California E15 bill clears legislature, opening market for Aemetis
California's legislature has unanimously passed Senate Bill 795, a measure that allows fuel retailers to dispense E15 petrol-ethanol blends using existing vapour recovery equipment, based on manufacturer certifications rather than the more burdensome individual equipment recertification previously required. The bill now awaits the signature of Governor Gavin Newsom.
Aemetis (NASDAQ: AMTX), a California-based ethanol and renewable fuels producer, praised the passage. The company operates a 65 million gallon per year ethanol plant in Keyes, in the Central Valley, and stands to benefit from the enlarged state market the legislation is designed to unlock.
The policy background
E15 refers to petrol blended with 15% ethanol, compared with the E10 standard blend currently dominant in California. Year-round E15 sales in the state were authorised by Assembly Bill 30, signed into law in October 2025, but implementation stalled because dispensing equipment had to meet certification requirements that most retailers could not easily meet with existing infrastructure. SB 795 resolves that bottleneck by accepting manufacturer certifications for vapour recovery systems already in place at forecourts across the state.
A study from the University of California, Berkeley, cited by Aemetis in its announcement, estimates that switching California drivers to E15 could reduce blended petrol costs by $2.7 billion per year. That figure is a modelled projection and has not been independently verified by The Cleantech Times.
Eric McAfee, chairman and chief executive of Aemetis, described the bill as "a major step in opening California's market to more American-made ethanol" and credited the Governor and legislature for supporting E15 as a tool to lower fuel costs and reduce transport emissions.
Market context
The shift from E10 to E15 at California scale would, according to Aemetis, add more than 600 million gallons of annual ethanol demand in the state, roughly ten times the output of its own Keyes plant. That represents a substantial demand signal for US corn-ethanol producers and raises questions about feedstock sourcing, land use and the carbon intensity of the incremental supply.
The wider biofuels market in California is shaped by the state's Low Carbon Fuel Standard (LCFS), which rewards fuels with lower lifecycle carbon intensity relative to a declining benchmark. Ethanol's credit position under the LCFS depends on feedstock, production energy source and transport distance. Aemetis has separately been developing a sustainable aviation fuel (SAF) plant and a carbon dioxide sequestration project in California, both of which could improve the carbon profile of its Keyes output and generate additional LCFS credits.
Beyond ethanol, the Keyes plant already produces more than two million pounds of distillers grain per day for livestock feed, supplying around 80 Central Valley dairies, and is described by the company as California's largest producer of renewable CO2, used in food and beverage processing. These co-product revenue streams matter for project economics.
What to watch
For investors in Aemetis, the key questions are timing and offtake. SB 795 still requires the Governor's signature, and the pace at which retailers upgrade or recertify equipment will determine how quickly the incremental demand materialises. California's retail fuel market is large but fragmented, and E15 uptake will depend on retailer incentives and pump-level infrastructure investment across the state. Aemetis has not disclosed any new supply contracts or volume commitments linked to the legislation's passage.