Gevo, Inc. (NASDAQ: GEVO) has signed a “take-or-pay” agreement with
Delta Air Lines, Inc. (NYSE: DAL) to supply 75 million gallons of
sustainable aviation fuel (SAF) per year for seven years (the
“Agreement”). Based on current assumptions, including those around
future pricing of commodities and the future values of certain
environmental benefits, Gevo estimates that the Agreement should
generate approximately $2.8 billion of revenue, inclusive of the
value from environmental benefits, for Gevo over the seven-year
term of the Agreement.
The Agreement replaces the existing agreement
signed with Delta in 2019 to purchase 10 million gallons per
year and bolsters Delta’s commitment to incorporating SAF into its
operations.
“On behalf of the entire team at Gevo, I want to
congratulate our partners at Delta for their leadership in
continuously pushing the aviation industry towards net-zero
emissions. Delta makes for a great customer, recognizing that big
change is needed. I also appreciate their faith in what we are
doing at Gevo. Net-zero jet fuels matter. We expect production from
our first Net-Zero plant to begin in 2025. To meet the demand that
we now have under contract, we need to develop and build more than
one Net-Zero plant. This is a happy problem to have,” said Patrick
R. Gruber, Ph.D., Gevo’s Chief Executive Officer.
“Net-Zero Fuels are made by using low-carbon
feedstocks produced with climate-smart agricultural practices and
by eliminating fossil-based energy from the business system as much
as possible. In addition, our customers depend on us to count
carbon at every step of the process,” said Paul D. Bloom, Ph.D.,
Gevo’s Chief Carbon Officer, and Chief Innovation Officer. Dr.
Bloom continued, “By accurately accounting for carbon emissions
using Argonne National Laboratories GREET model along with our
Verity Tracking platform we will provide confidence to our
customers like Delta that scientifically robust and transparent
methods are used to meet and measure their sustainability goals. We
want to create a win-win value proposition for every participant in
the SAF supply chain by tracking all carbon intensity benefits in
our SAF.”
“SAF is a critically important lever we have
available today to help our industry reduce the lifecycle carbon
emissions from aviation fuel,” said Kelly Nodzak, Delta’s Director
of Global Jet Fuel Procurement. “That’s why we are working to
develop the market and a broader understanding of the effectiveness
of SAF, which can reduce lifecycle emissions up to 80 percent when
used in pure form compared to fossil jet fuels.”
“With the right policies and incentives in place,
we can unlock a future where sustainable aviation fuel is a viable
climate solution that benefits air travel and beyond,” said Amelia
DeLuca, Delta’s Vice President of Sustainability. “SAF production
creates good-paying jobs in manufacturing, improves the
environmental quality for all, and fosters rural economic
opportunity for feedstocks and pathways. It will help us protect
the planet we share and the places we call home.”
Gevo has remained focused on sustainability at
every stage of production. Gevo has developed two alcohol-to-jet
pathways that can utilize various low-carbon feedstocks grown using
sustainable agriculture. These feedstocks can then be converted, in
some cases, to high-value nutritional products and energy-dense
liquid hydrocarbons, including SAF. Gevo’s production processes
will incorporate renewable energy, including wind turbines, biogas,
and combined heat and power systems (CHP) to increase efficiency
and reduce carbon intensity to net-zero levels, which the customer
can then pass on through the fuel.
The Agreement is subject to certain conditions
precedent, including Gevo developing, financing and constructing
one or more production facilities to produce the SAF contemplated
by the Agreement. A copy of the Agreement between Delta and Gevo
has 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 when burned, have the potential to yield net-zero greenhouse
gas emissions when measured across the full life cycle of the
products. 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 life cycle). 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 Gevo’s website:
www.gevo.com
About Delta Air Lines
Delta’s commitment to sustainability is about joining arms to
create a better world. The airline’s ambitious commitment to carbon
neutrality from March 2020 onward is coming to fruition with swift
impact through immediate actions, coupled with long-term
investments to combat climate change. These investments will drive
innovation, advance clean air travel technologies, accelerate the
reduction of carbon emissions and waste, and establish a path to a
more sustainable future. As a company driven by purpose, we hold
ourselves to a high standard of producing sustainable, responsible
financial results while investing in healthy communities,
maintaining a diverse and inclusive workforce, and protecting
natural environments. These values drive our overall approach to
Environmental, Social, and Governance (ESG) sustainability and
responsibility.
Learn more at the Delta Air Lines website:
www.delta.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, without limitation, including the Agreement,
Delta’s purchase of SAF from Gevo, Gevo’s ability to produce SAF,
Gevo’s estimate of the revenue that might be generated from the
Agreement, Gevo’s ability to produce SAF and other fuels with a
net-zero carbon intensity, Gevo’s technology, Gevo’s development,
financing and construction of production facilities to produce SAF,
the attributes of Gevo’s products, 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, 2021,
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
ContactHeather L. Manuel+1 720-418-0085IR@gevo.com
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