’ll post a written version and an audio version of this earning – of this Aemetis earnings review and business update. Kate?

Thank you, ladies and gentlemen. This does conclude today’s event. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation.