Amit Dayal: Thank you. And then with respect to the…
Eric McAfee: Kelly, I think we lost Amit.
Andy Foster: Yes.
Amit Dayal: Hello, can you hear me?
Eric McAfee: Yes, we can hear you now. Try it again.
Amit Dayal: Yes, so I was just trying to go back to the tallow feedstock from India, the permitting and the qualification, et cetera, that is required. Is this a one-time thing or will it be required for each shipment that takes place?
Eric McAfee: Good question. It’s actually a one-time thing. It’s the carbon intensity of the fuel produced when tallow is used from a new region. In this case, from India. So there’s some default pathways, but then you can get a much better score if you actually show for example, we run a 100% biomass energy in our plant in India. The underlying default has coal as the electricity source, and so we get a lower carbon intensity score than the default. So it’s sort of like our biogas business. We’re running along at a negative 150 default pathway. We want to move to a negative 415 provisional pathway, which is a word that means our projects pathway. Does India has the same kind of dynamic? It’s quicker, because it’s a Tier 1 pathway. It’s not a Tier 2, which Tier 2 is more project specific. Tier 1 is more of a standardized process, but it still takes you six months to get done.
Amit Dayal: Understood. Just last one, again, on the India side. For modeling purposes, should we assume similar levels of production and shipment in India that we saw in Q2?
Eric McAfee: For Q3?
Amit Dayal: Yes, for Q3.
Eric McAfee: I would take it down a little bit. We’re doing multiple procurement cycles. They’ve been expanding the number of locations we’re shipping to. And so it’s not the entire quarter we’ve contracted this point in time, but we’re two-thirds of the way there. And as over the course of August and September, we’ll be looking for additional orders. So we’ll probably be press releasing sometime next month as we get the full order for the quarter done. But what they did was they moved quickly, which is what we wanted, so we could continue production and keep on going in at July and August that meant that they haven’t quite gotten all their tenders done for the September timeframe. So we’ll probably put out press release once we have good visibility on the quarter.
Amit Dayal: Okay. Thank you, guys. That’s all I have. Appreciate it.
Eric McAfee: Thank you.
Operator: Your next question is coming from Ryan Todd with Piper Sandler. Please pose your question. Your line is live.
Ryan Todd: Thanks. Maybe just one for me. I mean Congratulations on the continued progress on digesters and the RNG side of the business. You’re still building gas and storage at this point. Can you maybe walk through your latest thoughts on potential timing of gas monetization? What do you need to see to start monetizing gas and maybe timing or progress on LCFS pathway approval?
Eric McAfee: Sure. We have our default pathway approved for four of our digesters. We have two more we expect to get here in the next few weeks. So we’ll have six of our digesters that can generate revenue at the negative 150 timeframe. There’s a requirement that we have to ship not in the quarter it’s produced, not in the next quarter, but in the quarter after that. We have to actually ship the product in order to get LCFS credits. We can’t just let it sit in the ground for 18 months, which very possibly might be exactly what we want to do in order to maximize our LCFS revenue. So we will be showing some revenues as we meet these minimum thresholds. But we are working diligently with the CARB team to get our provisional pathway.
Negative 415 is what we estimate to be completed. And then we’ll be able to ship everything that’s in the ground in that quarter and the quarter afterwards. So we are definitely meeting the minimum requirements. And in Q3, we’ll be showing revenue as a result of that in Q4, as we have to do a look back to the earlier quarters. But I can tell you our business model would be just leave it in the ground until it’s negative 415 and we’re working diligently to get that approval in place as quickly as possible.
Ryan Todd: Great. Thanks, Eric.
Eric McAfee: Sure. Thank you.
Operator: Your next question is coming from Dave Storms with Stonegate Capital. Please pose your question. Your line is live.
Dave Storms: Good afternoon. Just two quick ones for me on the dairy digester side. With the additional $75 million in funding expected to close this year, can we just do simple math and say that translates to about 21 new digesters being funded?
Eric McAfee: That’s approximately correct. The size of the dairies will have an impact on that. So it’s a range. It’ll be somewhere in the 18, which would be six per funding to 22. So I would probably plug in 20 and then true it up. As you see press releases come out, because we’ll announce how many dairies are in each project.
