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Note 2 - Revenue
 3 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

2.  Revenue

 

We derive revenue primarily from sales of ethanol and related co-products in California, renewable natural gas ("RNG") and related environmental attributes in California, and biodiesel and refined glycerin in India.

 

California Ethanol Revenues: Starting in the second quarter of 2023, we began selling all our ethanol to J.D. Heiskell Holdings, LLC ("J.D. Heiskell"), who sells it to customers designated by us, and we have designated Murex, LLC, who continues to market the product.  J.D. Heiskell does not charge a fee for reselling the ethanol, but it receives the payments from the ultimate customer.  We also buy our corn feedstock from J.D. Heiskell, and J.D. Heiskell pays us the net balance between ethanol and other product we sell to J.D. Heiskell and our corn purchases from J.D. Heiskell. Our accounting (i) treats us as the purchaser/customer for corn purchases from J.D. Heiskell and we record the full purchase cost in cost-of-good sold, and (ii) treats us as the seller for ethanol and other product sales, so we treat all sales as revenue.

 

Given the similarity of the individual sales transactions with J.D. Heiskell, we have assessed them as a portfolio of similar contracts. Prior to May 25, 2023, the performance obligation was satisfied by delivery of the physical product from our finished goods tank to our customer’s contracted trucks. Effective on May 25, 2023, the performance obligation is satisfied by delivery of the physical product to our finished goods tank leased by J.D. Heiskell. The transaction price is determined based on daily market prices and quarterly contract pricing negotiated by Murex for its customers for ethanol and based on dry distillers' market and local demand by our marketing partner A.L. Gilbert Company (“A.L. Gilbert”) for WDG. The transaction price is allocated to one performance obligation.

 

During the last two weeks of December 2022, we undertook an extended maintenance cycle and accelerated the implementation of several important ethanol plant energy efficiency upgrades. Our decision was partly driven by the high natural gas prices in California during the period. After monitoring natural gas pricing and margin profitability, we decided to extend the maintenance cycle into the first and second quarters of 2023 and restarted the plant at the end of May 2023, which accounts for lower revenue amounts shown in the table below for the period ending March 31, 2023.

 

The following table shows sales in our California Ethanol segment by product category:

 

   

For the three months ended March 31,

  
   

2024

    

2023

  

Ethanol sales

   $ 25,385     $ 368  

Wet distiller's grains sales

     9,213       -  

Other sales

     1,491       107  

Total

   $ 36,089     $ 475  

 

California Dairy Renewable Natural Gas Revenues: Our facilities as of March 31, 2024, consist of eight anaerobic digesters that process feedstock from dairies into biogas, a 36-mile collection pipeline leading to a central upgrading hub, and an interconnect to inject the RNG into the utility natural gas pipeline for delivery to customers for use as transportation fuel.  In connection with dispensing the RNG, we generate sellable credits under the federal Renewable Fuel Standard (referred to as "D3 RINs") and the California Low Carbon Fuel Standard ("LCFS"). We began selling D3 RINs in the third quarter of 2023 and began selling LCFS credits in the first quarter of 2024. We recognize revenue from sales of RNG concurrent with our production and injection into the transportation pipeline.  We recognize revenue from sales of D3 RINs and LCFS credits at the time we sell the credits.

 

   

For the three months ended March 31,

  
   

2024

    

2023

  

RNG, LCFS and D3 RIN sales

   $ 3,792     $ 206  

 

India Biodiesel Revenues: 

 

The following table shows our sales in our India Biodiesel segment by product category:

 

   

For the three months ended March 31,

  
   

2024

    

2023

  

Biodiesel sales

   $ 30,992     $ 1,190  

Other sales

     1,761       280  

Total

   $ 32,753     $ 1,470