Welcome to the Aemetis second quarter 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 for Aemetis, Inc.. Mr. Waltz, you may begin.
Thank you, Taryn. Welcome to the Aemetis second quarter 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. We suggest visiting our website at aemetis.com to review today's earnings press release, corporate presentation, 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 investor 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 regard to our future stock performance, plans, opportunities, and expectations with respect to financing activities and 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 Securities and Exchange Commission filings, which are posted on our website and are available from the company without charge. Our discussion on this 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 June 30, 2021, which is available on our website.
Adjusted EBITDA is defined as net income or loss, plus to the extent deducted in calculating such net income, interest expense, gain on extinguishment, income tax expense, intangible and other amortization expense, accretion and other expense of Series A preferred units, depreciation expense, and share-based compensation expense. I'd like to review the financial results for the second quarter of 2021. Revenues during the second quarter of 2021 were $54.9 million, compared to $47.8 million for the second quarter of 2020. Our North American operation in the second quarter of 2021, as compared to the second quarter of 2020, experienced steady growth volume with an increase in the selling price of ethanol from $2.63 per gallon to $2.78 per gallon, and an increase in the delivered corn price from an average of $4.55 per bushel to $8.04 per bushel.
Increased COVID-19 infection rates and high selling costs negatively impacted sales in India. Gross profit for the second quarter 2021 was $3.6 million, compared to $14.1 million during the second quarter of 2020. Our North America segment accounted for substantially all of the reported consolidated gross profit in both periods. Selling, general, and administrative expenses were $5.8 million during the second quarter of 2021, compared to $4 million during the second quarter of 2020 as a result of period expenses incurred as part of the development of our ultra-low carbon initiatives. Operating loss was $2.1 million for the second quarter of 2021, compared to an operating income of $10 million for the second quarter of 2020, resulting from a combination of lower demand for the higher profitability industrial alcohol products and rising corn prices.
Interest expense during the second quarter of 2021 was $5.2 million, excluding accretion and other expenses in connection with Series A preferred units in our Aemetis Biogas LLC subsidiary, compared to $6.2 million during the second quarter of 2020. Additionally, our Aemetis Biogas LLC subsidiary recognized $3.8 million of accretion and other expense in connection with preference payments on its preferred stock during the second quarter of 2021, compared to $1.4 million during the second quarter of 2020. Net loss was $10.6 million for the second quarter of 2021, compared to net income of $2.2 million during the second quarter of 2020. Cash at the end of the second quarter of 2021 increased to $7.2 million, compared to $600,000 at the end of 2020. Capital expenditures increased property plant equipment by $12.9 million, driven by investments in our ultra-low carbon initiatives.
Company debt decreased by $48.7 million compared to December 31, 2020. That completes our financial review for the second quarter of 2021. Now I'd like to introduce the Founder, Chairman, and Chief Executive Officer of Aemetis, Eric McAfee, for a business update. Eric?
Thank you, Todd. As we discuss the results from Q2 2021, I encourage you to consider viewing the Aemetis corporate presentation, which can be found on the homepage of the aemetis.com website. 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, and IRS 45Q tax credits, while reducing operating costs by using waste materials as feedstock. We own and operate production facilities with more than 110 million gallons per year of production capacity in the U.S. and India. Included in our production portfolio is the largest ethanol plant in California, a 65 million gallon per year fuel ethanol plant located in Keyes, California, near Modesto, that we leased in 2009, retrofitted for 18 months, started operations in mid-2011, and have owned since 2012, when the original shareholders converted their ethanol plant ownership into about 10% of the common stock of Aemetis.
We also built, own, and operate a 50 million gallon per year capacity distilled biodiesel and refined glycerin biorefinery on the east coast of India, near the port city of Kakinada. Aemetis has unique access to low carbon intensity, low cost, renewable waste oil feedstocks in India for use domestically or for export to use in our future California production plants. We work to improve our communities in which we operate by reducing air pollution and offsetting the carbon emissions that contribute to global climate change. Our capital investments and the ongoing operations of our biofuels digester and production plants create thousands of direct and indirect jobs, feeding and housing hundreds of families that depend on us to sustain and expand our business.
Despite the extraordinary circumstances of the past year, we have maintained 100% employment at all of our facilities. We seek to build a strong, sustainable, valuable company by supporting a resilient, supportive corporate culture among our teams, who work together to build and operate our projects. Financing the past 15 years of growth at Aemetis has placed us on a path to become a $1 billion revenues business without heavily diluting shareholders, and that was not easy. It took hard work and sacrifice and extreme commitment to our shareholders by our management team and our board of directors. Our entire top management team has more than 12 years of tenure at the company, with our president, Andy Foster, joining the company during the founding in 2006, and our head of Aemetis International, Sanjeev Gupta, joining in 2007.
We have 1 Aemetis Board of Directors member that has served for 14 years, formerly serving as the Secretary of the U.S. Department of Agriculture. Two of our Board members were formerly long-term executives at Chevron Corporation. Our Audit Committee Chairman and Lead Independent Director has served as the Chief Financial Officer of 5 public companies, each of which had more than $1 billion of revenues, and the largest had $16 billion of revenues. We have a deeply committed and experienced team that has been working for many years to execute a long-term vision and to build value for shareholders. Fortunately, the positive regulatory trends for renewable fuels and the leading role of biofuels in decreasing carbon emissions have provided government policy support for Aemetis' businesses.
Long-term, low interest rate, 20-year guaranteed loans from the U.S. Department of Agriculture, the Department of Energy, and California tax-free municipal private activity project financing opportunities are now being pursued as financing tools by Aemetis, instead of highly dilutive equity financing. We have executed a financing strategy of funding rapid growth utilizing short-term, high interest rate borrowings, which are then refinanced using long-term, low interest rate debt. During the second quarter of 2021, Aemetis achieved important milestones toward revenue growth and the sustained profitability of each of our four lines of business. Now, Andy Foster, President of the Aemetis North America Business, will review highlights of our renewable natural gas and ethanol businesses. Andy?
Thank you, Eric. As Eric mentioned, at Aemetis, we're focused on producing below zero carbon intensity products, including negative carbon intensity renewable natural gas and renewable fuels. A prime example is our dairy-based renewable natural gas business, which will mark the one-year anniversary of commercial production in September. Excuse me. RNG is a negative carbon renewable fuel that perfectly exemplifies the circular bioeconomy that Eric often refers to when describing our approach to reducing greenhouse gas emissions while producing sustainable below zero carbon transportation fuels. The RNG initiative has many synergies with our Keyes Ethanol Plant, which uses agricultural feedstock that absorbs CO2 from the atmosphere during plant growth, from which our production facility produces ethanol and high-value animal feed.
The Aemetis ethanol plant produces about 65 million gallons per year of renewable ethanol, but also produces about 2 million pounds per day of wet distillers grains that supply about 80 local dairies, which feeds more than 100,000 dairy cows. Those cows eat renewable feedstock produced by Aemetis and create waste, which in turn produces methane. Aemetis captures the dairy methane emissions by building large covered anaerobic digesters. We then transport the biogas via an Aemetis-owned pipeline to the Aemetis ethanol plant, where it is used as an energy source for ethanol production or is upgraded to produce renewable natural gas for use in transportation. In addition to supplying compressed natural gas stations throughout California, RNG from Aemetis can fuel RNG trucks at our Keyes plant to carry our wet distillers grains to the 80 dairies, as well as transport biofuels to customers throughout Northern California.
This process is a sustainable negative carbon intensity circular bioeconomy that productively uses dairy waste as fuel and significantly reduces air pollutants and carbon emissions statewide. Trucks can be fueled by our RNG at any compressed natural gas station connected to a utility pipeline in California, as our RNG interconnection to the PG&E pipeline will enable us to send RNG to other fueling stations that we either build or own, or are owned by others. This end-to-end system is scheduled to be operating by the end of 2021. Let me just take a moment to update you on some key milestones achieved as we build our network of dairy digesters and the supporting infrastructure that will deliver RNG to the California market.
In September 2020, we completed phase 1 of the Aemetis Biogas Central Dairy Digester Project and commenced operation of the first 2 covered lagoon digesters in the Aemetis Biogas Central Dairy Digester Project, including onsite biogas cleanup and pressurization, a 4-mile pipeline owned by Aemetis, and a boiler unit to utilize the biogas as process energy at the Keyes Ethanol Plant. We are now building phase 2 of the project. During Q1 of this year, 2021, the California Air Resources Board issued an updated carbon intensity fuel pathway for the Keyes Ethanol Plant, utilizing a negative 426 CI score for our biogas, compared to approximately a positive 100 carbon intensity for petroleum natural gas.
Both dairy digesters, onsite hydrogen sulfide removal and pressurization, the biogas pipeline, and the ethanol plant boiler unit have been in continuous operation since last September, allowing us to reduce the use of petroleum natural gas at the Keyes facility. In the second quarter, we began construction of the RNG biogas upgrading facility that is co-located at the Keyes plant. As of Tuesday, the foundation was completed, and we will begin mechanical installation of the gas processing equipment in approximately two weeks, with expected completion of the biogas upgrading facility in Q4 of this year, with commissioning and interconnection to the PG&E pipeline to follow shortly thereafter. The Aemetis RNG fueling station, also co-located at the Keyes plant, has been fully engineered, and the production of major equipment began in the second quarter of this year.
We expect to complete installation and commissioning of the RNG fueling station at approximately the same time as the centralized biogas upgrading facility. After a two-year process of engineering, permitting, and equipment fabrication, in the fourth quarter of this year, we expect to have the PG&E gas pipeline interconnection completed, allowing us to flow upgraded RNG to customers throughout California. Aemetis is currently engaged with a number of potential biogas offtake partners, and we expect to have contracts in place during the third quarter. Another significant milestone for the RNG project was achieved last week when Aemetis was granted an encroachment permit to use the county right of way for construction of the 21-mile Stanislaus County segment of our pressurized biogas pipeline.
This will allow us to begin construction of phase 2 pipeline in the 3rd quarter, which will connect the next series of dairy digesters with the RNG upgrading facility. We are planning to build an additional 15 dairy digesters and 32 miles of pipeline in the next 4 quarters to be operational in 2022. 5 additional digester projects will begin construction in 2021, with expected completion in the 1st half of 2022. 3 of the digesters have been fully permitted, with the remaining 2 expected to be permitted by the end of this month. Engineering has been completed for the Merced County digester projects, and permits for the digesters and that segment of pipeline have been submitted for review. Construction for the Merced County segment of the digester project is scheduled to begin in early 2022.
Overall, the first half of 2021 has been extremely productive for advancing the construction of the Aemetis Dairy Renewable Natural Gas project, and we continue to sign up additional dairies and to further expand our digester network. We've made some key new hires on our biogas team and expect to add additional team members in the coming months. To date, Aemetis has been awarded about $23 million of grants from the California Energy Commission, the PG&E, and other government agencies for the dairy biogas project and production of renewable natural gas. Let me take a moment to discuss progress at our California ethanol plant. As Todd mentioned earlier, we saw a 16% year-over-year increase in revenues from ethanol sales in the second quarter.
Since the economy began to reopen in the first half of 2021, demand for ethanol has been robust through the first half of the year. Ethanol pricing has been favorable as well. Corn pricing remains a drag on higher profitability, however, with a smaller than normal corn supply this year and ongoing logistical issues with the railroads. While domestic gasoline demand has been favorable, it's at about 95% of 2019 levels. U.S. exports have lagged and are down by about 9% year-over-year for the first half of 2021. Ethanol imports, especially to California from Brazil, were especially persistent in the second quarter of 2021. Strong demand and favorable pricing for both wet distillers grains and distillers corn oil remain bright spots in the overall product mix. We expect this trend to continue.
Despite ongoing challenges related to COVID over the past year and a half, the Keyes plant has continued to demonstrate strong and consistent operations. We are excited about the progress we've made on multiple projects underway that will dramatically transform the Keyes plant and allow us to significantly reduce the use of petroleum-based natural gas and the carbon intensity of our products.
Let me just take a moment to give you a few updates on the projects that are expected to increase cash flow by approximately $23 million per year once completed. First, in the next month, we expect to complete the installation and commissioning of the $8 million ZEBREX zeolite membrane dehydration unit from Mitsubishi that will reduce natural gas use at the ethanol plant by replacing our molecular sieves, which use a significant amount of petroleum gas to generate steam, with an ethanol water separation unit that operates electrically with electrically powered equipment. This upgrade to using an electric ethanol dehydration system is expected to reduce the carbon intensity of our fuel, and was partially funded by a $1.5 million energy efficiency grant and about $5 million of debt funding from Mitsubishi Chemical.
Second, in June, we installed five new stainless steel storage tanks and load-out, increasing our storage capacity by about 250,000 gallons, which will provide us additional flexibility for operation of the new dehydration system in the plant for other applications. Three, we are installing a $10 million solar panel and microgrid array with battery backup to further reduce natural gas consumption by replacing carbon-based natural gas with zero carbon intensity solar electricity while optimizing energy use throughout the ethanol plant. This solar project is funded by an $8 million California Energy Commission grant. We are in the final engineering stages of the PV microgrid system and expect to make an announcement shortly regarding our solar construction partner, and we will launch construction in the third quarter of this year.
Fourth, and our last upgrade project, we are designing and building an electrically driven mechanical vapor recompression, also known as MVR system, to significantly reduce petroleum natural gas use, which is designed to reduce more than 60% of the steam utilized at the Keyes plant. This is partially funded by a $6 million California Energy Commission grant. The initial process engineering has been completed for the MVR system, and we are expected to announce the launch of the project and design build partners in the third quarter as well. When completed, these upgrades are designed to significantly reduce or even potentially eliminate petroleum natural gas use at the ethanol plant in Keyes, and reduce or eliminate our steam-driven cogen system, saving approximately $8 million per year of natural gas and utility pipeline transmission costs.
Our California biorefinery is being upgraded to primarily operate using high-efficiency electric motors and pumps powered by renewable power sources, including our solar microgrid system. The combination of the new electric membrane dehydration system, zero CI solar, and the use of RNG, as well as the MVR system, is expected to result in a significant reduction in carbon intensity for the fuel produced at our Keyes Ethanol Plant, making the Keyes Plant a sustainable, profitable supplier to the California biofuels market. Eric?
Thank you, Andy. Let's review our new subsidiary, Aemetis Carbon Capture. In October 2020, the Aemetis plant in California was identified in a study issued by the Stanford Center for Carbon Storage as one of three ethanol plant CO2 sources in California that have the highest potential return on investment from building a carbon capture and sequestration facility compared to the oil refineries, cement plants, and natural gas power plants that comprise the 61 largest CO2 emission sources in California. Our ethanol plant already captures about 150,000 metric tons per year of CO2, and already compresses the CO2 in the Messer liquefaction plant into transportable liquid carbon dioxide from which we already generate IRS 45Q tax credits for CO2 reuse. We are now completing a two-month confirmation review of the underground CO2 sequestration formations that were cited in the Stanford study.
We have determined that the Keyes plant and the Riverbank plant site are located above about a 7,000-foot deep strata known as a cap rock, and an 8,000-foot deep strata known as a basement rock. Between the two layers is a saline formation that was cited by Stanford as ideal for carbon dioxide sequestration. Over a long period of time, the CO2 reacts with saline to form a mineral that is permanently sequestered underground and does not return to the atmosphere. We expanded the team managing the Aemetis carbon capture subsidiary by adding Mehagan Hopkins as Manager of Regulatory and Compliance to lead the EPA Class VI CO2 injection well permitting process, as well as manage other permitting and regulatory opportunities related to the Riverbank site and our jet diesel plant development process.
In addition to California permitting experience for industrial and commercial projects, Mehagan worked at Chevron for 10 years and recently managed Chevron's global waste remediation. In phase 1 of the Aemetis Carbon Capture project, we plan to inject up to 400,000 metric tons per year of CO2 emissions from our biogas, ethanol, and jet diesel plants into 2 sequestration wells, which we plan to drill near our 2 biofuels plant sites in California.
We are expecting to construct CO2 injection wells that have a minimum of 1 million metric tons per year of injection capacity per well, then build the above-ground compression facility for an additional 1.6 million metric tons per year of CO2 gas compression capacity after the initial 400,000 tons per year is operational. We are in active discussions with multiple CO2 emission sources that would generate LCFS credits and IRS 45Q credits, including major oil refineries in California and direct air capture companies. Regarding the supply to Aemetis of up to 2 million metric tons per year of CO2 for phase 2 of the Aemetis carbon capture project. The initial phase of construction includes drilling 2 characterization wells to provide empirical data for the EPA Class VI permit. The injection wells will be drilled after receiving EPA and other permits.
We are currently in the engineering and permitting process for the 2 characterizations wells, with the expectation that we can drill the first characterization well in Q1 of next year. Let's discuss our Carbon Zero Renewable Jet and Diesel Fuel project using negative carbon intensity hydrogen in Riverbank, California. We are pleased that the Aemetis Carbon Zero biorefinery under development in Riverbank, California, near Modesto, continues to achieve major milestones. After several years of work, earlier this year, we announced the issuance of 19 separate air permits related to the Riverbank refinery, otherwise known as the ATC or Authority to Construct permits. Further amendments to the permits are planned as a part of final engineering. We are currently in the engineering phase of the jet diesel plant to support the closing of 20-year USDA debt financing.
During Q1 2021, we signed a technology agreement with Axens of France for the catalyst and process technology for the jet diesel plant. We also signed an agreement with Koch Project Solutions as the project manager for the engineering phase of the jet diesel project, which accelerated the pace of project development toward construction. We recently completed the engineering scope of work that was managed by Koch and are now moving to the EPC engineering and contracting agreements with the expected EPC contractor. We have engaged ATSI as the owner's engineer for the jet diesel plant, based on more than five years of work on projects with Aemetis. We also announced that Koch Project Solutions had signed a design and engineering agreement with Worley, a $7 billion global engineering firm that is doing engineering work for the large Phillips 66 renewable diesel plant in the San Francisco Bay Area.
Worley has now completed its primary scope of work and is working with Aemetis to support the completion of the EPC agreement. Recently, we identified a global EPC that is converting a California oil refinery into a renewable diesel plant, and last year completed the initial engineering design for a facility using the Axens technology. The goal of the permitting and engineering process is the financial closing of the 20-year debt funding, since Aemetis has already invested about $32 million of equity and grants into the project. The Riverbank jet diesel plant is designed to produce 45 million gallons per year of renewable jet and diesel, generating more than $230 million per year of revenue and more than $65 million per year of positive cash flow.
We plan to expand production to 90 million gallons per year at the Riverbank site by year 2025 as part of our five-year plan to generate approximately $460 million of revenues from renewable diesel and aviation fuel and $130 million of annual positive cash flow. The Riverbank plant is designed to use waste orchard wood and other waste biomass, such as dead forest wood, to produce cellulosic hydrogen, which will hydrotreat vegetable and other renewable oils to produce jet and diesel fuel. Let's review our biodiesel business in India. Our Universal Biofuels subsidiary in India bid on a portion of a $900 million biodiesel purchase tender offer for about 225 million gallons issued by the three India government oil marketing companies. Due to increased feedstock prices, the OMC bidding process for months in 2021 have not resulted in prices that have been accepted by biodiesel producers.
The bidding process continues, with the higher price of crude oil resulting in higher prices for diesel in India and increasing the bid prices offered by OMCs for biodiesel. Since our Indian subsidiary has no debt, is fully constructed and fully commissioned, we are well positioned for a rapid revenue increase as large government purchases of renewable biodiesel begin to occur to meet climate change and air quality goals once the current COVID crisis facing India begins to subside and the India government procurement activities for biodiesel are expanded. Let's finish with a brief review of an important innovation, which is in the commercialization process from the Aemetis technology development group. Millions of acres of wildfires each year and other adverse impacts of climate change continue to create significant losses of property and life, causing alternative uses of waste wood to become a focus of government policy and funding.
Headed by Dr. Goutham Vemuri as our Vice President of Technology Development, working with our laboratory staff in Minnesota and at the Keyes Ethanol Plant in California, the Aemetis technology development team worked with the federally funded Joint BioEnergy Institute in Berkeley, California, for more than three years in the development of a patented process to extract sugars from low-cost waste, orchard, and forest wood feedstocks. We now hold exclusive licenses to two issued patents that protect the sugar extraction technology for use with waste biomass and with wood from non-commercial forests.
By extracting negative carbon intensity C6 and C5 sugars from waste wood, we plan to reduce the amount of corn starch used in our ethanol production process by using negative carbon intensity sugars from waste wood to produce cellulosic ethanol. Every 10% of our feedstock for ethanol production that is obtained from waste wood sugars instead of corn starch is expected to generate about $30 million per year of increased EBITDA from the Keyes ethanol plant. The remaining lignin and non-converted sugars are designed to be the feedstock for our gasifier unit at the Riverbank jet diesel plant to produce carbon-negative cellulosic hydrogen for the hydrotreatment of vegetable and other oils to produce sustainable and diesel fuels. A $3 million California Energy Commission grant was awarded to JBEI and Aemetis, which partially funded the years of collaborative work and lab testing that led to the granted patents.
Recently, Aemetis was awarded a $250,000 U.S. Forest Service grant to further develop the sugar extraction technology. After being notified by the Department of Energy of our successful production plant proposal for sugar extraction from waste wood, we have now completed the application for a $1 million U.S. Department of Energy grant. This DOE grant is unique. In the event that Aemetis is awarded the $1 million grant, which will be used for engineering and permitting a production facility, the DOE has set aside up to $40 million of additional grant funding to fund the production plant to extract sugars from locally sourced orchard and forest waste wood. We expect commercial operations to pre-extract cellulosic sugars from waste wood when the Riverbank Renewable Jet and Diesel Plant becomes operational.
In summary, Aemetis is expanding a diversified portfolio of negative carbon intensity projects from dairy renewable natural gas and low carbon ethanol to renewable jet and diesel fuel. Our company's values are a long-term commitment to building value for shareholders, empowerment and respect for our employees and business partners, and making significant and positive contributions to the communities we serve. Let's take a few questions from our call participants. Taryn?
Thank you, Mr. McAfee. We will now be conducting a question and answer session. If you do have a question, please press star 1 on your telephone keypad at this time. If you're using a speakerphone, we ask that while posing your question, you pick up your handset to provide the best sound quality. Again, ladies and gentlemen, if you do have a question or comment, please press star 1 on your telephone keypad at this time. We'll take our first question from Manav Gupta with Credit Suisse. Please go ahead.
Hey, Andy, thank you for the update on the RNG developments. Help us understand this a little better. You expect to have 17 dairies online by the end of 2Q22. Your pipe is coming in by the end of the year. Your RNG trucks are coming in by the end of the year. Is there a way few of these dairies can come online by end of 4Q? Similarly, for some dairies in 1Q, should we expect all 15 to turn up in 2Q of '22, or will there be a ramp here, and if you could walk us through the ramp?
Yeah. In my remarks, I said that I thought we would be getting the next 5 dairies on by Q2 of next year, not the entire 15. We'll begin construction on the next 5 within, I'm going to guess, within the next 30-45 days. Depending on our permitting status, if we can get the subsequent 5 after that done, we'll begin them at the end of this year or the beginning of next year, and then we'll sequentially go from there. I think the goal is to have everything completed by the end of 2022, not by the middle of 2022.
Okay. End of 2022. Okay, fine. Also help us understand, your overall aim to hit with the phase 3 is 52 dairies. How many have you already signed up? The way we see it, you have two advantages. You have a pipe, and you have existing relationships with the farmers. There are some bigger players with bigger balance sheets. How many more dairies do you need to sign up to get to that 52, and do you think you'll be able to do it when there is competition from the bigger players?
Currently we have about 18 dairies that are either under contract or in process of being under contract, or will be under contract with leases signed by the next 30 days. We're in discussions with, I want to say, at least 20 more dairies that we're in various stages of discussion with. Some that are located near the pipeline and some that are not. Some that are further away that we would be able to service in different ways going forward. We're still finding a lot of interest from the dairies. I think California CARB put out a report, I believe it was a week or two ago, that essentially indicated that the dairy industry was not meeting its goals as per Senate Bill 1383 in terms of the overall reduction. I think that got a lot of people's attention.
We've been hearing from dairy owners that they're concerned about this. I think the market continues to be strong for us, and we're meeting a lot of new dairies. To be honest with you, I'm finding that time is the hardest part in getting out to meet all these folks. We're still getting a lot of interest, and I don't see any challenge in us hitting the stated goal in terms of the overall build-out. Certainly not within the next year, but as Eric had announced, the 5-year plan, we expect to be able to stay on track with that.
Okay. The last quick follow-up for Eric is, Eric, you have a guidance out there of $325 million EBITDA, which has no contribution from carbon capture and sequestration. Even if we stick to $325 million, is there, in your opinion, anything that has changed because of which you think that $325 million will not be achievable excluding the carbon capture and sequestration?
No. I would say that the only thing that has had any material impact on the company over the last six months is that there's generally been a lack of enforcement of the Federal Renewable Fuel Standard by the Biden administration. This is a bit of a vote that the Wall Street investor has been making, is that they've been voting in favor of the idea that the Biden administration would comply with federal law and fully enforce the RFS. Michael Regan's appointment at the EPA was specifically conditioned upon him saying to Congress that he would fully enforce federal law, including the Federal Renewable Fuel Standard. He was asked that question by Senator Grassley. We are now in August of 2021, the Federal Renewable Fuel Standard requires, in November of last year, the renewable volume obligation would've been announced. It's now August, it has not been announced.
This is a bit of a test, and I think Wall Street is watching it closely on how the Biden administration supports the 2 federal court orders that have stated the EPA has been in violation of the RFS and now it needs to comply with the RFS. We, as an industry, are watching that closely as well. I think we'll do fine as Aemetis, but as an industry, this should be a very strongly sustainable, profitable industry today, this minute, by enforcing federal law, and we have not seen that yet. That's an upside that I'm looking forward to seeing happen. I would say that upon that enforcement, the $325 million becomes very comfortable within the range of what we're achieving here.
Without that enforcement, we hit the 325. It's just a lost opportunity that the President should recognize and should follow up on his campaign commitments and enforce the RFS.
Thank you so much for taking my questions, Eric.
Sure. Thank you, Manav.
We'll take our next question from Derrick Whitfield with Stifel. Please go ahead.
Thanks. Good afternoon, all.
Hello, Derrick.
Eric, beginning with your Carbon Zero business, I wanted to focus on a couple of feedstock comments from your prepared remarks. With the year-to-date increase we've observed in feedstock costs across the U.S., I wanted to ask if you could share your views on the global feedstock markets and speak to the opportunities you could pursue to mitigate some of those feedstock pressures at your Riverbank plant.
The jet and diesel feedstock is different than our current ethanol business. As you know, our ethanol business uses sugar currently derived from corn starch. In the future, waste wood is also going to be an expected feedstock use for that. The vegetable and animal oils, which are used in renewable diesel and sustainable aviation fuel, are, as you know, a highly competitive feedstock marketplace. We are uniquely positioned because India is the second largest exporter of meat in the world and produces a significant amount of animal tallow. That tallow product is very difficult to transport. It is essentially a solid at room temperature, and so transporting it 1,000 miles and then converting it, upgrading it to meet the technical specifications of renewable diesel production, and much less transporting it across the Pacific Ocean, has been a very significant barrier to its use in renewable products.
We're the largest biodiesel producer in India. We've operated our plant on animal tallow and have a relationship with a market player that has control over about 70% of the market and is seeking a special relationship with a company that has the infrastructure and the approvals to be able to use tallow. Not only can we use tallow in our India plant, but also quite frankly, export the product to California for use in our plant in California. We plan to use that unique access to over 1.3 billion people's used cooking oil and tallow waste product to be able to supply our California plant with what is today, and I do expect this to continue, a very significant discount from the current price of feedstock to use for renewable diesel production.
Terrific. It sounds like certainly a great positive for your business. Perhaps shifting over to the financial side of the equation, could you comment on the general purpose of the mixed shelf you filed in late July and speak to your interest in raising equity at these levels?
Todd, you want to talk about that?
Yeah, I'd be happy to. The shelf is a tool that I think you'd see a lot of companies our size put up and raise. We have it set up as a general purpose shelf covering a variety. We have mostly put it in place so that when we see that the markets are sort of available and favorable to us, that we can file an instrument and take advantage of it. It takes a while to get a shelf together and up, and so we put it up recently just as part of sort of overall corporate hygiene.
Sure. That's very helpful. Thanks for your time, guys.
Thank you.
Thank you, Derrick.
We'll take our next question from Amit Dayal with H.C. Wainwright & Co. Please go ahead.
Thank you. Good afternoon, everyone. Eric, just with regards to the timeline for the initial set of 17, 18 dairy digesters, I think in the earlier part of this year, you said these would be coming online by the second quarter of 2022. Now the timeline seems to have moved towards the end of 2022. Could you help us understand what's driving some of this push out? Is it just permitting issues? Is there anything else that we should be aware of?
Actually, I wouldn't even say it's permitting issues. Andy is just being, I think, accurate in that our current visibility is it'll take all of 2022 to put 15 digesters in the ground. The reality is our execution is on time with our biogas upgrading unit, our PG&E injection unit, and our RNG fueling station. Digesters in and of themselves are not a particularly difficult thing for us. It's not a technology or other challenge. It's largely up to how fast our contractors execute. We could see an upside to a year-end 2022 forecast, but I don't think today we have visibility into what that timing is.
I think Andy accurately is assessing our current view, which is it could easily take us into third or fourth quarter next year to complete all 15 of them, but there's certainly an upside to that if we see the contractors move a little quicker than otherwise expected. We are still operating in COVID, and I think, unfortunately, and probably unexpectedly, there have been new restrictions on operations in California. Those currently are not hampering our process, but seem to show up in surprising ways as we're trying to access labor for these projects. I think Andy accurately assessed that the third and fourth quarter next year would be a wrap-up of those remaining 10 digesters.
In general, we continue to do the most difficult part of the process, which is the upgrading unit, the interconnection unit, and the RNG fueling stations on schedule for completion this year. It's just a matter of this commodity process of installing the digesters at the dairy and interconnecting to our pipeline, which again, we're also building. The most difficult part is getting done. The easiest part is simply a labor and execution phase of digester construction.
That's understandable. In terms of just getting a better handle on when you potentially can start recognizing revenues from these digesters, when all of these come online, should we be looking at those revenues to be recognized in 2023? Or will they start sort of slowly ramping in 2022 itself?
Yeah. No, good question, and I guess it gives me the opportunity, this is Andy, by the way, to further clarify what I was talking about earlier. We've gotten the permit to build the pipeline. We have a 12-month construction schedule for 32 miles of pipeline. Most of the contractors have told us they can do it in 10. We're building in a little bit of slip time there because you just don't know what's going to happen when you start digging in the ground. We will start construction on the next 5 dairies with, as I said, within the next 30 to 45 days. The digesters actually go along pretty quickly. It doesn't take very long to build the digesters, especially with the weather we've had in California. Everything's pretty dry, so the digester is fairly easy to build.
We're going to build the pipeline in segments as we add the dairies. Stanislaus County is 21 miles. We're going to be building that out, and the next five dairies that are connected to that will be obviously the priority, the first part of the pipeline that's going to be built. As we get into the spring of next year and start bringing these next five dairies online, and it could be February, depending on the kind of winter we have. That does have a little bit of impact as you're digging the digesters and the pipeline. Let's assume that, if I'm reading the weather correctly, they're saying it's going to be another La Niña year, which means it'll be dry in California. We have a favorable construction season. We'll start recognizing revenue from those digesters as they're brought on.
We're going to be able to start transmitting gas through the pipeline. We'll have our PG&E connection by that point. As we bring on the next 5 dairies, we'll start recognizing that revenue. As we bring on the 5 after that, we'll start bringing it in. It's not a wait till the end until we start doing that. It'll happen sequentially as we bring these new digesters online.
Understood. Thank you for that.
Does that answer your question?
Just one last one. Yes.
Okay.
It does mean we get a better handle.
Good
Last one from me, guys. On the CapEx side, with the progress you're making with permitting and getting everything ready on the engineering side, is a lot of that CapEx going to be felt in 2022? Will that start already showing up in 2021 itself?
We announced about $12 million of CapEx in the first 2 quarters of 2021. I would assume we haven't done the math on it, but we'll see another gas cleanup unit and pipeline and other stuff. We'll probably see another $20 million+ in the second half of 2021, maybe $30 million when I think about the gas upgrading and some other things. In 2022, the first 2 quarters will be completion of the pipeline, and that'll add another $12 million+ the digester. We're seeing quarterly of roughly $10 million a quarter of CapEx happening.
Thank you. Right, guys, that's all I have. Thank you so much.
Sure, thanks. I should remark again, these are one-time costs we have with gas upgrading, interconnect, RNG fueling stations, even the pipeline are sort of one time that then get spread over the digester. After this cycle of construction that Andy was talking about, then we just have the onsite dairy digester and hydrogen sulfide cleanup that interconnects to the pipeline. The pace of our digester construction is expected to accelerate as we move into that phase. Right now, bringing on a dairy digester in the next 30 days would generate no revenue at all without a pipeline and interconnection. Our rollout here is to get pipeline interconnection in our first three dairies started immediately and then scale up with additional digesters.
As Andy mentioned, he didn't put a timing on it, but building a digester is an 80 to 120-day process, as long as you have reasonably favorable weather. It's not a long, one-year process we're dealing with.
We'll move to our next question from Jordan Levy with Truist Securities. Please go ahead.
Morning, guys, and thanks for all the commentary. Definitely great to hear from the whole team. I want to talk quickly on the carbon capture side of things for a new business that seems to be progressing relatively quickly, which is certainly encouraging. I just want to get a sense of how you're all thinking about the capital requirements there outside of the injection wells themselves and as you work with the third parties to secure offtake agreements and for internal capture volumes?
Our plan with our carbon sequestration process is to build the two characterization wells. Each well's budget's about $4 million. Spend about $2 million on the permitting process consultants and 2D and 3D seismic and some other stuff going in. All in, it's about $10 million, we estimate about an 18-month process. That's highly variable depending on how the EPA resources their process. We think getting two characterization wells and the empirical data in front of the EPA gives us an opportunity to potentially get a Class VI license by the end of next year. We would then be well-positioned to actually drill the injection wells in 2023. The actual process, though, of equity funding would be the $10 million.
The USDA Rural Energy for America Program, as well as several programs at the Department of Energy, would be able to match that $10 million with DOE funding or USDA funding to build the actual 1 million tons per year of underground capacity. That's the casing cementing and the other well development will be funded using government-guaranteed debt. Once we do that, we have 400,000 tons per year of capacity from our existing biofuels plants that would have above ground equipment compressing that and injecting into the wells, and would've been basically funded with $10 million of equity and then USDA or DOE loans. At that point, we have contracts we're negotiating with major oil companies and actually a couple direct air capture companies that we would bring online and would incur additional CapEx for above ground compression.
The below ground construction would be completed, but the above ground compression units would then be installed, and that would be a secondary financing, but would be based upon running a business that at that point in time was estimated to have roughly $75 million of revenue. I'm sorry, $75 million of cash flow from about $100 million of revenue, just off of our own CO2. As you can see, what we've designed this to be is reflective of where the real risk is, which is getting the 2 characterizations wells drilled and getting the EPA Class VI license. Once you have that, it's fairly easy to debt finance the rest of the process. We're doing that debt financing in 2 phases.
Take advantage of the fact we control a certain amount of the CO2 ourselves and can generate positive cash flow from that generates the equity for the rest of it. The reason we've done this phasing is we have no appetite for a large equity raise at this price or even in this range of prices. Our shelf offering is set up with the idea it gives us flexibility as the valuation of the company increases significantly, reflecting the value of this operation we're doing in biogas and our offtake agreements with renewable jet and diesel projects, and just a number of other things we're doing with significant milestones that we're continuing to achieve. We do not have any appetite to use a significant equity raise to fund carbon sequestration.
With a budget of only $10 million over the next 18 months to create a tremendous amount of shareholder value, we are, I think, well positioned to do this without potentially any dilution to shareholders.
Thanks for that, Eric. That's a nice segue into my next question on the financing side of things. We noticed in your recent 10-Q just some changing in wording around the ability to extend your maturities to 2023 on much of your debt structure. I know you talked to this briefly in your prepared remarks. I just want to get a little more color on that, and then additionally, what sort of options the team might look into as a means of simplifying some of that debt structure as you move forward in some of the longer-term growth projects you're working on.
Sure. We have a, what, a 12-year-plus relationship with Third Eye Capital that has had more than 25 amendments in the course of that relationship. Yes, we've extended that relationship out over the past 12 months. Market conditions are such that we're now seeing a lot of appetite for environmental, social, and governance, those ESG kinds of projects. Certainly, transition investors, formerly in oil and gas now looking to get into renewables, have brought additional capital into the market. Climate change-focused capital has become a focus on this market. We recently saw Renewable Energy Group complete a $550 million Series A green bond that was at 5.8% interest rate. It has traded well post-offering. We also this week saw NOVA, the Sunnova solar company, complete a $400 million green bond, again, at about 5.8%.
It was sold at a slight discount, but seems to be trading well. We're seeing institutional investors come into the debt side of the balance sheets of renewable energy companies, and this is a rather new development. It shows a confidence in the regulatory framework that these companies operate under. I think our company's well positioned to be one of those green bond participants as well as I've already mentioned, the United States Department of Ag, the Department of Energy, and the California Pollution Control District private activity bonds are three markets we're already in addition to the green bond market.
We are working diligently with what we consider to be some of the world's leading investment banks in these markets, and certainly looking to simplify our capital structure with longer-term financing, but lower our cash costs so we can invest our equity in growth. I think that strategy is well positioned in the current marketplace to be successful in the third and fourth quarter this year.
Thank you very much, Eric, and thank you Todd and Andy as well.
Thanks.
Thanks.
We'll take our next question from Todd Firestone with Evercore. Please go ahead.
Hey, thanks for taking my question. I just had a couple. Maybe trying to think about what could be the next catalyst at Riverbank or you could provide a lot of color of what we should be looking for in the second half of 2021 or into 2022.
There are offtake agreements that we announced in, I think it was late Q1, for renewable diesel as well as sustainable aviation fuel. Actually a consortium of airlines for sustainable aviation fuel. We are currently in contract negotiations with multiple airlines. We have three primary renewable diesel offtakers that we're currently basically selecting which relationship we're going to be moving forward with. We have three very active bidders, let's call it, in our renewable diesel business. Those would be milestones I would expect we would achieve in the third quarter. Those offtake agreements are going to be matched with milestones in engineering.
I gave some disclosure today about some of the progress we've made on the engineering and permitting side of the business. That continues to move very steadily toward a closing of project financing, which I currently expect is going to be a Q1 event of next year. That's a slight slip from a Q4, but Q4 is definitely possible. We've just seen a reignition of this COVID news. It seems to slow down government and commercial lenders. I think it's Q1 of next year is when project financing is currently expected to occur.
That's great. Thanks. Maybe just one on India. You gave quite a bit of color there today of how business can improve there and just the size of the market. How can we think about the timing of a real step change in revenue generation? Is that a 2023 event? Maybe a little color on what needs to happen to transition that business to generating materially higher revenue.
There's two things that could be upside opportunities for India for us. Number 1 is simply the government, despite the COVID delays, moving forward with its national biofuels policy, which is a 5% blend of about 1.25 billion gallons of biodiesel. That's 1 billion gallons more than the current capacity in the country. There is increasing focus on climate change, certainly in the United Nations issuing its recent report claiming that we're already past the point of no return on climate change. There's just a lot of factors that would lead the Indian government to want to more aggressively enforce its current law. That's really the number 1 factor for us, is that everybody's showing the right steps in the right direction, just those steps have been slow. The second would be a fall in feedstock prices.
We have sourcing, as I mentioned, of tallow, We're going through a current process in which we potentially could be using that in production in much more expanded basis. Access to lower cost local feedstock is certainly part of our strategy that could position us well for rapid growth in India. Either one or both of those coming together could rapidly expand our India plant.
That's great. I appreciate it. Thank you.
Sure. Thank you.
We'll take our next question from Ed Woo with Ascendiant Capital Markets. Please go ahead.
Yeah, thanks for taking my question. A quick housekeeping question. Have you guys recognized any revenue from the biogas project yet?
We are currently showing that through our ethanol plant. We are using that biogas to run our ethanol plant. Our ethanol carbon intensity is lower now that we've got our pathway approved. It's being monetized through ethanol revenues right now.
Great. My last question is: what do you view as the price of oil, and how will that impact you? Absent any changes in the renewable fuel standards, if that doesn't change, how will the price of oil impact your ethanol business?
I don't think the price of oil is going to directly have a very material impact on ethanol. What will definitely have a material impact would be a strong enforcement of the Renewable Fuel Standard, which is 15 billion gallons per year, plus a 500 million gallon court order issued by a federal court in July of 2017. If the Biden administration simply follows federal law, we'll have a 15.5 billion gallon market demand, which will be a very robust demand for the ethanol molecule. I think that has the most direct impact on our margins in the current market.
All right. Great. Well, thank you for answering my questions, and good luck.
Thank you.
Thank you.
We'll take our next question from Marco Rodriguez with Stonegate Capital. Please go ahead.
Hey, guys. This is Dillon Wagner filling in for Marco today.
Sure.
Thank you for taking my question. I just wanted to see if y'all could provide a quick update on y'all's investment in Nevo Motors.
Sure. We have a strategic ownership in Nevo, and we have kept the specifics of the operation of Nevo off of the radar screen, primarily because of the rapid expansion of our core business, including entering the carbon sequestration business, which occurred after our Nevo Motors activity. Nevo has a stated goal already of using biofuels as range extenders for electric trucks, and that strategy continues to get a lot of investor attention. We see future activity at Nevo that will be very beneficial to Aemetis shareholders. We own a little less than 20% of the company. It's utilizing Aemetis' existing infrastructure of biogas fueling and facilities at Riverbank and other things that we have at Aemetis rather than our cash.
Our expectation is that over the next 12 months, we'll see some more public disclosure of the Nevo product line and how that strategy is being implemented. We have not highlighted it because we don't want investors to be confused that Aemetis somehow is an electric truck company because we own some shareholdings in an expanding biofuels range extender application of our existing core business.
Got it. One more question. There's just been a lot of discussion of climate change in the news and big pushes by governments and automakers to drive significant levels of electric vehicle sales. How are y'all looking at this trend to impact y'all's business?
I think that investors increasingly are looking at how do you make electricity out of something that's not carbon intensive. Over 50% of electricity in the U.S. is made from coal or petroleum natural gas, which is very highly carbon intensive, more than, frankly, gasoline. Our biogas at -426 carbon intensity is certainly one of the most carbon negative electricity sources in the world, and easily displaces petroleum natural gas as a better energy source for electric vehicles. As these initiatives are adopted to rapidly expand charging infrastructure and electric vehicle models increase in number the carbon intensity of fuel, I think, is going to become a central issue. Running electric vehicles on coal isn't necessarily a step forward when that coal carbon intensity is higher than that of gasoline or diesel.
I think our biogas has an expanding market opportunity feeding the electric vehicle revolution. As our discussion we just had about Nevo Motors, I think that the electric vehicle revolution, as you start carrying heavier cargoes, ends up demanding more and more of batteries, and that the range and capacity of larger vehicles needs a range extender. If that range extender is petroleum diesel or petroleum gasoline, the carbon intensity of that electric vehicle ends up being impeded. You end up having an opportunity for biofuels such as ethanol or biogas to be used in range extenders to basically make your electric vehicle carry a heavy cargo and go farther than what the batteries can contain.
We end up, at Aemetis, playing both the electricity role in electric vehicle and also the biofuel range extender fuel when that electricity has run out and the batteries no longer can carry what was originally obtained from a wall socket, essentially. I think investors increasingly are going to start understanding that it's really about carbon intensity, that even a gasoline or diesel vehicle can have electric drivetrain. It's really where did the electricity come from? What energy source did it come from? Whether it was coal or petroleum natural gas or -426 carbon intensity Aemetis biogas is going to end up being the primary driver of these discussions as people understand that climate change is what we're really fighting here. It's not really a question of the drivetrain of the vehicle.
Got it. Appreciate the color. Thanks.
Sure. Thank you, Dillon.
There are no further questions at this time. I would like to turn the floor back over to management for closing comments.
All right. Thank you. We appreciate the Aemetis shareholders and analysts and others who joined us today. Please review the Aemetis corporate presentation, which is on the Aemetis website. We look forward to talking with you about participating in the growth opportunities at Aemetis in the future.
Thank you for attending today's Aemetis earnings conference call. Please visit the investor section of the Aemetis website, where we'll post a written version and an audio version of this Aemetis earnings review and business update. Karen?
Thank you. This does conclude today's teleconference. We thank you again for your participation. You may disconnect your lines at this time, and have a great day.