Advanced BioFuels USA

by Jim Lane (Biofuels Digest) In Colorado, Gevo entered into a long term, take or pay Renewable Hydrocarbons Purchase and Sale Agreement with Trafigura Group, the largest contract in Gevo’s history. Trafigura is one of the world’s leading independent commodity trading companies with over $171B and over $54B in revenue and assets, respectively. Under this contract Trafigura is expected to take delivery of 25 million gallons per year of renewable hydrocarbons, the majority of which is expected to be low-carbon premium gasoline with a smaller portion of the volume for sustainable aviation fuel starting in 2023.

What’s the bigger picture?

The deal adds to substantive offtake deals struck with Delta, Total and SAS in the past year and with AvFuel in 2018. The Delta deal was particularly material in terms of changing the way in which sustainable aviation fuels agreements are structures, and more on that here.

Gevo is selling out the inventory from its planned advanced isooctane and sustainable aviation fuels plant, as a part of the financing agreement. That’s why the agreement is subject to certain conditions, including Gevo acquiring a production facility to produce the renewable hydrocarbon products contemplated by the Agreement and closing a financing transaction for sufficient funds to acquire and retrofit the production facility.

Making educated estimates of production capacity: the known and surmised

…

The Gevo backstory

Having produced SAF and other hydrocarbons for nearly a decade, Gevo has a unique business system as it integrates sustainable agriculture and biorefining to produce SAF and low-carbon premium gasoline. For every gallon of low-carbon premium gasoline or SAF produced, Gevo produces about ten pounds of protein for the food chain, delivering substantially all of the nutritional value of corn to the food chain. The farmers who supply Gevo on average are capturing carbon, building up their soil with regenerative agriculture techniques.

Gevo began to use ISCC+ and Roundtable on Sustainable Biomaterials (RSB) certified corn for its Luverne, Minnesota facility while displacing fossil-derived power and heat with wind turbines and the upcoming implementation of biogas from dairy manure generated nearby. The execution of this circularity is unique and Gevo’s SAF is expected to have greenhouse gas profile reduction of 70% compared to the fossil-based jet fuel alternative.  Eventually, it may be possible through soil carbon sequestration to completely decarbonize jet fuel through the use of Gevo’s SAF.

More on the Delta deal here.

More on the SAS deal here.

More on the Total deal here.

The Trafigura backstory

This commitment will support Trafigura’s efforts to develop the market for low-carbon fuels including low-carbon premium gasoline. The Agreement will also enable Trafigura to supply SAF to both US and international customers whose interest is growing in low-carbon jet fuel.

If you’re not familiar with the company — it’s a giant international commodities trader with a big book of business in fuels, more on the company here.    READ MORE

IP Valuation Firm Sets Gevo IP Portfolio at Greater Than $400M (GEVO)

Gevo, Trafigura sign major biofuels agreement (Biofuels International)