Gevo and Scandinavian Airlines System Amend Agreement to Increase Off-Take of Sustainable Aviation Fuel, valued at over $100 ...
February 22 2021 - 8:00AM
Gevo, Inc. (NASDAQ: GEVO), announced today that it and Scandinavian
Airlines System (“SAS”) have signed an amendment to increase SAS’s
minimum purchase obligation to purchase sustainable aviation fuel
(“SAF”) to 5,000,000 gallons per year. Gevo and SAS signed the
original fuel sales agreement in October 2019 (the “Fuel Sales
Agreement”).
With the finalization of this this amendment to the
Fuel Sales Agreement (the “Amendment”), Gevo expects to supply SAS
with SAF beginning in 2024 from Gevo’s Net-Zero 2 Project for use
and distribution in low carbon fuel regions of the United States.
The value of the Fuel Sales Agreement, as amended, is estimated at
over $100 million over the entire term of the agreement inclusive
of the related SAF and environmental credits.
“With this amendment, SAS has significantly increased the amount
of SAF that it is willing to purchase from Gevo. This amendment is
evidence of the strong and growing demand for Gevo’s renewable
hydrocarbon products. We expect to ink additional offtake
agreements later this year,” said Patrick R. Gruber, Chief
Executive Officer of Gevo. “SAS have a vision and plan that they
are executing, even in spite of the global pandemic. This
additional volume will help Gevo grow its business and hopefully
accelerate making real Gevo’s Net-Zero 2 plant,” added Mr.
Gruber.
“SAS has an ambitious goal in reducing its’ absolute climate
affecting emissions by 25 percent from 2005 levels by 2025. This
increase of Gevo SAF will help us to reach at least 20% of the SAF
needed to reach our emission reductions goal. SAS chooses partners
like Gevo that have the vision and ambition to support the aviation
industry’s transition to net zero emission,” says Lars Andersen
Resare, Head of Sustainability, SAS.
Beyond Net-Zero 1
Gevo has introduced the concept of Net Zero Projects. Announced
in early 2021, these production facilities are being designed to
produce energy-dense liquid hydrocarbons using renewable energy and
Gevo’s proprietary technology. The first Net-Zero project, Net-Zero
1, is expected to be built in Lake Preston, South Dakota.
The Net-Zero Projects are being 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.
Gevo expects that each Net-Zero Project will have the capability
to produce approximately 45MGPY of liquid hydrocarbons (jet fuel
and renewable gasoline) and are also expected to produce at least
350,000,000 lbs/yr of high protein animal feed. To reduce and
eliminate the fossil fuel resources used in the production
facilities, each Net Zero Project is expected to have an anaerobic
digestion wastewater treatment plant that is capable of generating
enough biogas to run the plant and supply a combined heat and power
unit, capable of meeting approximately 30% of the plant’s
electricity needs. The remaining 70% of electricity to run the
plant is expected to come from wind power. Net-Zero 1 may also
obtain renewable natural gas (“RNG”) using manure from dairy or
beef cows. These efforts should make this Net-Zero 1
self-sufficient and help ensure it will be off a fossil-based grid.
Gevo also believes in transparency and is setting up sustainability
tracking methods to work alongside our farmers.
The Fuel Sales Agreement, as amended, is subject to certain
conditions precedent. A copy of the Fuel Sales Agreement and the
Amendment have been filed with the U.S. Securities and Exchange
Commission on Form 8-K.
About Gevo
Gevo’s mission is to transform renewable energy and carbon into
energy-dense liquid hydrocarbons. These liquid hydrocarbons can be
used for drop-in transportation fuels such as gasoline, jet fuel,
and diesel fuel, that have the potential to yield net-zero
greenhouse gas emissions when measured across the full lifecycle of
the products. Gevo uses low-carbon renewable resource-based
carbohydrates as raw materials from residues and slurries, and is
in an advanced state of developing renewable electricity and
renewable natural gas for use in production processes, resulting in
low-carbon fuels with substantially reduced carbon intensity (the
level of greenhouse gas emissions compared to standard petroleum
fossil-based fuels across their lifecycle) and GHG scores. Gevo’s
products perform as well or better than traditional fossil-based
fuels in infrastructure and engines, but with substantially reduced
greenhouse gas emissions. In addition to addressing the problems of
fuels, Gevo’s technology also enables certain plastics, such as
polyester, to be made with more sustainable ingredients. Gevo’s
ability to penetrate the growing low-carbon fuels market depends on
the price of oil and the value of abating carbon emissions that
would otherwise increase greenhouse gas emissions. Gevo believes
that its proven and patented technology, which enables the use of a
variety of low-carbon sustainable feedstocks to produce
price-competitive low carbon products such as gasoline components,
jet fuel, and diesel fuel, yields the potential to generate project
and corporate returns that justify the build-out of a
multi-billion-dollar business.
Learn more at Gevo’s website: www.gevo.com
About SAS
SAS, Scandinavia’s leading airline, with main hubs in
Copenhagen, Oslo and Stockholm, flies to destinations in Europe,
USA and Asia. Spurred by a Scandinavian heritage and sustainability
values, SAS aims to be the global leader in sustainable aviation.
We will reduce total carbon emissions by 25 percent by 2025, by
using more sustainable aviation fuel and our modern fleet with
fuel-efficient aircraft. In addition to flight operations, SAS
offers ground handling services, technical maintenance and air
cargo services. SAS is a founding member of the Star Alliance™, and
together with its partner airlines offers a wide network
worldwide.
Learn more at https://www.sasgroup.net
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 relate to a variety of matters, including, without
limitation, statements related to the Agreement and the Amendment,
Gevo’s SAF, Gevo’s ability to produce the SAF, Gevo’s ability to
realize revenue from the Agreement and Amendment, Gevo’s ability to
enter into additional offtake agreements for its products, Gevo’s
Net-Zero Projects, including Net-Zero 2, Gevo’s ability to produce
products that have a “net-zero” greenhouse gas footprint, Gevo’s
plans and strategy, the NW Iowa Project, Gevo’s ability to finance
its projects, and other statements that are not purely statements
of historical fact. These forward-looking statements 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, 2019, 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.
Investor and Media ContactIR@gevo.com+1
720-647-9605
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