Green Plains (NASDAQ:GPRE) executives outlined operational changes, tax credit expectations, and market conditions for ethanol during a fireside chat, emphasizing a shift toward more data-driven plant management and a growing focus on low-carbon production and free cash flow generation.
Management changes and new operating approach
CEO Chris Osowski said several governance and process changes have been put in place over the past year following the addition of three new board directors. He said the company created new board committees focused on risk management and strategic planning and set “new expectations” for employees.
CFO Ann Reis, who joined recently and previously worked at another ethanol producer, said she believes the company is “on the right path,” describing ethanol as an industry with “lots of opportunities.”
45Z carbon credits: drivers behind the EBITDA outlook
Osowski attributed the company’s higher expectations for carbon-related earnings to several developments tied to the federal 45Z credit. He said the company appreciated recent guidance on 45Z and viewed it as positive relative to expectations.
He said key drivers behind the company’s outlook include:
- The Advantage Nebraska project being fully operational and capturing carbon at high recovery rates.
- Removal of indirect land use change from the carbon intensity (CI) calculation, which he said benefited all locations and helped all plants qualify for 45Z.
- Operational improvements aimed at higher ethanol yields.
- Use of renewable energy credits to offset electrical consumption, helping lower CI scores further.
When asked about upside beyond the company’s current-year expectations, Osowski said performance still depends on plants running well and continuing to improve yields and reduce energy inputs. He highlighted “fast-returning” capital projects intended to cut energy usage and increase captured carbon volumes.
Farm practices and CI scoring: opportunity, but timeline uncertain
Osowski said Green Plains’ 45Z outlook did not assume additional benefits from farm practices. He described a “beta version” of a USDA calculator that includes five elements farmers may receive credit for, including no-till, strip-till, and certain fertilizer practices such as manure use. He said prior USDA guidance had included a broader “laundry list” of practices.
However, he noted that final rules are not yet available and that the USDA approach must ultimately connect with the DOE 45Z GREET calculator. He said the company has been told that this linkage would come sometime in 2026, but no specific timing has been provided.
Osowski also discussed how program design could affect farmers already using conservation practices. He said prior approaches that benchmarked improvements against a farmer’s historical practices risked incentivizing farmers to “till it up” to reset a baseline. He said the company does not believe the final guidance will take that approach and instead expects it to focus on current-year practices, supported by data collection, attestations, and documentation.
Carbon transport: Summit uncertainty and alternatives
Asked about the Summit carbon pipeline, Osowski said Summit’s agreement structure differs from Green Plains’ Tallgrass-related arrangements for Advantage Nebraska. He pointed to two legislative proposals moving through Iowa: one that would eliminate the ability to use eminent domain for CO2 pipelines and another that would make eminent domain a “last resort.” He said the outcome of those legislative sessions could affect Summit’s path forward.
For non-pipeline plants, Osowski said the company is evaluating the potential for truck or rail movement of liquid CO2 to sequestration sites, adding that the company is applying a return-focused, data-driven approach to capital decisions.
Monetization and timing of cash from credits; ethanol market and demand
On credit sales, Osowski said Green Plains has marketed all credits produced in 2025 and has already taken some associated cash, while it is actively marketing 2026 credits. He said the company is encouraged by the level of interest and expects to provide additional announcements “in the near future.”
Turning to ethanol operations, management said it was pleased with first-quarter positioning and consolidated crush margins versus the prior year, citing record Midwest corn yields and supply. Osowski also said domestic ethanol strength has improved and that inventories have not built as much as anticipated. He added that distillers corn oil (DCO) values strengthened during the quarter and that plants ran well through an early-quarter cold spell. Management noted the industry is approaching seasonal spring maintenance downtime and said it was pleased with how the company is heading into the second quarter.
On exports, executives said demand has been particularly positive. Osowski referenced commentary from the National Ethanol Conference, where “export acceleration” was discussed, and said Canada represented roughly 30% to 35% of U.S. export volume. He also cited year-over-year increases in imports by the Netherlands, along with increased volumes to the EU as a whole and to India. Green Plains said it participates directly in exports to a limited extent, including a northern Minnesota facility that exports about 15% of its volume to Canada.
On longer-term demand, management said it is watching efforts to expand year-round E15 and said adoption has been increasing, with a cited U.S. blend rate above 10% and around 10.5% for 2025. Osowski described ongoing legislative frustration and said concerns from certain refiners related to small refinery exemptions (SREs) have been a sticking point, though he said he believes a negotiated solution is achievable.
Finally, Osowski said the company has moved past a strategic review period that included selling its Obion, Tennessee, location and paying down debt, and is now focused on becoming a “low cost, low carbon biofuel producer in the Midwest.” He said capital allocation priorities include maintaining and upgrading plant assets, improving yields and lowering energy consumption, investing in grain storage and receiving infrastructure to increase farmer-originated bushels, and evaluating options including debt paydown, potential shareholder returns, and possible M&A.
About Green Plains (NASDAQ:GPRE)
Green Plains Inc is a leading producer of fuel-grade ethanol and related co-products in the United States. Headquartered in Omaha, Nebraska, the company operates an integrated network of biorefineries that convert corn and other grains into renewable fuels. Through its production facilities, Green Plains supplies ethanol to domestic fuel markets and export channels, supporting efforts to reduce greenhouse gas emissions and promote cleaner-burning transportation options.
Beyond ethanol, Green Plains manufactures a range of co-products that add value throughout the agricultural supply chain.
