This is next-generation advanced renewable fuel that will put advanced technology into every gallon. It is technically biofuel because it comes from bio-based feedstocks, but it’s totally new technology from the ground up. Our technology starts by leveraging agriculture. Because sustainable growing practices and regenerative agriculture are employed, farmland sequesters carbon in the soil, yields increase, and farmers have a premium crop that will be attractive in the marketplace.
We expect that our Net-Zero plants will produce sustainable aviation fuel and renewable premium gasoline that will result in net-zero carbon emissions over the life of the fuel. This means that we’ve eliminated carbon emissions from the process to create fuels to serve these markets. The net-zero result is expected to include the burning of our fuels. So when our products leave our facility, they are expected to have substantial negative carbon intensity.
Many people and businesses rely on transportation fuels. They don’t have time to think about if zero carbon emissions is possible. Instead they continue on with their lives and business. They may explore alternatives and electric vehicles but relatively few act. How do we know?
In the transportation sector, even in the most optimistic cases for adoption of electric vehicles, fuel cells, and hybrid, the demand for hydrocarbon fuels is in the hundreds of billions of gallons.
The current market size for hydrocarbon fuels is about 900 billion gallons worldwide each year.
In the median scenario, energy-dense hydrocarbons are forecast to fuel 57 percent of transport energy in 2050. These estimates already incorporate aggressive EV adoption and higher shares of renewable energy, including biomass-based renewable fuels.
Even in the most-aggressive mitigation scenario, oil is projected to fuel over 20 percent of the global transport sector in 2050.
In the least-aggressive scenario, energy dense liquids will fuel nearly 83 percent of the global transport sector in 2050.
The question is, how to rely on liquid fuels, but still reduce the carbon footprint.
According to the U.S. Energy Information Administration, Annual Energy Outlook 2020, Reference Case, liquid fuels are in our future in every scenario.
Even when considering aggressive electrification, liquid fuels still play a large role as a source of energy, according to this hypothetical case based on EIA numbers and data from Rhodium Group Study 2020. The penetration rate of electrification is highly uncertain.
Also worth noting, in the 30 years leading up to 2050, that liquid fuels are going to continue to play a substantial role through the transition.
That’s where Gevo comes in.
The fuels we expect to produce, including sustainable aviation fuel and renewable premium gasoline, are fungible. That means they are molecularly the same as the petroleum-based fuels they are poised to replace.
What does it all mean? To put it simply, Gevo’s energy-dense liquid hydrocarbons are ready to be adopted by markets now. This problem is large enough, so we’re definitely going to need every solution. With our fuels we can start hitting targets for emissions reductions, and then figure out the challenges all solutions face, such as the pricing of electric vehicles, more efficient vehicle technology, investment in setting up charging infrastructure, helping reduce the carbon footprints of municipal fleets, and meeting government mandates.
