Gevo at MicroCap Rodeo: Renewable Fuel Ambitions

Published 25/09/2025, 20:04
Gevo at MicroCap Rodeo: Renewable Fuel Ambitions

On Thursday, 25 September 2025, Gevo Inc. (NASDAQ:GEVO) showcased its strategic focus on renewable fuels at the MicroCap Rodeo Fall Conference. The company outlined its ambitious plans to expand ethanol production and develop sustainable aviation fuel solutions. While Gevo’s innovative approach presents significant growth opportunities, challenges in market demand and execution remain.

Key Takeaways

  • Gevo is focused on renewable fuels, including jet fuel, gasoline, and diesel, made from renewable carbon.
  • The company plans to increase ethanol production at its North Dakota plant and monetize carbon dioxide removal credits.
  • Gevo aims to address a projected shortfall in jet fuel demand by 2035 with sustainable aviation fuel (SAF).
  • The company is financially stable with $127 million in cash equivalents and a current adjusted EBITDA run rate of $20 million per year.

Financial Results

  • Current adjusted EBITDA run rate is approximately $20 million annually.
  • Near-term EBITDA target of $40 million through optimization of carbon and ethanol sales.
  • Potential $110 million EBITDA target without building additional ATJ plants.
  • Gevo holds $127 million in cash equivalents on its balance sheet.

Operational Updates

  • Gevo acquired an ethanol plant in North Dakota, utilizing 12% to 16% of its capacity.
  • Plans to increase ethanol production and capture CO2 for sale, aiming for a $60 million uplift.
  • Developing a marketplace for Carbon Dioxide Removal (CDR) credits.
  • Modular construction of ATJ plants is planned to reduce costs and risks.

Future Outlook

  • Gevo targets to meet a projected shortfall of 2.3 to 2.4 billion gallons in jet fuel demand by 2035 through SAF production.
  • Plans to deploy approximately 70 new 30-million-gallon ATJ plants by 2035.
  • Intends to separate the carbon value from jet fuel value, selling carbon credits to offset emissions.

Q&A Highlights

  • Gevo’s acquisition of the North Dakota plant presents a $60 million opportunity in monetizing carbon value.
  • The company is a leader in obtaining validated, audited, and certified carbon credits.
  • Focused on creating reproducible models for building and financing ATJ plants.

Readers are encouraged to refer to the full transcript for more detailed insights.

Full transcript - MicroCap Rodeo Fall Conference:

Sean Severson, CEO and founder, Water Tower Research: I’m Sean Severson, CEO and founder of Water Tower Research. Great to have our next presenter and company today, Gevo. Doctor, are you Mr. or Doctor? Which one? Doctor, Doctor, Doctor. Dr. Pat Gruber. We’re going to talk a little bit about Gevo, and then we’re going to leave plenty of time for Q&A on this one as well. There’s a lot going on at the company, but we’ll go through an overview of the company, and then we’ll get to some Q&A. Pat? Great. Glad to see you. We’re a company that’s focused on a new generation of fuels, the renewable resource-based jet fuel, gasoline, and diesel fuel. They’re made from renewable carbon, and they can achieve even carbon-negative footprints. Here’s the thing about them, is that to produce them on a cash cost basis, they can be economical.

I’ll do this to take a little bit about our story, where we’re at today, and how we look as a business and how to think about us. Our team is extremely well experienced. We’ll get this slide later, but we’re people who’ve been there, done it, built plants before, operated stuff before. We represent a team that’s one of the very few in the world who’s ever done agricultural stuff crossed over into the petrochemical world. If you were familiar with NatureWorks PLA, the clear plastic stuff that’s biodegradable, usually a clear cup, green band, and a whole bunch of products. I invented that stuff when I was young. I led the teams to build the plants. The people who worked with me then, we were all at Cargill and built stuff. We all came over here, and we wanted to do something bigger. We wanted to do hydrocarbons.

The cheapest way to make hydrocarbons from renewables is to take carbohydrates through alcohols. Alcohols like ethanol and other alcohols like isobutanol, and then do the chemistry, copying it straight out of the petrochemical industry of what’s done, and turn it into these hydrocarbon fuels. Put it all together and do it with a low carbon footprint. Our team is well experienced. When you look at our filings, you’re going to see four groupings of businesses. One of them is Gevo Fuels. Gevo Fuels encompasses ethanol. We recently bought an ethanol plant up in North Dakota. We’re using 16% of 12% of the capacity. One of the obvious things we’re going to want to do is you should buy more CO2 and put down that hole and get value for it. There’s a couple of ways that we can capture the value for it.

The wetland look is, it’s in a call to Broom Creek Formation. This is a cartoon of it. To give you the idea, it’s, like I said, been operating for three years. Interestingly enough, the people who built this, the plant was owned by Red Trail Energy. Red Trail Energy is a co-op. It’s owned by a farmer group who are both oilmen and farmers, mixtures of people. They said, I think it’s going to be important someday, and they built themselves a beautiful well. As I said, today, this is the only one that’s available on a public company basis, only three in the United States. They’re moving more in the future, and we’ll see this. Carbon capture is important. It creates a product that is called a CDR, Carbon Dioxide Removal credit. That’s the voluntary carbon they sell. That’s an important concept, the CDR.

It has nothing to do with the 45Z tax credit, nothing. They’re completely separate and unrelated. CDR. A ton goes down. You want to buy a ton? We’ll sell it to you. It’s going to cost you some money. One of the things is that we use corn as a raw material. This is important. You see my friend Corny, the cob out of here. He says, I’m not that kind of corn. We have to remind people that the kind of corn that we use in process is not the kind you eat. It is not in a bag, on a cob, or in a can. That ain’t the kind of corn we’re talking about here. We’re doing the 99% of the corn that’s grown. People forget this, particularly the enviros who like to talk about this food. You’re going to take food off a plate.

Sorry, that’s not true. Not food off a plate. In fact, you’re capturing all of the protein value and selling it in the marketplace. It’s important. To understand, say, a ton of corn, one third goes to ethanol, one third of a ton makes protein, which goes to the food chain, and the other third is carbon dioxide. Guess what? We’re doing a couple of interesting things here. We got ethanol as a product, and then we have protein as a product. Awesome. That’s a good co-product value. Now we’re talking about monetizing, creating value for that other third of a ton of raw material. That’s pretty important economically. You’ll see it. Where analysts get us wrong is not understanding how this business system works, because it is a little bit complicated. Corn comes in, and we’re going to take the corn, grind it up, mill it.

We’re going to use the carbohydrate portion and use that to make ethanol. We will take the protein and separate it, sell it to the food chain, take the corn oil, and sell it to the food chain. We are going to generate carbon, which we can sell to a voluntary carbon market, or we can also generate tax credits and other things. These things show up as co-products, so they are sometimes caught into costs. Cost of goods sold are offsets to our cost of goods, cost of production. You will not necessarily see it on a revenue line. If someone asked me that earlier today, where do we see this stuff? The carbon values come up as costs. The tax credits come up as a cost improvement.

Lazy analysts, when you come across them, they will have taken the corn and done some kind of a calculation. We are talking about SAF or jet fuel. They will talk about it, and they will do some kind of a calculation based on energy. They are lazy. They need to look at it in detail, do the economics, and actually come up with it, and you get the right answers. Low carbon corn, you sell out the co-products, you get low carbon ethanol. Cool, that is the business we have today that we are operating. It is profitable. In the future, we see ATJ, Alcohol-to-Jet, and I will explain that. No, I will get to it. Stand by. There are two markets that we are addressing in carbon markets.

Think of them as these are markets where we are actually selling dollars per ton, is the right way to think of this. Completely separate than a 45Z tax credit. The low carbon fuels markets like LCFS in California, Oregon, Canada, Washington, and others, you can get $50 to $200 a ton. That is better than zero. You can do CDRs. Those are $100 to $300 a ton. It does not take a genius to figure out that we should be focused on selling CDRs. That is what you saw last week in an announcement. We saw we sold something in NASDAQ. We are developing this marketplace. The reason you have not seen lots of these things is no one has handed us this sell this water. We just bought this plant and it closed on Peck in February.

Now we are taking it to the marketplace and seeing voluntary carbon markets as CDRs. An important concept. You can always bundle the carbon with a gallon of ethanol and sell it into California. That is this other market, generally at a lower price. Your EBITDA question is now being answered. The adjusted EBITDA potential, we are currently at a run rate of about $20 million a year. This is, if you look at this, this is what we think is going to happen in the near future. Right now, the light blue is going to be the tax credit market where we’re able to monetize tax credits. Another 45Z, big beautiful bill that runs through the end of 2029. It’s important. When you look at that light blue and you see the growth there, that’s pretty darn certain.

There’s another blue shadow up above there that’s about the voluntary carbon markets. That’s where we are putting a lot of emphasis to make happen, because we think that ultimately is where the world needs to go. Ethanol generates money, and then R&D. Where it has the negative in the column that has a negative above it, that’s our expenses. GSA, R&D, you know, the SARD or whatever you want to call it. It’s our burn. That’s what that is. That’s the subtraction. We’re saying that, yeah, we can see our way in very short order to $40 million a year with that. Very shortly after that, $110 million. This was without building an ATJ plant. This is just optimizing how we sell more carbon, optimize more ethanol. Optimizing more ethanol makes more CO2. It makes more protein.

It’s easier to understand what we’re trying to achieve here on this site. You did good by buying this site and by bringing in the carbon expertise on how to monetize sites. We are not a company that needs to raise money anytime soon from an operations standpoint. We have $127 million of cash equivalent on the balance sheet. We’re in pretty good shape. We like that. That’s an important point. As one looks at it, people say, gosh, it’s going to take you a long time to get an ATJ plant. You know what? We can be profitable without an ATJ plant. Get out of it. Get over it. We’re going to go build this ATJ plant. We’re going to lots of them. It’s a question of how we do it, but we don’t have to live and die by that sword. That’s a good place to be.

Now remember, we’re a company with hundreds of patents, huge amount of technology, fully designed plant, and we’re out to get that thing financed and built. That is our main growth platform is ATJ. I’ll tell you that story now. Fundamentals, first of all, this is information from the Energy Information Agency. U.S. jet fuel demand is increasing. In fact, it’s increasing all around the world. The demand for gasoline products is decreasing generally. Refineries are shutting down in the U.S. In a barrel of oil, there’s only 9% of jet fuel. The question is, where is the rest of the jet fuel going to come from in the future? What’s going to be the shortfall? How do you fill it? In 2035, it’ll be 2.3, 2.4 billion gallons a year of a shortfall.

The only alternative is going to be to import that. There will be some adjustments that refineries can do, but you can’t turn diesel fuel into jet fuel. It doesn’t work. It’s going to be sharp. This is actually the reason people want to see SAF, renewable jet fuel, be commercialized. Without it, absolutely, the price is going up for them. Our jet, this chart is a scatter chart of oil price versus jet fuel price. On the lower left, you see us overlapping heavily with the blue dots. That’s the cash cost of production of our stuff. It’s competitive with jet fuel. You know what that means? We can actually deliver a product on the same basis, assuming my plant was paid for, as that petrochemical company. Same basis, even though ours is made for renewable and has a zero carbon footprint. That’s pretty cool.

Which do you think people would buy if those two things are available? The challenge, of course, is that we have to pay off new capital. That’s the reality. Theirs is paid off. We have to pay for it. That’s what all those co-product values come and do. Those tax credits can help us. That’s how that works. It’s pretty interesting. Half thought is up to the right, and power and liquids thing is even off the chart. There are all kinds of technical reasons for it. If anyone ever wants to know, get me. I’ll tell you about it. Why that one is economically challenged. It’s about the use of energy. If one of these builds that ATJ plant up in North Dakota, adjacent and connected to our plant, we’d expect to add about $150 million of uplift to that site. $150 million of EBITDA uplift to that site.

Based upon the contracts we currently have in place, where we’re selling jet fuel as jet fuel, nothing’s done. It’s just jet fuel going to the market, and we sell the carbon to that same channel that passed the airlines. You hear what I said? We’re separating the carbon value from the jet value. The airline buys jet. The person who actually cares about carbon downstream, the buyer of airline seats, buys carbon. That’s incredibly important. Rather than trying to jam it all into the airline, make it where they can’t afford anything. Very important point. Okay? That’s what it looks like. That’s pretty exciting. That 2.3 billion gallons, if you’re doing simple math, we did 30 million gallon plants. That requires 70 new plants by 2035. That sounds like a lot of plants. Could we do that? Yeah, 70 is a lot. You know what?

That’s a targetable environment to deploy. These little markers are representing the 180 ethanol plants in the U.S. Lots and lots of opportunity. Let’s go back here and point out, for each site, it generates about $100 million of EBITDA outside of our boundary, or $30 million of regional impact, 400 to 600 jobs. It’s important for rural economic development. Remember, ethanol demand is predicted to be flat or declining. Corn production without increasing land is increasing. We’re going to be a billion bushels more corn produced this year than people expected. What happens? What do you do? You’ve got to find new uses. Energy security is a huge issue. The Trump administration wants energy security, wants economical hydrocarbon products. Guess what? We check all the boxes. That’s what we do. It’s pretty interesting. We can evade carbon too and satisfy that need for the marketplace.

A little bit different game. The executive order does specifically mention ethanol in the aviation field. That’s still different. What we’re doing over here, our puzzle pieces are saying you have to actually know a lot. You have to know how to do agriculture and processing and sell protein and sell to animals, sell, do the chemistry. You have to sell carbon. You have to sequester carbon. It’s actually a lot. When people ask, why don’t those big oil companies do it? They don’t have agriculture. Why don’t the agriculture companies do it? They don’t know how to do hydrocarbons. We do. This is what we’ve done for the last, me, 30 years. Now we’re at a point where the market seems to care about it. We can finally pin down the value in the marketplace and get on it. For instance, we’ll build ATJ plants. It’s a targetable environment.

We use, we’re going to call it Project North Star up there in North Dakota. Get that thing optimized, get it, get you improved the cash flow, and then we’ll build an ATJ plant, ATJ 30, and then we’ll cut and paste them. Now we’re going to have to build these things differently than doing a stick-built project finance. I don’t believe in that model. I don’t like that model. I think it makes everybody rich but us. What we’re going to do is build it in a factory in modules. We’re going to make modules in a factory, okay? Truck-sized modules that these modules can then be tested, validated, proven that they work. It de-risks them from an execution standpoint. The wells are, you know they work. We know the electronics work. We can put them on a ship.

In this case, we’ll ship them to Duluth, Minnesota, put them on a truck, and drive them over to North Dakota. That’ll sell them like Legos with more regional builders rather than having some giant lump sum turnkey EPC project. They’re doing that. That puts all the money in the EPC project guy’s hands, right? If we’re doing them in a factory, guess what? It’s a freaking factory. We can build more than one plant at once if we want. Our key task then is to continue to generate the cash flow, improve the cash flow up there in North Dakota, Project North Star, and expand capacity, expand, learn how to sell more carbon, learn how to sequester more. Carbon is important for enhanced oil recovery as well. There’s a demand up in the bucket for that. Cool.

We’re going to go figure that out too, because I don’t care who buys my CO2 as long as I get paid for it. I don’t care where it goes, right? All I care is what we make more money.

Unidentified speaker: You’ll lower it to what?

Sean Severson, CEO and founder, Water Tower Research: I have no idea how that’ll work, how they’ll account for it. We’ll do it as just a transfer. If you want to buy my tons, pay me.

Unidentified speaker: Okay, sounds good.

Sean Severson, CEO and founder, Water Tower Research: You get more oil out of it.

Unidentified speaker: Yeah.

Sean Severson, CEO and founder, Water Tower Research: Yeah.

Unidentified speaker: I don’t know that.

All right. Joseph, when you want to build these ATJ plant designs, do you consider whether to put them off in these areas?

Sean Severson, CEO and founder, Water Tower Research: No, we don’t need to, because it’s just a drop-in fuel. Put it in the rail car and ship it to wherever. There’s a limit to a number of trips. These are true drop-ins. That’s one of the things about when I’m talking about hydrocarbons, literally drop-in products. It’s not a surprise. Techniques we’re using. Jet fuel is made this way in the petrochemical industry from old. It’s no surprise that it’s going to be straightforward. People talk about it as magic. This is one of the things that gets on my nerves in our industry. Ooh, I got the greatest special sauce. I call it bullshit. Sorry. It’s not. You can’t do things that are big with all this foofy stuff. It’s got to be stuff that’s tried and true and proven. That’s where we land. We just happen to have a, I don’t know, pragmatic point of view.

I’ll add it to the work. No kidding, what we’re going to do: grow our EBITDA, deploy the first plant, and that really comes down to how we’re going to finance that plant. That’s what it really is going to come down to. How do we make it reproducible? I’m not interested in being a one-trip pony. One plant, and that’s all we do. That’d be serious underachieving. That’s not what we want. Got to have a reproducible model to be deployed over and over and over again. That requires both the execution of how you build plants, but then the financing of those plants. That’s the topics all around the world. We do have projects around the world. We just don’t talk about them. Now, I could take questions.

Unidentified speaker: Just one question, Pat. If you look at the businesses that exist today and are now generating cash, if you unpack this a little bit for investors, you got the cash-generating businesses. Talk a little bit about those in the bar chart. What is the opportunity to develop and grow those? How should investors think about those, the R&D, the ethanol, the carbon, and then we can touch a bit on the SaaS.

Sean Severson, CEO and founder, Water Tower Research: Yeah, so what we’ll be doing is, remember we just took over this plant. The previous owners of the plant didn’t, that wasn’t in their wheelhouse to monetize carbon value. We come along, it’s an uplift of $60 million. Okay? That’s the time to do that. It was a non-trivial thing to do because you’ve got to get it all audited, validated, certified by people, and then insured. That’s what we did. That’s why other people haven’t done it yet. We’ve been the first to do this. We see that growing, and that’s pretty much certainty about how the system works by increasing the ethanol production incrementally and by how carbon exposure is calculated by the vehicle built. We see that. The next one, first just starting at the bottom of the chart of the things that are blue. The next one is about the CDRs.

That market is interesting because people have never been offered something where it’s like, look, there’s a meter. You can watch the tons go down the hole. It’s unequivocal. It’s not somebody planted a tree somewhere, and I hope it’s good. It went down the hole. It’s a carbon removal credit. So it’s a gold standard. That’s why Carolyn Romero certified it. That’s why NASDAQ bought it. That’s why. Yeah, it’s not pushing all around you, I’m not even going to deny it.

Unidentified speaker: I understand.

Sean Severson, CEO and founder, Water Tower Research: You have to push everybody. I’m sure you covered every single person.

Unidentified speaker: Did you guys, you know, anyone that asked about me changing the name?

Sean Severson, CEO and founder, Water Tower Research: Yeah.

Unidentified speaker: Okay.

Sean Severson, CEO and founder, Water Tower Research: I’ll leave that up to you guys.

Unidentified speaker: We will make it clear that we’re still trading under Gevo and GEVO. We are undergoing a transition to the new name.

Sean Severson, CEO and founder, Water Tower Research: I still use the company description that I have too.

Unidentified speaker: Which one did you choose?

Sean Severson, CEO and founder, Water Tower Research: Yeah, let me make sure that’s.

Unidentified speaker: Yes, that’s fine.

Sean Severson, CEO and founder, Water Tower Research: That’s okay?

Unidentified speaker: Yeah.

Sean Severson, CEO and founder, Water Tower Research: If I look.

Unidentified speaker: It’s a very short one. Yeah, it’s for him to announce.

Sean Severson, CEO and founder, Water Tower Research: Yeah, this one is.

Unidentified speaker: Okay.

Sean Severson, CEO and founder, Water Tower Research: I have a few questions, but I’ll jump in. Let’s just run with anything that comes up, yeah?

Unidentified speaker: Yeah, those ones we submitted.

Sean Severson, CEO and founder, Water Tower Research: Yeah.

Unidentified speaker: We like those ones.

Sean Severson, CEO and founder, Water Tower Research: Yeah, I love it.

Unidentified speaker: All right, thank you, everyone. We’re going to get started with the next.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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