Gevo switches to ethanol at Lucerne as it waits for isobutanol market to catch up

November 8, 2017 |

In Colorado, Gevo said it decided to reduce its employee base at the Luverne Facility in October to better match industry norms in terms of staffing levels necessary to produce solely ethanol at the plant. It does not believe that this staffing reduction will impact its ability to periodically return to the co-production of isobutanol and ethanol, as it expects to temporarily shift resources from its headquarters in Englewood, Colorado to the Luverne Facility to make up for any shortfalls. The company expects that this reduction in force, as well as the focus on ethanol production, will result in a significant decrease in controllable expenses at the Luverne Facility.

During certain periods of the third quarter of 2017, Gevo only produced ethanol at the Luverne Facility. Given the Luverne Facility has only one production line suitable for isobutanol, Gevo’s current isobutanol production costs are higher than its expected sales price. As a result, the cash flow profile of the Luverne Facility is improved by dedicating production to ethanol, rather than co-producing isobutanol and ethanol.

Going forward, Gevo expects its operating strategy will be to focus on the production of ethanol and to produce limited volumes of isobutanol until the completion of the Luverne Facility Expansion or until the it has repaired or replaced one or both of two older fermentation vessels.

Gevo: The Digest’s 2015 5 Minute Guide

Category: Fuels

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