Gevo updates on SAF offtake agreements and NZ1 project

October 10, 2022 |

In Colorado, Gevo now has approximately 375 million gallons per year of predominantly take-or-pay, financeable SAF and hydrocarbon fuel supply agreements, which are expected to support project debt financing. This level of demand would require multiple plants to be built over the next four years to satisfy those agreements. Based on current market projections and certain assumptions, collectively, these agreements represent approximately $2.3 billion in expected annual sales. Offtake partners include: Trafigura, Kolmar, Delta Airlines, American Airlines, Alaska Airlines, Finnair, Japan Airlines, British Airways, Aer Lingus, and SAS.

Following the recent groundbreaking ceremony in Lake Preston, South Dakota, the Net-Zero 1 (“NZ1”) project is on schedule with initial volumes of SAF expected to be delivered in 2025. NZ1 is expected to produce approximately 55 MGPY of SAF, or 62 MGPY of total hydrocarbon volumes, which would satisfy part of the ~375 MGPY of financeable SAF and hydrocarbon supply agreements that are currently in place.

The transition to an ethanol-to-SAF design from Gevo’s original isobutanol-to-SAF and isooctane design continues to yield improved output expectations as pre-project planning has been completed through phase 2 of front-end loading work (“FEL-2”). The results of this work, combined with support from the CFPC, have led to the forecast Project EBITDA1 for NZ1 to be in the range of $300-$325 million per year, a 56% increase at the mid-point from the prior estimate of $200 million per year. The total installed cost for NZ1, including the capital required for the alcohol-to-jet fuel plant as well as any site development costs, is currently forecasted to be approximately $850 million, a 33% increase from the prior estimate of $640 million. This increase is primarily due to increased steel, equipment, and supply chain costs related to the inflationary environment.

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Category: Fuels

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