Methes Energies, which has
long since mastered comprehensive feedstock-driven RIN (Renewable
Identification Number) tracking and documentation for EPA, IRS and LCFS (Low
Carbon Fuel Standard) compliance, even creating their own proprietary
biofuel-centric accounting and logistics software platform to support this end,
recently doubled down on their biofuel/feedstock chain of custody validation
ahead of the EPA’s upcoming Quality Assurance Program (QAP) for biofuel RINs on
imports and domestic production.
A key deal with
EPA-registered QAP provider of much sought after A-RINs at a discount (which
offer downstream assurances and are generally viewed as a guaranteed RIN, as
opposed to less unimpeachable B-RINs), places MEIL ahead of the pack when it
comes to the new Renewable Fuel Standards (RFS) program. The new guidance set
forth under this EPA program is designed, in part, to increase RIN transfer
liquidity, particularly in the case of smaller biofuel producers, enhancing
underlying growth dynamics for the sector.
The timing by Methes
Energies here setting up their QAP program is superb, lining up several
synergistic plays ahead of the EPA’s definitive move:
• Increased B100 (100% biodiesel) production coming on
stream from their primary plant in Sombra, Ontario (currently 13M gallons/year)
• Recent BQ-9000® National Biodiesel Accreditation Program
status award as a Producer and Marketer (fuses middle-distillate blendable ASTM
D6751 standard for B100 with a comprehensive logistics situational awareness
praxis)
• Existing Foreign Renewable Fuel Producer importer of
record status with EPA that lets them import to U.S. from Sombra and a fleet of
railcars that can handle biodiesel and feedstock
The revised-down (about 16%)
biofuel mandate by EPA for 2014 of 15.21B gallons gives operators like MEIL
plenty of room to work with and this is one company that really knows what it
takes to make it in this industry, something which places them ahead of competitors
(producers/marketers) at a similar size and scale. But it is the broad-spectrum
nature of MEIL’s business model that really sets them apart as one of the
survivors that can thrive under prevailing market winds.
The company’s proprietary
software platform for instance handles constantly changing ASTM methodologies
and does full BQ9000 compliance with the BQ9000 LIMS (Laboratory Information
Management System). This platform does far more than logistics like inventory
management, tracking feedstock and doing blend audit trails on mixed fuel
though, it handles complete sales and invoicing requirements, as well as sample
management and comes ready to use out of the box, letting clients remotely
manage everything via any device they want. Compelling service offerings like
MEIL’s management software platform, combined with a production component and
sales of their Denami 600 (1.3M gallons/year) and Denami 3000 (6.5M
gallons/year) processor models, makes the company exceptionally resilient, with
a strong foothold in the sector.
MEIL’s technological prowess
is a core virtue when it comes to carving out a slice of the biodiesel market
pie; a virtue evident from their real-time remote monitoring capabilities used
to ensure seamless biodiesel production from the units sold to the company’s
clients. These same senor and management electronics allow the company to
handle upgrades and maintenance proactively, as well as recommend
feedstock-related tuning for optimum product quality. Methes Energies really
understands how to consistently make top-quality biodiesel, jump through all
the regulatory loopholes with ease and get that product to market, making the
tighter target from EPA even largely beneficial to the company (as less
experienced players get strangled). Moreover, MEIL’s entire business strategy
emphasizes competition in the sector as being healthy, given that they provide
services, fuel production, biodiesel production units and related support
(acting as a kind of fast-food franchisor type of operator).
An agile mover like Methes
is poised to reap the substantial rewards that exist under such market
conditions and the company is clearly thinking ahead of the game with their
move to take advantage of the new EPA quality assurance regulations. It should
be interesting to see how things shake out as the Sombra upgrades come online
and they start moving more product to the U.S. over their rail infrastructure.
For more info on Methes
Energies, visit: www.Methes.com
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