Gevo provides update on Net Zero, RNG projects in Q4 report
SOURCE: Gevo Inc.
March 10, 2023
BY Erin Voegele
Gevo Inc. released fourth quarter financial results on March 9, confirming that the company’s Net Zero 1 project in South Dakota remains on schedule for startup in 2025. Gevo said its renewable natural gas (RNG) project continues to ramp up operations, while the Luverne, Minnesota, biorefinery is idle.
Gevo broke ground on its Net Zero 1 facility in September 2022. According to the company, front end engineering and design (FEED) work is substantially complete and detailed engineering continues. Equipment procurement has begun and detailed planning for this year’s construction ramp up has commenced. Financial close on the project is expected to occur later this year.
Over the next year, Gevo plans to begin ordering long-lead equipment for the Net Zero 1 facility and execute an EPC contract. The company also said it plans to select a fabricator for hydrocarbon plant modules and complete final negotiations with the USDA and initiate the company’s Climate-Smart Farm-to-Flight grant, which has an award ceiling of up to $30 million.
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In partnership with Axens, Burns and McDonnell, and Praj, Gevo has also begun engineering for its Net Zero 2 project, which is expected to be three times the size of Net Zero 1. According to Gevo, the facility is being designed to utilize fossil-free electricity, process energy and hydrogen at a commercially advantaged location convenient to supply Chicago O’Hare International Airport with sustainable aviation fuel (SAF).
During an earnings call, Gevo CEO Patrick Gruber also confirmed that there is a third Net Zero project under development, but said the project is confidential. In addition, Gruber noted that Gevo is in the planning stages for several Net Zero sites that would be developed in cooperation with existing ethanol plants and is considering licensing deals.
Regarding the RNG project in Northwest Iowa, Gevo confirmed that production began ramping up during the second half of last year. The project has an initial production capacity of 355,000 MMBtu per year, which Gevo plans to expend to approximately 400,000 MMBtu by the end of 2023. For the current calendar year, the RNG project is expected to produce between 350,000 and 375,000 MMBtu.
Gruber said Gevo has already received approval from the U.S. EPA to generate renewable identification numbers (RINs) under the Renewable Fuel Standard for the RNG it produces and has applied for a temporary pathway from the California Air Resources Board to allow its RNG to be sold into the California Low Carbon Fuel Standard market.
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In its financial release, Gevo also briefly addressed the status of its biorefinery in Luverne, Minnesota. According to the company, activities at the Luverne facility were minimized to care and maintenance status during the third quarter of 2022, as the company has shifted its focus to its Net Zero projects.
Gevo reported $500,000 in revenue for the fourth quarter related to sales of RNG. The company reported loss from operations of $26.9 million for the quarter, compared to a $16.5 million loss during the same period of 2021. Non-GAAP cash EBITDA loss was $18.9 million, compared to $10.9 million. GAAP net loss per share and non-GAAP adjusted net loss per share for the quarter was 11 cents compared to 19 cents during the fourth quarter of 2021.
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