Aemetis Jumps on California's E15 Ethanol Blend Approval
Governor Newsom's signature on AB30 is expected to expand the ethanol market by over 600 million gallons annually.
Shares of Aemetis (AMTX) saw a notable increase after California Governor Gavin Newsom signed Assembly Bill 30 into law, immediately authorizing the sale of E15, a gasoline blend containing 15% ethanol. This legislative move, which brings California in line with the rest of the nation, is projected to increase the state's ethanol demand by more than 600 million gallons per year, providing a significant tailwind for the Cupertino-based renewables company.
The approval of E15 is a major development for the California fuel market. Previously, the state was the only one in the US to prohibit this blend. the move could lower gasoline prices for consumers and reduce carbon emissions. For Aemetis, which operates a 65-million-gallon-per-year ethanol plant in Keyes, California, the new law creates a substantial growth opportunity right in its backyard.
In response to the news, the market reacted positively, with Aemetis shares seeing a 0.88% price impact on trading volume 1.2 times the average. The company has been preparing for this moment, investing in upgrades to its facilities to increase efficiency and reduce its carbon footprint. Aemetis CEO Eric McAfee praised the new law, stating it helps to lower gas prices while advancing environmental goals. , recognizing it as a substantial opportunity to expand its market.
This legislative victory comes as Aemetis continues to advance its position in the renewable fuels sector. The company is investing $30 million in a new system at its ethanol plant designed to improve cash flow by an estimated $32 million per year. While analyst ratings from earlier in the year were already positive, the immediate approval of E15 is expected to give Aemetis's ethanol products a in the newly expanded California market, further bolstering the company's prospects.