Gevo, Avfuel enter into renewable jet fuel supply agreement

By Gevo Inc. | June 21, 2018

Gevo Inc. announced today that it has entered into a long-term agreement to supply its renewable alcohol-to-jet fuel (ATJ) to Avfuel Corp., effective July 1. Avfuel is a leading global supplier of aviation fuel and services to all industry consumer groups, servicing more than 3,000 locations worldwide. The supply agreement with Avfuel is Gevo’s first long-term commercial supply agreement for its ATJ.

“We are pleased to have a customer and partner like Avfuel,” said Patrick Gruber, CEO of Gevo. “Avfuel has tremendous reach with more than 650 Avfuel-branded locations and 3,000-plus fueling locations worldwide to a vast scope of customers. We appreciate its vision and leadership in working with us to bring a better and more sustainable fuel to the market place. Not only can we reduce greenhouse gas emissions, but we also can produce a higher quality product than petroleum-based jet fuel from a technical standpoint. The whole supply chain should benefit, as well as the end customer. This contract with Avfuel is an excellent first step and will serve as a catalyst for Gevo to build up the aggregate demand so we can proceed with the development of a larger scale ATJ facility.”

Craig Sincock, owner, president and CEO of Avfuel said, “As a leader in the global supply of aviation fuel and services, we have a social responsibility to make sustainable alternative jet fuel a reality in the marketplace. Our agreement with Gevo is a notable component in our overall strategy to support our industry’s commitment to reduce carbon emissions and enhance sustainability to mitigate its effect on climate change.”

Sincock remarked that the agreement with Gevo will help the company meet the demand of its customers for a low-carbon, alternative jet fuel, filling a gap in the industry’s supply chain.

The supply agreement contemplates two phases. During the first phase, Gevo will supply Avfuel from its smaller-scale hydrocarbon processing facility it operates in Silsbee, Texas, in partnership with South Hampton Resources Inc.  Currently, the Silsbee Facility has the capacity to produce approximately 70,000 gallons of renewable hydrocarbon products per year (50 percent of which is ATJ and 50 percent of which is isooctane).

During the first phase, Gevo expects to construct a larger-scale hydrocarbon facility at its existing ethanol and isobutanol production facility located in Luverne, Minnesota, to produce larger quantities of ATJ, subject to Gevo's receipt of sufficient financing. Upon completion of the Luverne Hydrocarbon Facility, the second phase of the supply agreement would commence, which would have a term of five years, subject to extension upon the mutual agreement of the parties. During the second phase, Gevo would supply Avfuel with larger volumes of ATJ, ramping up to 1,000,000 gallons of unblended ATJ per year, which, when blended with conventional jet fuel, would produce many millions of gallons of finished ASTM D1655 jet-fuel product for distribution per year.

With further regard to the environment, for every 1 million gallons of ATJ produced, approximately 20 million pounds of animal feed and protein would also be produced and sold into the food chain. To produce ATJ, Gevo fractionates grain to produce protein and animal feed while using the residual carbohydrate portion of the grain for fermentation to produce the intermediate chemical: isobutanol. The isobutanol is then chemically transformed using a hydrocarbon processing facility into ATJ meeting ASTM D7566 (standard specification for aviation turbine fuel containing synthesized hydrocarbons). The ATJ made by this process has very low sulfur, low particulates, and higher energy density than petro-based jet fuel.