Green Plains Q3 Earnings Rise on 45Z Credits and Stronger Ethanol Margins

Green Plains reported a sharp increase in third-quarter earnings as federal 45Z production tax credits and stronger ethanol crush margins lifted profitability, offsetting lower revenue and production volumes. The biofuels producer also increased its expected 2026 EBITDA contribution from 45Z credits to $230 million to $250 million and outlined an agreement to convert the credits into cash.

For the three months ended September 30, 2026, net income attributable to Green Plains rose to $85.4 million, or $1.03 per diluted share, from $11.9 million, or $0.17 per diluted share, a year earlier. Adjusted EBITDA more than doubled to $118.0 million from $52.6 million.

The latest adjusted EBITDA included $65.4 million from 45Z credits and $52.6 million from the company’s base business. Revenue declined to $496.0 million from $508.5 million, but costs and expenses fell to $403.4 million from $448.0 million, helping operating income increase to $92.6 million from $60.5 million. Other expense narrowed to $6.3 million from $49.3 million, while interest expense decreased to $8.1 million from $47.7 million.

Ethanol margins strengthen despite lower volumes

Green Plains recorded a consolidated ethanol crush margin of $122.8 million, up from $59.6 million in the prior-year quarter. The company said the margin improved by approximately $0.11 per gallon sequentially, supported by reliability, yields, cost efficiencies and commercial execution.

Ethanol production operating income increased to $99.0 million from $30.9 million. After adding depreciation and amortization, adjusted ethanol production operating income was $121.8 million, compared with $54.8 million a year earlier.

The company produced 174.9 million gallons of ethanol during the quarter, representing 95% of production capacity when excluding the idled Fairmont capacity. Production was down from 197.3 million gallons in the third quarter of 2025. Distillers grains output declined to 357,000 equivalent dried tons from 417,000 tons, while Ultra-High Protein production fell to 49,000 tons from 71,000 tons. Renewable corn oil output was 64.2 million pounds, compared with 72.3 million pounds, and corn consumption decreased to 58.6 million bushels from 66.6 million.

Management said capital is being directed toward projects intended to improve the safety, reliability, efficiency and cost structure of existing assets.

45Z outlook and monetization

Green Plains now expects 45Z production tax credits to contribute $230 million to $250 million of EBITDA in 2026. That outlook comprises an estimated $160 million to $180 million opportunity from its Advantage Nebraska operations and approximately $70 million from credit generation at its remaining facilities. The company also expects a higher carbon-related EBITDA contribution in 2027, without providing a specific amount.

On October 29, Green Plains signed an agreement to monetize its 2026 tax credits, supported by third-party emissions verification. The arrangement covers a minimum of $250 million of 2026 credits. The presentation identified $325 million of potential credits committed for purchase, along with an option for an additional $30 million.

The company had recognized $210 million of 45Z production tax credit assets as of September 30. It said $140 million was converted into cash in November, with the remainder expected to be collected during the first half of 2027. The parties may also expand or extend the arrangement to credits generated in future years. Green Plains said further carbon-intensity improvements and low-carbon investments could provide additional value.

Balance sheet and capital priorities

Year-to-date operating cash flow through the third quarter was $47 million, while cash and cash equivalents totaled $160 million at quarter-end. Green Plains said its capital-allocation priorities include reinvesting in existing assets, managing debt to maintain a strong balance sheet, selectively pursuing organic projects and acquisitions, and evaluating share repurchases against other opportunities using a risk-adjusted return framework.

The company cautioned that its outlook remains subject to commodity-price volatility, ethanol and biofuel supply and demand, regulatory and tax-policy changes, tariffs, renewable-fuel and low-carbon programs, counterparty performance, and the execution of new products and technologies. Actual benefits from 45Z credits, carbon-intensity improvements, restructuring and future investments may also differ from management’s current expectations.