Gevo Withdraws DOE Loan Application to Pursue Private Funding for SAF Facility

Key Takeaways

Gevo Inc. withdraws $1.46 billion loan application with the Department of Energy, opting for private financing for its ethanol-to-jet facility in North Dakota.
The company aims to expedite project execution and improve returns without aligning with DOE’s required objectives.
Gevo is targeting a final investment decision for its sustainable aviation fuel plant, expecting completion within two to three years.

Gevo Pursues Private Financing for Ethanol-to-Jet Plant

Gevo Inc., a renewable fuels producer, announced its decision to withdraw its application for a $1.46 billion loan guarantee from the Department of Energy (DOE). The company intends to seek private financing options for its planned ethanol-to-jet (ATJ) plant in North Dakota, aiming to finalize funding by the end of the year. This move follows a conversation with the DOE’s Office of Energy Dominance Financing (EDF), where it became apparent that the project’s requirements—primarily support for enhanced oil recovery—are not commercially viable at this stage for the project area.

In a statement, Gevo emphasized that pursuing alternative financing aligns better with its strategic objectives, allowing for an accelerated timeline and potentially improved returns. Despite withdrawing the application, Gevo stated that it retains the option to resubmit a request for funding in the future.

Gevo’s ATJ facility is a pivotal component of its recently acquired low-carbon ethanol operation in North Dakota, which is designed to produce sustainable aviation fuel (SAF) from ethanol. The company previously aimed for a final investment decision by midyear, with construction expected to take two to three years.

CEO Paul Bloom remarked that the North Dakota site is one of the best locations in the U.S. for such initiatives. “In a pro-agriculture and pro-energy state, local farmers continuously enhance productivity,” Bloom noted, highlighting the favorable conditions for biofuel production.

Last year, Gevo received a conditional commitment from the DOE to guarantee a loan for a SAF project located in Lake Preston, South Dakota. The company sought to shift this approval to its North Dakota facility, which integrates low-carbon ethanol production and carbon capture capabilities. Federal and state incentives for producing low-carbon fuels, including SAF, are viewed as significant opportunities for the ethanol sector and corn farmers, who supply vital raw materials for biofuel production. Currently, around 40% of the U.S. corn crop is utilized for ethanol manufacturing.

Despite the potential for growth, the momentum surrounding SAF has decreased compared to previous years, with various investment and construction projects stalling. Some airlines have also scaled back their sustainability initiatives. However, geopolitical tensions in the Middle East are reigniting interest in jet fuel, as soaring prices and concerns over supply shortages emerge.

Following this announcement, Gevo’s stock fell approximately 12% in after-hours trading on Nasdaq, reflecting investor concerns over the company’s financial strategy and project timelines.

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