Gevo Stock

Gevo, Inc. (Gevo) focuses on solving greenhouse gas emissions for those sectors of the transportation industry that are not amenable to electrification or hydrogen.

The company focuses on transforming renewable energy into energy-dense liquid hydrocarbons that can be used as renewable fuels, such as sustainable aviation fuel (SAF), with the potential to achieve a ‘net-zero’ greenhouse gas (GHG) footprint. The company uses the Argonne National Laboratory’s GREET (Greenhouse gases, Regulated Emissions, and Energy use in Transportation) model (the GREET Model) to measure, predict and verify GHG emissions across the life cycle of its products. The ‘net-zero’ concept means that the company expects that by using sustainably grown feedstock (i.e., low till, no-till and dry corn cultivation), renewable and substantially decarbonized energy sources, drop-in hydrocarbon fuels can be produced that have a net-zero, full life cycle footprint measured from the capture of renewable carbon through the burning of the fuel.

The company’s primary market focus, given demand and growing customer interest, is SAF. The company also has commercial opportunities for other renewable hydrocarbon products, such as RNG; hydrocarbons for gasoline blendstocks and diesel fuel; ingredients for the chemical industry, such as ethylene and butenes; plastics and materials; and other chemicals. The company’s SAF production process uses carbohydrates as a feedstock.

Segments

The company operates through three segments: Gevo, Agri-Energy and Renewable Natural Gas.

Gevo

This segment is responsible for all research and development activities related to the future production of SAF, commercial opportunities for other renewable hydrocarbon products, such as hydrocarbons for gasoline blendstocks and diesel fuel; ingredients for the chemical industry, such as ethylene and butenes; plastics and materials; and other chemicals. This segment also develops, maintains and protects its intellectual property portfolio, provides corporate oversight services, and is responsible for development and construction of its Net-Zero Projects.

Agri-Energy

This segment is responsible for the operation of the company’s Luverne Facility, and the development and optimization of the production of isobutanol, ethanol and related products.

Renewable Natural Gas

This segment produces-pipeline quality methane gas captured from dairy cow manure.

Greenfield Projects

In January 2021, the company announced its initial greenfield Net-Zero Project, Net-Zero 1 (NZ1), that is planned to be constructed at Lake Preston, South Dakota. NZ1 is being designed to produce approximately 62 million gallons per year (MGPY) of total hydrocarbon volumes, including 55 MGPY of SAF. The plant is expected to be powered by wind-based electricity. The products expected to be produced at the NZ1 include animal feed protein products, corn oil, SAF, naptha (gasoline) and/or diesel fuel. The co-products produced at the NZ1 and destined for the food chain, on a tonnage basis, are greater than that for renewable fuels. The company’s NZ1 will be operational in 2025.

In addition to the Lake Preston, South Dakota site, the company has identified several other greenfield sites that are attractive from the standpoint of fundamental economics, access to sustainable feedstocks, deployment of renewable energy and transportation of finished product to market. The company has signed agreements and letters of intent with multiple parties to secure access to several sites.

Renewable Natural Gas

The company is developing renewable natural gas (RNG) and biogas projects to generate incremental profit and to create a long-term option to potentially supply RNG to its Net-Zero Projects as part of its long-term strategy to decarbonize SAF and other hydrocarbon fuels.

In 2019, the company began developing RNG projects. Animal manure can be digested anaerobically to produce RNG. RNG has value in markets, such as California, as well as in its hydrocarbon production process by helping it achieve carbon negative GHG emissions on its renewable hydrocarbon products. The end products resulting from such a decarbonization process have lower CI scores and increased market value, in addition to having a more positive impact on the environment. The company developed its initial RNG project, Gevo NW Iowa RNG, LLC (Gevo RNG), to generate RNG captured from dairy cow manure, which is supplied by three dairies located in Northwest Iowa totaling over 20,000 milking cows. When fully operational, the Gevo RNG project is expected to generate approximately 355,000 MMBtu of RNG per year. The company commenced construction in April 2021.

In January 2022, Gevo RNG began start-up operations, and in the third quarter of 2022, the company ramped up its production of biogas, raw biogas upgrading to RNG, and the injection of RNG into an interconnected natural gas pipeline. The majority of the revenue from the associated environmental attributes, however, is expected to commence in 2023.

The company leverages its relationships to identify and execute new project opportunities. Typically, new development opportunities come from its existing relationships with dairy owners who value its reputation in the industry.

Proprietary Carbohydrate Conversion Technologies

In September 2021, the company signed an agreement with Axens North America, Inc. (Axens) for their technology on this process since they have already scaled it up and they have licensed to many commercial production facilities. The agreement establishes a strategic alliance aimed at accelerating the commercialization of sustainable alcohol-to-SAF projects in the United States. As part of the alliance, Axens brings technologies with over 60 related patents, engineering packages, proprietary catalysts and certain proprietary equipment required to convert alcohols into SAF and they will provide certain process guarantees to the company.

The company’s Net-Zero plant concept depends upon a variety of decarbonization methods to ensure the operability of the plant while also reducing and eliminating the need for fossil-based energy. The company has partnered with companies, such as Zero6 Energy to develop the technology suite for this decarbonization.

To prove out technologies, the company owns and operates a development scale plant in Luverne, Minnesota (the Luverne Facility). This development scale plant enables the company to solve the practical issues involved with scale up of new technologies and testing of new unit operations.

Facilities and Projects

Development Scale Facility

The company owns a development scale plant, the Luverne Facility. The Luverne Facility is located on approximately 55 acres of land containing approximately 50,000 square feet of building space. During the third quarter of 2022, the activities at the company’s Luverne Facility were transitioned to care and maintenance, as it has shifted focus to its Net-Zero Projects.

The Luverne Facility is well equipped and positioned as a development site. The Luverne Facility also provides a unique opportunity to showcase the company’s decarbonization and business systems and raise awareness for future partnerships, project offtakers, investors, and local communities, even though operations at the site have been minimized.

RNG Facilities

The company developed its initial RNG project, Gevo RNG, in Northwest Iowa to generate RNG captured from dairy cow manure, which is supplied by three dairies located in Northwest Iowa totaling over 20,000 milking cows. When fully operational, the Gevo RNG project is expected to generate approximately 355,000 MMBtu of RNG per year. The RNG is sold into the California market under dispensing agreements BP Canada Energy Marketing Corp. and BP Products North America Inc. (collectively, BP) has in place with Clean Energy Fuels Corp., the largest fueling infrastructure in the U.S. for RNG. The company commenced construction of the Gevo RNG project in April 2021, and in the third quarter of 2022, the Gevo RNG project ramped up production of biogas, raw biogas upgrading to RNG and the injection of RNG into an interconnected natural gas pipeline.

The company has four leases for land and three fuel supply agreements related to the Gevo RNG project. Under these contracts, the company leases land from dairy farmers on which it has built a gas upgrading unit, three anaerobic digesters, related equipment and pipelines. These leases expire at various dates between 2031 and 2050.

Development Properties

In July 2022, the company purchased approximately 240 acres of land for NZ1 in Lake Preston, South Dakota, followed by a groundbreaking ceremony in Lake Preston in September 2022. NZ1 is on schedule with initial volumes of SAF expected to be delivered in 2025. Water and wind energy development agreements were executed in the third quarter of 2022, and other key milestones are on track for completion in accordance with the company’s comprehensive project plan.

Intellectual Property

Certain production technology to convert ethanol to hydrocarbons has been exclusively licensed to the company in the U.S. by Axens North America, Inc. (Axens), and incorporates more than 60 patents, as well as proprietary production technology and know-how. Additionally, the company has multiple patents and patent applications covering the ethanol to hydrocarbons routes.

Government Regulation - Environmental Compliance

The company’s air emissions are subject to the Clean Air Act, the Clean Air Act Amendments of 1990 and similar state and local laws and associated regulations.

History

The company was founded in 2005. It was incorporated in Delaware in 2005. The company was formerly known as Methanotech, Inc. and changed its name to Gevo, Inc. in 2006.