EPA Approves Pathway for Isobutanol as an Advanced Biofuel
January 17 2017 - 9:00AM
Gevo, Inc. (NASDAQ:GEVO), announced that the U.S. Environmental
Protection Agency (“EPA”) has approved the pathway for isobutanol
produced at Gevo’s Luverne, MN plant to be an advanced biofuel
under the Renewable Fuel Standard Program (“RFS”). This is the
first time that the EPA has approved a pathway for an advanced
biofuel that uses starch from feed corn to produce an
alcohol. With a partial substitution of fossil based energy
sources that are currently used at Luverne with green energy
sources, such as biogas, it should be possible for Gevo to achieve
the 50% or greater greenhouse gas emissions (“GHG”) reduction
needed to claim the advanced D5 Renewable Identification Number
(“RIN”) according to the pathway approval.
A RIN is a serial number assigned to biofuels for
the purpose of tracking their production, use and trading, as
required under the RFS. RINs can be sold and traded, and as a
result carry a monetary value, which is linked to the biofuels that
generate the RINs.
Gevo’s isobutanol from feed corn starch currently
generates D6 RINs, and with this approval, Gevo’s isobutanol could
generate D5 RINs as well. D5 RIN credits have historically
had greater value in the marketplace than D6 RINs, potentially
making Gevo’s isobutanol more valuable in the future. Isobutanol,
used as a gasoline blend stock, generates 1.3 RINs per gallon. This
compares to ethanol’s 1.0 RINs per gallon, given isobutanol’s
higher energy density as a molecule. Currently D5 RINs have a
value of approximately $1.00 versus approximately $0.75 for a D6
RIN. Therefore, at these current values, a gallon of isobutanol
would generate RIN value of $1.30 per gallon if it qualified for a
D5 RIN, as compared to $0.98 per gallon under a D6 RIN, or an
additional $0.32 per gallon.
Isobutanol can also be converted into renewable jet
fuel and gasoline. Each of these products would also qualify for
RINs.
In order for Gevo to achieve the 50% or greater GHG
emission reduction measured with the EPA methodology, Gevo would
need to substitute part of its fossil based energy sources at its
plant in Luverne with renewable energy sources, for example
substituting natural gas with biogas in the production process.
“The new EPA pathway combines the lowest cost
carbohydrate feedstock sources with green energy, resulting in
advanced fuels with a significant GHG reduction. It is worth noting
that this pathway leads to the only advanced biofuel that has
potential to significantly lower GHG’s while also generating large
amounts of protein for animal feed. In fact, practically
all of the protein from the feed corn used by Gevo
is captured and sold for animal feed. This feed
corn, which is not used for human consumption, and which is
supplied to Gevo in Luverne is what the local farmers are
calling “low carbon corn” because of the advanced farming
techniques they use to minimize chemical inputs, the low till/no
till fields that are building up soil carbon and the
high yields that they achieve which minimizes land use.
We are pleased that there is now a route for advanced fuels
that provides protein that contributes to the food system. We
expect that the approval of this pathway will open up new business
opportunities for Gevo, while driving sustainable environmental
improvements,” said Dr. Patrick Gruber, Gevo’s Chief Executive
Officer.
About Gevo
Gevo is a leading renewable technology, chemical
products, and next generation biofuels company. Gevo has developed
proprietary technology that uses a combination of synthetic
biology, metabolic engineering, chemistry and chemical engineering
to focus primarily on the production of isobutanol, as well as
related products from renewable feedstocks. Gevo’s strategy is to
commercialize bio-based alternatives to petroleum-based products to
allow for the optimization of fermentation facilities’ assets, with
the ultimate goal of maximizing cash flows from the operation of
those assets. Gevo produces isobutanol, ethanol and high-value
animal feed at its fermentation plant in Luverne, Minnesota. Gevo
has also developed technology to produce hydrocarbon products from
renewable alcohols. Gevo currently operates a biorefinery in
Silsbee, Texas, in collaboration with South Hampton Resources Inc.,
to produce renewable jet fuel, octane, and ingredients for plastics
like polyester. Gevo has a marquee list of partners including The
Coca-Cola Company, Toray Industries Inc. and Total SA, among
others. Gevo is committed to a sustainable bio-based economy that
meets society’s needs for plentiful food and clean air and
water.
Forward-Looking Statements
Certain statements in this press release may
constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements, which include statements relating to
Gevo’s ability to meet the requirements to claim the D5 Renewable
Identification Number as described above, including Gevo’s ability
to achieve the 50% or greater greenhouse gas emissions reduction,
and whether Gevo will pursue the D5 Renewable Identification Number
pathway described above, are made on the basis of the current
beliefs, expectations and assumptions of the management of Gevo and
are subject to significant risks and uncertainty. Investors are
cautioned not to place undue reliance on any such forward-looking
statements. All such forward-looking statements speak only as of
the date they are made, and Gevo undertakes no obligation to update
or revise these statements, whether as a result of new information,
future events or otherwise. Although Gevo believes that the
expectations reflected in these forward-looking statements are
reasonable, these statements involve many risks and uncertainties
that may cause actual results to differ materially from what may be
expressed or implied in these forward-looking statements. For a
further discussion of risks and uncertainties that could cause
actual results to differ from those expressed in these
forward-looking statements, as well as risks relating to the
business of Gevo in general, see the risk disclosures in the Annual
Report on Form 10-K of Gevo for the year ended December 31, 2015,
and in subsequent reports on Forms 10-Q and 8-K and other filings
made with the U.S. Securities and Exchange Commission by Gevo.
Media Contact
David Rodewald
The David James Agency, LLC
+1 805-494-9508
gevo@davidjamesagency.com
Investor Contact
Shawn M. Severson
EnergyTech Investor, LLC
+1 415-233-7094
gevo@energytechinvestor.com
@ShawnEnergyTech
www.energytechinvestor.com
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