Methes
Energies is an increasingly successful producer/seller of biodiesel, as well as
automated biodiesel processors which are coveted throughout the industry for
their compact, continuous flow, multi feedstock-ready design and the
proprietary, performance maximizing/remote monitoring software that goes along
with them. The company continues to edge forward as a sector player on the
strength of top-quality B100 (100% biodiesel) coming out of their showcase
production and the 13M gallons/year primary production facilities in Ontario,
in conjunction with a considerable mastery of the complex RIN (Renewable
Identification Number) tracking and documentation required to satisfy EPA, IRS
and LCFS (Low Carbon Fuel Standard) regulations.
Methes
has even developed a comprehensive RIN authentication architecture consisting
of a best practices model and proprietary software platform that is
feedstock-centric (as it should be for optimal RIN authentication), tracking
the entire lifecycle of the feedstock/fuel while also giving the user a
powerful tool for handling everyday accounting tasks. This situational
awareness capability over its own feedstock/output, and the ability to provide
the same service to its clientele, is one of the keys to MEIL’s
competition-friendly business model, which emphasizes building a network of
interests in the biodiesel space and optimizing its own competitiveness (like a
franchisor role in the fast food sector). Recent Producer/Marketer status
achieved for the BQ-9000® National Biodiesel Accreditation Program, combined
with the company’s selection of EPA-registered QAP (quality assurance program)
provider, Genscape Inc., for RIN verification and the company’s existing
Foreign Renewable Fuel Producer importer of record status with EPA, makes Methes
an extremely agile biodiesel facilitator.
With
global biodiesel production on-track to rise 8% this year to just over 29M
tons, even the lower proposed EPA target cap in the Renewable Fuel Standard for
2014/2015 of 1.28B gallons of biodiesel, nearly 29% lower than the 1.8B gallons
produced by the industry last year, can’t slow down what markets see as a good
thing. A major deal announced last week by Methes Energies (Jun 18) with some
of the company’s U.S. clients has them on task to supply over $6M in biodiesel
(1.4M gallons plus) by September 30 this year. Moreover, this deal is
essentially the tip of the iceberg with these clients and it is expected to be
the first of many more like it to come. MEIL structured the deal around a
3-month window, wisely not getting themselves locked into a longer period,
largely due to the potential for market volatility.
Interestingly
enough, this deal also holds the possibility for MEIL to get retroactively
reinstated Biodiesel Blender’s Tax Credit at $1.00/gallon. All the sweeter when
you realize Methes has their feedstock and selling prices locked in for the
next three months according to company President, Nicholas Ng, who also noted
that production ramping across the company’s entire footprint was currently going
quite well. With 26 jumbo rail cars at their disposal dedicated to moving B100,
Methes is able to ship relatively cheap, yet extremely high-quality product to
markets across North America and the U.S. appetite for biofuels isn’t slowing
down, despite what the EPA thinks the market wants. Motorists in Iowa for
example purchased some 2.7M gallons of E85 (85% ethanol and 15% gas) in Q1 this
year, a 48% jump over the same period in 2013 according to the Iowa Renewable
Fuels Association, with the real-world cost saving benefits of biofuel
resonating in end markets soundly.
The
company’s production footprint is made up of their own Denami 600 (1.3M
gallons/year) and Denami 3000 (6.5M gallons/year) units, a testament to their
system engineering and manufacturing prowess. These babies can reliably produce
ASTM-quality B100 biodiesel from a wide variety of feedstocks and MEIL is able
to churn a new unit out in only 16 to 20 weeks of manufacturing up-time,
ultimately delivering solutions based on the Denami unit(s) that range from
customized turn-key facility installs, to fully-managed and maintained
implementations. Modular and scalable, the Denami systems can rapidly evolve a
biodiesel production footprint in a highly granular fashion, allowing customers
to tack on as much or as little custom production as required for their
specific purposes/locations as things change over time.
Whether
they are shipping fuel to eager end markets or helping clients implement their
own localized production solutions, Methes continues to generate substantial
buzz in the biofuels space and it is worth keeping an eye on the company for
more activity as energy prices inexorably climb on broad-spectrum influences
that range from mounting carbon regulations in the U.S. and EU, to energy-related
geopolitical tensions. Green energy like biofuels continue to remain an
attractive, securely executable play in this market, with ready transportation
and usability logistics maintaining bullish baseline tailwinds for the entire
sector.
For
more info on Methes Energies, visit: www.Methes.com
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MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
