In September, the U.S. Department of Energy updated the formula it uses to score how cleanly dairy waste gas qualifies for a federal production tax credit. The update more than quadrupled the credit rate — and owed Aemetis back pay for the two quarters it had already sold at the lower figure.
Shares closed 38.40% higher at $1.73, on dollar volume of about $30 million.
For anyone holding the stock, the key question is how much of the third quarter's swing to profit was a one-time event. The $11 million was a true-up for gas dispensed in the first two quarters, credited at the new rate following the September update.
The mechanism: the government's update to its 45ZCF-GREET emissions model assigned a lower carbon intensity score to dairy renewable natural gas. Under the Section 45Z production tax credit, a lower score means a higher credit per unit of gas. According to CFO Todd Waltz, the rate Aemetis received rose from about $15 to about $62 per MMBtu. The $11 million was the difference owed on gas already dispensed before the September 8 update took effect.
Revenue in the third quarter reached $88 million, up 49% from the same period a year earlier, according to the company's earnings release. The Section 45Z credits recognised as revenue totalled $24.7 million in the quarter. Net income was $5.2 million, against a net loss of $23.7 million in the third quarter of 2025.
Strip out the $11 million true-up and the credit income from dairy gas actually dispensed in the quarter was about $9.1 million, according to the release.
Cash at the end of the quarter was $3.4 million. Through the first three quarters of 2026 combined, Aemetis recorded a net loss of $25.9 million, as the strong third quarter only partially offset losses in the first half. The company says it is pursuing refinancing of its Keyes ethanol plant and working toward a possible listing of its Indian biodiesel subsidiary.
Two new dairy digesters came online in October, bringing the network to 14 digesters fed by waste from dairy farms. A project to replace most of the fossil gas used at the ethanol plant with electricity is under construction, the company says, with all equipment acquired and completion approaching.
What recurring dairy gas credits at the new rate amount to, sustained over a full year, is what the company's ability to hold onto profitability will depend on.