Gevo announces plans to decarbonize Luverne plant

By Erin Voegele | May 09, 2019

Gevo Inc. released first quarter 2019 financial results May 8, highlighting efforts to decarbonize its Luverne, Minnesota, biorefinery and predicting the company could be become profitable during the next 18 months.

Patrick Gruber, CEO of Gevo, opened the company’s earning call by saying he believes the company is at or near a tipping point. According to Gruber, Gevo has finalized several agreements and turned its balance sheet around. “We’re making, overall, very good progress,” he said.

Gruber also spoke about the company’s efforts to decarbonize the energy used at its Luverne facility. The intent is to lower our carbon score, he said, noting the company is working on renewable electricity and renewable natural gas (RNG). “We expect that accomplishing these projects should make Luverne profitable, even just selling low carbon ethanol,” he said. Gruber said he plans to announce details of the wind energy and RNG projects in the future.

When the margin uplift from the decarbonization projects is combined with the margin uplift from the value added feedstock products the company is in the midst of producing using stockwave dry fractionation technology, Gruber said Gevo could become profitable in the next 18 months, depending on overall market dynamics, how must the company is spending to commercialize isobutanol jet fuels, and other factors. Production of low carbon ethanol for the California market combined with animal feed is something the company is doing simply to make money, he added, stressing that Gevo’s growth in the long run is all about isobutanol, jet fuel and isooctane. The company is continuing to develop markets for these products, Gruber said.

On the same day Gevo released its financial results, the company also announced that the city of Seattle will utilize a blend of Gevo’s renewable isobutanol with conventional gasoline in its pilot program to reduce the carbon intensity of fuels used in Seattle’s fleet vehicles.

Gruber also mentioned the binding definitive construction license agreement the company signed with Praj Industries in April to commercialize the production of isobutanol from sugar-based feedstocks. The two companies also signed a memorandum of understanding (MOU) to commercialize renewable hydrocarbon technology and products in India.

Regarding the company’s jet fuel technology, Gruber said there is a project on the table to expand hdyrocarbon capacity to approximately 1 million gallons per year. That expansion is planned for the Luverne location.

Gruber said the process to add capacity to produce isobutanol hydrocarbons at the Luverne facility would be completed in two steps. First, the company would add equipment for isobutanol hydrocarbons to the plant. Second, the company would build on a large capacity for isobutanol hydrocarbons of about 18 MMgy of isobutanol and 8 to 10 MMgy of hydrocarbons. These projects would be done side-by-side with existing ethanol production while the low carbon ethanol plant continued to operate.  

Gevo reported revenues of $6.4 million for the quarter, down from $8.2 million during the same period of last year. Gross loss was $2.6 million, compared to gross loss of $2.3 million during the first quarter of 2018. Gevo incurred a net loss of $6.1 million for the quarter, compared to a net loss of $2.5 million during the same three-month period of last year.