Gevo Exceeds $1.5B in Long-Term Revenue Contracts with Signing of Trafigura
August 20 2020 - 9:00AM
Gevo, Inc. (NASDAQ: GEVO) announced today that it has entered into
a binding Renewable Hydrocarbons Purchase and Sale Agreement, dated
August 17, 2020 (the “Agreement”) with Trafigura Trading LLC, a
wholly-owned subsidiary of Trafigura Group Pte Ltd (“Trafigura”).
The Agreement is a long term, take or pay contract and is the
largest contract in Gevo’s history. Trafigura is one of the world’s
leading independent commodity trading companies with over $171B and
over $54B in revenue and assets, respectively. Under this contract
Trafigura is expected to take delivery of 25MPGY of renewable
hydrocarbons, the majority of which is expected to be low-carbon
premium gasoline with a smaller portion of the volume for
sustainable aviation fuel (“SAF”), starting in 2023.
This commitment will support Trafigura’s efforts to develop the
market for low-carbon fuels including low-carbon premium gasoline.
The Agreement will also enable Trafigura to supply SAF to both US
and international customers whose interest is growing in low-carbon
jet fuel.
“This is our largest single contract to date, and with it,
brings Gevo to over $1.5B of revenue in long term contracts when
added to the other contracts we have in place. As drop-in fuels,
Gevo’s renewable, very high-octane gasoline and SAF are a perfect
fit with Trafigura’s existing fuels business and will allow them to
integrate these low-carbon options seamlessly into their supply
chains. We expect that our low-carbon fuels will enable certain of
Trafigura’s customers to substantially lower their carbon
footprint,” said Patrick Gruber, Chief Executive Officer of
Gevo.
“Today’s agreement is a natural fit between our companies that
will help drive the expansion of our renewable fuels product
offering. We look forward to continuing to make a positive impact
on the transition towards a low carbon economy,” said Robert
Kreider, Head of the Strategic Management and Development Group,
North America for Trafigura.
Having produced SAF and other hydrocarbons for nearly a decade,
Gevo has a unique business system as it integrates sustainable
agriculture and biorefining to produce SAF and low-carbon premium
gasoline. For every gallon of low-carbon premium gasoline or SAF
produced, Gevo produces about ten pounds of protein for the food
chain, delivering substantially all of the nutritional value of
corn to the food chain. The farmers who supply Gevo on average are
capturing carbon, building up their soil with regenerative
agriculture techniques. Utilizing a low-carbon ecosystem is vital
to Gevo. Gevo began to use ISCC+ and Roundtable on Sustainable
Biomaterials (RSB) certified corn for its Luverne, Minnesota
facility while displacing fossil-derived power and heat with wind
turbines and the upcoming implementation of biogas from dairy
manure generated nearby. The execution of this circularity is
unique and Gevos’ SAF is expected to have greenhouse gas
profile reduction of 70% compared to the fossil-based jet fuel
alternative. Eventually, it may be possible through soil carbon
sequestration to completely decarbonize jet fuel through the use of
Gevo’s SAF.
The Agreement is subject to certain conditions precedent,
including Gevo acquiring a production facility to produce the
renewable hydrocarbon products contemplated by the Agreement and
closing a financing transaction for sufficient funds to acquire and
retrofit the production facility contemplated by the Agreement. A
copy of the Agreement between Trafigura and Gevo has been filed
with the U.S. Securities and Exchange Commission on Form 8-K.
About GevoGevo is commercializing the next
generation of gasoline, jet fuel and diesel fuel with the potential
to achieve zero carbon emissions, addressing the market need of
reducing greenhouse gas emissions with sustainable alternatives.
Gevo uses low-carbon renewable resource-based carbohydrates as raw
materials 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).
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, patented
technology enabling 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 www.gevo.com.
Trafigura
Founded in 1993, Trafigura is one of the largest physical
commodities trading groups in the world. Trafigura sources, stores,
transports and delivers a range of raw materials (including oil and
refined products and metals and minerals) to clients around the
world. The trading business is supported by industrial and
financial assets, including a majority ownership of global zinc and
lead producer Nyrstar which has mining, smelting and other
operations located in Europe, Americas and Australia; a significant
shareholding in global oil products storage and distribution
company Puma Energy; global terminals, warehousing and logistics
operator Impala Terminals; Trafigura's Mining Group; and Galena
Asset Management. The Company is owned by around 700 of its 8,000
employees who work in 80 offices in 41 countries around the world.
Trafigura has achieved substantial growth over recent years,
growing revenue from USD12 billion in 2003 to USD171.5 billion in
2019. The Group has been connecting its customers to the global
economy for more than two decades, growing prosperity by advancing
trade. Visit: www.trafigura.com
Forward-Looking StatementsCertain 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 with Trafigura, Gevo’s ability to produce the products
required by the Agreement, Gevo’s ability to raise the capital
necessary to acquire and retrofit the production facility
contemplated by the Agreement, Gevo’s ability to realize the full
amount of the revenues under its agreements 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.
Gevo Investor and Media Contact
720-647-9605 IR@gevo.com |
|
Trafigura Media Contact +41 (0)
22 592 4528media@trafigura.com |
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