Q4 2021 Green Plains Inc & Green Plains Partners LP Earnings Call

Speaker 1: Good morning and welcome to the Green Plains Inc. and Green Plains Partners' fourth quarter and full year earnings conference call. Following the company's proposed remarks, instructions will be provided for Q&A. At this time, all participants are in a listen-only mode. I want to turn the call over to your host, Phil Boggs, Executive Vice President, Investor Relations. Mr. Boggs, please go ahead. Phil Boggs, Executive Vice President, Investor Relations.

Good morning.

Plains, Inc, and Green Plains partners.

First quarter and full year earnings conference call.

The company's prepared remarks instructions will be provided for Q&A.

At this time all participants are in a listen only mode I will now turn the call over channels for bogs.

Thank you. Thank you to the Vice President Investor Relations. Mr. <unk>. Please go ahead.

Good morning, everyone welcome to Green Plains, Inc, and Green Plains partners fourth quarter and full year 2021 earnings call participants on today's call are Todd Becker, President and Chief Executive Officer, Patrick Simpkins, Chief Financial Officer, and Leslie van or mainland EVP product marketing and innovation.

Speaker 2: Good morning, everyone. Welcome to Green Plains Inc. and Green Plains Partners' fourth quarter and full year 2021 earnings call. Participants on today's call are Todd Becker, President and Chief Executive Officer, Patrick Simpkins, Chief Financial Officer, and Leslie VanderMeulen, EBP Product Marketing and Innovation. There is a slide presentation available, and you can find it on the investor page under the event presentations link on both corporate websites.

A slide presentation available and you can find it on the Investor page under the events and presentations link on both corporate websites.

Speaker 2: During this call, we will be making forward-looking statements which are predictions, projections, or other statements about future events.

During this call we will be making forward looking statements, which are predictions projections or other statements about future events.

Speaker 2: These statements are based on current expectations and assumptions that are subject to risks and uncertainty.

These statements are based on current expectations and assumptions that are subject to risks and uncertainties.

Speaker 2: Actual results could materially differ because of factors discussed in today's press releases, and the comments made during this conference call and in the risk factor section of our Form 10-K , Form 10-Q , and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement. Now I'd like to turn the call over to Todd Becker.

Actual results could materially differ because of factors discussed in today's press releases and the comments made during this conference call and in the risk factors section of our Form 10-K Form 10-Q , and other reports and filings with the Securities and Exchange Commission, we do not undertake any duty to update any forward looking statements now I'd like to turn the call over to Todd Becker.

Thanks, Bill and good morning, everyone and thanks for joining our call today, our transformation continues to gain momentum we continue to execute on key milestones necessary to achieve our 2024 and 2025 transformation and we are making great strides towards achieving these goals 2022 is shaping up to be a transformative year and we are excited to review our progress.

Speaker 2: Thanks Phil, good morning everyone and thanks for joining our call today. Our transformation continues to gain momentum. We continue to execute on key milestones necessary to achieve our 2024 and 2025 transformation and we are making great strides towards achieving these goals.

Speaker 2: 2022 is shaping up to be a transformative year, and we are excited to review our progress and ongoing initiatives.

And ongoing initiatives.

Speaker 2: We released our inaugural sustainability report late last year and are planning to release another in Q2. The market is starting to realize we are a true ESG story. We always have been, but we haven't always been forward about telling you.

We released our inaugural sustainability report late last year and are planning to release. Another in Q2. The market is starting to realize we are a true ESG story, we always have been but we haven't always been forward about telling yet.

Speaker 2: That has changed and we have made significant commitment to reducing our GHG footprint 50% by the end of the decade and be carbon neutral by 2050. These aren't idle goals and we have a concrete path to achieve them and more.

That has changed and we have made significant commitment to reducing our ghd footprint, 50% by the end of the decade and be carbon neutral by 2050. These arent, Idaho goals and we have a concrete path to achieve them and more.

Speaker 2: For the fourth quarter, as we had indicated earlier, we had hedged our consolidated crush margins early. We strategically did this in order to reduce our risk and protect the capital that we had raised to execute on our transformation and ended the year with over $680 million in cash equivalents as well as additional liquidity from available credit facilities.

For the fourth quarter as we had indicated earlier, we had hedged our consolidated crush margins early we strategically did this in order to reduce our risk and protect the capital that we had raised to execute on our transformation and ended the year with over $680 million in cash equivalents as well as additional liquidity from available credit facilities.

Speaker 2: We achieved 20 cents per gallon in the consolidated crush and approximately 17 cents for the full year. Overall in 2021, these results are in line with what was available in the daily average crush as we had significantly overachieved in the first half of the year. If we would have not hedged anything all year, our year would have not been substantially different although the fourth quarter would have been higher making up for extreme weaknesses in the first half that we avoided by hedging and risk management.

We achieved <unk> per gallon in the consolidated crush and approximately <unk> 17.

For the full year overall in 2021. These results are in line with what was available in the daily average crush as we had significantly over achieved in the over achieved in the first half of the year. If we would have not hedge anything all year, our year would have not been substantially different although the fourth quarter would have been higher making up for extreme weaknesses in the first.

Half that we avoided by hedging and risk management Q4 was unique from any perspective and an unprecedented maybe.

Speaker 2: Q4 was unique from many perspectives and unprecedented.

Speaker 2: maybe the only time we will see this. With that said, we manage for the long-term financial stability of Green Plains.

Maybe the only time you will see this with that said, we managed for the long term financial stability of Green Plains operational utilization at our Madison and Mount Vernon locations were impacted by supply chain constraints tied to national chip shortages in labor tightness, which delayed completion of these upgrades limited our opportunistic gallons just this week we stop.

Speaker 2: Operationally, utilization at our Madison and Mount Vernon locations were impacted by supply chain constraints tied to national chip shortages and labor tightness, which delayed completion of these upgrades, limiting our opportunistic gallons.

Speaker 2: Just this week we started one side of the new Mount Vernon dryers and expect the pull system to be operational late this quarter. Additionally, our York location experienced grain bin damage during the quarter, which limited overall utilization at that location as well. While we are thankful that no one was hurt as a result of this accident, the combined challenges to the quarter and utilization from these three locations resulted in lost opportunity given the expansion of the crush in the spot market.

<unk> one side of the new Mount Vernon Dryers, and expect a pull system to be operational late this quarter.

Additionally, our York location experienced <unk> grain been damaged during the quarter, which limited overall utilization at that location as well, while we are thankful that no. One was hurt as a result of this accident combined challenges to the quarter and utilization from these three locations resulted in lost opportunity given the expansion of the crush in the spot market.

We continue to be focused on running Green plains, one oh, well in order to execute on Green Plains to point out the fourth quarter also included some negative impact from mark to market items in our export business as well as some higher eliminations from ethanol gallons and renewable Cornell shipments that werent delivered due to logistics challenges in the U S. At the end of the quarter.

Speaker 2: We continue to be focused on running Green Planes 1.0 well in order to execute on Green Planes 2.0.

Speaker 2: The fourth quarter also included some negative impact from mark-to-market items in our export business as well as some higher eliminations from ethanol gallons and renewable corn oil shipments that weren't delivered due to logistics challenges in the U.S. at the end of the quarter. Combined, these items reduced our results by about $8 million. Much of it will come back over the first couple of quarters in 2022.

Combined these items reduced our results by about $8 million much of which much of it will come back over the first couple of quarters in 2022.

Speaker 2: Deliveries on those positions got executed. On top of that, the York incident took over $5 million out for the corridor as well.

As delivery deliveries on those positions got executed on top of that the York incident took over $5 million out for the quarter as well.

Speaker 2: Margins started out soft in 2022 as stocks and production levels built and increased fast.

Margins started off soft in 2022 stocks production levels built in increased fast with current logistical challenges in trucking and rail service on the carriers, we saw the industry slowdown in stocks through this week. This along with the fact that ethanol is a significant discount to our Bob and the RIN values remain elevated we built.

Speaker 2: With current logistical challenges in trucking and rail service on the carriers, we saw the industry slow down and stock through this week. This along with the fact that ethanol is a significant discount to RBOB and the RIN values remain elevated. Given the

Speaker 2: We believe the discretionary blender is fully incented to blend more ethanol. While hesitant to call a bottom to the margin structure, with gas demand rebounding this week as we get out of winter with mild temperatures, driving demand can clear this excess quickly. In addition, it looks like

Leave the discretionary blender is fully incentive to blend more ethanol, while hesitant to call a bottom to the margin structure with gas demand rebounding. This week as we get out of winter with mild temperatures driving demand can clear. This excess quickly. In addition, it looks like more parties continued.

Take advantage of a flawed Chicago pricing mechanism, which sent to market to new lows on very little volume as we continue to argue for a better way to price 1 million barrels of ethanol production per day for the industry that are impacted by a few million gallons of sales and the window.

Speaker 2: take advantage of a flawed Chicago pricing mechanism, which sent the market to new lows on very little volume. As we continue to argue for a better way to price a million barrels of ethanol production per day for the industry that are impacted by a few million gallons of sales in the window.

Speaker 2: Finally, as global economics begin to put the pandemic behind us...

Finally, as global economics begin to put the pandemic behind US we believe we could see strong energy and transportation demand as we move through the year more importantly, though the market needs fuel ethanol plants to run as vegetable oil demand has been robust and prices continue to move higher. In addition, we are seeing strong demand for high protein.

Speaker 2: We believe we could see strong energy and transportation demand as we move through the year. More importantly though, the market needs fuel ethanol plants to run as vegetable oil demand has been robust and prices continue to move higher. In addition, we are seeing strong demand for high protein ingredients, particularly after we started up our second MSC location and begin to demonstrate our increased size and redundancy to the market.

<unk>, particularly after we started up our second MSC location and begin to demonstrate our increased size and redundancy to the market I will discuss that later in the call the positive impact to our strategy for what seems to be a potential shortages in many of our products.

Speaker 2: I will discuss that later in the call, the positive impact to our strategy for what seems to be a potential shortage in many of our products.

Speaker 2: We are scheduled to begin our 60% protein trial at Wood River in the next week or two, and we are excited about the potential to produce a new value-added ingredient that can be used to target the aquaculture space.

We are scheduled to begin our 60% protein trial at Wood River and the next week or two and we are excited about the potential to produce a new value added ingredient that can be used to target. The agriculture space. We are working with our agriculture customers, who are excited to get samples of the new product and we believe this can be transformative for us in our program.

Speaker 2: We are working with our aquaculture customers who are excited to get samples of the new product, and we believe this can be transformative for us and our program. We have a long-term goal of moving beyond protein levels in the 50s and fully operating in the 60s and above, and we'll know more shortly on that opportunity.

We have a long term goal of moving beyond protein levels in the fifties and fully operating in the <unk> and above and we'll know more shortly on that opportunity. We broke ground on our buying in the fourth quarter and are on track for a mid 2022 startup of the patented MSC protein system at O'brien, Mount Vernon and Central City.

Speaker 2: We broke ground on O'Brien in the fourth quarter and are on track for a mid-2022 start-up of the patented MSC protein system at O'Brien, Mount Vernon, and Central City, and plan to break ground at Tharaldson this spring as soon as the ground is thawed. The long lead time equipment is in place and we are executing our start-up plan.

And the plan to break ground at <unk>. This spring as soon as the ground has thawed. The long lead time equipment is in place and we are executing our startup plans Green Plains partners was able to increase our distribution this quarter to <unk> 44 per unit. We are pleased to increase the distribution for a second quarter in a row. The partnership is unguarded.

Speaker 2: Green Plains Partners was able to increase their distribution this quarter to 44 cents per unit. We are pleased to increase the distribution for a second quarter in a row. The partnership is ungirded under

Under.

Speaker 2: excuse me, the partnership is committed in long-term minimum volume commitments resulting in a strong and stable cash flows. I will come back on the call to provide an update on our exciting ongoing initiatives for 2022 and beyond and spend time on all of our verticals, protein, oil, sugar, and carbon. Now I'll turn the call over to Patrick.

Excuse me the partnership is committed and long term minimum volume commitments, resulting in a strong and stable cash flows I will come back on the call is to provide an update on our exciting ongoing initiatives for 2022 and beyond and spend time on all of our verticals protein oil sugar and carbon now I will turn it over the call over to Patrick to review, both Green Plains, Inc.

Speaker 2: to review both Green Plains, Inc. and Green Plains Partners financial performance.

Green Plains partners financial performance, Thank you Todd and good morning.

Speaker 2: Thank you, Todd, and good morning. Green Plains consolidated revenues for the fourth quarter of $802.3 million were higher than the same period a year ago, $47.8 million, driven mainly by higher prices and run rates. Our plant utilization rate improved year over year and for the fourth quarter with an 83% run rate during the period, which compares favorably to a 76% run rate in the prior year fourth quarter.

Green Plains consolidated revenues for the fourth quarter of $802 3 million or higher than the same period, a year ago, $47 8 million driven mainly by higher prices and run rates, our plant utilization rate improved year over year and for the fourth quarter with an 83% run rate during the period, which compares favorably to a 76% runoff.

Rate in the prior year fourth quarter we.

Speaker 2: We anticipate concluding final startup items at Madison, Mount Vernon, and York during the first quarter, putting us in a position for higher utilization rates as we move through 2022.

We anticipate including final startup items at Madison, and Mount Vernon and York during the first quarter, putting us in a position for higher utilization rates as we move through 2022.

Speaker 2: Before the quarter, we reported a net loss of $9.6 million and 18 cents per diluted share, compared with a $49.6 million loss reported for the same period in 2020.

For the quarter, we reported a net loss of $9 6 million <unk>.

Per diluted share compared with a $49 $6 million loss reported for the same period in 2020.

Speaker 2: Adjusted EBITDA for this quarter was $32 million, comparing favorably to $9.4 million in the prior year quarter, largely due to stronger ethanol crush margins realized in the quarter, offset by a year-over-year decline in contributions from ag and energy margins, largely due to favorable natural gas optimization in the prior year.

Adjusted EBITDA for the quarter was $32 million comparing favorably to $9 4 million in the prior year quarter, largely due to stronger ethanol crush margins realized in the quarter offset by a year over year decline in contributions from AG and energy modules largely due to favorable natural gas optimization in the prior year.

Speaker 2: Our net loss for the quarter included a non-cash tax charge of $4.8 million related to a valuation adjustment on a deferred tax asset.

Our net loss for the quarter included a non tax charge for noncash tax charge of $4 $8 million.

Related to evaluation adjustment on deferred tax assets.

Speaker 2: For the period, we realized a 20-cent-per-gallon consolidated crush margin in the quarter and a 17-cent-per-gallon crush margin for the full year as a result of ethanol fundamentals, strong corn oil pricing, and protein sales.

For the period, we realized a <unk> 20 per gallon consolidated crush margin in the quarter and a 17% per gallon crush margin for the full year as a result of ethanol fundamentals strong corn oil pricing and protein sales.

Speaker 2: For the quarter, our SG&A cost for all segments was $18.2 million, compared to $22.8 million in Q4 of 2020, driven by an adjustment to our accrued compensation during the quarter partially offset by higher costs from the addition of fluid-quip SG&A expenses.

For the quarter, our SG&A cost for all segments was $18 2 million compared to $22 8 million in Q4 of 2022, 2% driven by an adjustment to our accrued compensation during the quarter, partially offset by higher costs from the addition of fluid quip SG&A expenses.

Speaker 2: Interest expense of $6.9 million was favorable to the $10.5 million reported in the prior year fourth quarter, driven mainly by a combination of a change in the treatment of interest expense related to our convertible debt in early 2021, extinguishment of debt associated with our 22 and 24 converts, offset by issuance of 27 converts, and the effect of capitalized interest.

Interest expense of $6 $9 million was favorable to the $10 5 million reported in the prior year fourth quarter, driven mainly by a combination of a change in the treatment of interest expense related to our convertible debt in early 2021 extinguishment of debt associated with our 'twenty, two and 'twenty four converts offset by issuance of 27 converts and the <unk>.

<unk> capitalized interest for.

For 2022 based on expected debt levels cash interest expense should average approximately $10 million per quarter. The four capitalized interest, which will result in lower reported interest expense.

Speaker 2: For 2022, based on expected debt levels, cash interest expense should average approximately $10 million per quarter before capitalized interest, which will result in lower reported interest expense.

Income tax expense for the quarter was $4 8 million, which represents a cumulative income tax adjustment for the year as we've discussed before Green Plains remains in a net accumulated loss position and as a result, we cannot use our nols or credits until we demonstrate consistent income. We therefore have to reserve against any future tax benefits in the interim.

Speaker 2: Income tax expense for the quarter was $4.8 million, which represents a cumulative income tax adjustment for the year. As we've discussed before, Green Plains remains in a net accumulated loss position, and as a result, we cannot use our NOLs or credits until we demonstrate consistent income. We therefore have to reserve against any future tax benefits in the interim.

Speaker 2: On slide nine of the earnings deck is a summary of the company's balance sheet highlights. We ended the period with $698 million of cash and networking capital compared to $302.8 million for the prior year, reflecting the results of a successful capital campaign during 2021 in support of our growth objective.

On slide nine of the earnings deck is a summary of the company's balance sheet highlights. We ended the period with $698 million of cash and net working capital compared to $302 8 million for the prior year, reflecting the result of the successful capital campaigns during 2021 in support of our growth objectives.

Speaker 2: Our liquidity position at the end of the quarter included $685.8 million in cash, cash equivalents and restricted cash along with marketable securities.

Our liquidity position at the end of the quarter included $685 8 million in cash cash equivalents and restricted cash along with marketable securities.

Speaker 2: with approximately $287.8 million available primarily under our working capital revolvers and delayed draw term loans.

With approximately $287 $8 million available, primarily under our working capital revolvers and delayed draw term loan.

For the quarter, we allocated $62 $3 million of capital to profit sustaining and growth projects, including $42 $4 million to our MSC protein initiatives and approximately $15 $3 million towards towards maintenance Capex safety and regulatory capital with.

Speaker 2: For the quarter, we allocated $62.3 million of capital to profit-sustaining and growth projects, including $42.4 million to our MSC protein initiatives and approximately $15.3 million towards maintenance CapEx, safety and regulatory capital, with total CapEx ending the year around $187.2 million.

With total capex ending the year around $187 2 million.

Speaker 2: As we look at 2022, total CapEx is anticipated to be in the range of $250 to $300 million, including approximately $27 million of maintenance capital, with another $18.6 million of capital rolling over from 2021 projects that should be completed in the first quarter of 2022.

As we look at 2022 total capex is anticipated to be in the range of $250 million to $300 million.

Including approximately $27 million of maintenance capital with another $18 $6 million of capital Rolling over from 2021 projects that should be completed in the first quarter of 2022.

Speaker 2: The balance of our capital spend will be allocated to MSC Protein and other key growth initiatives. This remains an important year for the company as we plan to deploy significant levels of investment capital raised over the past 12 months toward achieving our transformation initiatives.

The balance of our capital spend will be allocated to MSC protein and other key growth initiatives. This remains an important year for the company as we plan to deploy significant levels of investment capital raised over the past 12 months toward achieving our transform transformation initiatives.

Speaker 2: I am pleased to report the partnership realized an adjusted EBITDA of $12.2 million for the quarter and continues to perform according to plan. EBITDA was down from $13.8 million for the same period a year ago as a result of the sale of the Parents Ford and Hereford plants.

I am pleased to report the partnership realized an adjustment adjusted EBITDA of $12 2 million for the quarter and continues to perform according to plan EBITDA was down from $13 8 million for the same period a year ago. As a result of the sale of the parents board in Hereford plants refinancing of the partnerships debt earlier in the year.

Speaker 2: Refinancing of the partnership's debt earlier in the year combined with continued performance supported by MVCs enabled the partnership to enhance returns to unit holders by increasing the quarterly distribution to 44 cents per unit while maintaining a 1.05 coverage ratio for the quarter. For the partnership, distributed cash flow was $11 million for the quarter compared to $11.3 million for the same quarter of 2020.

Combined with continued performance supported by NBC has enabled the partnership to enhance returns to unitholders by increasing the quarterly distribution to <unk> 44 per unit, while maintaining a 151 <unk> coverage ratio for the quarter with.

So the partnership distributable cash flow was $11 million for the quarter compared to $11 3 million for the same quarter of 2020.

Speaker 2: Over the last 12 months, Adjusted EBITDA was $52.1 million, Distributable Cash Flow was $45.4 million, and Declared Distributions were $26.4 million, resulting in a 1.17 times coverage ratio, excluding any adjustment for the required principal payments amortized in the past year. Now I'd like to turn the call.

Over the last 12 months adjusted EBITDA was $52 1 million distributable cash flow was $45 4 million and declared distributions were $26 4 million, resulting in a one seven times coverage ratio, excluding any adjustment for the required principal payments amortized in the past year now.

Now I'd like to turn the call back over to Todd.

Thanks, Patrick So our theme of execution on our strategy continues and I'd like to walk you through an update on each of our strategic pillars.

Speaker 3: Thanks, Patrick. So our theme of execution on our strategy continues, and I'd like to walk you through an update on each of our strategic pillars.

First on our value added ingredients and ultra high protein initiatives. We continue in construction mode and we are planning on bringing four locations online during 2022 and early into 2023, including our turnkey partnership we plan to have over 700 million gallons converted producing over 400000 tons annualized.

Speaker 3: on our value-added ingredients and ultra-high-protein initiatives. We continue in construction mode, and we are planning on bringing four locations online during 2022 and early into 2023, including our turnkey partnership. We plan to have over 700 million gallons converted, producing over 400,000 tons annualized in early 2022.

Early 2022.

We are seeing strong customer interest as represented by multiyear Mou in the pet space, We announced last quarter and have continued to see growing demand, adding additional customers in all areas. We are in substantive late stage discussions with partners to use our ultra high protein products as well as production of ingredients using our products and agriculture.

Speaker 3: We are seeing strong customer interest as represented by multi-year MOU in the Pets-based we announced last quarter, and have continued to see growing demand adding additional customers in all areas.

Speaker 3: We are in substantive, late-stage discussions with partners to use our ultra-high-protein products as well as production of ingredients using our products in aquaculture as the demand for plant-based alternatives to soy and fish meal are growing globally. We expect announcements to be forthcoming during Q1 and Q2 of this year.

As the demand for plant based alternatives to soy and fishmeal are growing globally.

We expect announcements to be forthcoming during Q1 and Q2 of this year.

Speaker 3: One key is the 60% protein trial we are starting this month, and if successful, we believe we will have good visibility into potential aquaculture demand.

<unk> is the 60% protein trial, we're starting this month and if successful we believe we will have good visibility into potential Aqua culture demand, we have a high degree of confidence we will find our path to much higher protein concentrations.

Speaker 3: We have a high degree of confidence we will find our path to much higher protein concentration.

Speaker 3: The World is Short Protein thesis remains intact and is especially relevant to our products now and in the future.

The World is short protein thesis remains intact and is especially relevant to our products now and into the future the addressable market for ultra high protein at just 5% inclusion rate in feed rations are addressable market for our novel ingredient ingredient has over 14 million tonnes and when completed our production will be approximately 700000 tons.

Speaker 3: The addressable market for ultra-high protein at just 5% inclusion rate in feed rations.

Speaker 3: Our addressable market for our novel ingredient is over 14 million tons. And when completed, our production will be approximately 700,000 tons, well below what's needed, but one of the largest new and novel plant-based proteins in many decades at real scale to make a structural shift in what we feed our pets, our farm-raised fish, and also swine, dairy, and poultry.

Well below what's needed for one of the largest new and novel base plant based proteins and many decades at real scale to make a structural shift.

What we feed our pets, our farm raised fish and also swine dairy and poultry.

Speaker 3: We also believe a successful 60% or higher protein product will be the ultimate differentiator.

We also believe a successful 60% or higher protein product will be ultimate differentiator.

The recent price move and all things protein is just more evidence that world demand for protein will continue its trajectory of the last 20 years and start to accelerate again, where more and more supply will be needed alleviating fears of expanded soy crush production pressuring markets globally. We believe trade flows will continue to change it proved to be continually beneficial to ultra high protein.

Speaker 3: The recent price move in all things protein is just more evidence that world demand for protein will continue its trajectory of the last 20 years and start to accelerate again where more and more supply will be needed, alleviating fears of expanded soy crush production pressuring markets globally. We believe trade flows will continue to change and prove to be continually beneficial to ultra-high protein production, or any protein for that matter.

Or any protein for that matter.

Speaker 3: Regarding our Renewable Corn Oil Strategy, we continue to see strong demand and high values for vegetable oils overall and for our low carbon intensity score renewable corn oil.

Regarding our renewable cournot strategy, we continued to see strong demand and high values for vegetable oils overall and for our low carbon intensity score renewable corn oil.

Speaker 3: While pricing took a brief pause in the fourth quarter, we are now seeing robust demand and pricing return to the industry and expect acceleration of values towards the end of 2022 as the renewable diesel industry is expected to double again this year on its capacity.

While pricing took a brief pause in the fourth quarter. We are now seeing robust demand and pricing returned to the industry and expect acceleration of values towards the end of 2022 is a renewable diesel industry is expected to double again this year and its capacity.

Speaker 3: Our yields have improved with the addition of MSV to Shenandoah and Wood River, and our teams are focused on maximizing our corn yields, which is the most valuable pound-for-pound component of the corn kernel. We continue to anticipate that our annualized production exit rate this year will be over 330 million pounds after factory and completion of the ongoing MSV projects this year, heading towards 400 million pounds per year once everything is completed. In corn oil, as in protein,

Our yields have improved with the addition of MFC to Shenandoah and Wood River and our teams are focused on maximizing our corn yields which is the most valuable pound for pound component of the corn kernel. We continue to anticipate that our annualized production exit rate. This year will be over $330 million to pounds. After factoring in completion of the ongoing MSC.

This year heading towards 400 million pounds per year. Once everything is completed in corn oil as in protein. We are in substantive discussions on how to partner at feedstock to increase returns for our shareholders I will share more thoughts on that at the end of the call and believe being patient has only increased the value of this part of the business.

Speaker 3: We are in substantive discussions on how to partner our feedstock to increase returns for our shareholders. I will share more thoughts on that at the end of the call and believe being patient has only increased the value of this part of the business as we have a structural advantage by owning and controlling IP around expanding yields not only through MSC systems but also standalone technologies Flu Equip is in the process of developing.

We have a structural advantage by owning and controlling IP around expanding yields not only through MSC systems, but also standalone technologies fluid quip is in the process of developing.

One of our most exciting updates us on the clean sugar front as a reminder, fluid quip invented and owns the unique patented process that will produce clean sugar or dextrose from a dry milling operation. This is a completely disruptive technology that can increase the value of our assets exponentially in our opinion why do we call clean sugar because.

Speaker 3: One of our most exciting updates is on the clean sugar front. As a reminder, FluidClip invented and owns the unique patented process that will produce clean sugar or dextrose from a dry milling operation.

Speaker 3: This is a completely disruptive technology that can increase the value of our assets exponentially, in our opinion. Why do we call it clean sugar? Because study after study has indicated we produce a dextrose that is at least 50% lower in carbon intensity, a la cleaner, than dextrose produced in a wet mill using a completely different, more energy-intensive process.

Do you have to study has indicated we produce a dextrose that is at least 50% lowering carbon intensity a lot cleaner than dextrose produced any wet mill using a completely different more energy intensive process. We've been busy at our innovation center at you are getting ready to scale. This up and produce commercial volumes of clean sugar, we have completed the F E.

Speaker 3: We have been busy at our Innovation Center at York getting ready to scale this up and produce commercial volumes of clean sugar. We have completed the FEL1 study and are ready to begin detailed engineering on a large-scale commercial system. We currently don't see any other substantive technology risk in other unit operations in the clean sugar process. We believe we are making good progress on co-location discussions and off-take agreements as we have sent more and more additional unique clean sugar samples to potential customers.

<unk> study and are ready to begin detailed engineering on a large scale commercial system.

We currently don't see any other substantive technology risks and other unit operations and the clean sugar process. We believe we are making good process progress on co location discussions and off take agreements as we have more and more additional unique clean sugar samples to potential customers are.

Speaker 3: Our engineering is being done with a plan to break ground in the second half of 2022 on a clean sugar system at one of our biorefineries. This will most likely involve dedicating a portion of the corn grind at a facility rather than a full-scale conversion to start, which will allow the system to continue to scale up while also leaving flexibility to produce ethanol depending on market conditions.

Our engineering is being done with a plan to break ground in the second half of 2022 on a clean sugar system at one of our bio refineries. This will most likely involve dedicating a portion of the corn grind at a facility rather than a full skill at scale conversion to start which will allow the system to continue to scale up we'll also leaving flexibility to produce ethanol it depends.

On market conditions, a commercial 30000 bushels per day system, the equivalent of over 30 million gallons of ethanol should produce close to 400 million pounds of clean sugar or dextrose annually. We also believe our cost of production using our patented low carbon technology is competitive to other products out there today, so who is interested in our product we bill.

Speaker 3: A commercial 30,000-bushel-per-day system, the equivalent of over 30 million gallons of ethanol, should produce close to 400 million pounds of clean sugar or dextrose annually. We also believe our cost of production using our patented low-carbon technology is competitive to other products out there today. So who is interested in our product? We believe this type of product

This type of product.

Is the in demand feedstock for the <unk> bio economy that is upon US we are talking with customers from synthetic biology to green chemicals to bioplastics to enzymes to just about anything that is being made in a fermenter and all of the results have been positive.

Speaker 3: is the in-demand feedstock for the bio-economy that is upon us. We are talking with customers from synthetic biology to green chemicals to bioplastics to enzymes to just about anything that is being made in a fermenter. And all the results have been positive.

Finally.

On carbon we remained focus on our best monetize this last piece of the corn kernel other than clean sugar, which does it on its own. Our team is reviewing opportunities that are three south eastern locations and the potential goes beyond just direct injection.

Speaker 3: On carbon, we remain focused on how to best monetize this last piece of the corn kernel, other than clean sugar, which does it on its own. Our team is reviewing opportunities at our three southeastern locations, and the potential goes beyond just direct injection.

Speaker 3: Eight of our other locations remain committed to Summit Carbon Solutions' project to capture the fermentation CO2 from these plants, lowering their CI scores dramatically.

Our other locations, we remain committed to summit carbon solutions project to capture the fermentation Sidoti from these plants lowering their ci scores dramatically.

Speaker 3: We continue to assess the use of our capital to help fund the Summit pipeline and remain in discussions to do this. Summit continues to make progress on standing up the pipeline, from compression equipment, to site designs, to permitting processes, to survey permissions, to starting to execute right-of-way agreements, to cost estimates.

We continue to assess to assess the use of our capital to help fund the summit pipeline and remain in discussions to do this summer continues to make progress on standing up the pipeline from compression equipment to site designs to permitting processes to survey permissions to starting to execute right away agreements two cost estimate.

<unk> and engineering and drilling the first stratigraphic test wells to pore space acquisitions. This project remains on track and we are excited to be a shipper and an early owner. This project is a winning formula as it focuses on the health and longevity of U S agriculture, and the farmers who depend on the us ethanol industry to remain a viable place to sell.

Speaker 3: and drilling the first stratigraphic test well to pore space acquisition.

Speaker 3: This project remains on track and we are excited to be a shipper and an early owner. This project has a winning formula as it focuses on the health and longevity of U.S. agriculture and the farmers who depend on the U.S. ethanol industry to remain a viable place to sell their crops.

Their crops.

Speaker 3: We remain optimistic that the clean energy portions of the Build Back Better bill will ultimately make their way to some form of legislation that will pass. The expansion of the 45Q tax credit for carbon capture and sequestration and the new sustainable aviation fuel tax credits are both items that could also provide tailwinds for green projects.

We remain optimistic that the clean energy portions of the build back better Bill will ultimately make their way to some form of legislation that will pass the expansion of the 45 Q tax credit for for carbon capture and sequestration and the new sustainable aviation fuel tax credits are both items that could also provide <unk> for green Plains, we're closely.

Speaker 3: We are closely monitoring the various competing technologies for alcohol-to-jet opportunities to produce sustainable aviation fuels and believe this could be an important development for the industry over the long term. This is still very early days for ATJ, and we at Green Plants have undertaken a full technological review of available technologies and others that are nascent looking for a partner to help commercialize them as well. More to come on this, but we believe there's plenty of time on this opportunity.

Monitoring the various competing technologies for alcohol to jet opportunities to produce sustainable aviation fuels and believe this could be an important development for the industry over the long term. This is still very early days for a T. J and we at Green Plains have undertaken a full technological review available technologies and others that are <unk>.

Looking for a partner to help commercialize them as well more to come on this but we believe there's plenty of time on this opportunity.

Speaker 3: Finally, let's take a look at the opportunities for Green Plains to create significant value for our shareholders.

Finally, let's take an opportunity, let's take a look at the opportunities for green plains to create significant value for our shareholders.

Speaker 3: We believe our investment and ownership in FluEquip and the IP portfolio with our partners is the leading agricultural technology opportunity in the world today. In 2021 alone, we were issued an additional seven patents.

We believe our investment and ownership in fluid quip and the IP portfolio with our partners is the leading agricultural technology opportunity in the world today and 2021 alone. We were issued an additional seven patents five in the U S. One in Canada, one in Brazil, We received several notices in late 2021 as well.

Speaker 3: five in the U.S., one in Canada, one in Brazil. We received several notices in late 2021 as well, which should go active in 2022. This all bolsters our IP, and we will defend against infringement. We believe there may be some of that going on.

She'll go active in 2022.

This all bolsters, our IP and we will defend against infringement that was we believe there may be some of that going on we.

Speaker 3: We are not a company that just buys someone else's technology anymore. Our technology is starting to accrue real value, in my opinion. The opportunities to monetize the products from a kernel of corn using RIP continues to expand, and we aim to capitalize on those opportunities.

We are not a company that just by someone else's technology anymore. Our technology is starting to accrue accrue real value in my opinion the opportunities to monetize the products from a kernel of corn using our IP continues to expand and we aim to capitalize on those opportunities.

Speaker 3: So what does this all mean for the value of green plants today and in the future? Other than the volatility in our Gen 1 fuel platform, we can start to look through that as we see our transformation take shape in 2022, getting ready for 2024 and beyond. Our non-ethanol margin guidance from last quarter for 2022 remains the same.

So what does this all mean for the value of Green Plains today and in the future other than the volatility in our Gen. One fuel platform. We can start to look through that as we see our transformation take shape in 2022 getting ready for 2024 and beyond our non ethanol margin guidance from last quarter for 2022 remains the same with corn oil pricing once again.

Speaker 3: With corn oil pricing once again touching $0.70 per pound, we feel comfortable that corn oil itself

<unk> 70 per pound, we feel comfortable that corn oil itself could contribute over $140 million to $150 million of EBITDA. During 2022 at 65 cents a pound on average ultra high protein contribution is still estimated to contribute between 40 and $60 million of work as well in 2022.

Speaker 3: could contribute over $140 million to $150 million of EBITDA during 2022 at $0.65 a pound on average.

Speaker 3: Ultra-high protein contribution is still estimated to contribute between 40 and 60 million as well in 2022. And on top of that, the rest of the platform from specialty alcohol

And on top of that the rest of the platform from specialty alcohol to AG and energy will be additive less of course corporate SG&A.

Speaker 3: to ag and energy will be additive, less, of course, corporate SG&A.

Because we are still transforming and that transformed fuel ethanol economics will also need some recovery from current levels to not take away from anything and be additive to these numbers. We are growing in confidence. So we can produce clean sugar at scale with base margins significantly higher than traditional dry mill economics. This patented and on technology can truly be disruptive and lastly.

Speaker 3: As we are still transforming and not transformed, fuel ethanol economics will also need some recovery from current levels to not take away from anything and be additive to these numbers. We are growing in confidence that we can produce clean sugar at scale with base margins significantly higher than traditional dry mill economics.

Speaker 3: This patent-in-its-own technology can truly be disruptive, and lastly, we are in the beginning stages of decarbonization to produce sustainable ingredients that matter, as our stakeholders expect us to do all of this in a responsible manner. Thanks for joining our call today, and we can now start the Q&A session.

We are in the beginning stages of de carbonization to produce sustainable ingredients that matter as our stakeholders expect us to do all of this in a responsible manner. Thanks for calling in joining our call today and we can now start the Q&A session.

Speaker 1: As a reminder, to ask a question, you need to press star one on your telephone. To withdraw your question, press the pound key. Please limit your questions to no more than two at this time. If you wish to ask additional questions, please rejoin the queue. Please stand by while we continue to compile the Q&A.

As a reminder to ask the question.

Paul.

Telephone to withdraw your question press the pound key.

Your questions to no more than two at this time.

To answer additional questions. Please rejoin the queue. Please.

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Compile the Q&A roster.

First question Greg.

Speaker 1: Our first question comes from Craig Irwin from Roth Capital. You may begin. Good morning. I'm Craig Irwin from Roth Capital.

Craig Irwin Roth capital you may begin.

Hi, good morning, and thanks for taking my questions.

So.

Speaker 4: So, I guess nobody in their right mind owns Green Plains for ethanol. So, I'll let the analyst that didn't pay any attention to your hedging comments previously bug you about the delta in the quarter. I would say congratulations on the operating progress.

I guess nobody in their right mind owns Green plains ethanol. So I'll, let the analysts that didn't pay any attention to your hedging comment previously that view about the delta in the quarter I would say congratulations on the operating progress.

Speaker 4: Todd, the key question that I'm getting from investors this morning is, the 400,000 tons of hypo that's going to be produced in 2023, when do we start to get visibility on pricing there? I know you're working actively with a large number of different customers. It's exciting to hear 60% is going into trials.

Todd the key question that I'm getting from investors. This morning is.

400000 tons of high products, that's going to be produced in 'twenty three when do we start to get visibility on pricing there I know youre working actively with a large number of different customers.

Exciting to hear.

60% is going to trials.

Speaker 4: How does this take shape? What should we be looking for? And what do you see as a reasonable scenario?

How does this take shape, what should we be looking for and what do you see as a reasonable scenario.

Yes, Thanks, Craig.

Speaker 3: Yeah, thanks, Craig. We are in process, continued process, of evaluating markets for our products.

We are in process continued process of evaluating markets for our products. We already are in pet food that is traded at a premium to high protein soybean meal prices today today high protein soybean meal has about a 200 to $250 premium over traditional DDG.

Speaker 3: We already are in pet food that has traded at a premium to high-protein soybean meal prices today. Today, high-protein soybean meal is about a $200 to $250 premium over traditional DDGs. And remember, just at that price, every $100 a ton is about 6 cent a gallon equivalent.

And remember just at that price every every $100 a ton is about six cents a gallon equivalent so baseline just on protein alone you are starting to see that type of premium if you're just comparing it to high protein soybean meal and every hundred dollars above that is obviously another six cents a gallon not include.

Speaker 3: So baseline, just on protein alone, you're starting to see that type of premium if you're just comparing it to high-protein soybean meal. And every $100 above that is obviously another six cents a gallon, not including the uplift from corn oil that we don't even include in those original corn oil numbers.

The uplift from corn oil that we don't even include in those original Cornell numbers. So when you take a look at all of that our first goal is.

Speaker 3: So when you take a look at all of that, you know, our first goal is.

Is.

Speaker 3: to get and stand up higher protein concentrations. And we didn't want to stop at 56 and 58 and get the market really primed on that. We really believe we can and will achieve higher protein concentrations with our partners from a biological perspective. And we really wanted to kind of wait and before we extend contracts extensively in volume.

To get and stand up higher protein concentrations and we don't want US we didn't want to stop at $56 58 and get the market.

Really primed on that we really believe we can and will achieve higher protein concentrations with our partners from a biological perspective, and we really wanted to kind of wait and before we extend contracts extensively in volumes to see if we're to see what our successes on the upcoming 60 pro commercial trials and if we're successful.

Speaker 3: to see what our success is on the upcoming 60 Pro commercial trials. And if we're successful there, then I think our first stop is to start competing against things like...

There then I think our first stop.

As to start competing against things like.

Speaker 3: soy protein concentrates and other products that are priced at $800 to $900 a ton. On top of that, when you think about just the breakdown of our product today, it's 75% yeast and 25% protein and 25% yeast.

Soy protein concentrates and other products that are priced at 800 to $900 a ton on top of that when you think about just the breakdown of our product today, it's 75% east and 25%.

75% protein and 25% east if.

Speaker 3: If you take the price of the 75% protein and the price of the 25% yeast in comparable in the market today, our product should be worth $800 a ton. And so our focus starts there and we start to think up from those levels. The key is being able to make that product and get it into the market. We are working with customers.

If you take the price of the 75% protein and the price of the 25% yeast in comparable in the market today, our product should be worth $800 a ton and.

And so our focus starts there and we start to and we start to think up from those levels. The key is being able to make that product and get it into the market. We are working with customers from.

Speaker 3: from South America, to Europe , to the Mediterranean, to North Africa, and to Asia, focused on these higher protein levels.

From South America to Europe to the Mediterranean to North Africa into Asia on focused on these higher protein.

Products and really not taking a lot of time spending with them on the $50 to 52 protein product because we believe that our differentiation. We're on that we're on the verge of differentiation and we'll know a lot more in the next 30 to 60 days on the success of these trials. So the look will come later in the year as we.

Speaker 3: products and really not taking a lot of time spending with them on the fifty to fifty two protein product that we believe that our differentiation we're on the verge of differentiation.

Speaker 3: And we'll know a lot more in the next kind of 30 to 60 days on the success of these trials. So the look will come later in the year.

Speaker 3: as we determine what we're going to start these new sites up with and what protein we're going to start them up with. And at that point, I think we'll be able to give the market a much better look, except to say that we built the systems based on a 12 to 20-cent

We determine what we're going to start these new sites up with and what protein we're going to start them up with and at that point I think we'll be able to give the market a much better look except to say that we built the systems based on a 12% to 20.

Speaker 3: a gallon margin, which is based on a $200 to $350 premium over distiller's grains.

A gallon margin, which is based on a 200 to $350 premium over distillers grains were able to achieve that today and more and as high of that in pet food and agriculture, and we're in deep discussions substantive discussions in several areas with all.

Speaker 3: We are able to achieve that today and more and as high of that in pet food and aquaculture. And we're in deep discussions, substantive discussions.

Speaker 3: in several areas with all of our customers, with all of our species to put something in place that I believe will be really exciting for our shareholders.

All of our customers with all of our species to put something in place that I believe will be really exciting for our shareholders.

Speaker 4: Thank you for that. So as a second question, I wanted to ask about the Novozymes relationship. You did maybe touch gently on this subject in your response just now, but the potential for

Thank you for that so the second question I wanted to ask about the no designs relationship you did maybe touch.

Generally on the subject in your response, just now but the potential for.

Speaker 4: an engineered food product with better bioavailability, a better nutritional profile that can be tailored to the needs of your different customer groups.

And engineered food product with better bioavailability, a better nutritional profile that can be tailored to the needs of your different customer groups can you maybe.

Speaker 4: Can you maybe describe for us the progress that's been made in the last couple of years? You know, when would we potentially see things move into trials, and what do you see as the potential upside scenario of that technology being adopted in the high-protein platform?

Describe for us the progress that's been made in the last couple of years.

When.

Would we potentially see things moving to trials.

And what do you see as the potential upside scenario of that technology being adopted in the high protein platform.

Yes, that's a constant discussion that we continue to have with our partners.

Speaker 3: Yeah, that's a constant discussion that we continue to have with our partners, and Novozymes happens to be one of them. And our partnership with Novozymes and others always were beyond just protein concentrations. But in order to really start this new trial, we wanted to be up and running at multiple locations so we have redundancy and we can make product for our customers at the spec we sold.

And novozymes happens to be one of them and our partnership with Novozymes.

And other is always well beyond just protein concentrations in order to really start this new trial, we wanted to be up and running at multiple locations. So we have redundancy and we can make product for our customers.

At the spec, we sold and so.

Our next step is to really focus on the fact that our product contains 25% east and if you look at the value just the plain value of used today in the market is significantly higher than the value of protein and so we are starting to work together to target that 25% used to express characteristics.

Speaker 3: Our next step is to really focus on the fact that our product contains 25% yeast, and if you look at the value, just the plain value of yeast today in the market is significantly higher than the value of protein. And so we are starting to work together to target that 25% yeast to express.

Speaker 3: characteristics that uh... that that is able to do that whether it's amino acid or palatability or nutritional characteristics we have work ongoing with our partners to uh... to go after those opportunities that's really where you make a step change in the value of this product where you can again and we've and we've been we're starting to see some results from early work that we've done and we're and we're positive about those results but we have a long way to go but when you think about

That.

That is able to do that whether it's amino acid or palatability or nutritional characteristics. We have work ongoing with our partners to go after those opportunities that's really where you make a step change in the value of this product where you can again and we've been we're starting to see some results from early work that we've done.

We're positive about those results, where we have a long way to go but when you think about <unk>.

Speaker 3: bioengineering yeast and the opportunities that are there, we already make a lot of yeast and we have a lot of fermentation capacity available. And so when you combine those two together...

<unk> engineering east and the opportunities that are there, but we already make a lot of <unk> and we have a lot of fermentation capacity available and so when you combine those two together.

Speaker 3: and you put that uh... into a formula we believe really that's what we're going with this product it was never about making fifty percent protein if that's all we did it certainly be a nice thing to do but uh... our value is gonna come from making sixty percent protein and greater but also the value to come from really bioengineering around the yeast and our partnership that's the value of our partnership uh... and and what we're doing together with with novizymes and others and and that's where we think the real opportunity is going to come for our company

And you put that into a formula we believe really thats, where were going with this product it was never about making 50% protein.

That's all we did it certainly would be a nice thing to do but our value is going to come from making 60% protein and greater but also the value is going to come from really bioengineering around the east in our partnership that's the value of our partnership.

And what we're doing together with Novozymes, and others and and Thats, where we think the real opportunity is going to come for our company.

Yeah.

Thanks again for taking my questions.

Thank you.

Speaker 3: Thank you.

Your next question comes line of Manhattan.

Speaker 1: Your next question comes from Manav Gupta from Credit Suisse. You may begin.

From credit Suisse, you may begin.

Speaker 5: Hi guys, so I think about a year or so ago

Hi, guys.

Think about the cyclical you guys correctly predicted that eventually the renewable diesel market stock pricing in the carbon intensity and the gap between <unk> nine and <unk>.

Speaker 5: You guys had correctly predicted that eventually, the renewable diesel markets will start pricing in the carbon intensity, and the gap between soybean oil and corn oil will close. Now what we're seeing is that.

What we are seeing is that corn oil has started to move above <unk> nine. So obviously my question here is do you expect that going ahead as well.

Speaker 5: corn oil has started to move above soybean oil. So obviously, my question here is, do you expect that going ahead as over, you know,

One 2 billion gallons up for new R&D capacity comes on most of it has some almost retreat that so you have been.

Speaker 5: 2 billion gallons of new RD capacity comes on, most of it has some form of pre-treat that soya bean will...

Peter the discount decline. So you have a premium product going ahead, that's the first question.

Speaker 5: created a discount to coin so you have a premium product going ahead? That's the first question.

Speaker 3: Yeah, we've seen a really a structural shift in the demand for distillers, corn oil and what we produce, which is why we're so focused on making more of it, both through the ourselves through our own process improvements.

Yes, we've seen a really a structural shift in the demand for distillers corn oil and what we produce which is why we're so focused on making more of it both through the ourselves through our own process improvements use of the MSC protein system, which is another process improvement in terms of extracting liberating more oil.

Speaker 3: use of the MSC protein system, which has another process improvement in terms of extracting and liberating more oil. And on top of that, we believe that there's some ability to separate some of that technology to even stand alone and get more of that oil left in the kernel. Remember, there's 1.8 pounds of oil per 56 pounds of corn. And if we are already achieving one two-to-one.

And on top of that we believe that there is some ability to separate some of that technology to even stand alone and get more get more of that oil left in the kernel remember there was one eight pounds of oil per 56 pounds of corn and if we are already achieving one two to one three.

Speaker 3: Relative to the 1.8, you know, we're two-thirds of the way there And it's really the heart the hard work being in now and liberating the rest of it to answer your question regarding pricing We have really seen

Relative to the one eight where two thirds of the way there and it is really the heart of the hard work being in now and liberating the rest of it to answer your question regarding pricing, we have really seen strength.

Speaker 3: as a premium to soybean meal for distiller's corn oil, even as high at, for some markets, you know, over 10 cents a pound that we've seen bids that high. Then it comes, it's relaxing a little bit, but overall, we expect that as more and more, as we double renewable diesel capacity this year in 20, as we get to late 2022, both benefits

As a premium to soybean meal for distillers corn oil even as high.

For some markets over 10 cents a pound that we've seen bids that high then it it's relaxing a little bit, but overall, we expect that as more and more as we double renewable diesel capacity. This year in 'twenty as we get to late 2022, both benefits.

Speaker 3: will accrue, a benefit will accrue to both soybean oil and distiller's corn oil. There really, if you take a look at the future of what's coming online, there really is a structural shortage of all, but there's definitely a structural shortage of low-carbon intense waste oils and waste stocks, whether it's fats, animal fats, or used cooking oil.

We'll accrue benefit will accrue to both soybean oil and distiller corn oil, they're really if you take a look at the future of what's coming online. There really is a structural shortage of all but there is definitely a structural shortage of low carbon intense waste oils and waste stocks, whether its fats animal fats or used cooking oil.

And that's really where we're going to participate in and that's what gives us confidence that if you just take a look at green plains for our oil.

Speaker 3: And that's really where we're going to participate in. And that's what gives us confidence that if you just take a look at Green Plains.

Speaker 3: for our oil contribution margin alone.

Contribution margin alone.

Speaker 3: which is baseline $140 to $150 million a year right now, not inclusive of what comes out of the MSC system. You just take a look at that relative to the value of Green Plains alone, and that on its own front really starts to make our assets more valuable.

Which is baseline of 130 to $140 million to $150 million a year right now not inclusive of what comes out of the MSC system.

You just take a look at that relative to the value of Green plains alone and that on that on its own front really starts to make our assets.

Continually more valuable as we as we are the fuel for.

Speaker 3: continually more valuable as we are the fuel for that opportunity to reduce your carbon intensity scores by producing renewable diesel. So we're very excited about the opportunity obviously, but if I was making soybean oil I'd be just as excited about that opportunity as well.

For that opportunity to reduce your carbon intensity scores by producing renewable diesel. So we're very excited about the opportunity obviously, but if I was making soybean oil I'd be just as excited about that opportunity as well.

Perfectly clear.

Speaker 5: perfectly clear. And my follow-up here is, I understand, look, 4Q is in the rear-view mirror. We shouldn't focus on it. I just want to understand a little bit, what kind of supply chain challenges you faced? Are those easing? So we can just get a little more confidence that in 2022, whether it's first half or second half, whatever happened in 4Q doesn't repeat. Thank you, and I'll leave it there.

Follow up here is I understand look <unk> is in the rearview mirror.

As shown focus on it I just wanted to understand a little bit what kind of supply chain challenges you faced.

Those easing so if you can just give a little more confidence.

In 2022, whether it's first half second half.

I have one for you.

It doesn't repeat thank you and I'll leave it there.

Yes, when we look at our full year, and we went back and looked at it if we would've been in the spot market. Every single day, we would have been within a half cents a gallon of the daily average crush.

Speaker 3: Yeah, when we looked at our full year and we went back and looked at it, if we would have been in the spot market every single day, we would have been within a half cent of gallon of the daily average crush for the year, not inclusive of obviously

For the year now not inclusive of obviously.

Speaker 3: a negative contribution from assets that were being modernized. It really came down to these last two or three assets waiting for parts, and actually waiting for a chip that was in short supply to run our DCS, our control system at Madison. Once that finally came, we are now ramping up Madison to full rates, and we're making great progress there.

Negative negative contribution from assets that were being modernized it really came down to these last two or three assets waiting for parts and actually waiting for a ship that was in short supply to run our Dcs our control system at Madison. Once that finally came we are now ramping up Madison to full rates.

And we're making great progress there the same thing happened at Mount Vernon, which we were replacing the dryer as it outlived outlived its useful life and I think youre going to see more and more of that which caused disruptions in the U S fuel ethanol market. Because these assets are getting older and they are going to need to be upgraded which is why we spent over the last couple of years.

Speaker 3: The same thing happened at Mt. Vernon, where we were replacing the dryer as it outlived its useful life. And I think you're going to see more and more of that, which may cause disruptions in the U.S. fuel ethanol market because these assets are getting older and they are going to need to be upgraded, which is why we spent over the last couple of years...

Capital on our own modernization programs same thing with Mount Vernon one side of that one half of the dryer has started up this week the other half.

Speaker 3: capital on our own modernization programs. Same thing with Mount Vernon, one half of the dryer has started up this week, the other half...

Speaker 3: Should start up in the next three to four weeks and we should be back up and running there in time

Should start up in the next three to four weeks and we should be back up and running there in time.

Speaker 3: for the startup of MSC later in the year, because that's one of our protein production facilities that's being built is in Mount Vernon, Indiana. Great location from a river standpoint, great location from a southeastern demand standpoint. So those should be behind us. Everything's on site that we need to accomplish this. Labor continues to be a challenge.

For the startup of MFC later in the year, because that's one of our protein production facilities Thats being built is in Mount Vernon, Indiana, Great location from a river standpoint, great location from the southeastern demand standpoint, so those should be behind us everything's on site that we need to accomplish this labor continues to be a challenge.

Speaker 3: We have seen escalation in costs of production across the industry in things like labor, denaturant, and chemicals such as urea, but that's an equal opportunity cost increase.

We have seen escalation in cost of production across the industry and things like labor day nature, and and chemicals such as urea.

But every thats, an equal opportunity cost increase.

Speaker 3: And so, overall, I think we're in better shape now to run in 22 than we were in 21.

So overall I think we're in better shape now to run in 'twenty two than we were in 'twenty one.

Speaker 3: And more importantly, in our York facility where we have our specialty alcohol business.

More importantly in our York facility, where we have our specialty alcohol business.

Speaker 3: You know, a bin collapsed. The bins were significantly old. Nobody was injured. We have already stood up one bin replacement, and the other one is being finished. And that should be mid-March when we bring that facility back full online, but we're running that at about 50% capacity, which negatively impacted the fourth quarter as well. So, you know, overall, when we look forward, we're very excited about all of our opportunities in protein, oil, sugar, and carbon, and a steady ethanol market would be another great outcome as well.

<unk> collapsed the bins were significantly old nobody was injured we've already stood up one been replacement and the other one is being finished and that should be mid March when we bring that facility back full online, but we're running that at about 50% capacity, which negatively impacted the fourth quarter as well. So overall when we look when we.

We look forward, we're very excited about all of our opportunities and protein oil sugar and carbon.

Steady ethanol market would be another great outcome as well.

Thank you.

And our next question from Adam Samuelson from Goldman Sachs You may begin.

Speaker 1: And our next question will come from Adam Samuelson from Goldman Sachs. You may begin. Yes. Thanks.

Yes. Thank you good morning, everyone.

Good morning.

Speaker 6: Good morning. Good morning. So, Todd, I want to just maybe clarify just some of the pieces of 22, because, obviously, you gave some pieces on corn oil and the high-pro that you will be producing as increments. Obviously, those kind of all get rolled into the ethanol crush, and I'm just trying to make sure I understand. Okay. Great.

So Tom I wanted to just maybe clarify some of the pieces of 'twenty two.

Obviously, you gave some pieces on.

On corn oil and the high pro that you that you will be producing as increments.

So those kind of all get rolled into the ethanol crush.

When I'm just trying to make sure I understand.

Okay.

Right.

You are actually trying to.

How we should think about your asset the reported ethanol crush.

Speaker 7: how we should think about the reported ethanol crush.

Speaker 7: for this year and I guess even more specifically in the first quarter, obviously we've got very high corn oil prices, general ethanol.

For this year.

And even more specifically in the first quarter, obviously, we've got very high corn oil prices.

General ethanol.

Speaker 7: crush margins have weakened considerably.

Crush margins have weakened considerably.

Hi.

Speaker 7: deviated meaningfully from spot market conditions based on hedging over the past year, good and bad. I'm just trying to make sure we're calibrated in terms of how that translates into actual ethanol crush in the first quarter or framing and what that all means from an reported ethanol crush for the year because there's just a lot of moving parts.

Deviated meaningfully from spot market conditions based on hedging over the past year, good and bad.

Trying to make sure we're calibrated in terms of how that translates into actual ethanol question in the first quarter, our framing what that all means from an asset reported ethanol crush for the year, because it's just a lot of moving pieces.

Speaker 7: the way you're talking about the difference. No, listen, hopefully I can clear it up here, right? And you take a look at, we start the year thinking, as we said, we zero-base ethanol. Right now, ethanol, from a pure ethanol crush standpoint, is negative, so we have to make up for some of that later in the year, and we think that's kinda how we started out last year as well. But if you look at,

Youre talking about the different no listen.

Hopefully I can clear it up here right and you take a look at we start the year thinking as we said we zero based ethanol right.

Now ethanol from a pure ethanol crush standpoint.

Is negative so we have to make up for some of that later in the year and we think thats kind of how we started out last year as well.

But if you look at you look at <unk>.

Speaker 3: corn oil, by itself, could contribute over $140 million.

Corn oil.

Itself contribute over $140 million.

If you look at protein.

Speaker 3: you look at protein uh... on a stand-alone contribute between forty and sixty million

On a standalone contribute between 40 and $60 million.

And obviously, our other businesses as well and it's really going to come down to if ethanol is a minus 10 or a plus 10 or a minus 20 or a plus 50 I mean I think that's really what we're going to have to we will give you better clarity at the end of the first quarter on every component of achievement and we'll show you. How every component worked through our process what was the daily ethanol crush.

Speaker 3: and obviously our other businesses as well. And it's really going to come down to if ethanol is a minus 10 or a plus 10 or a minus 20 or a plus 50. I mean, I think that's really what we're going to have to, we'll give you better clarity at the end of the first quarter on every component.

Speaker 3: of achievement, and we'll show you how every component worked through our process. You know, what was the daily ethanol crush? What was our corn oil return? What was our protein return? We're going to start to really show you the value as we accelerate.

What was our corn oil return what was our protein return what are so we're going to start to really show you the value as we accelerate that even at even a negative environment into base crush based ethanol margin.

Speaker 3: that even a negative environment in the base crush, base ethanol margin...

Speaker 3: We should still achieve positive results, and then when ethanol is zero or above, we should achieve extremely positive results. And so that's really what we're setting ourselves up for. We're seeing it already during the first quarter as you look at the base margin while negative. You know, when you add all things up together, it doesn't remain negative very long, and we're starting to see at this point.

We should still achieve positive results in and when ethanol is zero or and above we should see <unk>.

Achieved extremely positive results and so that's really what we're setting ourselves up or we're seeing it already during the first quarter.

As you look at the.

The base margin while negative.

When you add all all things up together.

It doesn't remain negative very long and we're starting to see at this point.

The market feels like it's hit a little bit of a bottom from the from the margin standpoint in terms of seeing a bid return into the market and the fact that there are significant.

Speaker 3: the market feels like it's hit a little bit of a bottom from the from the margin standpoint in terms of Seeing a bid return into the market and the fact that there are significant

Speaker 3: supply chain issues around moving ethanol around the united states today and we will probably get back into some market dislocations later in the quarter and uh... and when you look at yet b the incentive to blend ethanol you know i think that will really take shape as well but in the meantime we started out week uh... during the quarter but it looks like uh... second quarter starting to come back and uh... you know our view is that the the base ethanol crush

<unk> chain issues around moving ethanol around the United States today, and we will probably get back into some market dislocations later into the quarter and then when you look at the FD.

The incentive to blend ethanol I think that will ultimately take shape as well, but in the meantime, we started out weak during the quarter, but it looks like second quarter is starting to come back and our view is that the base ethanol crush.

Based on everything we know we will return to positive and then on top of that you can add all of these numbers for 2022.

Speaker 3: Based on everything we know, we'll return to positive and then on top of that, you can add all these numbers for 2022.

Speaker 7: Okay, that's a very helpful framing. And then if I could have a follow-up on the clean sugar as you start engineering work on the first system.

Okay.

It's a very helpful framing and then if I can have a follow up on the on the clean sugar as you start engineering work on the first the first system.

Speaker 8: Just to be clear, A, is there any capital associated with that in the way you thought about 2022 CapEx? I guess you won't fully know this until the engineering is complete, but on a per effective gallon of capacity.

Just to be clear a there is there any capital associated with that and the way you thought about 2022 capex.

I guess you won't fully know this until the engineering is complete but on a per effective gallon of capacity.

Is there.

Speaker 8: Is there a difference in how you framed it in the past, I think it was about a dollar a gallon, how you framed it previously, and do the unit economics still look like they would match to how you've been talking about it over the last 12, 18 months?

Different than how you framed it in the past about a dollar a gallon.

How you framed it previously.

And do the unit economics still look like they would match to <unk>.

Talking about it over the last 12 18 months or so.

Yes, we think that.

Speaker 3: Yes, we think that everything we said is basically what we've what we're saying today. That's why when we think about it

Everything we said is basically what we've what we're seeing today.

That's why when we think about it.

Speaker 3: were, we could start out with a smaller plan, but obviously CapEx per.

We could start out with a smaller plant, but obviously capex per per unit would be would be higher so when we when we're looking at it we think the best size plant is the equivalent of about 30000 bushels, a day, it could be plus or minus that and engineering and the yen, which is basically 30 million gallons of our equivalent production or about three.

Speaker 3: per unit would be higher. So when we are looking at it, we think the best-sized plant is the equivalent of about 30,000 bushels a day. It could be plus or minus that. In engineering, in the end, which is basically 30 million gallons of our equivalent production, or about 3% of our production, that will produce about 400.

Percent of our production that will produce about 400 million pounds of dextrose clean low carbon dextrose all of the economics right now that we're seeing thus far are consistent with what we said in the past sub $1 per gallon.

Speaker 3: of dextrose, clean, low-carbon dextrose. said in the past, sub-one dollar per gallon.

Speaker 3: equivalent capex and greater than 50 centigallon equivalent margins based on about 15 cent a pound dextrose versus our cost of production. And so when you take a look at that

Equivalent capex and greater than 50 cents, a gallon equivalent margins based on about 15 cents, a pound dextrose versus our cost of production and so when you take a look at that.

Yes.

Speaker 3: We are very confident that the plan we have in place.

We are very confident that the plan we have in place.

Speaker 3: is a good plan to do our first unit. We also have demand for our first unit. We're in discussions with several companies for potential co-location from renewable chemicals.

As a good plan to do our first unit. We also have demand for our first unit. We're in discussions with several companies for potential co location from renewable chemicals too.

Two synthetic biology to other opportunities that exist in the world today with companies that you probably have heard of.

Speaker 3: to synthetic biology to other opportunities that exist in the world today with companies like that uh... you probably have heard of and so uh... we were strongly believe that uh... the demand is there for the product uh... and and very deep and also are the a little different product we're not

So we strongly believe that the demand is there for this product.

And it's very deep today and also ours is a little different product. We're not we don't have to go to a fully reflect find clear dextrose, we're leaving.

Speaker 3: We don't have to go to a fully refined, clear dextrose. We're leaving.

Speaker 3: Some minerals and other characteristics in it, which actually is turned to be beneficial for these producers They don't want to buy the clear food grade Dextrose and so when we take a look at all of that and we look at what we accomplished in York and being able to Make the product we have great confidence that our first system will break ground in 2022 and it'll be the the beginning what we believe is a revolution in In our platform to start to look forward Towards the future with

Some minerals and other characteristics in it which actually has turned to be beneficial for these producers. They don't want to buy the clear food grade dextrose and so when we take a look at all of that and we look at what we accomplished in York and being able to make the product we have great confidence that our first system, we will break ground in 2022.

And it'll be the beginning what we believe is a revolution.

In our platform to start to look forward.

Towards the future with clean sugar.

Okay, and just to clarify if there was a break ground later this year or is that are in service by early 'twenty four or what's the how long do you think thats going to take them to come into service.

Speaker 7: And just to clarify, if there's a break ground later this year, is that an in-service by early 2024, or how long do you think that's going to take to come into service?

Speaker 3: And we think it's, depending on the size of what we do, we think it's somewhere between a year and 14 or 15 months, so it's a late 2023 service.

We think it's depending on the size of what we do we think it's somewhere between a year and 14 or 15 months. So it's a late 2023 service.

Okay. If we can get into if we can get broken ground by the end of the third quarter of 2022, which is our goal and we're making our site selection as we speak on which one of our sites we will do that.

Speaker 3: If we can get it, if we can get ground by the end of the third quarter of 2022, which is our goal, and we're making our site selection as we speak on which one of our sites we will do that at. Okay. All right.

Alright, all are really helpful. I'll pass it on thank you. Thank.

Thank you.

Speaker 1: And our next question will be from Ben Benvenu from Stevens, you may begin.

And our next question one have been the venue from Stephens you may begin.

Hey, Thanks, good morning, everybody.

Speaker 8: Good morning. So I want to ask about corn oil. You anchored your contribution from that product to $0.65 a pound. I think point taken and understood that the outlook looks quite bullish for vegetable oils and corn oil in particular.

Good morning.

Can I ask about.

Corn oil you anchor your contribution from from.

That product to 65 cents a pound.

I think point taken.

Understood that the outlook looks quite bullish for vegetable oils and corn oil in particular I wanted to get your view, though on.

Speaker 8: I want to get your view, though, on how much leverage you think the business has to hire coronal prices with the idea that...

How much leverage do you think the business has to higher corn oil prices with the idea of that.

Speaker 8: I suppose across the industry as the corn oil price goes up, it essentially lowers the break-even price for ethanol. So I would think you're kind of upside.

I suppose across the industry as the corn oil price goes up it essentially lowers the breakeven price for ethanol.

I would think youre kind of upside.

Price would be driven by your yield improvements more so than the absolute price, but I'm just curious to hear your thought process around how you think about dimensionalize that.

Speaker 8: The price would be driven by your yield improvements more so than the absolute price, but I'm just curious to hear your thought process around how you think about dimensional analysis.

I think when you take a step back and you look at the demand for the fuel today and demand for.

Speaker 3: I think when you take a step back and you look at the demand for the fuel today and demand for...

Just in general.

Speaker 3: energy around oil and Arbob and gasoline and globally. There's still a very good base demand for our product when the consumer dries and the consumer gets back to normal. And when we look at that...

Energy around oil or Bob in gasoline and globally.

There is still a very good base demand for our product when the consumer drives and the consumer gets back to normal.

And when we look at that.

Speaker 3: On top of that, I think there's other opportunities that will come out of these alcohol products, whether it's in specialty or whether it's in ATJ and other things like that. So while you can certainly make an assumption that, and certainly industry in the past has let it happen, not everybody's corn oil yields are as high as others.

Of that I think there's other opportunities that will come out of these alcohol products, whether it's in specialty or whether it's in a T J and other things like that so while you could certainly make an assumption that.

And certainly the industry in the past is let it happen not everybody is corn oil yields are as high as others, but.

Yes, certainly some of that could be given back into the base the base unit economics of the crush.

Speaker 3: Yes, certainly some of that could be given back into the base unit economics of the crush.

Speaker 3: You know, so far, we haven't experienced that much of that yet, but I think ultimately.

Far we havent experienced that much of that yet, but I think ultimately you.

Speaker 3: You have to have a healthy ethanol industry if you really want to have all that distiller's corn oil to make significant margin in making renewable diesel, and I think the industry realizes that as well. So I think that was the talk regarding different products that the industry makes. They'll just give it away, but I don't think necessarily that's the case. I think right now...

You have to have a healthy ethanol industry. If you really want to have all of that the stores Cornell to make significant margin and making renewable diesel and I think the industry realizes realizes that as well. So I think that was the talk regarding different product at the industry makes the bill just give it away, but I don't think necessarily thats. The case I think right now the weeks.

Speaker 3: The weakness is really just driven by the weak consumer demand in the first in January , which is rebounding today. And then ultimately, there's still the issue around supply dislocations and supply chain movements with carriers and truckers. So I think there's an opportunity still to not have to give that back away. Some of the leverage you're right is correct.

This is really just driven by the weak consumer demand in the first in January which is rebounding today and then ultimately.

There's still the issue around supply dislocations in supply chain movements with carriers and truckers. So I think theres an opportunity still to not have to give that back back away at some of the leverage Youre right is correct when.

Speaker 3: when you take an industry average of 0.7 or 0.8 pounds per bushel and all of our stuff we'll be achieving at our

When you take it to an industry average of 708 pounds per bushel and all of our stuff will be achieving at our at our.

Speaker 3: MSC plants, you know, 1.1 to 1.3 or higher, and then plus other opportunities to extract more oil. You can leverage yourself on that, but I don't think that's going to have to be the case. I think that the demand is so deep for low-seeds.

MSC plants, one one to $1 three or higher and then plus other opportunities to extract more oil you can leverage yourself on that but I don't think thats going to have to be the case I think that the demand is so deep.

For low Ci feedstocks.

Speaker 3: in renewable diesel and it's going to get deeper that uh... ultimately uh... the industry doesn't have to give that away in the ethanol crush and they can realize all those economics and more

In renewable diesel and it's going to get deeper.

That ultimately the industry doesn't have to give that away and the ethanol crush and they can realize all of those economics and more.

Yes, Okay makes sense. Thank you Todd.

Speaker 8: My second question is just around the phasing of Farrellton, how you guys expect that project to ramp and kind of where that is in the critical path of your priorities?

My second question just is around the phasing of apparel.

I expect that project to ramp and kind of where that is in the critical path of your priorities at the moment.

Speaker 3: It's in a huge critical path of our priorities. We are just waiting for the ground to thaw, quite frankly. And when that ground thaws, we're going to get building.

It has been a huge critical path of our priorities. We are just waiting for the ground at all quite frankly, and when that ground thaws, we're going to get building.

Speaker 3: We're ready to mobilize. We have started to do some of that already. It's just a matter of winter and getting ready to, we worked all winter to do some advanced work because we knew that obviously it's hard to build up there. We're just waiting at this point. And we're, engineering is ready to start and or ready to go in terms of.

We are ready to mobilize we have started to do some of that already.

Just a matter of winter.

And getting getting ready to we worked all winter.

To do some advanced work because we knew that obviously, it's hard to hard to build up there and we're just waiting at this point.

Engineering.

Is ready to start and are ready to go in terms of.

What we've done so far it's ready to start construction and we are ready to build what will be the biggest plant in the United States.

Speaker 3: What we've done so far, it's ready to start construction, and we are ready to build what will be the biggest plant in the United States, producing the largest amount of ultra-high protein, also expanding their corn oil yields as well. And we're very excited about what we're doing up there on a size, scope, and scale in protein with our partners. We expect...

Producing the largest amount of ultra high protein also expanding their corn oil yields as well.

And we're very excited about what we're doing up there on the size scope and scale and.

And protein with our partners we expect.

Speaker 3: to hopefully be completed with construction in 2022.

Hopefully that can be completed with construction.

In 2022.

Speaker 3: But we want to make sure that, depending on the weather, when we complete construction, we may hold off starting that until it warms up a little bit. But if we can move faster, we'd like to at least try to get this thing running towards the end of the year. But it could take into 2023 to get that started up. Construction should be substantially complete this year.

But we want to make sure that depending on the weather when we complete construction. We may we may hold off starting that until it warms up a little bit, but if we can move faster.

We'd like to at least try to get this thing running towards the end of the year, but it could take into 2022 to get 2023 to get that started up construction should be substantially complete this year.

Okay awesome.

Speaker 8: Awesome. We'll root for warmer weather. Good luck with the rest of the year. Thank you. Yes, appreciate it.

For warm weather good luck with the best of the year.

Yes, I appreciate it.

Your next question.

Speaker 1: Our next question will come from Jordan Levi from Trust Truist Securities. You may begin.

Jordan <unk> from first choice Securities you may begin.

Good morning.

Speaker 7: Not at all. You've touched on a lot so far, but maybe more of a high-level question. Obviously, a lot of the volatility recently in earnings is coming from ethanol. I wanted to see if

You've touched on a lot so far but maybe more of a high level question. Obviously, one of the volatility recently in earnings coming from ethanol I wanted to see if you can.

Speaker 7: you could give us your thoughts as we kind of go through this next phase of the transformation plan on the confidence that investors can have in not only the earnings ramp but the stability of the earnings ramp that comes with the transformation and the ability to mitigate some of the ethanol volatility that we've seen in the recent quarters as protein and other initiatives scale up.

Could give us your thoughts as we go through this next phase of its transformation plan.

Confidence bolsters can add in.

Not only the earnings but the stability of the year.

Earnings.

With the transformation.

Ability to mitigate some of the ethanol volatility that we've seen in the recent quarters protein another edition of scale.

Speaker 3: Yeah, as we get into 2023 and 2024, when our build should be completed, and you start to produce

Yes, as we get into 2023 and 2024, when our our build should be completed.

And you start to produce.

Speaker 3: six to 700,000 tons of protein per year. Our base earnings from there will be, we expect just at 50 pro, and again, we're not gonna, you know, we can talk about the higher proteins in a second, should be still around 150 million a year just on base earnings as a comparable to whatever the high-protein soybean meal market is today. That's just the base earnings, if you take.

Six to 700000 tons of protein per year.

Our base earnings from there will be we expect just at 50 pro and again, we're not going to.

We can talk about the higher proteins in a second should be still around $150 million a year just on base earnings.

That's a comparable to whatever the high protein soybean meal market is today, that's just the base earnings if you take.

Speaker 3: your Cornell on top of that of base earnings.

Your corn oil on top of that base.

Base earnings.

Speaker 3: And then you add those two together, I think you start right then and there over the total close to a billion gallons of production at a 30 cent a gallon start.

And then you add those two together I think you start right then and there.

Over the total close to 1 billion gallons of production at a 30% of gallons start so whether ethanol is minus 10 or plus 10, I think you start to accelerate away from ethanol economics, because you have so many things that.

Speaker 3: So whether ethanol is minus 10 or plus 10, I think you start to accelerate away from ethanol economics because you have so many things that are available to you to push harder away from that. If you increase your protein concentrations to 60 percent...

Are available to you to push harder away from that if you increase your protein concentration to 60% and you take your first cut at $800 a ton as just a replacement for things like sorry.

Speaker 3: and you take your first cut at $800 a ton as just a replacement for things like...

Speaker 3: you know, soy protein concentrate, you obviously from there can see a significant increase and another acceleration away from ethanol economics. I think the ultimate acceleration away from still ethanol economics, you know, as we covered protein and we covered oil, is really going to be around converting more and more away from alcohol and more and more into into clean sugar.

Soy protein concentrate you obviously from there you can see a significant increase in another acceleration away from ethanol economics, I think the ultimate acceleration away from ethane is still ethanol economics as we've covered protein and we covered oil is really going to be around <unk>.

Converting more and more away from alcohol and more and more into into clean sugar and we are gaining more confidence every day and at that point you to completely divorced yourself from ethanol economics. So 2022 could still be a volatile year, we know where we're going to get us a certain amount of our base earnings from <unk>.

Speaker 3: And we are getting more confidence every day. And at that point, you completely divorce yourself from ethanol economics. So 2022 could still be a volatile year. We know where we're going to get a certain amount of our base earnings from. We have to manage through the volatility of the underlying.

Have to manage through the volatility of the underlying.

Speaker 3: a traditional ethanol margin, which I think we'll be able to do that during the year and I think we are certainly seeing

Traditional ethanol margin, which I think will be able to do that during the year and I think we are certainly seeing signs that the consumer is ramping up is driving in gas demand that the world is ramping up driving in gas demand, we've seen return of export interest.

Speaker 3: that the consumer is ramping up his driving and gas demand, that the world is ramping up driving and gas demand. We've seen return of export interest for our product as well, and that would be very helpful as the U.S. consumer ramps up and the global consumer ramps up. The global consumer, other than traditional markets, have been

For our product as well.

Be very helpful.

As the U S consumer ramps up and global consumer wraps up the global consumer consumer other than traditional markets have been.

Somewhat.

Speaker 3: exited from the U.S. ethanol export demand, and we're starting to see some of that come back at sitting at $0.65 under gasoline with another $1.20 RIN for our domestic consumers. So overall, the fundamentals look actually solid, just got to get out of the winter doldrums. And at that point, I think

<unk> from the U S ethanol export demand and we're starting to see some of that come back at sitting at 65 under gasoline with another $1 24.

For our domestic consumers. So overall the fundamentals look actually solid just got to get out of the winter doldrums and and at that point I think.

Speaker 3: that are able to manage our volatility. But come 2023, we start to accelerate away from ethanol economics. And come 2024, we should be able to completely get away from those economics other than some slight volatility.

Better able to manage the volatility, but it come 'twenty three we start to accelerate away from ethanol economics and come 2024, we should be able to completely get away from those economics other than some slight volatility.

Yes.

So I think Jordan just to close on that and I think.

Speaker 3: Just to close on that, Jordan, we have three under construction, one breaking ground. Our exit run rate and our entry run rate into 2023 is solid. We are fully in process and under construction at our three sites, and we'll continue to post updates on that, and also starting to really spring on Wood River as we had a few extra bottlenecks we needed to fix.

Just to close on that Jordan, we have four on three under construction, one breaking ground our exit run rate in our entry run rate into 2023.

Is solid.

We are fully in process and other construction at our three sites.

And and we will continue to post updates on that.

And it also is starting to really bring on wood River as we had a few extra bottlenecks we needed to fix.

Speaker 3: And even as late as early as next week, we should start to see the benefits of that. And lastly, it's one of those you build it and they will come. A lot of the bids that we saw for our product

And even as late as early as next week, we should start to see the benefits of that and that and lastly, it's one of those you build it and they will come.

Lot of the bids that we saw for our product.

Speaker 3: Before we built it, weren't real, they were just testing us. And now that we have product, actual product, we have significantly more demand than actually the product we make today. So we're very excited about that as well, and we'll see where that goes during the next couple of quarters.

Before we built it werent real they were just testing us and now that we have product actual product, we have significantly more demand than actually the product. We make today. So we're very excited about that as well and we will see where that goes through the next couple of quarters.

Speaker 7: That's a good segue into my next question on the protein side of things, just wanted to see if we could get maybe some more details on some of the trials you've been doing with customers outside of PET, and whether those have been supportive of sort of the J-Curve profile you've talked to before, and the uplift in value you've seen there. And yeah, I'll leave it there.

That's a good segue into my next question on the protein side of things just wanted to see if we could get maybe some more details on.

Some of the trials, you've been doing with customers outside of pet and whether those have been supportive of sort.

The J code profile, you've talked to before and the uplift.

<unk> seen there.

Yes.

Speaker 3: Yeah, we have done trials over the last year in almost all of the species, including beef cattle. We've seen some of our product go into that as well, and some of our post-MSC, and we'll get into that in a second. But look, we continue to see good results in aquaculture. We continue to see great interest in pet, by the way. We're expanding our pet customer base as we speak from everything from SuperSac.

Yes, we have done trials over the last year and almost all of the species, including beef cattle, we've seen some of our products go into that as well and some of our post MSC and we'll get into that in a second but but look we continue to see good results in Aqua culture, we continue to see great interest in <unk>.

By the way, we're expanding our pet customer base as we speak from everything from Super sacks.

Speaker 3: to full rail quantities as well. And so it's not just one of the top, one of the big five that are buying our product. It's really anybody that makes pet food today has an interest in our product. And so when you kind of look at that demand alone.

For two full rail quantities as well so it's not just one of the top one of the big five that are buying our product. It's really anybody that makes pet food today has an interest in our product and so when you kind of look at that demand alone that's.

Speaker 3: That's at least a couple of MSC plants, and our product is the standard for what we're seeing in that industry, and we're starting to see more of the brands.

That's at least a couple of couple of MSC plants and our product is the standard for what we're seeing in that industry and we are seeing starting to see more of the brands start to accept and include our product into into pad and that came through again palatability trials ongoing trials, we're still on some more ongoing trials and Pat to see what other use.

Speaker 3: start to accept and include our product into PET. And that came through again, palatability trials, ongoing trials. We're still into more ongoing trials in PET to see what other uses there are.

As there are and then when you look at things like poultry, we've even had trials in poultry and continue to do more and more and that's a very good substitution protein clean protein for that space and what we're seeing at least in that industry and again, we're not we're not we're not feeding feeding poultry today, but person.

Speaker 3: And then when you look at things like poultry, we've even had trials in poultry.

Speaker 3: and continues to do more and more. And it's a very good substitution protein, clean protein.

Speaker 3: for that space and what we're seeing at least in that industry.

Speaker 3: And again, we're not feeding poultry today, well, personally, but...

But we're starting to see the demand for clean proteins returned cleaned diets, because I think that that adds a lot of value to the feed ration as well and we're seeing demand there as well and then when we get into swine, which is really the.

Speaker 3: We're starting to see the demand for clean proteins return, clean diets.

Speaker 3: Because I think that adds a lot of value to the feed ration as well, and we're seeing demand there as well. And then when we get into swine, which is really what we thought really wouldn't be

Well, we thought really wouldn't be.

The market that.

Speaker 3: comes for this product, but we're starting to see really good demand out of the swine markets as well from

It comes for this product, but we're starting to see really good demand out of the swine market as well from.

Speaker 3: from piglets all the way through uh... finishing rations and that's actually the one that's a bit surprising is that how well this product does in those markets as well so week we have three innovation centers operating

From <unk>, all the way through finishing rations and that's actually the one that's a bit surprising is that how well this product does and those markets as well. So we have three innovation centers operating one in Shenandoah doing Aqua trials and we're in the middle of a very large scale.

Speaker 3: One in Shenandoah doing aqua trials, and we're in the middle of a very large scale.

Speaker 3: uh... salmon uh... trial where uh... if any of you visited you saw them they were tiny and now they're uh... they're at least the size of uh... of a couple handfuls so they're getting bigger and we're seeing great results so far but again there's a long way to go on when you grow salmon

Salman trial, where.

If any of you visited you saw them they were tiny and now they're.

There are at least the size of.

A couple of handfuls, so theyre getting bigger and we're seeing great results, so far but again theres a long way to go on when you grow salmon.

Speaker 3: And then in our York, our Omaha Feed Innovation Center has now fully opened. We're producing specialty feeds there as well, and we have amazing technology there that we're sharing with our customers. And then our York Innovation Center, obviously what you've seen the results on clean sugar.

Then in our York, our Omaha feed Innovation Center has now fully opened we're producing startup specialty feeds there as well and we have amazing technology. There that we're sharing with our customers and then are your innovation center, obviously, what you've seen our results and clean sugar so.

Speaker 3: You know, while certainly that's an investment we're making, everything we're seeing across our three innovation centers and from our customers is saying that we just need to get these production facilities stood up and running, and the rest will take care of itself.

While certainly that's an investment we're making everything we are seeing across our three innovation centers and from our customers is saying that we just need to get these these production facilities stood up and running and the rest will take care of itself.

Maybe I could just sneak one quick last one in.

Speaker 7: Maybe I can just sneak one quick last one in. You talked to Aqua a bit. It's been a little while since we talked to Optimal specifically. I'm looking to see your thoughts on how important

Can you talk to Alcoa, a bit it's been a little while since we talked to optimal specifically, we're going to see your thoughts on how important.

Speaker 7: this trial on 60Pro is to optimal and, you know, what that could mean for the scaling of that business you have as well.

This trial 60 pro is to optimal and what that could mean for the scale.

Well that business do you have as well.

Yes, the optimal is a great optimal fish.

Speaker 3: Yeah, well, Optimal is a great...Optimal Fish is a small business that does trophy ponds and a large amount of bass and other things like that. Optimal Aqua is our brand regarding our commercial aqua feeds.

As a small business it does trophy trophy ponds, and a large mouth bass and other things like that optimal Aqua is our brand regarding our commercial aqua feeds.

Speaker 3: And this 60 pro trial we think is a differentiation for them They've been running trials with higher inclusion rates of the 56 and the 58 pro Looking to get their hands on more 60 pro and we think that's a differentiation and a real value creator the Substantive discussions were in are around aquaculture are really around formulation diets inclusions and production

And this 60 pro trial, we think is a differentiation for them. They have been running trials with higher inclusion rates of the $56 50 April looking to get their hands on more 60 pro and we think thats, a differentiation and a real value creator.

Substantive discussions we're in.

Around Aqua culture are really around formulation diets inclusions.

And production of <unk>.

Speaker 3: of commercial aqua feeds together with partners, and we think we're on the verge of some really exciting announcements there, and to continue to work towards those with our partners. So that is really, once we get above 60 pro, that's when we really start to focus globally on getting our product included, you know, everywhere from Chile to Canada to Europe to Africa to Asia.

Commercial Aqua feeds together with partners and we think we're on the verge of some really exciting announcements there and have continued to work towards those with our partners. So.

That is really once we get above 60 pro that's when we really start to focus globally on getting our product included.

We were from Chile to Canada to Europe to Africa.

Asia.

Thanks, Tom.

Thank you.

Speaker 1: Our next question will be from Steve Byrne from Bank of America.

Our next question.

Steve Byrne.

Bank of America, you may begin.

Speaker 3: If your clean sugar technology is successful, what fraction of your ethanol capacity would you convert over to it? Is there a limit there? If it's not all of it, do you have an interest in any of these developing technologies to convert ethanol to either gasoline or aviation fuel?

If youre a clean sugar.

Technology is successful.

Fraction.

<unk> of your ethanol capacity would you convert over it over to it is there a limit there.

It's not all of it.

You have an interest in any of these developing technologies to convert ethanol to either gasoline or aviation fuel.

I think when you look at today, what we know.

Speaker 3: is that if we, and we believe that the demand for clean sugar is going to double or more in the next five to ten years,

Is that if we and we believe that the demand for clean sugar is going to double or more in the next five to 10 years 10 years.

We will continue just to convert our own sites to produce more and more.

Speaker 3: we will continue just to convert our own sites to produce more and more of the clean sugar product. And that's really what our plan is today. Obviously, we can...

The Queen sugar product and Thats really what our plan is today obviously.

We can.

When you convert a site you can toggle.

Speaker 3: When you convert a site, you can toggle back and forth between dextrose and ethanol, whichever pays more, or dextrose and, say, alcohol to jet, whatever pays more. And I think that's really where our great optionality comes.

Back and forth between dextrose, and ethanol whichever pace more or dextrose, and say alcohol to jet whatever pace more and I think thats really where our great Optionality comes.

The.

Speaker 3: It's where the best earnings against that corn kernel happen. Our view is that it will happen in clean sugar first. While it's happening in oil first, protein next.

We are the best.

Earnings against that corn kernel happened our view is that it will happen in clean sugar first while it's happening in oil one protein next.

Speaker 3: sugar after that, and then potentially some of these new fuels, and beyond that, renewable chemicals are potentially going to be produced in our fermenters as well.

Sugar after that and then potentially some of these new fuels and beyond that renewable chemicals are potentially going to be produced in our firm enters as well so.

Speaker 3: When you take a look at all of that, that's kind of the order. I think today what's really important around ETJ is we are evaluating all the technologies. You've seen announcements. We don't believe today there's any exclusivity in any of those technologies yet. While there's certainly announcements of people that are adopting and companies that are adopting, those technologies are available to others in the market today. But there's other technologies sitting in the national labs, there's other technologies sitting at other companies that...

When you take a look at all of that is kind of the order I think today whats really important around <unk> as we are evaluating all the technologies and you've seen announcements.

No. We don't believe today there is any exclusivity in any of those technologies, yet while theres certainly announcements of people that are adopting and companies are adopting those technologies are available to others in the market today, but there's other technology is sitting in the National Labs, Theres, others technology sitting at other companies that.

Speaker 3: Excuse me, we are also evaluating as well.

Excuse me we are also.

Evaluating as well.

It's still highly subject in our view to some of the government programs that you have to put in place to make it profitable, but some of them you're going to make.

Speaker 3: still highly subject, in our view, to some of the government programs that you have to put in place to make it profitable, but some of them, you know, you're going to make potentially without some of those programs.

Potentially without some of those programs so.

Speaker 3: I think it's about toggling to what the best outcome is and having the optionality to toggle what the best outcome is. And in order to obviously invest to make the new renewable jet, it's going to be a significantly more investment, a higher investment than making dextrose and clean sugar, in our view. So it's just a step process, but I think what it does, and it illustrates.

It's about toggling to work the best outcome is and having the optionality to toggle, what's the best outcome is and in order to obviously invest to make the new renewable jet, it's going to be a significantly more investment higher investment than making <unk>.

Dextrose and clean sugar in our view so it's just a step process, but I think what it does and it illustrates.

Not just for Green Plains.

Speaker 3: But for this industry, we are on the verge of rebasing the valuation.

But for this industry, we are on the verge of Rebating the valuation of a dry mill facility to really have a lot more value than what the market is giving you credit for and while we have close to 1 billion gallons as others with more than others with less.

Speaker 3: of a dry mill facility to really have a lot more value than what the market's giving it credit for. And while we have close to a billion gallons, there's others with more and others with less.

Speaker 3: This industry is on the verge of, I think, a revaluation and a rebasing.

This is this industry is on the verge of I think a reevaluation of re basing that while you may you want to deal with that you can deal with the monthly and quarterly volatility of ethanol.

Speaker 3: that while you want to deal with it, you can deal with the monthly and quarterly volatility of ethanol economics, but you need to look past all of that and look at the base value of these assets as you look at protein, oil, sugar, carbon, as well as jet and other opportunities around chemicals, and that's really the future of this industry.

Economics, but you need to look past all of that and look at the base value of these assets as you look at protein oil sugar carbon as well as jet and other opportunities around chemicals and thats really the future of this industry.

Speaker 9: And did want to follow up with you with one on renewable diesel and the outlook in the U.S. for increased production is certainly going to have a challenge pulling in feedstock and you're seeing that already and your comments are well taken about the demand outlook for soybean oil and corn oil, etc.

Did want to follow up with you with one on renewable diesel.

Outlook in the U S were increased production certainly going into how the challenge pulling in feedstock and Youre seeing that already in your comments are well taken about.

The demand outlook for soybean oil.

Corn oil et cetera. My question for you is do you see any risk here.

Speaker 9: My question for you is, do you see any risk here?

Speaker 9: that there could be a glut of meal from all that increased crushing and having an impact on your protein initiatives.

There could be a glut of Neil from all that increased crushing and having an impact on your protein.

Issue codes.

Yes, I think Thats a great question and certainly you have to look at that closely number one the cadence of these bills is going to take a long time just to continue to build out.

Speaker 3: Yeah, I think that's a great question, and certainly you have to look at that closely. Number one, the cadence of these builds is going to take a long time just to continue to build out more soybean crushing opportunities, but I don't think any of them that are building are worried about whether the world will be able to take all of that meal out of the United States. I think there's a positive disposition, even with additional...

More soybean crushing opportunities, but I don't think any of them that are building are worried about whether the world will be able to take all of that meal out of the United States I think theres, a positive disposition, even with additional soybean crush capacity United States that the world is shifting trade flows in Argentina is a bit of a mess.

Speaker 3: soybean crush capacity in the United States, that the world is shifting trade flows and Argentina is a bit of a mess. Will China be able to continue to buy whole soybeans or are they going to have to buy meal and switch policy there? I think the market's anticipating potentially there. But in general, while certainly...

Will China be able to continue to buy wholesale beans, or theyre going to have to buy meal and switch policy. There I think I think the markets anticipating potentially there but in general while it's certainly.

Speaker 3: And I'm using, I'm stealing a bit of a word, but you might have some lumpy years, but you're not going to, ultimately, it'll clear fast. We've always seen protein clear fast in the world. And for our

And I am using I'm stealing a bit of.

Sure.

A word but you might have some lumpy years, but youre not going to ultimately it'll clear fast we've always seen protein clear fast in the world.

And for our standpoint.

Speaker 3: Yeah, we're looking at it closely, but we serve as a different piece of the demand.

Yes, we're looking at it closely but we service a different piece of the demand and as we accelerate into higher protein concentrations with nutritional and biological characteristics. We think that we won't have that upon us, but even if all of that crush capacity gets built with which I think it probably.

Speaker 3: And as we accelerate into higher protein concentrations with nutritional and biological characteristics...

Speaker 3: You know, we think that we won't have that upon us.

Speaker 3: But even if all that crushed capacity gets built, which I think it probably will, and I would think the economics will remain very good for that industry for a long time, if you look at that capacity and what's going to come on, the cadence of it isn't fast enough, I believe, that's going to have any significant impact on soybean meal pricing. And if it did, I think you'd start to see that. But the market is accelerating on pricing this product, because I think the world, as we open up...

Will and I.

I'd think the economics will remain very good for that industry for a long time.

If you look at that capacity and what's going to come on the cadence of it isn't fast enough I believe that's going to have any significant impact on soybean meal pricing and if it did I think you'd start to see that but the market is accelerating on pricing this product because I think the world as we open up.

Speaker 3: is not just a little short protein, but a lot of short protein.

Is not just a little short protein, but a lot of short protein.

Speaker 3: And I think COVID just put a pause on it, but now that the world continues to accelerate away from COVID, you see the resulting demand and price movements in protein.

And I think Covid, just put a pause on it but now that the world continues to accelerate away from Covid.

See the resulting demand and price movements in protein.

Thank you.

Speaker 1: Okay, our next question comes from the line of Ken Zaslow from Bank of Montreal. You may begin. Hey, guys. Hi, Ken. Quick, easy question. If your base case for protein is 125 to 150 million, if you were to go to 60 crow, what does that actually translate to?

Our next question comes from the line.

Ken Zaslow.

Bank of Montreal, you may begin.

Hey, guys.

Easy question.

Your base case for protein.

<unk>.

$125 $158 million.

If you were to go to 16.

What does that actually translate to.

I think 60 pro if you use just a.

Speaker 3: Look, we have a J-curve out there that certainly has high prices, but that's a long game. If you immediately say the first thing you're going to displace is an $800 a ton product, that is about a $0.30 to $0.35 uplift from traditional distillers grains.

We have a J curve out there that certainly has high prices, but that's a long game. If you immediately say youre. The first thing you're going to displace is an $800 a ton product.

That is about a 30% to 35 uplift from traditional distillers grains, and thats $3 million to $350 million uplift at 60 Pro plus it will take time to place all of that into the market and get that all in the proper channels, but overall that's the first place you would start to but you don't want to spend time there.

Speaker 3: And that's a $3 to $350 million uplift at 60 pro plus. It'll take time to place all that in the market and get that all in the proper channels. But overall, that's the first place you would start to. But you don't want to spend time there. I think you really want to go after the higher end, top end of that J-curve into displacement of.

You really want to go after the higher end top end at the top end of that J curve.

Into displacement of.

Speaker 3: Things like, you're not going to ever, you're never going to ever completely substitute fish meal, but I think there's opportunities to displace that in some diets. With plant-based U.S. grown ingredients, I think that's starting to catch wind as well. But I think if you just took a first look at $800 a ton, and then from there, obviously every $100 a ton is another $60 million or so above that, or $50 to $60 million dollars above.

Things like Youre, not going to ever you never can ever completely substitute fishmeal, but I think theres opportunities to displace that in some diets.

With plant based U S grown ingredients I think thats, starting to catch wind as well, but I think if you just took a first look at $800 a ton and then from there. Obviously every $100 a ton is another $60 million or so above the $50 million to $60 million above that so.

Speaker 3: It's a huge opportunity for us. Again, it's long before we thought it was going to happen. It was a three to five year venture up on the higher proteins with our partner. And our view is we're going to get there a lot quicker than we thought, but then it's just going to take time to develop that market.

It's a huge opportunity for us.

Again, it's a long before we thought it was going to happen. It was a three to five year venture up on the higher proteins with our partner.

Our view is we're going to get there a lot quicker than we thought but then it's just going to take time to develop that market.

Okay, Okay, I'm not that much.

Speaker 10: Okay, I'm not that smart. So wait, so 125 to 150 was under 50 pro. I know you're going to go beyond 60 pro, and I get that. But on the transition to that, if I was just to use that as a benchmark.

25 to 150 was under 50 Crow I know youre going to go beyond the 60, CRO and I get that but on the transition to that if I were just to use as a benchmark.

Would that be $2 50 would that be 200 would that be 400.

Speaker 10: Would that be 250, would that be 200, would that be 400? Help us out. What does that 60 pro mean relative to the 125 to 150 where you started out? And I get that it's gonna go higher, but just to transition through that, what would that translate to for us who like it?

Help us out what is that 60, CRO mean relative to the 125 to 150, where you started out and I get that it's going to go higher.

But just to transition to that what would that kind of thing.

For us.

It's simple.

Speaker 3: What that would translate to is that at $800 a ton, it adds somewhere between $0.30 and $0.35 a gallon, so somewhere between $300 and $350 million base load earnings from 60Pro at the first...

Okay, well that would translate to is that at $800 a ton it at somewhere between 30% and 35 cents a gallon so somewhere between 300 $350 million base load earnings from 60 pro at the first.

Speaker 3: cut and then obviously it goes up from there as you as you go and Go into higher value markets because you're still going to have a limited amount to this product And we think we'll attract higher value markets than that ultimately but it's not an immediate because you have time to work through trials and rations and nutritionists and

Cut and then obviously it goes up from there as you as you go and go into higher value markets, because youre still going to have limited amounts of this product and we think will attract higher value markets and that ultimately, but it's not an immediate because you have time to work through trials and rations and nutritionists and global trade flows and the rest of it but our first stop we believe is 800.

Speaker 3: global trade flows and the rest of it, but our first stop we believe is $800 a ton for that product and moving up from there as that product becomes more accepted and moves into different rations as well around the world.

There's a ton for that product and.

And moving up from there.

As that product becomes more accepted and moves into different rationale as well around the world but.

It's an 800 to $200 tonne opportunity and our view is that somewhere in the middle of that will land on it for this product.

Speaker 3: It's an $800 to $1200 ton opportunity, and our view is that somewhere in the middle of that we'll land on it for this product.

So your $300 million to $400 million EBITDA okay.

Speaker 10: So your $300 to $400 million EBITDA base is starting.

It's starting to become.

Yes.

Margin wise right something like that we don't need to anymore is that the way youre thinking about that three to 400 and you.

Speaker 11: Marginalized, right? It's not really the real base anymore. Is that the the way you're thinking about that three to four hundred that you kind Of put out there a while ago even just forget about the sugar for a second the corn oil at 70 cents eventually But even just with the high crow moving that base moves up substantially from where it is. Is that at least a fair statement?

Kind of put out there a while ago, even just forget about the sugar for a second the corn oil at 70 cents eventually, but even just with the high pro moving that moves up substantially from where it is.

At least a fair statement.

Speaker 3: That's why we're doing this every day. And that's why we're focused on the high pro. Again, it's, you know, your first much like

That's why we're doing this every day and that's why we're focused on the high pro again it's.

Your first and much like when.

Speaker 12: When we made 50 Pro, acceptance of the product, getting it in the rations, and then once you get it in the rations, you start to see more interest and prices start to move, etc. I think the same thing will happen with 60 Pro. We know we're the first place that we're going to head and what we want to displace or actually expand potentially, and then from there, we'll just start to move up that value curve. Nothing's immediate, but ultimately, the value of protein is the value of protein.

When we made 50 pro acceptance of the product getting it into rations and then once you get into rash as you start to see more interest and prices start to move et cetera. I think the same thing will happen with 60 pro.

We're the first.

The first place that we're going ahead, and what we want to displace or actually expand potentially and then from there. We'll just we'll just start to move up that value curve.

Nothing immediate but ultimately the value of protein is the value of protein.

Speaker 3: and you start to realize the real value of protein. But yes, you are correct in those numbers.

And you start to realize the real value of protein, but yes, you are correct in those numbers.

Okay.

Then on the.

Customer base that you have what percentage our pet food per.

Speaker 10: customer base that you have, what percentage are pet foods, what percentage are aquaculture, and then if you look in a year from now what will that next date and I'll leave it there.

Percentage of Agriculture, and then if you look in a year from now what will that mix.

And I'll leave it there.

Yes, because we only had really one plant plus one plant second plant online.

Speaker 3: Yeah, because we only had, you know, really one plant, plus one plant, second plant online until we brought Wood River online, it was 100% pet. And we're still filling pet out of our Wood River facility, but also starting to see interest in things like poultry, dairy and swine. So right now it's, it's well over 50% pet. But there is competition for that product and as well as aquacultures is we're really not

Until we brought wood River online it was 100% Pat.

And we're still filling pet out of our wood River facility, but also starting to see interest.

And things like poultry dairy and swine so right now it's.

Well over 50% pet.

But there is competition for that product and as well as Aqua culture is we're really not.

Speaker 3: wanting to send this product into aquaculture today until we get over 60 pro and then I think that transition will take place on customer uh... when you look at customer percentages of sales. So really we're focused on this trial so that we can we've been patient not wanting to send our 50 pro product into aquaculture channels waiting to get to the over the 60 protein product, 60% protein product.

Wanting to send this product into aquaculture today until we get over 60 Pro and then I think that transition will take place on customer.

When you look at customer percentages of sales. So really we're focused on this trial. So that we can we've been patient not wanting to send our 50 pro product into Aqua culture channels waiting to get to the over 60 protein product, 60% protein product.

Perfect. Thank you very much.

Thank you.

Our next question.

Speaker 1: Our next question will come from Eric Fine from Craig Hillman. You may begin.

And explain.

You may begin.

Speaker 2: Hey everyone, I'll just sneak one in here at the end, just on carbon capture.

Hi, everyone.

Sneak one in here at the end.

Just on carbon capture.

Speaker 2: You're definitely hearing more chatter just about some issues, regulatory-wise, permitting at the state and local level.

Definitely hearing more chatter just about some issues regulatory wise permitting at the state and local level.

Just curious if that changes the outlook there I think previously it seemed like the.

Speaker 2: Just curious if that changes the outlook there. I think previously it seemed like the pipeline and the eight were probably first. I mean, I know this is still longer term, but first. I mean, does that outlook on the permitting side potentially move the direct injection opportunity ahead of the pipeline opportunity?

Our pipeline in the eight will probably first I mean I know this is still longer term, but first I mean does that outlook on the permitting side potentially moves the direct injection opportunity ahead of the pipeline opportunity.

I think they're I think they're tracking.

Speaker 3: No, I think they're, I think they're tracking, uh, really.

Really.

Probably tracking more towards the pipeline still theyre, making great progress.

Speaker 3: probably tracking more towards the pipeline still. They're making great progress. And we're very happy with what Summit's doing. They're starting to ready get right away. Obviously, they're going through the permitting processes in each of these states.

We're very happy with what summit is doing there.

They are starting to already get right away they need obviously theyre going through the permitting processes in each of these states.

Speaker 3: And thus far, well, yeah, you certainly read the headlines about what's really happening is I think the states want the project. And the customer, when you get right-of-ways, some it's not showing up.

Thus far while yes, you certainly read the headlines about whats really happening is I think the states want the project and the customer when you get right of ways, we're not some its not showing up.

Speaker 3: As a traditional pipeline company, this is really when you look at it and who's on, who's shipping on this pipeline, this is an agricultural farmer-backed project.

As as a traditional pipeline company. This is really when you look at it and who's on Who's shipping on this pipeline this isn't agricultural farmer back project.

Speaker 3: And that's really what resonates about the Summit Carbon Pipeline as you look at permitting and right-of-ways through farmer and U.S. farmers' land. You know, when you think about who's showing up at the door, it's somebody very highly invested in agriculture. And I think when you put all that together, you know, yes, certainly you want to make sure obviously all your permits are in place, but thus far, I would say...

And Thats really what resonates about the summit carbon pipeline as you look at permitting and right of ways through farmer farmer and U S. Farmers land. When do you think about who is showing up at the door. It's somebody very highly invested in agriculture, and I think when you put all that together, yes, certainly you want.

To make sure obviously all your permits are in place, but thus far I would say.

Summit is tracking really well to where we thought they would be at this point.

Speaker 13: Summit is tracking really well to where we thought they would be at this point, and we have confidence that they'll continue to do that. Obviously, you have to assess the risks around, is there an extended time for permitting? But even with that said, I just can't imagine.

And we have confidence that they will continue to do that obviously you have to assess the risks around us are extended time for permitting but even with that said I just can't imagine that.

Speaker 3: that any of these states don't want to have this massive, awesome project run through their states.

Any of these states don't want to have this massive.

Awesome project run through their states to help obviously clean up the environment regarding regarding.

Speaker 3: to help, obviously, clean up the environment regarding...

Speaker 14: fermentation, CO2, etc. So we're very comfortable where they're at today. If you look at our other opportunities, Direct Inject is only one of many opportunities with carbon. There are other carbon technologies out there that don't necessarily have to go to Direct Inject, where you capture them and produce other products, and we're evaluating those as well.

Fermentation Sidoti et cetera, So we're very comfortable where they are at today. If you look at our other opportunities.

Jack is only one of many opportunities with carbon there are other carbon technologies out there that don't necessarily have to go to direct inject where you capture them and produce other products and we're evaluating those as well and we're in discussions on opportunities. There. So I think this carbon story is still very early days in <unk> and <unk>.

Speaker 3: And we're in discussions on opportunities there. So I think this carbon story is still very early days. And certainly, we committed early to a pipeline. But if you also think about the highest and best use of carbon for us at Green Plains is to make clean sugar.

Certainly we committed early to a pipeline, but if you also think about the use at the highest invest use of carbon for us at Green Plains is to make clean sugar beet.

Because clean sugar, you don't emit carbon anymore and the value of that combined in the product is higher than most other opportunities.

Speaker 3: And the value of that combined in the product is higher than most other opportunities in carbon with a lot less risk, because you're keeping the carbon from the corn kernel in a product. So if you think about what ethanol does every day.

In carbon with a lot less risk because youre keeping the carbon.

And from the corn kernel and of products. If you think about ethanol does everyday.

Speaker 15: A third of that kernel is just not valued at all. It goes up the stack. If you make clean sugar, you've now reused a third of that kernel, which is the carbon. When you make a sugar molecule, carbon is part of that, and you're no longer emitting carbon into the atmosphere. So I think our ultimate play on carbon at Green Plains is to be able to flex and make clean sugar as well.

A third of that kernel is just not valued at all it goes up to stack. If you make clean sugar you've now re used third of that Colonel which is the carbon when you make a sugar molecule carbon as part of that and you are no longer meeting carbon into the atmosphere. So I think our ultimate plan carbon at Green Plains is.

Able to flex and make clean sugar as well.

Okay. Thanks Todd.

Thanks.

Speaker 1: And our last question will come from our lineup, Lawrence Alexander from Jeffries. You may begin.

And our last question comes from the line of Laurence Alexander from Jefferies. You may begin.

Good morning, two quick ones on the dextrose, how long after the facility is in service do you expect to hit.

Speaker 9: Good morning. Two quick ones. On the dextrose, how long after the facility is in service do you expect to hit, you know, be able to validate normalized pricing?

<unk> is a validate normalized pricing.

And secondly, with fluid quip can you give an update on your licensing strategy.

Speaker 9: And secondly, with FluidQuip, can you give an update on your licensing strategy and maybe some sense of where licensing revenues could get to in, say, three to five years?

And maybe some sense of where licensing revenues could get to in say three to five years.

Yes, thanks Laurence.

<unk>.

Speaker 16: Our view is normalized pricing will happen pretty quick with regard to CST. We are in discussions with

Our view is normalized pricing will happen pretty quick with regard to CST. We are in discussions with multiple potential co location and end use opportunities.

Speaker 3: multiple potential co-location and end-use opportunities, and they know what the product is going to look like already, and they've used the product in their own production in terms of whether it's on the bench or whether it's in pilot, and it matches all the characteristics and more of what they have bought traditionally or are going to buy traditionally. So our view is that...

And they know what the product is going to look like already.

And they have used the product in their own.

Production.

Terms of whether it's on debenture, whether it's in pilot and matches all the characteristics and more for what they have bought traditionally.

To buy traditionally so our view is that.

Speaker 3: This one will be a little bit easier because the price of this product is well defined.

This one will be a little bit easier because of the price of the price of this product is pretty well as well defined.

Speaker 3: And all we have to do is produce it. And we actually think there'll be campus opportunities. We'll call them campus opportunities, where some of these partners that we're looking at and supplying them, Dextrose, will co-locate at this first facility, potentially, in the future as well.

And all we have to do is produce it and we actually think there'll be a campus opportunities will call on campus opportunities, where some of these partners that we're looking at supplying them dextrose will pull will co locate.

At this first facility potentially in the future as well so.

At that point Theres other mark Theres other opportunities. So we're excited about that I think that.

Speaker 3: At that point, there's other opportunities. So we're excited about that. I think that the product we have and the technology and the IP around this product, we continue to get more and more. Two of those seven patents last year were around clean sugar. And we're going to continue to lock that down and button that up. And I think that's really where the real value for Fluidquip is. Fluidquip as a standalone.

The product, we have and the technology in the IP around this product we continue to get more and more two of those seven patents last year were around clean sugar.

And we're going to continue to lock that down and button that up and I think thats really where the real value for fluid quip is fluid quip as a stand alone when.

Speaker 17: You know, when you take a look at that company, ultimately, as we build out our process, it's not, it's a little early days for that, but just the value of the IP from protein.

When you take a look at that company ultimately as we build out our process. It's not it's a little early days for that but just the value of the IP.

From protein to oil to clean sugar and beyond and.

Speaker 18: to clean sugar and beyond, and what's needed in the world of the bioeconomy.

And what's needed in the world of the bio economy.

Speaker 3: the value of the Fluqua portfolio and the potential licensing opportunities are certainly great. But remember, we own this technology, we don't buy technology anymore, and we need to make sure we monetize the ownership and the opportunities around this technology. I'll just close with one thing. As we think about FluquaVest protein, oil, and sugar, and I think it's a great way to think about it, and the IP around that, we will protect that IP, and we continue to bolster our position.

The value of the fluke portfolio and the potential licensing opportunities are certainly great, but remember we own. This technology, we don't buy technology anymore, and we need to make sure we monetize the ownership and the opportunities around this technology I'll just close with one thing as we think about fluke <unk> protein oil and sugar and I think it's a great way to think about it in the IP.

Round that we will protect that IP and we continue to bolster our positions.

Speaker 19: The world, when you think about the future of the world in synthetic biology and biochemicals and green biology and bioplastics and all the rest of it, how does it all happen? It happens in a fermentation vessel that's fed by clean sugar and it drops, the solids drop out and those solids need to get separated.

The World when you think about the future of the world in synthetic biology, and Biochemicals and Green biology, and Bioplastics and all the rest of it.

Does it all happened it happens in a fermentation vessel, that's fed by clean sugar and it dropped to solid to drop out and those solids need to get separated.

And what we believe is the large one of the largest scale separation and best separation technologies in the world outside of protein and what we're doing is the fluid quip technology. If you want to talk about the real opportunity around that is that as we move into as you know specifically as you move into the bio economy, it's going to take significant.

Speaker 20: And what we believe is one of the largest scale separation and best separation technologies in the world outside of protein and what we're doing is the FluidQuip technology.

Speaker 3: If you want to talk about the real opportunity around that is that as we move into, as you know specifically, as you move into the bioeconomy, it's going to take significant investment in separating all of these different...

And separating all of these different.

Chemicals or ingredients or biological components that all has to run through separation.

Speaker 3: chemicals or ingredients or biological components, that all has to run through separation. And we believe that FluEquip, on a separation technology alone, has an incredible opportunity ahead of them as well, because that's what we do today with our protein and our stillage, but you could do it with many other types of products running through the FluEquip system. So I think licensing strategies is part of it, but I also believe the technology deployment is just as valuable, if not more.

And we believe that fluid quip on.

Separation technology alone.

<unk> has an incredible opportunity ahead of them as well because that's what we do today with our protein and our Stillage, but you could do with many other types of products running it through the fluid quip system. So I think licensing strategies as part of it but I also believe the technology deployment is just just as valuable if not more.

Okay. Thank you.

Thank you.

Speaker 1: Thank you. I'm not showing any further questions in the queue. I'm going to call back over to Todd for any closing remarks.

Meaning for the questions in the queue I'll turn the call back over to Tom for any closing.

Thanks.

Speaker 3: Thanks everybody for coming on the call, obviously a lot to talk about, a lot of exciting opportunities ahead of us. We're standing up our systems. We're standing up our

Yes, thanks, everybody for coming on the call obviously, a lot to talk about a lot of exciting opportunities ahead of us we're standing up our systems, we're standing up our our strategy. We're moving into the next phases of our strategy and we believe that we possess great technology to do that and we've derisked a lot of that as we're going to make that investment into our next.

Speaker 21: Our strategy, we're moving into the next phases of our strategy, and we believe that we possess great technology to do that, and we've de-risked a lot of that as we're going to make that investment into our next phase of rolling out technology that's very valuable to our platform. When you look at the total green planes today, and you look at the solutions that we have, and the opportunities that we have, I believe that the times ahead of us are going to be very exciting, and exciting for our shareholders, because we're going to continue to prove

Ah phase of Rolling out technology, that's very valuable to our platform. When you look at the total Green Plains today and you look at the solutions that we have and the opportunities that we have I believe that the.

And the times ahead of us are going to be very exciting and exciting for our shareholders. Because we're going to continue to prove that the value of our assets are going to continue to go up but more importantly, the value of our IP and our technology portfolio is significantly undervalued relative to the long term opportunity at the company and we will continue to execute and this was an exciting year for us.

Speaker 22: that the value of our assets are going to continue to go up, but more importantly, the value of our IP and our technology portfolio is significantly undervalued relative to the long-term opportunity at the company, and we'll continue to execute. And this is an exciting year for us. We have baseload earnings, and we're going to continue to grow those baseload earnings as we go into 2023 and 2024. I appreciate you jumping on the call today, and we'll talk to you guys next quarter.

We have a baseload earnings.

And we're going to continue to grow those baseload earnings as we go into 'twenty three 'twenty four I. Appreciate you jumping on the call today, and we will talk to you guys next quarter.

Speaker 1: And this concludes today's conference call. Thank you for participating. You may now disconnect.

And this concludes today's conference call. Thank you for participating you may now disconnect.

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