Aemetis, Inc. (NASDAQ: AMTX) announced it has received key equipment for a $40 million mechanical vapor recompression (MVR) system at its ethanol plant in Keyes, California, including high-efficiency turbofans and other components, according to a company press release.

The MVR installation will include six 3,500-horsepower electric turbofans designed to heat alcohol vapors and generate steam without natural gas. The system is under construction and expected to be operational by the end of 2026.

Once operational, the company projects the system will reduce natural gas usage at the Keyes plant by approximately 80% and increase annual cash flow from operations by $32 million. The project is also expected to decrease the carbon intensity of the plant's fuel ethanol, affecting California Low Carbon Fuel Standard credits and Section 45Z Clean Fuel Production tax credits.

The project has received approximately $19.7 million in grants and tax credits from the California Energy Commission, Pacific Gas & Electric, and the U.S. Internal Revenue Service via Section 48C investment tax credits.

"MVR technology is being adopted in the ethanol industry for energy savings and economic incentives associated with lower emission rates, and Aemetis is among the first producers in North America to install the system," said Eric McAfee, Chairman and CEO of Aemetis.

The Keyes plant produces 65 million gallons of ethanol per year and has been operating since 2011. It also produces approximately 2 million pounds per day of animal feed and captures more than 100,000 tons per year of carbon dioxide for reuse as beverage-grade CO2.