Gevo provides update of proposed Net-Zero 1 project

By Erin Voegele | November 11, 2021

Officials from Gevo Inc. discussed progress on the development of the company’s proposed Net-Zero 1 biorefinery during a third quarter earnings call, held Nov. 10. The facility will be located in Lake Preston, South Dakota, and produce 45 MMgy of renewable hydrocarbons.

Lynn Smull, chief financial officer at Gevo, said the company’s primary execution focus is getting the Net-Zero 1 plant built and operating. Design and engineering work is progressing well. Smull said Gevo expects to begin ordering long-lead equipment and continued detailed engineering in the first half of next year. Partnerships for wind power and anaerobic digestion are progressing well, he added.

Juhl Energy, Geov’s design, build, own operate and manage (DBOOM) partner for wind is advancing a wind project and working with potential utility partners to ensure a structure that works for all parties, Smull said. He also noted Gevo is well into the engineering and commercial processes with multiple wastewater anaerobic digestion DBOOM partners and expect to finalize arrangements with a signing party in early 2022. Project financing elements for the Net-Zero 1 project are currently expected to be place in time for a mid-2022 debt offering, he added.

Smull also confirmed the company’s facility in Luverne, Minnesota, is currently operational and making isobutnaol. That isobutanol is being used to make small quantities of hydrocarbons at the company’s facility in Silsbee, Texas. Next year, Smull said Gevo expects to use Luverne’s isobutnaol production as feedstock for a modular hydrocarbon plant that is currently being fabricated by Praj and is scheduled to be installed at Luverene in 2022.

A statement released by Gevo includes several third quarter highlights achieved by the company. Those highlights include a memorandum of understanding (MOU) with ADM to support the production of sustainable aviation fuel (SAF) and other renewable hydrocarbon fuels; a strategic alliance with Axens North America Inc. aimed at accelerating the commercialization of sustainable ethanol-to-jet projects in the U.S.; the engagement of Kiewit Energy Group Inc. to lead front end engineering design (FEED) for the Net-Zero 1 facility; an asset purchase agreement with Butamax Advanced Biofuels LLC and its affiliate Danisco US Inc. to acquire certain patents; and a letter of intent with with Chevron U.S.A. Inc. to jointly invest in building and operating one or more new facilities that would process inedible corn to produce SAF.

Gevo reported $100,000 of revenue for the third quarter, down from $200,000 reported for the same period of last year. Loss from operations was $14.7 million, compared to a $6.1 million loss from operations reported for the third quarter of 2020. Non-GAAP cash EBITDA loss was $9.3 million, compared to a $4 million loss reported for the same period of last year.