Manav Gupta: Thank you.
Operator: And we will take our next question from Laurence Alexander with Jefferies. Your line is open.
Unidentified Analyst: Hi, this is [Carol Cheung] (ph) on for Laurence Alexander. Thank you for taking my question. Just two follow-ups on the protein side. Firstly, is the protein platform profitable already at the EBITDA level, or at the cash flow level? And if not, what level do you think you see to hit the cash flow breakeven, and I will ask all of them, like the second one is, do large buyers get either a volume discount or less volatility in prices as incentive? Thank you.
Todd Becker: Yeah, thanks. So when we initially built these assets are generally — generally, we 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 probably lost the turn, generally speaking, because of veg oil’s compression, at least a turn, maybe max turn and a half on veg oil compression and also protein compression. Now we’re starting to see that widen back out. 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 US, potential opportunities as well. So, it’s a difficult product to make.
It’s not just they set it and forget it. So we have — there are some capital associated with those projects as well. And then, the biology is still something that 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, and — but doing some other IP that we’ve discovered as well as — again, don’t count out — 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. On top of that, I would say, look, large buyer, small buyer, we want to get the maximum price that we can. We have several, if not lots of buyers around the world.
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 and 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 they — we think the margins are better to do that. But generally speaking, the market seems to be settling in at certain price levels and we’ll be competitive to that. But overall, our focus fully is getting to a much higher ratio of 60 Pro to 50 Pro.
Unidentified Analyst: That’s helpful. Thank you.
Todd Becker: Thank you.
Operator: And we will take our next question from Jordan Levy with Truist Securities. Your line is open. Please check your mute button, your line is open. I am hearing no response, we will move on. Our final question will come from Steve Byrne with Bank of America. Your line is open.
Steve Byrne: Hey, Todd, I recently toured the LanzaJet 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 sourcing low-carbon corn, et cetera, and do the premium you get on that ethanol, is it likely to offset those costs?
Todd Becker: Yeah. Look, LanzaJet is, while they’re bringing in early alcohol, in our view, I’m just letting in, this is our view, 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, one of the things that we’ve seen as an industry is that ourselves 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 is waiting for that modeling. So, generally speaking, yes, we’re competitive. We just had to get to it. We have to — you have to sequester carbon to make that first ability.
And then, 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 20 to 30 range CI? In that range. When you take a plant out of Nebraska, like at Central City that starts at 55 or so, and you take 30 off of it for — minimum 30 off of carbon capture, you’re down to 25. Take 10 more off to — for climate smart, you’re down to 15. Take five more off for post-compression carbon, you’re down to 10. We could easily, easily be lower than several — some sugar cane 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 and is a — will be a plentiful feedstock for these technologies. And I will tell you, notwithstanding what I — I don’t know much going on down there, except to say that Lanza has been a huge supporter as well of corn, US corn to jet, and alcohol to jet, as they see that as an absolute need to get to any scale. Devin, did you have anything else?
Devin Mogler: I’ll just add one clarifying point on that, Steve. The other reason that they’re bringing in the Brazil sugarcane ethanol is 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 40B and the forthcoming 45Z credits. And I also just want to clarify for corn alcohol, the jet, it’s only US-based corn that can qualify. Under the 40B guidance, there’s no Brazil corn ethanol that can qualify.
Steve Byrne: Very good. Just one follow-up on that. And again, it refers to Lanza. 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?
Todd Becker: Yeah, we’ve seen CO2 to alcohol 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 volume of alcohol, it’s going to have to come from traditional ethanol pathways, especially when you can just volumetrically, you just not — and our view, the best way to get to significant volumes of alcohol is going to be from the traditional sugarcane and/or corn in any real volumes. 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 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 US market.
Steve Byrne: Very good. Thank you.
Todd Becker: Thank you.
Operator: We will take our final question from Jordan Levy with Truist Securities. Your line is open.
Unidentified Analyst: Good morning all. Can you hear me?
Todd Becker: Yes, we can hear you now, Jordan. Yes.
Unidentified Analyst: Hi, sorry about that. It’s Henry on for 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 in your long-term thesis for the broader 50 Pro and 60 Pro markets. Is demand still looking as strong as expected both this year and then kind of in out years?
Todd Becker: I mean, as we said, you have significant changes that happen in the US soy crushing industry with significant capacity coming on this year and next year. Generally speaking, our long-term view is still the world will expand protein demand notwithstanding it could be chunky for a few years, but overall, as we accelerate away from 50 Pro into a much less supplied market of 60 Pro plus, and sequence and even higher protein concentrations from there, that’s just a different type of market that isn’t necessarily oversupplied at this point, but just needs to get acceptance into specific rations. So generally speaking, we’ll probably see over the next kind of 12 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 better than it did as protein values are rallying because of the problems that are in rains, et cetera, in Brazil and Argentina. 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, 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 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.
Low-carbon ingredients, while maybe not as outwardly important to some companies because of some of the blowback, internally, part of the reason we are seeing demand for all of our products across the board is because we can produce low-carbon ingredients 30% to 40% lower-carbon intensity in our sugar products, same for our protein products. Lower carbon intensity in the alcohol next year, and especially the advantage on 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.
