Gevo has introduced the concept of Net Zero Projects. Announced in early 2021, these production facilities are expected to produce energy-dense liquid hydrocarbons using renewable energy and our proprietary technology.
The projects are expected to result in the construction of facilities designed to produce liquid hydrocarbons in the form of sustainable aviation fuel and renewable gasoline. These fuels, when used for transportation, should have a net-zero greenhouse-gas footprint as measured across the entire lifecycle, based on the Argonne National Laboratory’s GREET model.
The Argonne GREET model counts carbon reductions toward sustainability, but it also looks at other factors, such as land use contributing to the food chain, the effect on water resources, and reducing other forms of waste. It’s a whole-picture model, and we use it to guide our thinking to make our projects even better.
The Net Zero projects are expected to produce large quantities of high-protein animal feed. The starch separated out of the corn as part of that production is used as a feedstock in the proprietary process that results in liquid hydrocarbons.
To eliminate reliance on fossil resources in the Net-Zero production facilities themselves, Gevo expects to add proven technology such as an anaerobic digestion wastewater treatment plant that could generate enough biogas to run the entire production facility and supply a combined heat and power unit, capable of meeting approximately 30 percent of the production facility’s electricity needs. The remaining 70 percent of electricity to run the production facilities are expected to come from wind power.
The Net-Zero production facilities may also use renewable natural gas (“RNG”) derived from manure of dairy or beef cows in anaerobic digesters. Aside from RNG, these digesters also result in fertilizer farmers can use to add nutrients to their fields.
Gevo has approximately 48 million gallons per year of contracts signed for a mix of jet fuel and renewable premium gasoline products, representing approximately $1.5 billion of revenue across the life of the contracts. Gevo anticipates signing take-or-pay contracts with additional customers in 2021. Additional contracts are expected to support additional Net-Zero projects.
Gevo is planning to close and begin construction of its first RNG project in 2021. Known as the NW Iowa Project, this Project will produce RNG by using anaerobic digesters to convert manure from dairy cows into RNG. RNG production is expected to begin in 2022. Citigroup is arranging the debt financing. Gevo plans to sell most of the gas to the RNG market in California and use some of the biogas generated from this project at its renewable hydrocarbons plant, for example, at Lake Preston, South Dakota, Luverne, Minnesota, and/or other sites.
Gevo seeks to secure investment agreements with strategic and financial project investors for Net-Zero projects if terms are attractive. Net Zero projects are moving forward, with planning and front-end engineering determining capital costs for development.