Vikram Luthar: Yeah. I think also in terms of buybacks, good to remind everyone that if you remember in our 2021 Investor Day, we talked about $5 billion of buybacks over the next four years through 2025. If you combine what we’ve done last year and this year, we’ve done almost about $2.6 billion of buyback, so we are ahead of that pace. And as I mentioned in my comments and as Juan said, if we don’t see compelling valuations and given our discipline, we probably at these trading levels, price levels, we probably are going to buy back a little more aggressively, and you probably will see a stronger pace of buybacks in Q4 as a consequence of some of those factors.
Ben Bienvenu: Okay. Very good. Thanks so much.
Vikram Luthar: Thank you, Ben.
Operator: Thank you. Our next question comes from Salvator Tiano from Bank of America. Your line is open. Please go ahead.
Salvator Tiano: Thank you very much. I want to ask a little bit about the carbonization and the work you’re trying to do Decatur. And I think when we — you were talking about the 7 million tons of you’re trying to sequester per year, the idea is that some of these will come from other facilities where you probably need to build pipelines. I’m just wondering, we’re seeing a lot of issues with permitting and other issues with CO2 pipelines in other regions. Could this — could you face similar issues and could this affect the total amount you will be able to request your indicator or on the other hand, could this actually be an opportunity and people that were relying on some other pipelines like Navigator 1 (ph) may come to you and use your indicator wells for sequestration?
Juan Luciano: Yeah. Thank you, Salvator for the question. This is a very important initiative for ADM. And it’s something that, as you know, we have started like 10 years ago, so it’s something that we have a lot of experience in, and we’re leveraging that experience and that head start, if you will, in our ability to inject carbon into the lower surfaces in our facility at Decatur. We have a couple of wells there, and we’re planning, as you said, to create five more injection wells over the next few years. It is true part of that will be bringing biogenic CO2 generated by our ethanol plants through pipelines. And we are working already in two of those pipelines. We have already submitted permits for all that. Those permits have been accepted.
So they are complete. They are in the process of being studied and analyzed, and we are reviewing also with our partners the right of way and acquisitions and all those type of agreements. Of course, as any industry that is breaking ground the pioneer suffer sometimes with the regulatory environment and having to adjust all that. So we’re working closely with the authorities across different states and in terms of trying to align the regulatory framework to the needs of decarbonization and to the desires of the Department of Energy and the Department of Agriculture to have a smart agriculture in the U.S. and decarbonize that. So work in progress, as you said, we have seen the news that you do. And you can take two tax that we might suffer a similar fate or that we will have less competition as you described.
At this point in time, we don’t have any bad news to report other than we continue forward with our efforts, and we will update you in the next call.
Salvator Tiano: Thank you very much.
Operator: Thank you. Our next question comes from Davis Sunderland of Baird. Davis, your line is now open. Please go ahead.
Davis Sunderland: Hey. Good morning, team. Thank you for the time and thank you for taking my question.
Juan Luciano: You’re welcome.
Davis Sunderland: Juan you already talked about it a little bit, but I just wanted to ask if you could expand a little bit more on the ethanol and renewable diesel supply and demand environment, maybe what you’re seeing for ’24 and beyond? And if you anticipate any incremental changes in consumer behavior over that time? Thank you very much.
Juan Luciano: Yeah, Davis. Listen, in ethanol, we think ethanol is going to have a very constructive environment, very high sugar prices are driving Brazilians to produce a lot of sugar versus ethanol, so we’re going to have less inputs of ethanol, biofuels mandates are growing around the world, whether it’s more ethanol or more biodiesel. So we see Brazil going up 1% per year in that regard. And we see ethanol continues to have very good export. It has a very good value to other [indiscernible] that normally, they go for like $2.50 per gallon. So we have a big advantage around the world. And for people that want to increase the octane in their gasoline. Ethanol is a very cheap [indiscernible] around the world. So the U.S. is the best producer of that, will continue to increase.
So you can see export having maybe a floor of 1.4 billion gallons going into 1.5 million. So that’s very good. When we look at renewable green diesel, there has been no changes on how we see renewal diesel growth in the medium term, which is to get to around 5 billion gallons in the U.S. by 2025, 2026. Of course, we’re a global company, we see that becoming 7 billion to 8 billion gallons by maybe — and maybe 14 billion, 15 billion gallons of renewable green diesel and SAF online by 2026 and 2027. So we are at the very early innings of all these biofuel demand that is coming, whether it’s again for renewable green diesel or the promise of decarbonization that SAF brings to aviation that it doesn’t have any other valid options right now.
So again, we’re going to be a player that speedy good shows that. We’re going to bring 1.5 million tons of capacity that will feed 75 million gallons of RGV. So we expect the others will deliver as we have delivered Spiritwood. So this is an industry we’re building that we’re excited about.
Davis Sunderland: Thank you very much.
Juan Luciano: You’re welcome.
Operator: Thank you. Our next question comes from Steven Haynes of Morgan Stanley. Steven, your line is now open. Please go ahead.
Steven Haynes: Hey. Thank you for taking my question. I wanted to just ask a question on the guidance. I think previously, you’re kind of saying $7 with some upside and now you’re saying in excess of $7. So maybe if you could just kind of help us, I don’t know, maybe quantify the difference in the two guidances and size, the upside piece would be helpful. Thank you.
Vikram Luthar: Well, so I think the first thing to note is, when in Q2, we said around $7 for potential — with potential for more upside. And what we have seen saying right now is that potential upside is coming through, and that’s why we’re raising our guidance in excess of $7. But if you step back, Steven, think about what’s happened between Q2 and Q3. One is, clearly, nutrition has been softer. We had guided to it similar in Q2. Now we are guiding to around $600 million. So you know, by definition, there’s a compensation in other parts of the business. And when you think about the compensation relative to our Q2, that’s probably going to come partially from AS&O and partially from CS. And we gave some guidance on AS&O for Q4 and also some guidance for CS.
CS to be rough relatively flat versus Q4, barring any continued expansion in ethanol margins, so that could be upside in CS. And in AS&O, we have some puts and takes in RPO in particular, and one went through this. We expect that to be weaker than Q4 of last year just because we expect these mark-to-market timing gains we realized in Q3 to be rolling off. And then in Ag Services, it’s going to be generally flat, excluding the legal settlement that was a onetime thing in Q4 of last year. And then in crush, it’s going to be strong. And I think Juan talked about that we are continuing to be constructive about the cross outlook particularly in the U.S. going forward, given some of the structural demand changes related to renewable green diesel in particular.
Steven Haynes: Thank you
Operator: Thank you. At this time, we currently have no further questions. So I’ll hand back to Ms. Britt for any further remarks.
Megan Britt: Thank you for joining us today. Please feel free to follow up with me if you have any other questions. Have a good day, and thanks for your time and interest in ADM.
Operator: Thank you for joining today’s call. You may now disconnect your lines.
