Q1 2024 Green Plains Inc Earnings Call

Operator: Good morning, and welcome to Green Plains Incorporated's first quarter 2024 earnings conference call. Following the company's prepared remarks, instructions will be provided for Q&A. At this time, all participants are in a listen-only mode. And I will now turn the call over to your host, Phil Boggs, Executive Vice President of Investor Relations. Mr. Boggs, please go ahead.

Good morning, and welcome to Green Plains incorporated first quarter 'twenty 'twenty four earnings conference call.

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

At this time all participants are in a listen only mode.

And I will now turn the call over to your host Phil Boggs Executive Vice President of Investor Relations. Mr. Box. Please go ahead.

Yeah.

Phil Boggs: Thank you and good morning, everyone. Welcome to the Green Plains Inc. First Quarter 2024 Earnings Call. Participants on today's call are Todd Becker, President and Chief Executive Officer, Jim Stark, Chief Financial Officer, and several other members of Green Plains' Senior Leadership Team. There is a slide presentation available, and you can find it on the investor page under the events and presentations link on our website. During this call, we will be making forward-looking statements, which are predictions, projections, or other statements about future events.

Phil Boggs: Thank you and good morning, everyone welcome to the Green Plains, Inc. First quarter 2024 earnings call.

Phil Boggs: Participants on today's call are Todd Becker, President and Chief Executive Officer, Jim Stark, Chief Financial Officer, and several other members of Green Plains Senior leadership team.

Phil Boggs: There is a slide presentation available and you can find it on the investor page under the events and presentations link on our website.

Phil Boggs: These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in today's press release, in 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 statement.

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

Phil Boggs: These statements are based on current expectations and assumptions that are subject to risks and uncertainties actual results could materially differ because of factors discussed in today's press release and the comments made during this conference call and the risk factors section of our Form 10-K Form 10-Q, and other reports and filings with the Securities and Exchange Commission would.

We do not undertake any duty to update any forward looking statements now.

Phil Boggs: Now, I'd like to turn the call over to Todd Becker.

Phil Boggs: Now I'd like to turn the call over to Todd Becker.

Todd A. Becker: Thanks, Phil. Good morning, everyone, and thanks for joining us on our call today. We were not alone in managing through a challenging market during the first quarter driven by industry oversupply from elevated production during a mild winter leading to an increased stocks position combined with weaker vegetable oil markets and compressed protein markets, leading to a weak first quarter and negative EBITDA of $21.5 million, although an improvement from last year of about 22%.

Thanks, Bill and good morning, everyone and thanks for joining our call today.

Todd A. Becker: We are not alone in managing through a challenging market during the first quarter driven by industry oversupply from elevated production during the mild winter leading to an increased stocks position combined with weaker vegetable oil markets and compressed protein markets as well.

Todd A. Becker: Leading to a weak first quarter and negative EBITDA of 21, and a half million, although I'd improvement from last year of about 22%. The typical first quarter doldrums at the industry as well as a quick deep freeze that had an outside outsized impact on some of our plants.

Todd A. Becker: The typical first quarter doldrums hit the industry as well as a quick deep freeze that had an outsized impact on some of our plants. Since we saw the extended margin compression, we took the opportunity to launch two major refreshes at Mount Vernon and Obeyan so we can run beyond historical norms at some of our best plants when they are completed, especially at Obeyan, which is one of our historically strongest margin plants that we've had for the last 15 to 17 years.

Todd A. Becker: Since we saw the extended margin compression, we took the opportunity to launch two major refreshes in Mount Vernon and Oh by and so we can run beyond historical norms at some of our best plants when completed, especially at all buying which was one of our historically strongest margin plants that we've had for the last 15 to 17 years.

Todd A. Becker: As I said, both of these are happening at traditionally strong margin sites, so we're going to have an outsized effect in a low margin environment. Operationally, we performed well, with utilization at about 92% and another strong quarter of protein production. And in an improved margin environment, we can start to push towards high 90% run rates with all the refresh investments we have made and are making. Speaking of margins, though, we have recovered a bit, but we still have a long way to go.

Todd A. Becker: Both of these are happening a traditionally strong margin side. So we're going to have an outsized effect in a low margin environment operationally, we performed well with utilization at about 92% and another strong quarter of protein production in an improved margin environment, we can start to push towards high 90% run rates with all the refresh investments we have made.

Todd A. Becker: And are making.

Todd A. Becker: Speaking of margins, though we have recovered a bit but still a long way to go Q2 margins now range from the mid high single digits to the low teens across the rest of the quarter on average for the rest of the year. Every month has returned to a positive margin on the curve, which is unique for this industry. At this time of year. This is at least a 25 cents a gallon improvement off the lows in somebody.

Todd A. Becker: Q2 margins now range from the mid-high single digits to the low teens across the rest of the quarter on average. For the rest of the year, every month has returned to a positive margin on the curve, which is unique for this industry at this time of year. This is at least a 25-cent-a-gallon improvement from the lows in some months.

Todd A. Becker: We'll talk fundamentals a little bit later on the fuel market. During the quarter, though, we continue to execute on our transformation strategy across the board, completing the acquisition of Green Plains Partners in early January, started commissioning of the SFCT demonstration facility with our partners at Shell in March, commissioning our CST project in Shenandoah as we speak, as well as bringing our MSC protein joint venture at Thurlson Ethanol in North Dakota online over the last couple of weeks, in addition to launching our sequence brand for our 60Pro product.

Todd A. Becker: We will talk fundamentals a little bit later on the fuel markets.

Todd A. Becker: During the quarter, though we continue to execute on our transformation strategy across the board completing the acquisition of Green Plains partners in early January.

Started commissioning of the SFC T demonstration facility with our partners at shell and March commissioning, our CST project in Shenandoah as we speak as well as bringing our M. S. C protein joint venture at their Olson ethanol in North Dakota online over the last couple of weeks. In addition to launching our sequence brand for our 60 pro product.

Todd A. Becker: We achieved these key milestones, and I will discuss more about these areas as we go through the call. It may seem like this is all not happening during times of macro weakness, but I can assure you that it is, and we have a lot of positive updates to share on sugar, protein, and carbon, which is part of the reason we see positive margins currently for the rest of 2024. Of note, the recent Great SAF modeling update demonstrates that if you can make low-carbon fuels, you have an asset more valuable today than you did on Tuesday morning. I will show you that path as well.

Todd A. Becker: T V's key milestones and I will discuss more about these areas as we go through the call. It may seem like this is all not happening during times of macro weakness, but I can assure you that it is and we have a lot of positive updates to share on sugar protein in carbon which is part of the reason we see positive margins currently for the rest of 2024.

Todd A. Becker: Of note. The recent greet S. A F modeling update demonstrates that if you can make low carbon fuels do you have an asset more valuable today than you did on Tuesday morning, I will show you that path as well.

Todd A. Becker: We continue to anticipate that as spring maintenance and the summer driving season progresses, we expect to see seasonal stock draws leading to strengthening base margins and leading us out of the winter doldrums that we have been stuck in for the last several months. Corn plantings look to be off to an excellent start, which could lead to a more favorable basis value as we move through the summer. We remain open to the margin structure across all of our products.

Todd A. Becker: We continue to anticipate that as spring maintenance in summer driving season progresses, we expect to see seasonal stock draws leading to strengthening based margins and lead us out of the winter doldrums and we have been stuck in for the last several months corn plantings look all look to be off to an excellent start which can lead to a more favorably but basis values.

Todd A. Becker: As we move through the summer we remain primarily open to the margin structure across all of our products.

Todd A. Becker: One quick update on the strategic review; the board and the leadership team are fully engaged in evaluating our strategic options, as we disclosed last quarter. We continue to believe the value of our platform is not reflected in our stock price, even more so after the great update that I mentioned. Hopefully, you saw during the quarter we announced our new specialty ingredient brand, Sequence, for our 60% protein product. We are really excited about this brand and what it represents for the high-value aquaculture feed and pet food markets we serve, as well as our ability to begin to custom-tailor nutritional solutions for our customers beyond just selling them protein, which is why we called it Sequence.

Todd A. Becker: One quick update on the strategic review of the board and the leadership team are fully engaged with evaluating our strategic options as we had disclosed last quarter. We continue to believe the value of our platform is not reflected in our stock price even more so after the grief updates that I mentioned.

Todd A. Becker: Hopefully you saw during the quarter, we announced our new specialty ingredient brand sequence for our 60% protein product. We're really excited about this brand and what it represents for the high value agriculture feed and pet food markets, we serve as well as our ability to begin to custom tailor nutritional solutions for our customers beyond just selling them protein, which is why we call.

Todd A. Becker: The sequence.

Todd A. Becker: Leslie and the innovation team have been working hard on very specific tailored taste and texture solutions that can be combined with sequence, another reason we are getting traction with our customers. Our sequential sales have been increasing as we approach the equivalent of one plant's production's worth of recurring sales, representing approximately 10% of our production capacity.

Todd A. Becker: Leslie and the innovation team have been working hard on a very specific tailored taste and texture solutions that can be combined with sequence. Another reason, we are getting traction with our customers.

Todd A. Becker: Our sequent sales have been increasing as we approach the equivalent of one plants productions worth of recurring sales.

Todd A. Becker: Representing approximately 10% of our production capacity.

Todd A. Becker: Interest in this product has been strong, and we believe we are on track to exit the year at the 20-30% capacity being committed to repeat sales customers and anticipate expanding it from there with the goal of eventually moving to 100% of our production to sequence. This product separates us from a more commoditized 50-pro market that has been under pressure from soybean meal, the spread between soybean meal and corn, which has been influenced by rapidly expanding soy crush capacity, although we have seen soybean meal prices elevate quite nicely over the last several days.

Todd A. Becker: And this product has been strong and we believe where we are on track to exit the year at the 20% to 30% capacity being committed to repeat sales customers and anticipate expanding it from there with the goal of eventually moving to 100% of our production to sequence.

Todd A. Becker: This product separates us from more Commoditized 50 pro market that has been under pressure from soybean meal.

Todd A. Becker: CT that spread between soybean meal, and corn, which has been influenced by rapidly expanding soy crush capacity.

Todd A. Becker: Although we have seen soy meal prices elevate quite nicely over the last several days based margins for our 50 pro are under pressure from both a tighter protein spreads as well as decline in vegetable oil pricing that we have always said, we justify the investment with 50% protein.

Todd A. Becker: Base margins for our 50 Pro were under pressure from both a tighter protein spread as well as a decline in vegetable oil prices, but we have always said we justify the investment with 50% protein but built them for 60% slash sequence or higher. Our sequence protein becomes a differentiator in the long run. Let me tell you why we're getting traction.

Todd A. Becker: Built them for 60% slash sequence or higher.

Todd A. Becker: Our secrets protein becomes a differentiator in the long run let me tell you why we're getting traction.

Todd A. Becker: This is a novel 60% protein. It's the world's first plant-based 60% protein ingredient made from a combination of corn and yeast. It is fermented for intestinal health. Corn and yeast provide a greater bioavailability and nutritional benefits for the customers we serve. Lastly on this topic, I am very pleased to report that in a recent analysis titled Emerging Protein-Rich Ingredients for Aquaculture, our protein ingredient received the highest accolades in a recent European report that continues to validate our view that our scalable and low-carbon intensity protein products are a much-welcomed addition to the supply of quality ingredients for aquaculture of which we are in trials in some of the highest value markets in the world today.

Todd A. Becker: This is a novel 60% protein is the world's first plant based 60% protein ingredient made from a combination of corn in the east. It is tremendous for intestinal health Accordingly, he's provided greater bioavailability and nutritional benefits for the customers we serve.

Todd A. Becker: Lastly on this topic I'm very pleased to report that in our recent analysis titled emerging protein rich ingredients rocker culture, our protein ingredient received the highest accolades in a recent European a report that continues to validate our view that our scalable and low carbon intensity protein products very much welcomed addition to the supply of quality agreement.

Todd A. Becker: <unk> for agriculture, but which we are in trials and some of the highest values in the markets.

Todd A. Becker: New markets in the world today.

Todd A. Becker: With ethanol at a roughly $1 gallon discount to ARBOB, it makes sense to max blend, and we are seeing strong exports that could end up being a record year for U.S. exports, potentially even exceeding 2018's 1.7 billion gallons. Now I'll hand the call over to Jim to provide an update on the overall financial results. I'll come back on the call to provide an updated strategic outlook on how carbon and sugar will play a larger role going forward.

With ethanol at a roughly a dollar gallon discount to our Bob It makes sense to Max blend and we are seeing strong exports and could end up the year with record year for U S exports potentially even exceeding 2018, one 7 billion gallons and I'll hand, the call over to Jim to provide an update on the overall financial results I'll come back on the call to.

James E. Stark: An updated strategic outlook, and how carbon and sugar will play a larger role going forward.

James E. Stark: Thanks, Todd, and good morning, everyone. Green Plains consolidated revenues for the first quarter were $597.2 million, which was $235.7 million, or approximately 28% lower than the same period a year ago. The lower revenue is attributable to lower prices for ethanol, dry distiller's grains, and corn oil in Q1 of 24 as compared to the same period a year ago. On average, prices were down in the range of 25 to 30 percent year over year.

James E. Stark: Thanks, Todd and good morning, everyone.

James E. Stark: Dean Plains consolidated revenues for the first quarter were $597 $2 million, which was $235 7 million or approximately 28% lower than the same period a year ago.

James E. Stark: The lower revenue is attributable to lower prices for ethanol dry distillers grains in Cornwall in Q1 of 'twenty four as compared to the same period a year ago on average prices were down in the range of 25% to 30% year over year.

James E. Stark: We also saw a drop in our commodity inputs with corn and natural gas is down significantly year over year and with ethanol trading at a significant discount to our Bob margin opportunities were limited in the first quarter due to the ethanol industry oversupply Todd mentioned earlier.

James E. Stark: While we also saw a drop in our commodity inputs, with corn and natural gas down significantly year-over-year, and with ethanol trading at a significant discount to ARBOB, margin opportunities were limited in the first quarter due to the ethanol industrial supply Todd mentioned earlier. Our plant utilization rate was 92% during the first quarter compared to 87.5% run rate reported in the same period last year and only slightly lower than the fourth quarter of 2023. We anticipate our plants to continue to perform in the mid-90% range of our stated capacity for 2024, barring any events outside of our control.

James E. Stark: Our plant utilization rate was 92% during the first quarter compared to 87.5% run rate reported in the same period last year and only slightly lower than the fourth quarter of 2023.

James E. Stark: We anticipate our plants to continue to perform in the mid 90% range of our stated capacity for 2024 barring any events outside of our control.

James E. Stark: For the quarter, we reported a net loss attributable to Green Plains at $51.4 million, or 81 cents per diluted share, compared to a loss of $70.3 million, or $1.20 per diluted share, for the same period in 2023. EBITDA for the quarter was $-21.5 million, compared to $-27.7 million in the prior year period. Depreciation and amortization expense was lowered by $3.9 million versus a year ago at $21.5 million. We anticipate that DNA will average approximately $22 million per quarter for 2024.

James E. Stark: For the quarter, we reported net loss attributable to Green plains of $51 $4 million or <unk> 81 per diluted share compared to a loss of $73 million or $1 20 per diluted share for the same period in 2023.

James E. Stark: EBITDA for the quarter was a negative $21 $5 million compared to negative $27 7 million in the prior year period.

James E. Stark: Depreciation and amortization amortization expense was lower by $3 9 million versus a year ago at 21, and a half million dollars. We anticipate that DNA will average approximately 22 million per quarter for 2024.

James E. Stark: We realized a loss of $9.3 million in consolidated crush in Q1 of 2024. That compares to a loss of $12.5 million in the prior year. With the acquisition of the partnership completed in January, we have combined the partnership segment into ethanol production. Since the partnership was primarily driven by ethanol-related items, including throughput fees and storage tanks associated with our ethanol plant, We have previously added much of that back to the Consolidated Crush, but there are some minor adjustments from combining the entire partnership, which are reflected in the 8K file this morning. Also, the operating maintenance expense line was combined into the cost of goods sold.

James E. Stark: We realized.

James E. Stark: A loss of $9 3 million in consolidated crush in Q1 at 24 that compares to a loss of 12 and a half million dollars in the prior year.

James E. Stark: With the acquisition of the partnership completed in January we have combined the partnership segment and to ethanol production.

James E. Stark: Since the partnership was primarily driven by ethanol related items, including the throughput fees and storage tanks associated with our ethanol plants.

James E. Stark: We have previously added much of that back to the consolidated crush, but there are some minor adjustments from combining the entire partnership which are reflected in the 8-K filed this morning.

James E. Stark: Also the operating maintenance expense line was combined into the cost of goods sold.

James E. Stark: For the first quarter, our SG&A expense for all segments was $31.8 million, which is in line with the prior year number. Interest expense was $7.8 million for the quarter, which includes the impact of debt, amortization, and capitalized interest, and was $2 million favorable from the prior year's first quarter. The decrease is primarily due to lower debt balances offset by slightly higher rates quarter-to-quarter.

James E. Stark: For the first quarter, our SG&A expense for all segments was $31 $8 million, which is in line with the prior year number.

James E. Stark: <unk> expense was $7 8 million for the quarter, which includes the impact of debt amortization and capitalized interest and was 2 million favorable from the prior year's first quarter.

The decrease was primarily due to lower debt balances offset by slightly higher rates quarter to quarter.

James E. Stark: Our income tax expense for the first quarter was $300,000 compared to a tax expense of $3.4 million for the same period in 2023. At the end of the quarter, the federal net loss carry-forwards available to the company were $89.6 million, which may be carried forward indefinitely. Unnormalized tax rates for the quarter at Green Plains, excluding minority interest, were around 24 percent. And we anticipate that our tax rate for 24 will also average at a 24 percent rate.

James E. Stark: Okay.

James E. Stark: Our income tax expense for the first quarter was $300000 compared to a tax expense of $3 4 million for the same period in 'twenty three.

James E. Stark: At the end of the quarter the net loss net federal net loss carryforwards available to the company were $89 $6 million, which may be carried forward indefinitely.

James E. Stark: Our normalized tax rate for the quarter Green Plains, excluding minority interest was around 24% and we anticipate that our tax rate for 24 also average at 24% rate.

James E. Stark: Our liquidity position at the end of the first quarter decreased from year end due to cash use and the completion of the partnership acquisition, as well as capital investments made during the quarter and the results from operations. However, I am certain we continue to be well positioned to achieve the next steps of our transformation plan.

James E. Stark: Our liquidity.

James E. Stark: Position at the end of the first quarter decrease from year end due to cash used in the completion of the partnership acquisition.

James E. Stark: Capital investments made during the quarter and the results from operations. However, I am certain we continue to be well positioned to achieve the next steps of our transformation plan.

James E. Stark: Our liquidity included $277.4 million in cash, cash equivalents, and restricted cash, along with approximately $230 million available under our working capital revolvers. For the first quarter, we allocated $22 million of capital across the platform, including $13 million to our Clean Sugar Initiative, about $4 million to other growth initiatives, and approximately $5 million for maintenance, safety, and regulatory capital. We anticipate CAFX for the year will now be in the range of $95 to $115 million in 2024.

Our liquidity included 277 4 million in cash cash equivalents and restricted cash along with approximately 230 million available under our working capital revolver.

For the first quarter, we allocated $22 million of capital across the platform, including $13 million to our clean sugar initiative about 4 million to other growth initiatives and approximately $5 million towards maintenance safety and regulatory capital.

James E. Stark: We anticipate capex for the year will now be in the range of $95 million to $115 million and 24. This.

James E. Stark: This range excludes the capture equipment needed for our Nebraska carbon capture initiatives. We do have financing lined up to cover those needs and plan to discuss these items further in the near future as the project progresses. Our capital strategy continues to be to deploy capital into the highest and best returning projects. Now, I'd like to turn the call back over to Todd.

James E. Stark: This range excludes the capture equipment needed for our Nebraska carbon.

James E. Stark: Capture initiatives, we do have financing lined up to cover those needs and the plan to discuss these items further in the near future as the project progresses, our capital strategy continues to be to deploy capital into the highest and best returning projects now I'd like to turn the call back over to Todd.

Todd A. Becker: Thanks, Jim. When we embarked on our journey several years ago, the IRA did not exist.

Todd A. Becker: Yeah. Thanks, Jim So when we embarked on our journey several years ago. The IRA did not exist. So while our go forward mix of opportunities may have changed the forward outlook in aggregate remains the same for 2025 because of the IRA and the 45 Z clean fuel production credit and the opportunities these present to produce low carbon intensity fuels.

Todd A. Becker: So while our go-forward mix of opportunities may have changed, the forward outlook in aggregate remains the same for 2025. Because of the IRA and the 45Z Clean Fuel Production Credit, and the opportunities these present to produce low-carbon intensity fuels, it is driving a reprioritization of our overall capital allocation strategy because of the guaranteed returns backed by the full faith and credit of the U.S. government. We remain confident that our Advantage Nebraska approach to carbon capture could begin to yield significant returns as early as next year.

Todd A. Becker: It is driving a re prioritization of our overall capital allocation strategy because of the guaranteed returns backed by the full faith and credit of the U S government.

Todd A. Becker: We remain confident that our advantage, Nebraska approach and carbon capture could begin to yield significant returns as early as next year are three Nebraska facilities, with which represent 287 million gallons of capacity at present will be on a pipeline project that already has its trunk line in the ground as a converted natural gas pie.

Todd A. Becker: Our three Nebraska facilities, which represent 287 million gallons of capacity at present, will be on a pipeline project that already has its trunk line in the ground as a converted natural gas pipeline, so building the laterals to our plants is relatively straightforward. Currently, our pipeline partners continue to make solid progress, and we are on track for starting up in the second half of 2025, and we plan to begin ordering the capture equipment in the next several months and expect construction to start later this year.

Todd A. Becker: So building the laterals to our plants is relatively straightforward currently our pipeline partners continue to make solid progress and we are on track for starting up in the second half of 2025, and we plan to begin ordering the capture equipment in the next several months and expect construction to start later this year given that we have first mover status where act.

Todd A. Becker: Given that we have first mover status, we are actively exploring redeploying capital to expand the production capacities for our Central City and Wood River Nebraska facilities by 30 to 40 million gallons each to take advantage of the early days of the 45Z clean fuel production credit and position ourselves as a preferred early feedstock supplier to alcohol to jet sustainable aviation fuel producers. We have already seen interest in this apply from multiple different parties, especially with the GREET SAF update announced.

Todd A. Becker: Exploring redeploying capital to expand the production capacities for our Central City and Wood River, Nebraska facilities by 30 to 40 million gallons to take advantage to take advantage of the early days of the 45 Z clean fuel production credit and position ourselves as a preferred early feedstock supplier to alcohol to jet.

Todd A. Becker: A stable aviation fuel producers we.

Todd A. Becker: We have already seen interest in the supply from multiple different parties.

Todd A. Becker: Specially.

Todd A. Becker: With the agreed Saf product update announced there are these are a couple of our premier facilities already have MSC deployed and have abundant local corn supply.

Todd A. Becker: These are a couple of our premier facilities that already have MSC deployed and have an abundant local corn supply. With York, we plan to decarbonize distillation with a small CAPEX project to reduce energy usage, which reduces carbon intensity as today it qualifies for 45Q, and we want to change that and opportunistically take advantage of early 45Z economics. But it really doesn't stop in Nebraska.

Todd A. Becker: With Europe, we plan to Decarbonize distillation with a small capex projects to reduce energy usage, which reduces carbon intensity as today. It qualifies for 45, Q and we want to change that and Opportunistically take advantage of early 45 Z economics.

Todd A. Becker: We have four other plants on the Summit Carbon Pipeline, and they continue to make good progress as well on getting permits in the states that we will operate in. With all of that said, at Current Econs, once up and running, we expect Nebraska alone to contribute over $100 million per year in carbon EBITDA starting in the second half of 2025, with the current progress we have made, again, all backed by the 45Z tax credit.

Todd A. Becker: It really doesn't stop in Nebraska, we have four other plants on the summit carbon pipeline and they continue to make good progress as well on permitting in the states that we will operate in with all of that said at current econ once up and running we expect Nebraska alone to contribute over $100 million per year in carbon EBITDA starting in the second half of 2025.

Todd A. Becker: With the current progress we have made again all backed by the 45 the tax credit.

Todd A. Becker: On MSC and protein, since our Fairmont and Madison locations have faced permitting delays for the proposed MSC protein projects for some time now, and we literally received our Illinois permit yesterday, we previously made the decision, because of the carbon economics, to put the capital allocation for that on hold for the time being, and only for the time being, while we turn our attention to our significant return profile of the Advantage Nebraska strategy, along with potential clean sugar facilities, which would be two to The returns associated with both carbon capture and clean sugar are driving this, and they are significantly better than anything else we can do.

Todd A. Becker: Our MSC sinter, and I'm, an MSC and protein since a fair amount of Madison locations have faced permitting delays for the proposed MSC protein projects for some time now and we literally received our Illinois permit yesterday. We previously had made the decision because of the carbon economics to put the capital allocation capital allocation for that.

Todd A. Becker: On hold for the time being and only for the time being while we turn our attention to our significant return product profile I'll be advantaged, Nebraska strategy, along with potential clean sugar facility, which would be two to three times larger than what we have in Shenandoah, Iowa today.

Todd A. Becker: The returns associated with both carbon capture and clean sugar are driving this and are significantly better than anything else. We can do.

Todd A. Becker: We will continue to evaluate our overall asset mix, and we are focused on the future of decarbonization and clean sugar as our top two priorities after 60% protein or sequence going forward. Part of the permit in Illinois is also the ability to run the plant at an expanded rate to reduce opex per gallon and improve margins at that site, as we always have had spare capacity we could not run under the previous permit. We also have several projects to be able to capture carbon in Mount Vernon and Madison underway under review as well. Those will just be a little further away.

Todd A. Becker: We will continue to evaluate our overall asset mix and we're focused on the future of the carbonation de carbonization and clean sugar as our top two priorities after 60% protein or sequence going forward.

Todd A. Becker: When we evaluate our portfolio.

Todd A. Becker: Part of the permanent Illinois is also the ability to run the plant and an expanded rate to reduce opex per gallon and improve margins at the site as we always have had spare capacity we cannot run under the previous per permit. We also have several projects to be able to capture carbon and Mount Vernon and Madison underway under review as well.

Todd A. Becker: Those will just be a little further out.

Todd A. Becker: While we have not issued a press release, I am happy to update you on our CST project, the Clean Sugar Project, in Shenandoah. It is now mechanically complete, and we have begun commissioning over the last month, and we expect to produce on-spec product in the next week or so. In addition, we are negotiating multi-year contracts for our low-carbon intense dextrose corn syrups, and we are continuing with substantive late-stage discussions for all of our 2025 volumes to take all of our capacity.

Todd A. Becker: While we have not issued a press release I am happy to update you on our CST project clean Sugar project in Shenandoah. It is now mechanically complete and we have begun commissioning over last month, and we expect to produce on spec product in the next week or so in addition, we are negotiating multiyear contracts for our low carbon intense dextrose corn syrups and we are continuing.

Todd A. Becker: With substantive late stage discussions for all of our 2025 volumes to take all of our capacity, we expect to start to sign some agreements in even in the next week or so.

Todd A. Becker: We expect to start to sign some agreements even in the next week or so. The Clean Sugar Technology is a game-changer for Green Plains and sets us apart as we actively explore plans for Site No. 2.

Todd A. Becker: Queen Sugar technology is a game changer for Green Plains and sets us apart as we actively explore plans for site number two lastly, based on current markets and pricing uplift and converted margins have remained the same at a minimum of 60 cents a gallon uplift with some products and volumes significantly higher than the 80 cent per gallon or 90 cents per gallon range.

Todd A. Becker: Lastly, based on current markets and pricing, the uplift in converted margins has remained the same at a minimum of $0.60 a gallon, with some products and volumes significantly higher in the $0.80 per gallon or $0.90 per gallon range. This is another reason we want to allocate capital to this versus protein at this point, especially now that we have Shenandoah beginning to operate.

Todd A. Becker: This is another reason, we want to allocate capital to this versus protein at this point, especially now that we have Shenandoah beginning to operate.

Todd A. Becker: The SAF tax credit and updated greed model from earlier this week set the stage for an increased asset valuation for any plant that can decarbonize. The SAF guidance has given us a starting point for rulemaking for the all-important 45Z Clean Fuel to Production Credit, which begins this coming January, just eight months from now, and we remain optimistic this will carry through to that rulemaking. There are a couple of takeaways here, and I think they're really important for everybody to understand.

Todd A. Becker: So you have tax credit and updated Green model from earlier. This week sets the stage for an increased asset valuations for any plant that can decarbonize. The SaaS guidance has given us a starting point for rulemaking for the all important 45 Z clean fuel to production credit which begins this coming January just eight months from now and we remain optimistic this will carry through to the.

Todd A. Becker: Rulemaking.

Todd A. Becker: A couple of takeaways here and I think they're really important for everybody to understand the guidance for Saf was in line with our expectations and to their credit they actually lowered some of the unreasonable land use change penalties associated with corn as a feedstock for alcohol to jet.

Todd A. Becker: The guidance for SAF was in line with our expectations, and to their credit, they actually lowered some of the unreasonable land use change penalties associated with corn as a feedstock for alcohol to jet. Climate Smart Ag practice is also allowed to count towards CI reduction in corn. But it's important to remember that 40B for SAF is just a stepping stone to the 45Z clean fuel production credit. One really important, and lastly, really important point is that a common misconception this week on the recent SAF guidance is that low CI corn will be required to qualify, and this is just not the case.

Todd A. Becker: Climate Smart AG crafted practices also allowed to count towards Ci reduction in corn. It is important to remember that 40 B for SAP is just a stepping stone to the 45 Z clean fuel production credit.

Todd A. Becker: One really important and lastly, really important point the common misconception. This week on the recent Saf guidance is that low Ci corn will be required to qualify and this is just not the case with Ccs or carbon capture you can get your score low enough to qualify for Saf and after that the lower Ci corn is just additive.

Todd A. Becker: With CCS, or carbon capture, you can get your score low enough to qualify for SAF, and after that, the lower CI corn is just additive to those economics, and we have a significant program around that as well. Bottom line, there is now a path for U.S. corn-based ethanol to qualify as a feedstock for producing alcohol at the jet, SAF, and the plants that it can decarbonize are going to be at a distinct advantage.

Todd A. Becker: To those economics, and we have a significant program around that as well.

Todd A. Becker: Bottom line there is now a path for U S corn based ethanol to qualify as a feedstock for producing the alcohol to jet S. AF and the plants that they can decarbonize are going to be at a distinct advantage and this gives us an increased confidence in our advantaged, Nebraska strategy and believe that a T. J sustainable aviation fuel has the potential to fundamentally.

Todd A. Becker: And this gives us increased confidence in our Advantage Nebraska strategy and believes that ATJ, Sustainable Aviation Fuel, has the potential to fundamentally revalue our asset base or any other plant that's on a pipeline today. By the way, we were just checking, but building a new ethanol plant in the United States, in our view, could be as high as $2.50 a gallon because we have priced them to see the economics related to when alcohol to jet fuel becomes a reality, and that's a minimum price at this point.

Todd A. Becker: We value our asset base or any other plant that's on a pipeline today.

By the way, we were just checking but to build a new ethanol plant in the United States in our view can be as high as $2.50 a gallon because we have price them to see the costs related to an alcohol to jet becomes a reality and that's a minimum price at this point.

Todd A. Becker: We continue to see Chinese quote-unquote yuko weighing on the domestic vegetable oil prices, including our renewable corn oil. Hopefully, new and expanded RD capacity will come online to help to rectify this imbalance, and we remain bullish on the long-term value of our low-carbon intensity corn oil. However, there is recent pricing pressure from our prior projections when we were using 70 cents a pound that is now currently in the high 30s to low 40s, resulting in EBITDA from our base corn oil uplift to the base ethanol margin of 80 to 90 million dollars per 2024.

Todd A. Becker: We continue to see Chinese quote unquote Yuko.

Todd A. Becker: <unk> got a domestic veg oil prices, including a renewable corner, hopefully new and expanded our D capacity coming online to help to rectify this imbalanced and we remain bullish on.

Todd A. Becker: On the long term value of our low carbon intensity corn oil. However, there is recent pricing pressure from our prior projections. When we're using 70 cents. A pound is now currently in the high <unk> to low <unk>, resulting in EBITDA from our base Cornell uplift to the base ethanol margin of $80 million to $90 million for 2024.

Todd A. Becker: Our MSC uplift has always included an uplift from coronal yield increases as well, which is where some base pressure came from, combined with the pricing pressure from lower soybean meal spreads during Q1, although starting to recover with a $40 ton rally from the lows. We are experiencing an MSC uplift of $0.07 to $0.12 a gallon.

Todd A. Becker: Our MSC uplift has always included an uplift from corn oil yield increases as well, which is where some base pressure came from.

Speaker Change: Excuse me.

Combined with the pricing pressure from lower soybean meal spreads during Q1, although starting to recover with a $40 ton rally from the lows. We are experiencing an MSC uplift of 7% to 12 cents a gallon.

Todd A. Becker: We believe sequence margin will more than make up for this difference and more, which is why we are focused on customer conversions every day in every market around the world. When we look ahead to the opportunity in front of us in 2025, if we assume some normalization while our mix has changed, our guidance has not. We are still on track for a near $300 million EBITDA contribution from our protein, corn oil, clean sugar, and decarbonization pillars, excluding any income contribution from base ethanol, corporate overhead, or ag and energy segments, which, by the way, performed well last year and are off to a good start this year.

We believe sequence margin will more than make up this difference and more.

Speaker Change: Which is why we are focused on customer conversions everyday and every market around the world when.

Speaker Change: When we look forward ahead, our head to the opportunity in front of us in 2025, if we assume some normalization while our mix has changed our guidance has not.

Speaker Change: We are still on track for a near $300 million EBITDA contribution from our protein corn oil clean sugar and de carbonization pillars, excluding any income contribution from base ethanol corporate overhead or AG and energy segments, which by the way has performed well last year and off to a good start this year I tried every which way I can what we keep coming up with this.

Todd A. Becker: I tried every way I could, but we keep coming up with this result, which is consistent with what we outlined at the beginning of our transformation in 2025. For protein, our 640 million gallons of converted capacity, including half of our ownership in our joint venture, could generate a base load of 80 to 120 million. As protein spreads wide and back out, we will see an increase, and we will see an increase as we, As 30 to 50% of our platform moves to sequence in, we believe in 2025.

Speaker Change: Result, which is consistent with what we outlined at the beginning of our transformation in 2025 and.

Speaker Change: And protein, our 640 million gallons of comparative converted capacity, including half of our ownership in our joint venture could generate a baseload of $80 million to $120 million as protein spreads widen back out we will increase and we will eat we will see an increase as we.

Todd A. Becker: We also look to add another one of one production facility in the future, as we mentioned earlier, but we want to make sure we allocate capital to the best projects today. Corn oil contributions on the base visits are fully reliant on prices, but 2025 should see some recovery as we are approaching the end of the biodiesel tax credit on December 31st, and corn oil is an advantaged feedstock relative to those valuations.

Speaker Change: At 30% to 50% of our platform moves to sequence and we believe in 2025. We will also look to add another one one production facility in the future as we mentioned earlier, but we want to make sure we allocate capital to the best projects today corner all contributions on the base business are fully relying on prices, but 2025 should see summary key.

Speaker Change: <unk> as we are approaching the end of the biodiesel tax credit in December 30, <unk> and corn oil is a advantaged feedstock relative to those valuations the contribution should be a base of $100 million and grow from there and sugar our belief that Shenandoah will be fully lined out as we go through this year and the facility could generate a baseload 15 to 25.

Todd A. Becker: The contribution should be a base of $100 million and grow from there. In sugar, our belief is that Shenandoah will be fully lined out as we go through this year, and the facility could generate a base load of $15 to $25 million a year on a full year basis, depending on what the customer mix ends up being again. We have strong customer demand, and as mentioned, we expect food grade certification in around 90 days after we make the on-spec product, hopefully in the next week or so.

Speaker Change: A year on a full year basis, depending on what the customer mix ends up again, we have strong customer demand and as mentioned, we expect food grade certification in around 90 days. After we make the on spec product hopefully in the next week or so.

Todd A. Becker: Finally, in decarbonization, the Nebraska First strategy is on track and, based on the latest green model, could generate up to and possibly exceeding $110 million a year on an annualized basis from our Nebraska assets alone beginning in 2025 and grow from there if we are able to quickly expand those assets and additionally when the Summit Carbon Pipeline comes online as well. We will also continually review our asset mix and where we have opportunities to monetize an asset, pay off debt, and de-lever our balance sheet while focusing on our Nebraska First mover advantage, where a combined expansion of 50 to 70 million gallons could have an outsized return due to carbon capture.

Speaker Change: And de Carbonization in Nebraska first strategy is on track and based on the latest green model could generate up to and possibly exceeding a $110 million a year on an annualized basis from our Nebraska assets alone beginning in 2025, and then grow from there. If we are able to quickly expand those assets and additionally, when summit carbon pipeline comes online as well.

Speaker Change: We will also continually review our asset mix and where we have opportunities to monetize an asset pay off debt and delever, our balance sheet, while focusing on our Nebraska first mover advantage, where he can combine an expansion of 50 to 70 million gallons could have an outsized return due to carbon capture we will do that much of our asset base is unencumbered and we have.

Todd A. Becker: We will do that. Much of our asset base is unencumbered, and we have no near-term maturities and remain in a strong cash position. We are also focusing on reducing our cost of debt as well, as we've seen some opportunities to do that as well. So while you see that the mix has changed from where we originally laid out the transformation, our efforts to transform this earnings power have not wavered notwithstanding a weak Q1 we just reported. Thanks for joining our call today. We can now start the Q&A session.

Speaker Change: No near term maturities and remain in a strong cash position. We are also focusing though on reducing our cost of debt as well as we've seen some opportunities to do that as well.

Speaker Change: So while you see that the mix has changed from where we originally laid out the transformation our efforts to transform this earnings power have not wavered notwithstanding a weak Q1, we just reported thanks for joining our call today, we can now start the Q&A session.

Speaker Change: Okay.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: Thank you.

Speaker Change: I'll now begin the question and answer session.

Speaker Change: If you have dialed in and would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.

Speaker Change: If you would like to withdraw your question simply press Star one again.

Speaker Change: If you are called upon to ask your question and our listening via Speakerphone on your device. Please pick up your handset and ensure that your phone is not on mute when asking your question.

Operator: To be able to answer as many questions as possible, we ask that you please limit yourself to one question and one follow-up. Again, it is star one if you would like to join the queue. And your first question comes from Adam Samuelson with Goldman Sachs. Your line is open.

Speaker Change: To be able to answer as many questions as possible. We ask that you. Please limit yourself to one question and one follow up.

Speaker Change: Again, it is star one if you would like to join the queue.

Speaker Change: And your first question comes from Adam Samuelson with Goldman Sachs. Your line is open.

Speaker Change: Yeah.

Adam L. Samuelson: Yes, thank you. Good morning, everyone. Good morning, morning. So, Todd, we have a lot of ground to cover.

Adam L. Samuelson: Thank you good morning, everyone.

Adam L. Samuelson: Good morning.

Todd A. Becker: Maybe I'd love to start on just the ethanol market outlook and kind of where we go from here to get things back in better balance. You talked about forward curves that are more favorable than in the past, but you're also talking about the business being open. Can you help us think about the demand side, which seems sluggish? What are you seeing on exports that might be the critical swing? That's the main balance and where you're seeing spot markings today and certainly through the second quarter.

Alright.

Adam L. Samuelson: A lot of ground to cover maybe I'd love to start on just the the ethanol market outlook and kind of where we go from here.

Adam L. Samuelson: Things back back in better balance you talked about.

Adam L. Samuelson: Forward curves that are more favorable than in the past, but you also talked about the business being being opened.

Speaker Change: Help us think about the demand side, we're seeing sluggish.

Speaker Change: What youre seeing on exports that might be the critical swing on.

Speaker Change: That demand balancing.

Speaker Change: Where youre seeing.

Speaker Change: Our margins today, and certainly through the second quarter.

Todd A. Becker: Yes, spot margins today across our platform are kind of ranging on average between 8 and 12 cents a gallon, somewhere in that range for May and June at this point, and post that made to high single digits, really kind of across the platform, maybe a little bit lower, a little bit higher in some places. All inclusive.

Speaker Change: Yes spot margins today across our platform are kind of range, you've got average between eight and 12 cents a gallon somewhere in that range.

Speaker Change: May and June at this point and post that.

Speaker Change: Mid to high single digits really kind of across the platform, maybe some little bit lower a little bit higher in some places.

Todd A. Becker: And so that has come off significantly from the lows. I mean, we saw mid-teens to and even in the negative 20s across the curve, and we've seen a significant rally on the back end of the curve as we typically when we see those type of numbers, it's not going to, it won't hold very long. So you have a, you know, corn market, and we had a flat, flat to inverted ethanol market, and that's kind of changed a little bit.

Speaker Change: All inclusive so that has come off significantly from the lows we saw mid.

Speaker Change: Teens, too and even into negative twenties across the curve and we've seen a significant rally in the back end of the curve as we typically.

Speaker Change: Typically when we see those type of numbers, it's not going to it won't hold very long. So you have a.

Speaker Change: Carry in the corn market and we had a flattish flat to inverted ethanol market and that's kind of changed a little bit we have to see more contribution.

Todd A. Becker: We have to see more contribution from the simple crush, as we've seen less contribution going forward from things like corn oil and distillers and those type of things, although natural gas is now a significant tailwind price-wise. So, generally speaking, from a demand perspective... You know, we've seen some pretty good weeks for driving demand coming out of winter. We have also now, as we enter into more of a summer driving season, hopefully gotten ourselves well positioned as an industry to take advantage of that. We remain a dollar or so under Arbob and with RIN values in the mid-50s or so at any given point. That's a $1.50 blend credit, so we've seen blends as high as 10.5% here recently.

Speaker Change: From the simple crush as we've seen less contribution going forward from things like like corn oil and distillers in those and those type of things. Although natural gas is now a significant tailwind pricewise. So generally speaking from a demand perspective.

Speaker Change: We've seen some pretty good weeks on driving demand kind of coming out of winter.

Speaker Change: We are also now as we enter into more of a summer driving season, hopefully get ourselves well positioned as an industry to take advantage of that we remain a well over a dollar under while we remain a dollar or so under our Bob and with the RIN values in the mid fifties or so in any given point, that's $1 50 blend.

Speaker Change: Credit so we've seen blends as high as 10, 5% here recently, so generally speaking the base business in the U S and and gas demand hopefully recovers kind of post last week and the week before and as we get into driving season, especially with higher fair rates and less capacity. You know, we're very we're very optimistic that the <unk>.

James E. Stark: Generally speaking, base business in the U.S. and gas demand hopefully recovers post last week and the week before as we get into driving season, especially with higher airfare rates and less capacity. We're very optimistic that the summer will act typically the same as it has. On top of that, we're so well-priced in the world for ethanol today, and I think more importantly, when you look at the last half of the year, we actually see Brazil as an opportunity to price into even with the tariffs that are in place as they do not have the excess ethanol capacity at this point to take care of all their back half demand.

Speaker Change: <unk> will act as typically the same that it has on top of that we're so well priced in the world.

Speaker Change: Ethanol today, and I think more importantly, when you look at the last half of the year, we actually see Brazil, as an opportunity to price into even with the tariffs that are in place as they do not have the excess ethanol capacity at this point to take care of our care of all their back half demand. So when you're kind of lining all up and you look at if we can just.

James E. Stark: So when you kind of line it all up, and you look at if we can just keep production steady as an industry and maintain some self-discipline. You know, I think we can set ourselves up for a continuing draw as we kind of come through the end of this Maiden Season. So generally speaking, margins are positive at this time of year across the board, and we're optimistic that that can continue to improve.

Speaker Change: Keep production steady as an industry and maintain some self discipline.

Speaker Change: I think where we can set ourselves up for a continuing draw as we kind of come through the end of this this maintenance season.

Speaker Change: Generally speaking margins are positive at this time of year across across the board fully.

Speaker Change: And we're optimistic that that can continue to improve Jim did you have something yeah, just from an export perspective that and we're running about 25, 6% ahead.

James E. Stark: Jim, did you have something? Yeah, just from an export perspective, Adam, we're running about 25, 26% ahead for the first quarter of this year versus last year, so that's what gives us the optimism that this could be a record year for us from an ethanol export standpoint.

James E. Stark: For the first quarter this year versus last year. So that's what gives us the optimism that this could be a record year for us from ethanol export standpoint.

Adam L. Samuelson: Okay, that's very helpful. Now, I want to just move over to some of the strategic initiatives and maybe talk about the clean sugar piece and talk about being in kind of late-stage negotiations with different offtakers. As you're seeing the Shenandoah Plant Commission, as you're getting close to the end of some of those pricing negotiations, can you talk about how you're envisioning kind of the uplift from that from that plan, both presumably in the second half of the year, but? The Cadence and Magnitude of the Thought That We Share. [inaudible] Yeah, thank you.

James E. Stark: Okay. That's very helpful and I wanted to say what are the some of the strategic initiatives and maybe.

James E. Stark: Talking about the <unk>.

Clean sugar peas and.

<unk> talked about being in kind of late stage negotiations with different different off takers.

James E. Stark: As you are seeing the Shenandoah Planning Commission.

James E. Stark: As you are getting close to the end of some of those pricing negotiations can talk about.

James E. Stark: How you're envisioning.

James E. Stark: EBITDA uplift from that from that plant.

James E. Stark: <unk>.

James E. Stark: In the second half of the year, but just the cadence and magnitude of that that we should start to be from Matt, Yes, We said.

James E. Stark: Relative to contribution.

Todd A. Becker: We said prior to these calls that contribution will ramp up during 24, because we're going to take a slow burn startup, as we say, just to make sure every single thing we do is on track and on spec, and we really want to get the food grade certification over the next 90 days once we make our first product. We are in significant negotiations with counterparties everywhere, from beverage markets to food ingredient markets, all the way into industrial markets.

Matt: Yeah. Thank you we said prior to.

Matt: These calls contribution will ramp up during 'twenty four because the plant we're going to take a slow slow burn startup as we as we say just to make sure every single thing we do.

Matt: <unk> is on track and on spec and we want to really want to get the food grade.

Matt: Certification over the next 90 days once we make our first product. We are we aren't significant negotiations with counterparties from everywhere from beverage markets to ingredient Mark food ingredient markets.

Matt: The way into industrial markets, we have enough demand to take all of our production for next year, which is two to 250 million pounds of product and all of that at a at the previously discussed margins or better. So it's really up to us at this point to get the plant lined out up and running get product on spec made.

Todd A. Becker: We have enough demand to take all of our production for next year, which is 2 to 250 million pounds of product, and all of that at the previously discussed margins or better, so it's really up to us at this point to get the plant lined out, up and running, get product on spec made, get it tested in all of these companies, the food companies, the industrials have it pretty much ready to go, to get it fully tested and certified, and at Margins are hanging, or actually, are in the range we talked about, which is kind of 65 cents to 90 cents a gallon uplift for those.

Matt: Get it tested and all of these companies the food companies. The industrials have it pretty much ready to go to get it fully tested and certified.

Matt: At that point I don't think we will have any shortage of demand for this and even the next plant that we build margins are hanging are actually are in where the range. We talked about which is kind of 65 to 90 cents a gallon of uplift or for those.

Todd A. Becker: Something we have to take into consideration, obviously, is the impact of the Gen 1 plant a little bit, but generally speaking, we're very optimistic about that. We believe we will have significant off-takes in place, because we are negotiating them right now, as the lion's share of everything we produce out of this plant, both for industrial and food use, especially into some of the ingredient markets that happen in fermentation. It's been a long time coming.

Matt: We have to take into consideration obviously is the impacted of Gen. One plant a little bit but generally.

Matt: Generally speaking, we're very optimistic about that.

Matt: We believe we will have significant off takes in place because we are negotiating them right now for as the lion's share of everything we produce out of this plant both from industrial and food use especially into some of the ingredient markets that happened in fermentation. So it's.

Todd A. Becker: We're really excited about it. We are going to do a grand opening in May of the site as well. And I think it's a great kickoff. And our first sale should come as early as next week for this year. And you'll be the first to know, I assure you, as our shareholders and people that follow the company. I appreciate all that I'll pass on.

Matt: It's a long time coming we're really excited about it Oh, we're going to do a grand opening in may of the site as well and I.

Matt: I think it's a great kickoff and our first sales should come as early as next week for this year and we're excited about that as well and you'll be the first to know I assure you as our shareholders and then people that follow the company.

Speaker Change: Okay I appreciate all that color I'll pass it on thank you.

Kristen E. Owen: And we will take our next question from Kristen Owen with Oppenheimer.

Speaker Change: And we'll take our next question from Kristen Owen with Oppenheimer Your line.

Todd A. Becker: Great, thank you for taking the question. A couple for me, just one clarification: O'Brien and Mount Vernon, are these back on Lauren?

Kristen E. Owen: Great. Thank you for taking my question.

Kristen E. Owen: Well for me.

Kristen E. Owen: One clarification O'brien.

Kristen E. Owen: Vernon I think back on line.

Todd A. Becker: Obion is starting to ramp up a little bit, but what we've done there, so everybody knows, is we've done a major refresh on conveyors that were 17 years old. We are replacing literally every conveyor front to back so the plants can run at higher capacities going forward. I mean, I think it's just some major refreshes that just have to happen occasionally.

Kristen E. Owen: Oh.

<unk> is starting to ramp up a little bit, but what we've done there. So everybody knows is we've done a major refresh on conveyors that were 17 years old we are replacing literally every conveyor front to back so the plants can run at higher capacities going forward I mean, I think it's just a major refreshes that just have to happen occasionally in addition at all buying and we're adding a new.

Todd A. Becker: In addition, at Obion, we're adding a new RTO to allow us to run the Gen 1 plant harder and the Gen 2 plant for protein harder as well. We are a little undersized there, and it is one of the, we think, premier plants in the United States, and it just hasn't run to where we want it to because of the conveyor project as well as the RTO. So that should be completed by the middle of the year, but we are already seeing some of the results because some of those conveyors are completed as we speak.

Kristen E. Owen: Our T O to allow us to run.

Kristen E. Owen: The Gen one plant harder and the Gen. Two plant for protein harder as well we were a little undersized there and it is one of the we think premier plants in the United States and it just hasn't run to where we wanted to because of.

Kristen E. Owen: The conveyer project as well as the <unk>, so that should be completed middle of the year, but we're already seeing some of the results because some of those conveyors are completed as we speak. So so generally speaking, it's not having as big of an impact in the second quarter as it had in the first quarter just because of.

Todd A. Becker: So generally speaking, it's not having as big of an impact in the second quarter as it had in the first quarter just because of where it was. But I think we will still see a little bit. But overall, the margins I gave you were the average across our total platform, including those at this point.

Kristen E. Owen: Where it was but I think I think we will still see a little bit but overall the margins I gave you were the average across our total platform, including those at this point.

James E. Stark: So that's really what we're doing at those two plants. Yeah, and Kristen and I would add, as we indicated, we still should be in that mid-90% utilization rate. So that would include those plants having to run, getting back to their normalized levels. Yeah, and lastly, when you look at the increased ability for O'Brien to run back at 120 to 130 million gallons a year, Madison has been limited to 100 million, under 100 million gallons a year because of a permit that has now been unlocked as of yesterday to go to 130 or 140, potentially. You know, we want to make sure that we do that responsibly based on the permit. But that's really just the driver; that's really the big programs that drive our OPEX back down to where it should be.

Kristen E. Owen: So that's really what we're doing at those two plants and.

Speaker Change: Krishna I would add is as we indicated we still should be in that mid 90% utilization rate. So that would include those plants, having to run getting running back to their normalized levels and lastly, when you look at the increased ability for <unk> to run back at 120 to 130 million gallons a year Madison has been limited to a $100 million under 100.

A million gallons a year because of the permit that has now been unlocked.

As of yesterday to go to a 130 or $1 40.

Speaker Change: Potentially we want to make sure that we do that responsibly based on the permit but that's really just drive that's really the big programs that drive our opex back down to where it should be.

Speaker Change: Per gallon.

Speaker Change: Okay.

Kristen E. Owen: One additional follow-up question there, and then I'll ask my second question at the same time, just so I'm not taking up too much time here, but the additional follow-up question, is Geraldson included in that mid-90s capacity utilization? And then sort of the bigger question here is really, you know, given the improving curve, you've got the ramp of these other facilities, clean sugar commissioning, I mean, I think the question that investors frequently ask is, are we at the point where we're now seeing the trough in Green Plains earnings potential and that we should see upside from here? Is this the low point? And how do we get comfortable with it?

Speaker Change: One additional follow up there and then I'll ask my second question is with all kinds of formats.

Speaker Change: The additional follow up.

Speaker Change: Our old plan included in that mid 90.

Speaker Change: Capacity utilization and then the bigger question here is where the given the improving curve you've got the ramp of these.

Speaker Change: These other facilities clean for commissioning.

Speaker Change: I think the question that investors frequently ask is are we at the point, where we're now seeing the trough.

Speaker Change: Green Plains earnings potential.

Speaker Change: We should see upside from here is this the low point.

Speaker Change: And how do we get comfortable with.

Todd A. Becker: Thank you. Yeah, thank you.

Todd A. Becker: Thank you. Yeah, thank you.

Speaker Change: Thank you yes. Thank you.

Todd A. Becker: Tyrosin is never included in our numbers, but protein will give you an update on how that ran during the quarter, but it's an excellent plant, one of the best probably in the world today, and one of the biggest in the world as well. So they do a great job up there, an amazing site, which is why we wanted to partner with them on our joint venture facility, with the improving curve, with everything coming back online, with improved capacities. You know, Q1 quarters are always an adventure. I think everybody knows that.

Speaker Change: <unk> never included in our numbers, but protein is protein will give you the update on how that ran.

Speaker Change: During the quarter, but it is an excellent plant one of the best probably in the world today and one of the biggest in the world as well so they do a great job up there amazing sight, which is why we wanted to partner.

Speaker Change: With them on our on our joint venture facility with the improving curve with everything coming back online with improved capacities Q1 quarters are always an adventure I think everybody knows that some.

Todd A. Becker: Some quarters, some Q1s are better than others, and some are worse than others. Part of our, you know, in a negative margin environment, along with the fact that we actually allocate SG&A compared to maybe some others, you know, it's just, it's an outsized negative quarter typically. I think we have to take a more proactive approach when we do actually see margins out front and not get too worried about hedging off some higher margins in the first quarter when there are opportunities to do that.

Speaker Change: Some court some Q1s are better than others, and some are worse than others.

Speaker Change: Part of our in a negative margin environment, along with the fact that we actually allocate SG&A compared to maybe some others.

Speaker Change: You know, it's just it's an outsized negative quarter typically I think we have to take a more.

Speaker Change: Our proactive approach to when we do actually do see margins out forward and not get too worried about hedging off some higher margins in the first quarter. When there are opportunities to do that I think we went away from that a little bit but generally speaking on the rest of the curve we remain open.

Todd A. Becker: I think we went away from that a little bit, but generally speaking, on the rest of the curve, we remain open. You know, look, CST is commissioning, protein is ramping, www.youtube.com or the link in the description below.

Speaker Change: CST is commissioning protein is ramping.

Speaker Change: Oil prices hopefully you know that's part of the trough two you've got to remember oil oil share for the soy soy guys is hitting multiyear lows at this point with oil in the low <unk> and now we're seeing protein prices rally again, we saw this a couple of years ago and protein really compressed the distillers grains and wheat.

Todd A. Becker: We've seen that as narrow here recently as $120 a ton, and now it's back out to $210 a ton in parts of the curve. That helps our margin structure overall, but we really need some recovery in vegetable oil prices as we see some major, major RD plants coming on in the middle of the year as well. And so some of these plants have 50,000 barrels a day of production needs for vegetable oils. And if you think about that, that's more than the whole U.S. ethanol industry makes.

Speaker Change: That we see that as narrow here recently is $120 a ton.

Speaker Change: And now it's back up to $210 a ton in parts of the curve that helps our margin structure overall, but we really need some recovery in veg oil prices as we see some major major R&D plants coming on middle of the year as well and so some of these plants at 50000 barrels a day of production needs for veg oils, and if you think.

Speaker Change: About that that's more than the whole U S. Ethanol industry makes that's coming online later this year so.

Todd A. Becker: I think we're troughing in a lot of different areas, and I think a lower corn price, a lower corn basis, and lower natural gas prices, when you add all those things together, I think we're going to start coming out of this and start to deliver what we talked about over the last several years.

Speaker Change: I think we're dropping in a lot of different areas.

Speaker Change: And I think a lower corn price lower corn basis, and lower natural gas prices when you add all those things up together.

Speaker Change: I think we're gonna start coming out of this and start to deliver what we talked about over the last several years.

Kristen E. Owen: Thank you. I'll take the rest offline.

Speaker Change: Thank you I'll take the rest offline.

Craig Edward Irwin: And we will take our next question from Craig Irwin with Roth MKM. Your line is open.

Speaker Change: And we'll take our next question from Craig Irwin with Roth.

Craig Edward Irwin: Your line is open.

Todd A. Becker: Hi, Thank you for taking my questions.

Craig Edward Irwin: Hi, Thank you for taking my questions.

Craig Edward Irwin: Todd the progress here with with carbon is exciting.

Craig Edward Irwin: And I.

Craig Edward Irwin: I guess, we all look forward to the confirmation of that.

Craig Edward Irwin: You've ordered the compression equipment.

Craig Edward Irwin: Given that the the interconnects.

Speaker Change: Sound like they're relatively straightforward. So my question is.

Todd A. Becker: So, Todd, the progress here with carbon is exciting, and I guess we all look forward to the confirmation that you've ordered the compression equipment, given that the interconnects sound like they're relatively straightforward. So my question is, you know, with carbon coming online, the implication is, you know, SAF actually gets a lot more exciting, a lot more real, and the great numbers seem to line up for your Nebraska plants to be early suppliers of it.

Speaker Change: With carbon coming online the implication is.

Speaker Change: SaaS actually gets a lot more exciting a lot more real and the greet numbers seem to line up for your Nebraska plants to be early suppliers in there.

Todd A. Becker: Can you maybe talk to us about whether or not you're having conversations about offtake for low-carbon ethanol? Is there specific interest from the SAF complex, people that, you know, are looking at building or already have capacity there? You know, can you help us frame out how long it will be before we see potential production with those gallons out of Nebraska into SAF?

Speaker Change: Can you maybe talk to us about.

Speaker Change: Whether or not youre, having conversations about offtake for low carbon ethanol.

Speaker Change: Is there specific interest out of the.

The SaaS complex people.

Speaker Change: You are looking at building already has.

Speaker Change: Capacity there.

Speaker Change: Can you help us frame out how long it'll be before we see potential production with those gallons out of Nebraska.

Speaker Change: <unk> SaaS.

Todd A. Becker: Yeah, thanks for the question. We're right now sizing the needs at this point, and what we've seen is a reduction in compression lead times from about 55 weeks to 40 weeks at this point. With our partner in Nebraska, we're getting ready to put our order in as we kind of finalize the scope. That should happen in the next few months.

Speaker Change: Yes, thanks for the question.

SaaS: We're right now sizing.

He needs at this point expect what we've seen is a reduction of compression lead times from about 55 weeks to 40 weeks at this point.

Speaker Change: With our partner in.

Speaker Change: In Nebraska, we are getting ready to put our order and as we kind of finalize the scope that should happen in the next few months.

Todd A. Becker: Construction on their project is starting in the next few months as well, and we expect to start construction on our own once we get the compression ordered. We'll start construction on our own interconnects at our plants, as well as the building. So we're very excited about it. Look, I think we're gonna start everything the last half of the year to be on the last half of next year. If you would have asked me a few months ago about what we were thinking about the SAF ATJ guidance that was gonna come out, I would say it's a stretch that alcohol could potentially qualify, and we weren't really sure. But we always have; we always keep the faith.

Speaker Change: Construction on their project is starting in final construction under project starting in the next few months as well and we expect to start.

Speaker Change: Hopefully construction on our once we get once we get the compression ordered will start work start constructions on our own interconnects at our plants as well as the building.

Speaker Change: So we're very excited about it look I think we're going to start everything last half of the year to be on last half of next year.

Speaker Change: If you would have asked me a few months ago with kind of what we were thinking about the SaaS a T. J guidance I was going to come out I would say, it's a stretch that alcohol could potentially qualify and we werent really sure but.

Speaker Change: We always have.

Speaker Change: We always keep the faith, but generally speaking what we saw come out so it gives us more confidence that our Nebraska early alcohol that qualifies to be put into SaaS will be very a very valuable product and it will give people confidence.

Todd A. Becker: But generally speaking, what we saw come out gives us more confidence that our Nebraska early alcohol that qualifies to be put into SAF will be a very valuable product, and it will give people confidence to build these plants at this point because I think until these rules came out, you just didn't really know whether alcohol could qualify. So when you go look at the guidance, if you have a lower CI plant, like our Nebraska plants are, the starting point, and you deduct the 30 plus points for carbon capture, under the new guidance, you do qualify.

Speaker Change: To build these plants at this point because I think until these rules came out you just didn't really know whether alcohol could qualify. So when you go look at the guidance. If you have a lower Ci plant like our Nebraska plants are the starting point and you deduct the 30 plus points for carbon capture under the new guidance you do qualify and then.

Todd A. Becker: And then the low carbon smart practices on the farm make it even more beneficial, and it will give people the courage to build alcohol to jet plants, I think, going forward. And even before that, we were engaged in multiple different discussions about post the new guidance.

Speaker Change: The low carbon smart or the carbon smart practices on the farm make it even more beneficial and more and it will give people encourage to build alcohol to jet plants, I think going forward and even before that we were engaged in multiple different discussions on post the new guidance.

Todd A. Becker: What can we do to enter into agreements to have commit early gallons to somebody that wants to build an early ATJ plant? There's a lot of that going on out there today. You know, when you take a look at the value of an asset in the middle of Nebraska that's going to be in an early decarbonized situation because of the early potential of the pipeline that's already built in Nebraska, that's a very, very valuable option.

Speaker Change: What can we do to enter into agreements to have commit early gallons two to somebody that wants to build a an early ATK plant and theres a lot of that going on out there today. So.

Speaker Change: When you take a look at the value of an asset in the middle of Nebraska, that's going to be on an early decarbonize situation because of the early potential of.

Speaker Change: Of the pipeline that's already built in Nebraska, that's a very very valuable option, which is why.

Todd A. Becker: Which is why we have to look at Wood River and Central City today to say, where can we de-bottleneck without a significant capital cost, 30 to 40 million gallons per plant, and take advantage of the early 45Z because we're going to be two years of 45Z with those plants. There's not a lot of other people in the world that have that position, especially outside of Nebraska. On top of that, then we have York, which we believe is, honestly, one of the oldest plants in the country.

Speaker Change: We have to look at wood River in Central City today to say, where can we debottleneck without a significant capital cost 30 to 40 million gallons for plant and take advantage of the early 45, <unk> because we're going to be two years of 45 Z with those plants that is theres not a lot of other people in the world that have that position, especially.

Speaker Change: Especially outside of Nebraska so.

Speaker Change: On top of that then we have York, which we believe is honestly, it's one of the oldest plants in the country and we're still going to put some money in there to get our carbon score down we don't have to do a big capital investment just to take advantage of 45 Z.

Todd A. Becker: And we're still going to put some money in there to get our carbon score down. But we don't have to do a big capital investment just to take advantage of 45Z because it's so beneficial. But I have to tell you, we contemplated, you know, what is the new cost to build? What is the new cost to build? And quite frankly, it's $2.50 a gallon, all in. And so when you look at that, relative to 45Z, it might work, but it's $2.50 a gallon all in, even if you have a great site. So I think the market's going to contemplate those type of things when you look at the insatiable alcohol-to-jet demand that could arise.

Speaker Change: So beneficial, but I have to tell you we contemplated.

Speaker Change: What is it what is a new cost build what is the new cost to build.

Speaker Change: And quite frankly, it's $2 50, a gallon all in and so when you look at that relative to the 45 it might work, but it is $2 50, a gallon all in even if you have a great site.

Speaker Change: The market is going to contemplate those type of things when you look at the insatiable alcohol to jet demand that could that could transpire.

Craig Edward Irwin: Excellent. So, my next question is related to some sort of ethanol and ethanol macro demand. So, right, we're starting off this year quite a bit better than last year, even though, you know, the crush of negative four cents was, you know, not what anybody wanted. But this year, we've got exports, and we've got some other nice tailwinds, like, I guess, you know, the issues in the airline industry with, you know, seat prices going up, and then, you know, routes being canceled It looks like miles driven could be up nicely this summer, too.

Speaker Change: Excellent so Mike My next questions related to sort of ethanol.

Macro demand, so right where we.

Speaker Change: We're starting off this year quite a bit better than last year, even though the crusher of negative <unk> <unk>.

Speaker Change: Not what anybody wanted.

Speaker Change: But this year, we've got exports and we've got some other nice tailwind like I guess.

Speaker Change: The issues in the airline industry with them.

Speaker Change: Seat prices going up and then.

Speaker Change: <unk> been canceled because of our plane availability and some of the other complications out there and it looks like miles driven could be up nicely. This summer too.

Todd A. Becker: Again, gasoline demand is bullish for ethanol. Can you maybe just help us frame out a little bit more precisely what you think on exports this year? You know, I'm hearing that Brazil is going to have an awful sugarcane crop this year. That means they could actually be an importer rather than an exporter. There are other benefits, you know, from Mexico or Canada. Can you maybe help us understand the size of the gap and what you think the export contribution can bring? And I don't know if you want to comment on the airline and miles-driven issue, but, you know, anything to help us understand, you know, how this supply-demand gap gets narrowed this summer.

Speaker Change: Again gasoline demand bullish bullish for ethanol.

Can you, maybe just help us frame out a little bit more precisely what you think on <unk>.

Speaker Change: On exports this year.

I'm hearing that Brazil is going to have an awful sugarcane crop that means they could actually be an in quarter rather than an exporter.

Speaker Change: Benefits, mainly from Mexico, or Canada can you maybe help us understand the size of the gap and what you think the export contribution can bring in.

I don't know if you want to comment on the airline and miles driven issue, but anything to help us understand how this supply demand gap gets narrowed this summer.

Todd A. Becker: Well, it's narrowing as we speak. I mean, we are starting to see some stock draws. We'd like to see production come down a little bit more. But, generally speaking, we saw some stock draws over the last couple of weeks, not big enough, though, to have an outsized impact yet because we really haven't even hit the summer driving season yet. So we're watching that closely.

Speaker Change: Well, it's narrowing as we speak I mean, we are starting to see some stocks draws we we'd like to see production come down a little bit more but generally speaking we saw some stock draws over the last couple of weeks not big enough though.

Speaker Change: Outsized impact yet because we haven't really even having to even hit summer driving season, yet. So we're watching that closely you are correct on we believe last half of the year, we could see Brazil reappear.

Speaker Change: A demand driver. In addition to we continue to have strong demand out of places like Canada and other markets around the world just because we.

Speaker Change: We just priced so well into some of those markets and they still have low carbon needs as well so generally speaking.

Todd A. Becker: You are correct that we believe in the last half of the year, we could see Brazil reappear as a demand driver. In addition, we continue to have strong demand out of places like Canada and other markets around the world, just because we priced them so well into some of those markets, and they still have low carbon needs as well. So generally speaking, as we looked out forward, we expected some of the margin recovery that happened already. But if we could get a few things to break our way, we could see a significant increase. You know, in the last half of last year, we generated about $100 million or so across the platform.

Speaker Change: As we looked out forward.

Speaker Change: We expected some of the margin recovery that happened already.

Speaker Change: But if we can get a few things to break our way we could see a significant increase in the last half of last year, we generated about 100 million or so across the platform. We think we can we can the opportunities to do better than that.

Todd A. Becker: You know, we think we can, we can, the opportunity is to do better than that, if we can get some things to break our way, especially with some of these ability to run our plants more efficiently at better rates, and so. Overall, the macros are starting to turn and look favorable, shown by certainly the recent uptick in the forward curve. One thing we'll have to watch is corn prices. You know, we've got to get the crop planted. We had great plantings last week at 25%. We'll wait to see what happens on Monday again.

Speaker Change: We think get some things break our way, especially with some of these ability to run our plants at a.

Speaker Change: More efficiently at better rates and so.

Speaker Change: Overall, the macros are starting to turn and look favorable shown by.

Speaker Change: Certainly the recent uptick in the forward curve.

Speaker Change: One thing we'll have to watch as corn prices, we don't we've got to get the crop planted we had great plannings last week at 25%, we'll wait to see what happens on Monday again.

James E. Stark: Probably a little bit lower than we'll think just because of the rain this week and we have a rainy season ahead of us. But generally speaking, you know, anybody that buys corn because we're not going to get a crop planted is a bit of a fool's game at this point. It's very early.

Speaker Change: A little bit lower than we would think just because of the rain. This week and we have a rainy season ahead of us, but generally speaking.

Speaker Change: Anybody that buys corn, because we're not going to get the crop planted as a bit of a fool's game at this point. It's very early our view is the crop will get planted acres are going to ground and and I think that'll be very favorable to ethanol.

Craig Edward Irwin: Our view is the crop will get planted, and the acres will go in the ground. And I think that'll be very favorable to ethanol. I think, Craig, I'd just give a little more color on exports. We think we'll be somewhere between 1.7 and 1.8 billion exporters, and that really doesn't include anything from the upside from Brazil. So when you look at kind of our leading export markets, it's Canada, the United Kingdom, India, the Netherlands, Colombia, South Korea, they're all, it's very well spread across the universe. And, you know, if Brazil comes in, that could be helpful to even more stronger export demand for us. Excellent

Speaker Change: I think Craig I'd, just give a little more color on exports, we think we'll be somewhere between $1 $71 8 billion exported that really doesn't include anything from upside from Brazil. So when you look at kind of a leading export market, its Canada, United Kingdom, India, Netherlands, Colombia, South Korea, they're all it's very well spread across.

Speaker Change: Across the universe in Brazil.

Speaker Change: Brazil comes in that could be helpful to even more stronger export demand for us.

Todd A. Becker: Excellent. Thank you both for taking my questions. Congratulations on the progress with HYPRO. I like HYPRO. Thank you.

Speaker Change: Excellent. Thank you both for taking my questions congratulations on the projects.

Speaker Change: With high Pro I like the high growth.

Speaker Change: Thank you.

Speaker Change: Thanks Jay.

Andrew Strelzik: And we will take our next question from Andrew Strelzik with BMO Capital Markets. Your line is open.

Speaker Change: And we will take our next question from Andrew <unk> with BMO capital markets. Your line is open.

Speaker Change: Okay.

Todd A. Becker: Hey, good morning. Thanks for taking the questions. I actually wanted to follow up on that last comment on IPRO, and it does sound like based on your comments, the volume is kind of tracking. You reiterated the 20, 30%, but I wanted to ask you about the economics of that revenue stream, high pro, or sequence specifically. We've certainly seen the broader protein markets evolve, you know, in recent months, and we've heard some demand sensitivity around premium ingredients generally. So just curious what you're seeing and expecting in terms of protein economics versus your initial expectations in those conversations.

Andrew: Hey, good morning, Thanks for taking the questions.

Andrew: I actually wanted to follow up on that last comment on high pro and it does sound like.

Andrew: To your comments that the volume is kind of tracking you reiterated the 2030%, but I wanted to ask you about the economics of that revenue stream high brokers or sequence specifically.

Andrew: Certainly seen the broader protein markets evolved in recent months and we've heard some demand sensitivity around premium ingredients generally so just curious what youre seeing and expecting in terms of protein economics versus kind of your initial expectations in those conversations.

Todd A. Becker: Yeah, you're right on all the protein economics. We've seen that definitely compress across anybody that makes any type of Premium Ingredient, Whip. The availability of some of these products that have come on to the market, which is why we want to have escape velocity from some of these lower proteins, and we're focused really on 60 pro-sequence and above.

Speaker Change: Yes, you are right on all the protein economics, we've seen that.

Speaker Change: Definitely compress across anybody that makes any type of.

Speaker Change: Premium ingredient.

Speaker Change: With the.

Speaker Change: The availability of some of these products that have come onto the market.

Speaker Change: Which is why.

Speaker Change: We want to have escaped velocity from.

Speaker Change: From some of these lower proteins and we're focused really on 60 pro sequence and above.

Todd A. Becker: What's unique about the 60PRO sequence is that it's a very different type of product that is made in a fermenter that has specific characteristics that taste and texture characteristics that our customers are looking for as a designed product. You know, we have seen that on the Corn Gluten Meal Market Compress as well, so we have to kind of watch that overall. And generally speaking, you know, we believe our product is a premium, a minimum corn gluten meal, if not a, you know, a significant premium to that, depending on the use case in the world.

Speaker Change: <unk> unique about 60 per sequence is that it's a very different type of product.

Speaker Change: It made it a fermenter.

Speaker Change: That has specific characteristics that taste and texture characteristics that our customers are looking for as a designed product.

Speaker Change: We have seen that.

Speaker Change: Corn gluten meal market compressed as well so we got to kind of watch that overall and generally speaking.

Speaker Change: We believe our product as a premium and minimum corn gluten meal if not.

Speaker Change: A significant premium to that depending on the use case in the world.

Todd A. Becker: So, look, we're overall, these are just markets that have been flowing. You've seen a significant recovery in the last couple of weeks or so in protein markets. So they've been bid up. We'll see what Argentina does. I won't make some of the same comments on Argentina I've made in the past, but generally speaking, it's still a bit of a wild card.

Speaker Change: So look we're overall these are just markets that ebb and flow you've seen a significant recovery in the last couple of last week or so and protein markets.

Speaker Change: So they have been bid up we'll see what Argentina.

Speaker Change: Does I won't make some of the same comments on Argentina I've made in the past, but generally speaking.

Speaker Change: Still a bit of a wildcard and I think it's proven itself out in the last couple of weeks, but.

Todd A. Becker: And I think it's proven itself in the last couple of weeks, but when we look at 60 pro, it's just the first step we have with some of our biggest customers, its labeling. You can't...

Speaker Change: When we look at 60 pro it's just the first step we have with some of our biggest customers. Some of its labeling you can't this is a very different type of product and so with one of our potential big customers that we've been talking to for three years. They finally got labelling approved for this product after many many tests many many use cases.

Todd A. Becker: This is a very different type of product, and so with one of our potential big customers that we've been talking to for three years, they finally got labeling approved for this product after many, many tests, many, many use cases, and how we're going to label the product. You have to remember, this is a combination of Protein and Yeast. And within that yeast, we can, Leslie and the team have been working on new technologies to embed into that yeast that we work with our customers on.

Speaker Change: And how we're going to label the product you have to remember this is a combination.

Our protein in the east end within the East we can Leslie and the team are working on new technologies to embed in that east that we've been working with our customers on.

Todd A. Becker: It's just a very different product, and I don't think you should count out even higher proteins from there. We've made significant breakthroughs on the bench and at lab scale on higher protein products, and I think that's our next step with this platform. Sequence is a platform, and You know, while certainly the base protein markets, you've seen it, there's an avalanche coming of high-pro-soybean meals, but generally speaking, the market seems to be taking it.

Speaker Change: It's just a very different product and I don't think you should count out even higher proteins from there we've made significant.

Breakthroughs on the bench at lab scale.

Speaker Change: Higher protein products and I think that's our next step with this with this platform sequent to the platform.

And.

Speaker Change: While certainly the base protein markets, you've seen it theres, an avalanche coming of of Hy Pro soybean meal.

Speaker Change: But generally speaking the market seems to be taking it it was never really a big concern of ours that the market would absorb it might be chunky.

Todd A. Becker: It was never really a big concern of ours that the market wouldn't absorb it. It might be chunky, but I think once it absorbs it, we go back to where we were in the past. It might take a few years, though.

Speaker Change: But I think once it absorbs it would go back to potentially where we were in the past might take a few years ago.

Andrew Strelzik: Yeah, okay, that's helpful. And then my second question: in the prepared remarks, in particular on CapEx, you made some comments around financing. I don't know if you can elaborate on that. And then, just kind of relatedly, more broadly, as you think about, you know, evolving the asset base towards some of the very exciting opportunities that you've talked about, whether that's expansion in Nebraska or more dexterous opportunities, how do you think about the capacity to fund those currently or the plans behind them? Those would be great. Thank you.

Got it Okay. That's helpful. And then my second question in the prepared remarks, and particularly around Capex you made some comments around financing.

Speaker Change: I don't know if you can elaborate on that and then just kind of relatedly more broadly as you think about.

Speaker Change: Evolving the asset base towards towards some of the very exciting opportunities that you've talked about whether that's expansion in nebraska or more dextrose opportunities. How do you think about the capacity.

Speaker Change: Those currently or the plans behind those would be great. Thank you.

Todd A. Becker: Yeah, thanks. I'll talk about the latter point, and Jim can talk a little bit about kind of our financing strategies, because I think we're in the middle of that trying to read, trying to kind of change our debt around and reduce our debt costs. But, generally speaking, that's what we have to do. We have to always look at and be, and be, quite frankly, realistic about ourselves and what we can do today and where we should allocate capital.

Speaker Change: Yeah. Thanks, I'll talk on the latter point, Jim can talk a little bit about on kind of our financing strategies because I think we're in we're in the middle of that trying to trying to kind of change or that around and reduce our debt cost but.

Todd A. Becker: When you look at the 45 Z opportunity, with guarantees, those are credits that are going to be multiple years ahead of anybody else with Nebraska coming online. We have got to really be honest and take a look at where we should allocate capital. Well, those are pretty good returns to do a little bit of an expansion there first because of the margin structure that's in place for the first two years of 45Z, and because we have Besides, You know, one other person in Nebraska, we have the most gallons in Nebraska today.

James E. Stark: Generally speaking that's what we have to do we have to always look at and be and be quite frankly realistic with ourselves of what we can do today and where we should allocate capital. When you look at the 45 Z opportunity.

James E. Stark: With guaranteed.

James E. Stark: Credits that are going to be multiple years ahead of anybody else in the Nebraska.

James E. Stark: Nebraska coming online.

James E. Stark: We have got to really be honest and take a look to say where should we allocate capital where those are pretty good returns.

James E. Stark: To expand and do a little bit of an expansion there first because of the margin structure. That's in place for the first two years of 45 Z and because we have besides.

James E. Stark: One other one other person in Nebraska, we have the most gallons in Nebraska today.

Todd A. Becker: We have got to take advantage of that position for our shareholders and for our balance sheet because it's such a generation of high free cash flow returns relative to anything else we can do as quickly as that. On top of that, clean sugar, you know, when we want to make sure, number one, we're in site selection now. It's between three or four states, and there's been a bit of competition there.

James E. Stark: We have got to take advantage of that of that position and for our shareholders and for our balance sheet, because it's such a generation of high free cash flow returns relative to anything else. We can do as quickly as that on top of that clean sugar.

James E. Stark: When we we want to make sure we number one we're in we're in site selection now it's between three or four states and theres been a bit of competition. There and then on top of that when we do make site selection, we want to make sure that we do that with customers in mind and customers that want us to build it and not just just put another dextrose facility on the market because we think those.

James E. Stark: And then on top of that, when we do make site selection, we want to make sure that we do that with customers in mind and customers that want us to build it and not just put another dextrose facility on the market because we think that will come. We will build it alongside commitments from customers to take the product, and that's how exciting this is. So yeah, we'll have to look at how we finance that next clean sugar facility.

James E. Stark: Will come we will build it alongside commitments from customers to take the product and that's how that's how exciting. This is so yes, we will have to look at how we finance that next clean sugar facility.

James E. Stark: You know, it's certainly not just cash off the balance sheet, but that's why we want We have plenty of spare capacity. I would say, first and foremost, we would look at putting some debt against some of those new bills, especially in sugar. I think I think we can do Nebraska off the balance sheet, in terms of either financing it with unencumbered capacity or cash. And I think that will drive our returns then to give us free cash flows to do the other things again and come back to building that 7th MSC site once the team really makes significantly more traction on 60% protein as well.

James E. Stark: Certainly not just cash off the balance sheet, but that's why we want to do a lot of unencumbered assets.

James E. Stark: We have plenty of spare capacity I would say first and foremost we would look at at putting.

James E. Stark: Some some debt against some of those new builds, especially in sugar I think I think we can do Nebraska off the balance sheet in terms of either financing it with unencumbered capacity <unk> cash and I think that will drive our returns to them to give us free cash flows to deal with the other things again I come back to.

James E. Stark: Building that.

James E. Stark: The.

James E. Stark: MSC site once we kind of once it once the team really makes it significantly more traction on 60% protein as well.

Todd A. Becker: And I would add, Andrew, that there's been no shortage of infrastructure partners who want to look into financing carbon capture equipment. We do have firm funding in place. As we get closer to finalizing that and when we can come to you and say that we've made the commitment, we've gotten everything ready in the schedule for building, we'll provide more details. But, as we said on the last call, we're probably somewhere around $100 million in capital for the three Nebraska plants today.

And I would add Andrew that there's been no shortage of infrastructure partners, who want to look into financing.

James E. Stark: Carbon capture equipment, we do have firm funding in place as we get closer to finalizing that and when we can come to you and say that we've made the commitment we've gotten everything ready and the schedule for building will provide more details, but as we said in last call.

James E. Stark: We're probably somewhere around $100 million in capital for the three three Nebraska plans today and again.

Todd A. Becker: And again, I think Todd reiterated earlier that that's a one-year payback based on the EBITDA, or actually under that, based on the EBITDA it'll generate. So from the standpoint of being able to find longer-term capital at good rates, there's not been any shortage of that for us when we look to put dollars around the carbon capture equipment that we're going to deploy in Nebraska. Hey Andrew, one last

James E. Stark: Thank Todd reiterated earlier that that's a one year payback based on EBITDA are actually under that based on EBITDA and will generate so.

James E. Stark: From the standpoint of being able to find longer term capital.

James E. Stark: At good rates, it's not been any shortage of that for us when we look to put dollars around carbon capture equipment that we're going to deploy in Nebraska, Andrew One last thing I will just tell you. This there's also besides what Jim just said.

Todd A. Becker: Hey Andrew, one last thing. I'll just tell you this.

Todd A. Becker: There's also, besides what Jim just said, there's no shortage of people that will monetize your forward cash flows. As soon as you start sequestering carbon and you have 45Z-backed credits, you can get very interesting advances on future cash flows at very interesting rates, at very interesting advance rates. So there's plenty of that that is starting to look at it. But we've also seen, I think more interestingly, demand for voluntary credits starting to rear its head here. You know, and it's not coming from me.

James E. Stark: There's no shortage of people that will monetize your forward cash flows as soon as you start sequestering carbon.

James E. Stark: And you have 45 Z backed credits.

James E. Stark: You can get.

James E. Stark: It can get very interesting advances on future cash flows that very interesting rates at very interesting advance rates.

Theres plenty of that that is starting to look at it we've also seen.

James E. Stark: More interestingly demand for voluntary credits starting to two rare its head here.

James E. Stark: It is not coming from I would say an airline or.

Andrew Strelzik: I would say, you know, an airline or a, you know, a transportation company, it's coming from technology. I mean, it's coming from commitments that, you know, players have made to decarbonize because of the increased use of so-called data center emissions and electricity. You know, there's significant demand showing up for high quality carbon credits generated from biogenic carbon. Now where will it go? I don't know, but I don't think there should be any thought that our view is it's a starting point of $50 a ton, maybe a little bit lower to start. But generally speaking, there is a case for significantly higher biogenic carbon credit values, even with the lower low carbon fuel standard values in California.

James E. Stark: Transportation company, it's coming from technology, I mean, it's coming from commitments that.

James E. Stark: Players have made to decarbonize because of the increased use of called data center emissions and electricity.

James E. Stark: Those are there is significant demand showing up for high quality carbon credits generated off of biogenic carbon now.

James E. Stark: Where will it go don't know, but I don't think there should be any thought that our view is it's a starting point of $50 a ton maybe a little bit lower to start but generally speaking there is a you can actually make a case for significantly higher biogenic carbon credit values, even with the lower low carbon fuel standard values in California.

Manav Gupta: Got it. Very helpful comments. I appreciate them very much.

Speaker Change: Got it very helpful comments I appreciate it very much.

Speaker Change: Thank you.

Todd A. Becker: And we will take our next question from Manav Gupta with UBS. Your line is open.

Speaker Change: Yes.

Speaker Change: And we will take our next question from Manav Gupta with UBS. Your line is open.

Todd A. Becker: So my question relates more to you know what you think on the corn oil pricing side because as you pointed out you know I think Martinez is ramping from 22,000 barrels towards 50,000 barrels and then Rodeo is ramping from 28,000 towards 50 again so big demand pull coming on that side but as some of these operators are also saying is look we are starting with soybean oil in some cases refined soybean oil because it's easier to process but once we you know get along the learning curve we will move over to a lower CIT stock so just trying to understand obviously as these new plants start up the demand for vegetable oil will go up but do you think there's a proportionally significantly bigger increase because the carbon intensity of corn oil is so much lower than soybean oil that the actual demand pull on corn oil is even harder than soybean oil as these new plants start up

Manav Gupta: My question relates more to you know what you think on the pricing side, because as you pointed out.

Manav Gupta: Martinez is ramping company 2000 barrels towards 60000 barrels and then real deal as ramping from 28000 towards 50 again, so big demand pull coming on that side, but as some of these operators would also saying is look we are starting that.

It would be an island in some cases, the define say a benign because it's easier to process like Muncie.

Manav Gupta: Along the learning curve, we will move over to lower CIP stock. So.

Manav Gupta: Just trying to understand obviously as these new plants, starting up the demand for vegetable oil will go up but do you think there's a proportionally significantly bigger increase because the carbon intensity.

Manav Gupta: So much lower than soya bean oil that that still demand pull on corn oil is even harder than soybean oil as these new plant startup.

Todd A. Becker: Well, I mean, a 50,000 barrel a day plant is more than the ethanol industry produces every day in corn oil. So we're very excited that those plants are going to ramp up later this year.

Manav Gupta: Well I mean at a 50000 barrel a day plant is more than the ethanol industry produces everyday and corn oil. So we're very excited that that plant that those plants are going to ramp up later later this year and when you look at it any way any way you shape. It maybe during this year. They can start up with soybean oil, but when you look at the economics next year and.

Todd A. Becker: And when you look at it, any way you shape it, maybe during this year, they could start up with soybean oil. But when you look at the economics next year and the going away of the biodiesel tax credit, the advantage that corn oil has in the 45Z and 40B, right, Devin, and 40B economics. There's going to be no shortage of corn oil needs next year. And again, I think, you know, we're starting to see some pressure on imports of yuko.

Manav Gupta: And the going away of the biodiesel tax credit and the advantage that corn oil has in the 45 Z.

Manav Gupta: 40, B right, Devon, and 40 B economics.

Todd A. Becker: But we're putting more pressure on the US government to say, what are we really importing? Somebody's got to figure out that not all Chinese use cooking oil, otherwise known as what we would say palm oil. So, you know, we're going to put a lot of pressure on those sources as well. But, generally speaking, you know, there will be a moment in time when all of these big plants come online, and they're going to need all of all of just about everything they can buy, especially low carbon oils.

There is no going to be no shortage of corn oil need to next year and again I think we're starting to see some pressure on imports of yuko, but where we're putting more pressure on them.

Manav Gupta: On the U S government to say what are we really importing somebody has got to figure out that that's not all your Chinese used cooking oil otherwise known as what we would say palm oil so.

Manav Gupta: We're going to put a lot of pressure on them.

Manav Gupta: Those sources as well but.

Todd A. Becker: And, and even recently, we maintain our advantage. And Devin can talk a little bit about that basis, the new guidance that just came out, we maintain our advantage on corn oil, correct, Devin? Yeah, so the new modeling.

Manav Gupta: But generally speaking when all when there will be a moment in time when you have all of these big plants, hitting and theyre going to need all of all of just about everything they can buy especially in a low carbon oils.

Manav Gupta: And even recently.

We maintain our advantage in debit can talk a little bit about that basis. The new guidance. So just came out we maintain our advantage on Cornell correct Devin that's correct.

Devin Mogler: Yeah, so the new modeling, and we expect that to tie into 45Z, which the administration has told us they're going to start working on before the ink is even dry on 40B. But you've got your corn oil, which is at an advantage over soybean oil, and even with the Climate Smart Ag practices that they allow for soybeans, it only allows them to reduce their carbon intensity by about five points, so corn oil should still be at an advantage. Now we do expect them to expand all those Climate Smart Ag practices across the board in 45Z, which could help soybean oil, but it'll also help us on the corn ethanol side.

Devin: Yes, so the.

Devin: The new modeling and we expect that to tie in to <unk> 45, Z, which the administration has told us they're going to start working on before the ink is even dry on 40, b, but you've got your corn oil, which has added advantage of soybean oil and even with the climate Smart AG practices that they allow for soybeans. It only allows them to reduce their carbon intensity.

Devin: About five points, so corn oil should still be at an advantage now we do expect them to expand all of those climate Smart AG practices across the board in 45, G, which could help soybean oil, but it will also help us on the corn ethanol side.

Devin: Yes.

Speaker Change: Thank you.

Lawrence Alexander: And we will take our next question from Lawrence Alexander with Jeffreys. Your line is open. Um, hi, this is Carol Jung.

Manav Gupta: And we will take our next question from Lawrence Alexander with Jeffreys. Your line is open. Hi, this is Carol Jung for Lawrence Alexander. Thank you for taking

Speaker Change: And we will take our next question from Laurence Alexander with Jefferies. Your line is open.

Speaker Change: Hi, This is Joe on for Laurence Alexander Thank you for taking my question.

Speaker Change: Just to follow up on the protein side, firstly at the Pelican plant from profits already at the EBITDA level or at the cash flow level and if not what level do you think TCE.

Joe: The cash flow breakeven.

Joe: And I'll ask I'll do the second one is do you like buyers get either a volume discount or less volatility in prices as incentive. Thank you.

Todd A. Becker: Yeah, thanks. So when we initially built these assets, we generally thought it would be more like a two, three to four year return just on 50 Pro and more of a two to three-year return on 60 Pro. I think we've probably lost a turn, generally speaking, because of vegetable oil compression, at least a turn, maybe a max turn and a half on vegetable oil compression, and also protein compression. Now we're starting to see that widen back out.

Speaker Change: Yes. Thanks, so when we initially built these assets are generally generally we thought it would be more like two three to four year return just on 50 pro.

Speaker Change: And more of a two to three year return on 60 Pro I think we've probably lost the term generally speaking because of the veg oils.

Speaker Change: Freshen.

Speaker Change: At least a turn maybe maybe Max turn and a half on veg oil compression.

Speaker Change: And also protein compression now, we're starting to see that widen back out the <unk>.

Todd A. Becker: You know, the big thing for us will be to go as fast as we can to sell as much as we can of our sequence product. And we're starting to see significant interest in that product, not just from the world but also from potential U.S. opportunities as well. It's a difficult product to make; it's not just that they set it and forget it.

Speaker Change: Good thing for us will be to go as fast as we can to sell as much as we can of our sequence product and we're starting to starting to see significant interest in that product not just from.

Speaker Change: From the world, but also from U S potential opportunities as well.

Speaker Change: A difficult product to make it's not just a set it and forget it. So we have there are some some capital associated with those projects as well and then to buy a lot biology is still something that we have exclusivity in some ownership in as well so.

Todd A. Becker: So we have, there is some capital associated with those projects as well. And then the biology is still something that, you know, we have exclusivity and some ownership in as well. So generally speaking, we continue to work every day to also increase our availability of 60 pro with less biology, but doing some other IP that we've discovered, as well as, again, nobody should count out the fact that we believe we can make even higher protein at this point, and we're going to start to think about that in the future as well.

Speaker Change: Generally speaking we continue to work everyday to also.

Speaker Change: Increase our availability of 60 pro with less biology.

Speaker Change: But doing some doing some other IP that we've that we've discovered as well as again don't count out and nobody should count on the fact that we believe we can make even higher protein at this point and we're going to start to think about that in the future as well on top of that I would say look large buyers small buyer we want to get.

Todd A. Becker: On top of that, I would say, look, large buyer, small buyer; we want to get the maximum price that we can. You know, we have several, if not lots of, buyers around the world. And generally speaking, you know, I mean, the market is the market for some of this stuff; we fit into the ration at a certain volume. You know, those buyers will be limited by what they put into the ration.

Speaker Change: The maximum price that we can we have we have more we have a lot.

Speaker Change: Several if not lots of buyers around the world and.

Speaker Change: And generally speaking I mean, the market is the market on some of this stuff we fit into the ration at a certain at a certain volume in.

Speaker Change: Those buyers will be limited by what they put into the ration. So we need to have a wide variety of buyers. Our focus is on expanding our international buying base, because we think the margins are better to do that.

Todd A. Becker: So we need to have a wide variety of buyers. Our focus is on expanding our international buying base because we think the margins are better to do that. But, generally speaking, the market seems to be settling in, you know, at certain price levels, and we'll be competitive at that. But overall, our focus is getting to a much higher ratio of 60 pro to 50 pro. That's helpful.

Speaker Change: But but generally speaking the market seems to be settling in at.

Speaker Change: At certain price levels and were just we will be competitive to that but overall our focus fully is getting to a much higher ratio of 60 Proto 50 probe.

Speaker Change: That's helpful. Thank you.

Speaker Change: Thank you.

Jordan Alexander Levy: And we will take our next question from Jordan Levy with Truist Securities. Your line is open. And please check your mute button. Your line is open. And hearing no response, we will move on. Our final question will come from Steve Byrne with Bank of America. Your line is open.

Speaker Change: And we will take our next question from Jordan Levy with Trust Securities. Your line is open.

Speaker Change: Okay.

Jordan Alexander Levy: And your line. Please check your mute button your line is open.

And hearing.

Speaker Change: We will move on.

The question will come from Steve Byrne with Bank of America. Your line is open.

Todd A. Becker: Hey, Todd, I recently toured the Alonzo Jet alcohol, the jet plant down in Georgia, and they're bringing in the ethanol from Brazil, reportedly due to a lower carbon intensity. My question for you is, can you be competitive with that cane bagasse sourced alcohol from carbon capture? Do you also need to pull these other levers like, you know, sourcing low-carbon corn, etc? And is the premium you get on that ethanol likely to offset those costs?

Steve Byrne: Hey, Todd I recently toured the the lines of jet alcohol to jet plant down in Georgia.

Steve Byrne: They are bringing in the ethanol from Brazil.

Steve Byrne:

Steve Byrne: Reportedly due to a lower carbon intensity. My question for you is can you be competitive with that.

Steve Byrne: Chamber gas sourced alcohol.

Steve Byrne: Carbon capture or do you also need to pull these other levers like <unk>.

Steve Byrne: Sourcing low carbon corn et cetera.

And do these through the premium you get on that ethanol is it likely to offset those costs.

Todd A. Becker: Yeah, look, a lot of it is while they're bringing in early alcohol, in our view, I'm just letting you know, this is our view. We don't, we don't really know everything that they do, but that is because of the program that's in place today. With the announcement this week on the rules, you know, one of the things that we've seen as an industry is that ourselves and our and everybody from airlines to energy companies to even Lanza that you're talking about are all pressing and in favor of some of the rules that came out this week. So it really was a matter of timing. And the GREET program; everybody's waiting for that modeling.

Speaker Change: Yes lots of it is while they are bringing in early alcohol in our view I'm just flooding and this is our view we don't we don't really know everything that they do.

But.

Speaker Change: That is because of the program that's in place today with the announcement this week on the rules.

Speaker Change: One of the things that we've seen as an industry is that.

Speaker Change: Ourselves and our and everybody from <unk>.

Speaker Change: Airlines to energy companies to even larger that Youre talking about are all pressing and in favor of some of the rules that came out. This week. So it really was a matter of timing and the greet program everybody is waiting for that modeling so.

Speaker Change: Generally speaking, yes, we're competitive.

Devin Mogler: So, generally speaking, yes, we're competitive. We just had to get there. We have to, you have to sequester carbon to make that first ability. And when you do that, your carbon, your alcohol will qualify for alcohol to jet. Climate Smart is just a kicker after that that even lowers your carbon score more. So when you take a look at the carbon score out of Brazil, which is probably in the 20 range or so, Devin, is that in the 20 to 30 range, CI?

Speaker Change: We just had to get to what we have to you have to sequester carbon.

That first ability and then when you do that your carbon <unk> alcohol will qualify for alcohol to jet climate Smart is just eight a kicker after that even lowers your carbon score more so when you take a look at the carbon score out of Brazil, which is probably in the 20 range or so Devin is at 20 to 30 range.

Speaker Change: Ci.

Devin Mogler: In that range, when you take a plant out of Nebraska, like a central city that starts at 55 or so, and you take 30 off of it for, minimum 30 off for carbon capture, you're down to 25. Take 10 more off for climate spark, and you're down to 15. Take five more off for post-compression carbon, and you're down to 10. We could easily, easily be lower than some sugarcane sources in Brazil and even potentially some corn sources as well.

Speaker Change: And in that range when you take a plant out in Nebraska, let get central city that starts at 55, or so and you take 30 off of it for minimum 30 offer carbon capture you are down to 25 take 10 more off for climate Smart you're down to 15 take five more off for post comprised from carbon youre down to 10.

Speaker Change: We could easily easily be lower than several sugar shut some sugarcane sources in Brazil, and even potentially some corn sources as well so that's the opportunity and the rules are there. They are now make corn ethanol that sits on a carbon capture pipeline to start competitive.

Devin Mogler: So that's the opportunity, and the rules are there, they are now making corn ethanol that sits on a carbon capture pipeline to start competitive, and is a, will be a plentiful feedstock for these technologies. And I will tell you, notwithstanding... I don't know much going on down there except to say that Lanza has been a huge supporter as well of U.S. corn to jet fuel and alcohol to jet fuel as they see that as absolutely needed to get to any scale. Devin, did you have anything else?

Speaker Change: And is a will be a plentiful feedstock for for these technologies and I would tell you notwithstanding.

Speaker Change: I don't know much going on down there except to say that Atlanta has been a huge supporter as well of corn U S corn to jet alcohol to jet as they see that as a absolute needed to get to any scale. Devon did you have anything else I'll just add one clarifying point on that Steve. The other reason that they are bringing in the Brazil sugarcane ethanol.

Todd A. Becker: I'll just add one clarifying point on that, Steve. You know, the other reason that they're bringing in the Brazilian sugarcane ethanol is that it's the only RFS pathway that exists for alcohol-to-jet. So they want to be able to get the RIN to stack on top of the credit. The industry is also working to make sure that we get corn ethanol pathways through the RFS in addition to the work on the 40B and the forthcoming 45Z credits. And I also just want to clarify, for corn alcohol-to-jet, it's only U.S.-based corn that can qualify. Under the 40B guidance, there's no Brazil corn ethanol that can qualify.

That's the only RFS pathway that exists for alcohol to jet so they want to be able to get the RIN to stack on top of the credit. So the industry is also working to make sure that we get corn ethanol pathways through the RFS. In addition to the work on the <unk> and the forthcoming 45 C credits and I also just want to clarify for corn Alpha.

Speaker Change: All the jet it's only U S based corn that can qualify under the <unk> guidance, there is no Brazil corn ethanol.

Speaker Change: That can qualify.

Steve Byrne: Hi, very good. Just one follow-up on that. And again, it refers to Lonza.

Speaker Change: Alright, very good just one follow up on that.

Speaker Change: <unk> refers to launch.

Speaker Change: They have the biological process to convert C. O two into alcohol. Just wondering if there is an alternative to building new capacity at the $2.50 a gallon on Capex you mentioned Todd.

Speaker Change: Have you considered.

Speaker Change: Consider that technology as an alternative to carbon capture and as an alternative to new capacity expansion.

Todd A. Becker: They have the biological process to convert CO2 into alcohol. Just wondering if, as an alternative to building new capacity at the $2.50 a gallon CapEx you mentioned, Todd, have you considered that technology as an alternative to carbon capture and as an alternative to new capacity expansion? Yeah, we've seen CO2 to alcohol.

Todd A. Becker: Yes, we've seen cotwo alcohol.

Todd A. Becker: in multiple different paths over the last 10 years, even starting with some Texas companies that had it as well. And so our view is, in order to do it at scale, in mass, you need industrial agricultural practices, more yields per acre, which is why, by the way, our indirect land use numbers got better. If you want real volumes of alcohol, it's going to have to come from traditional ethanol pathways. Volumetrically, in our view, the best way to get to significant volumes of alcohol is going to be from traditional sugar cane and or corn in real volumes.

Todd A. Becker: In multiple different paths over the last 10 years.

Todd A. Becker: Starting with some Texas companies that had it as well so.

Todd A. Becker: Our view is in order to do it at scale in mass you need industrial agricultural practices more yields per acre, which is why by the way our indirect land use numbers got better if you want real volume of alcohol, it's going to have to come from traditional ethanol pathway.

Todd A. Becker: Especially when you can.

Just volume metrically, you're just not in our view the best way to get to significant volumes of alcohol is going to be from the traditional sugarcane and our corn.

And any real volumes those are all interesting technologies and look I think everything everything is on the table today.

Todd A. Becker: Those are all interesting technologies, and look, I think everything is on the table today, but generally speaking, our view is that the single best way to get to the significant volume increases needed for the ability to satisfy the alcohol-to-jet standards and targets that are in place is going to have to come from the U.S. market.

Todd A. Becker: Generally speaking our view is that the single best way to get to significant volume increases needed for the ability to satisfy the alcohol to jet standards that targets that are in place is going to have to come from the U S market.

Speaker Change: Very good thank you.

Speaker Change: Thank you.

Jordan Alexander Levy: We will take our final question from Jordan Levy with Truist Securities. Your line is open. Morning all, can you hear me? Yes, we can hear you now, Jordan. Yes. Hi, sorry about that. It's Henry on for Jordan here. Appreciate you taking the question. Just looking at the

Speaker Change: We will take our final question from Jordan Levy with Truest Securities. Your line is open.

Jordan Alexander Levy: Good morning can you hear me.

Jordan Alexander Levy: Yes, we can hear you now, Jordan. Yes. Hi, sorry about that.

Jordan Alexander Levy: Yes, we got here you know Jordan, Yes, hi.

Henry: It's Henry on behalf of Jordan here. Appreciate you taking the question. Just looking at the protein business and some of your commentary on this call. Just wondering if anything's changed significantly kind of in your long-term thesis for the broader, you know, 50 pro and 60 pro markets. Is the guy still looking, you know, as strong as expected both this year and then kind of an out year?

Speaker Change: Hi, sorry about that Henry on for Jordan I. Appreciate you taking the question just looking at the protein business and some of your commentary on this call. Just wondering if anything's changed significantly kind of in your long term thesis for the broader 50 pro and 60 pro markets is demand still looking strong as expected. Both this year and then kind of in out years.

Todd A. Becker: I mean, as we said, you have significant changes in the U.S. soy crushing industry with significant capacity coming on this year and next year. Generally speaking, our long-term view is still that the world will expand protein demand. Notwithstanding, it could be chunky for a few years.

Speaker Change: I mean, as we said you know you have significant changes that happened in the U S soy crushing industry with significant capacity coming on this year and next year.

Speaker Change: Generally speaking our long term view is still the world will expand protein demand notwithstanding it could be chunky for a few years.

Todd A. Becker: But overall, as we accelerate away from 50 pro into a much less supplied market of 60 pro plus, and Sequence and even higher about higher protein concentrations from there, you know, that's just a different type of market that doesn't necessarily oversupply at this point but just needs to get acceptance into specific rations. So, Generally speaking, you know, we'll probably see continued compression in the 50 pro or less markets for the next kind of 12 to 24 months just because of the amount of soy coming on.

Speaker Change: But overall as we accelerated way from 50 pro into a much less applied market of 60 pro plus and.

Speaker Change: And sequence and even higher about higher protein concentrations from there.

Speaker Change: That's just a different type of market that does isn't necessarily oversupplied at this point, but just needs to get acceptance into specific rations. So.

Speaker Change: Generally speaking, we will probably see.

Over the next kind of 12 months to 24 months continued compression in the 50 pro or less markets, just because of the amount of soy coming on but right now it looks it looks better than it did as as protein values a rally because of the.

Todd A. Becker: But you know, right now it looks better than it did as protein values are rallying because of the, Because of the, because of the problems that are in the rains, etc., in Brazil and Argentina.

Speaker Change: Because of the.

Speaker Change: Because of the <unk>.

Speaker Change: Is that are in.

Todd A. Becker: Lastly, I can just say it's not just about protein. It's not just about oil. It's really about what we see demand for our products and sugar. It's because it's low carbon, especially in alcohol as well.

Speaker Change: Rains et cetera in Brazil, and Argentina, Lastly, I can just say.

Speaker Change: It's not just about protein is not just about oil it's really about what we see demand for our products and sugar this because its low carbon.

Speaker Change: In the alcohol as well and we are getting interest across the board on every one of our products because of the low carbon profile that we have and you can see that in our we just released our new sustainability report take a look at it it's something that we believe is very unique to green plains on what we can do across the board, especially in Nebraska next year as we begin to capture.

Todd A. Becker: And we are getting interest across the board for every one of our products because of the low carbon profile that we have. And you can see that in our – we just released our new sustainability report. Take a look at it.

Speaker Change: Our carbon.

Speaker Change: In 2025 and have an early mover advantage low carb low carbon ingredients, while maybe not as our early important to some companies because.

Speaker Change: Some of the <unk>.

Speaker Change: The blowback internally.

Speaker Change: Part of the reason we are seeing demand for all of our products across the board just because we can produce low carbon ingredients, 30% to 40% lower carbon intensity in our in our sugar products same for our protein products lower carbon intensity and the alcohol next year and especially the advantage of our lower carbon intense oils to generally speaking it's not just <unk>.

Todd A. Becker: It's something that we believe is very unique to Green Plains and what we can do across the board, especially in Nebraska next year as we begin to capture our carbon in 2025 and have an early mover advantage. Lower carbon intensity in alcohol next year and especially the advantage of our lower carbon intense oils. So, generally speaking, it's not just going to be all about whether there's enough demand or not demand. It's also going to be based on what we can produce in that area as well. Great. Thanks for all the color there.

To be all about.

Speaker Change: Whether there is enough demand or not demand is also going to be based on what we can produce in that area as well.

Henry: Just a quick follow-up. Do you guys have any incremental updates on the progress for the Blue Blade ESA-J plan? I know that's kind of a long way out, but just curious how that kind of plays in your longer-term strategy for SAF. Yeah, I mean, scaling a catalyst is always challenging.

Speaker Change: Great. Thanks for the thanks for all the color there and just a quick follow up.

Speaker Change: Guys have any incremental update you on the progress for the Blue Blade ECJ plan I know, that's kind of a long way out, but just curious how that kind of plays into your longer term strategy for SaaS.

Todd A. Becker: And, and, and that's proving out as well in that venture. But that's not the only thing that the venture was set up for, you know. We are definitely continuing to look at the catalyst that with PNNL that we've got control of, but also to look at the fact that again, you know, we're partnered with Tallgrass United on that venture, and we're going to be on a Nebraska pipeline. And you can you can go Google who that's with.

Speaker Change: Yeah, I mean scaling a catalyst is always challenging and that's proving out as well and that venture, but that's not the only thing that venture was set up for we are definitely continuing to look at the catalyst that with.

Speaker Change: With the P&L that we that we've got control of but also to look at the fact.

Speaker Change: That again.

Speaker Change: Partnered with tallgrass United on that venture you know that we're going to be on a Nebraska pipeline and.

Speaker Change: And you can you can go Google, who that's with and then.

Todd A. Becker: And then, you know, basically, you can see that that partnership is strong. And, generally speaking, we'll have some of the earliest low-carbon alcohol gallons that can go into jet fuel of anybody in the world, in large volumes. And I think that that will be a good, strong potential opportunity for all of our partners, and we'll see where it goes from there. But that is also not just a partnership that is focused on one single catalyst. We're really technologically agnostic to say that it's a strong partnership between infrastructure, supply, and demand, and nothing else exists like that, so we're also going to look at other technologies as well.

Speaker Change: Basically you can see that partnership is strong and generally speaking we will have some of the earliest low carbon alcohol gallons that can go into jet fuel of anybody in the world in volume and big volume and I think that that will be a good strong potential opportunity for all of our partners and we'll see where it goes from there but that is also up a notch.

Speaker Change: Just a partnership there.

<unk> is focused on one single catalysts were really technology technologically agnostic.

Speaker Change: Say that it's a strong partnership between infrastructure supply and demand and nothing else exists like that so we're also going to look at other technologies as well.

Todd A. Becker: And that concludes our question and answer session today. I will now turn the conference back over to Mr. Todd Becker for closing remarks.

Okay.

Speaker Change: And that concludes our question and answer session. Today I will now turn the conference back over to Mr. Todd Becker for closing remarks.

Todd A. Becker: Hey, everybody, thanks for getting on the call today. You can see there is a lot going on. We're making a lot of progress in all of our strategic areas. You know, we continue to believe we have a very valuable asset base. We're looking at everything you can imagine, from the mix of our assets, the size of our assets, what should be in and what should be out. We're looking at our balance sheet to say how we continue to be in a very strong position from a cash and a debt perspective as we have significant assets that are still unencumbered, and we have no near-term maturities.

Todd A. Becker: Hey, everybody. Thanks for getting on the call today, you see a lot going on and we're making a lot of progress on all of our strategic areas. We continue to believe we have a very valuable asset base. We're looking at everything you can imagine from the mix of our assets the size of our assets what should be in what should be out. We're looking at our balance sheet to say how do we continue to be in a very strong position for.

Todd A. Becker: Our cash and a debt perspective, as we have significant.

Todd A. Becker: Assets that are still unencumbered and we have no near term maturities.

Operator: You know, when we look at the future of Green Plains, while it might be evolving in every way we can, we believe we're still on target for some of the things that we laid out several years ago, notwithstanding a weak first quarter. And we're looking forward to the rest of the year and updating you in the next couple of quarters. So thanks to everybody on the call. Thanks for your continued support. And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect. Thanks for watching!

Todd A. Becker: I think when we look at the future of Green Plains is not just in it.

Todd A. Becker: While it might be evolving.

Todd A. Becker: Every which way we can we believe still we're on target for some of the some of the things that we laid out several years ago, notwithstanding a weak first quarter and we're looking forward to the rest of the year and updating you.

Todd A. Becker: In the next couple of quarters. So thanks to everybody on the call. Thanks for your continued support.

Operator: And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.

Speaker Change: Ladies and gentlemen, this concludes today's call and we thank you for your participation you may now disconnect.

Speaker Change: Okay.

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