Wednesday, December 08, 2021
Gevo (GEVO)
Significant Supply Agreement Fills Second Net-Zero Plant
Gevo Inc is a renewable chemicals and biofuels company engaged in the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks. Its operating segments are the Gevo segment and the Gevo Development/Agri-Energy segment. By its segments, it is involved in research and development activities related to the future production of isobutanol, including the development of its biocatalysts, the production and sale of biojet fuel, its Retrofit process and the next generation of chemicals and biofuels that will be based on its isobutanol technology. Gevo Development/Agri-Energy is the key revenue generating segment which involves the operation of the Luverne Facility and production of ethanol, isobutanol and related products.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
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Significant new supply agreement secured. Kolmar, a private Swiss company headquartered in Zug, has signed a fuel supply agreement (FSA) for 45 MGPY of renewable transportation fuel, including SAF and isooctane, from the Net-Zero 2 plant. The agreement has an initial delivery term of eight years with options for two three-year extensions. The FSA should generate annual revenue of $350 million, or $300 million from transportation fuels, including environmental credits, or ~$6.65/gallon, and $50 million from protein and corn oil co-product sales.
Contracted FSA portfolio expands and Net-Zero 1 and 2 are now full. The Kolmar FSA adds 45 MGPY and total revnue of $2.8 billion to the current contracted FSA portfolio. While the current contracted FSA portfolio is 99 MGPY, or revenue of ~$4.4 billion, the development pipeline remains large with potential CVX commitment of up to 150MGPY not yet included. The new contract fills up current design …
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
