Universal Biofuels in India halts biodiesel production while authorities investigate odor

Photo: Aemetis Inc.

In India, the Kakinada biodiesel plant owned and operated by Aemetis’ subsidiary Universal Biofuels was contacted by local officials in mid-December regarding complaints by local residents of odors in the industrial area where the plant is located.  

Aemetis had produced about two months of biodiesel inventory and voluntarily agreed to halt production to investigate odors.  

After ceasing operations for one month, however, odors in the area persisted, likely related to edible-oil fractionation facilities in the same area, according to Aemetis.  

An official notice was received by Universal Biofuels Jan. 19 requesting that the plant cease production until a review is completed, despite having already done so a month earlier.  

A resolution of the official order is being arranged with local officials.  

As the plant has two months of biodiesel product available for delivery to customers, the temporary cessation of production is not expected to impact the revenues under the current oil-marketing companies’ (OMC) allocation. 

Aemetis, through its Universal Biofuels subsidiary, built the Kakinada plant in 2008 and has operated the plant for more than 15 years, creating more than 100 direct jobs related to the plant and hundreds of jobs indirectly to support biodiesel plant operations.  

Aemetis said Universal Biofuels has extensive experience in dealing with local regulatory and government officials, and while it is not uncommon for officials to issue orders after the fact in response to local activists, production is expected to resume soon and expected deliveries under OMC allocations can be made from inventory on hand.  

Further, Aemetis has implemented an expansion of the Kakinada plant that increased annual production capacity from 60 million gallons per year (mgy) to 80 mgy. 

Universal Biofuels has also identified what Aemetis said is a highly qualified candidate to be chief financial officer and is working on a potential initial public offering (IPO) of the business in India later this year.  

The local compliance notices are considered to be in the ordinary course of business for oil refineries, renewable fuels plants, and other processing plants in India and are not expected to have an impact on the IPO process, according to Aemetis.