Hello and good afternoon, ladies and gentlemen. Welcome to today's virtual non-deal roadshow. My name is Julia Perrin, a virtual event moderator here at Renmark Financial Communications. On behalf of our team, we'd like to thank everyone in Europe for joining us today for the presentation of Gevo, Inc., trading on the NASDAQ under the ticker symbol GEVO. Presenting today is Eric Frey, VP of Finance and Strategy. The presentation will last approximately 20 to 25 minutes and will be followed by a formal Q&A session for which you can participate in using the chat box on the top right-hand corner of your screen. With that, I will hand it over to Eric.
Great. Thank you, Julia. Thanks, everybody, for being here. As she mentioned, we're Gevo, stock ticker GEVO on the NASDAQ. We recently released our fourth quarter and whole 2024 financial results and our 10-K. Also, on March 7th, we put out a business update with a lot of details about what we expect in the year 2025. 2025 is a big year for us. We made a transformative acquisition that was closed at the end of January.
You won't see the impact of that acquisition in our 2024 results, but we have tried to be as detailed as we can be about what we think is going to happen in 2025 and what we're targeting and what the assumptions are and what the kind of sensitivities are around that. It's a big year for us, and I wanted to—we wanted to talk a little bit about that and also give our shareholders and possible new folks an opportunity to hear our story and ask us questions.
Let me hop right into it. I'll try to maybe take 15 or 20 minutes to give you an overview of our company and what we do, and then we'll leave the rest of the time for questions. Check out our IR website, on our website. We do have a list of past presentations, past podcasts, and virtual fireside chats like this that are available that are recorded that you can go look at for more information. I think the best place to start is with this corporate investor presentation and the business update that we released on March 7th. With that, I'll get started.
We think that we're pretty unique as public companies go. If you're familiar with the renewable energy space generally, whether it's wind, batteries, geothermal, solar, there's an enormous and growing demand for energy. In particular, there's an enormous and growing demand for energy that reduces greenhouse gas emissions. We're part of that overall industry. Within that industry, there's a subsector that produces drop-in fuels.
The same liquid, high-energy density hydrocarbons that work in a diesel truck or in a jet engine today, can you produce that, but from a method that comes from biomass that's sort of grow as you go instead of harvesting it from deep under the earth and then burning it and emitting greenhouse gases? Can you pull greenhouse gases out of the air by growing biomass in a sustainable way and then use that to make the same drop-in fuels?
That's what we're focused on. Within that, we focus on proven technologies. Gevo does have proprietary technologies and IP, but our core operations and our large projects, growth projects, focus on proven commercial technologies that have been shown to operate at scale that already exist. They may not have been put together in the way that we've designed them to give this result where you have a sustainable drop-in product, but the unit operations exist in the petrochemical industry.
That's something that's unique about us and a few other types of companies. The last thing on this, or the second to last piece on this pyramid here that makes us unique is we focus on the abundant feedstock of plant sugars as the starting point. The world has an abundance of plant sugars, and particularly the United States has an abundance of plant sugars.
You can certainly eat sugar, but we have a lot of sugar. You can also ferment it into ethanol, but we have a lot of ethanol. What Gevo is focused on is leveraging this enormous industry, this scalable, low-cost industry to make hydrocarbon fuels. You can use the same infrastructure, the same diesel or jet engines, and get the same performance and energy, but in a way that gets you to a net zero or even net negative carbon result.
That is what we are targeting. The last piece in the top of this pyramid that we think makes Gevo unique is this process actually gets you a result. It can get you a result that is net cost competitive with fossil oil. That is very surprising to a lot of people. Most of us usually think that there is a dilemma.
Something's either going to be lower carbon and more expensive, or it's fossil fuels, but it's cheap. Our goal is to break that dilemma and actually create an industry that can be net cost competitive with fossil oil. I can explain how we do that. We're a diversified company. We're diversified and integrated in that we have several pieces that all kind of tie together. Let me talk about what those pieces are.
Overall, the common thread is on the left side of this page, which is we start with things like non-food corn, non-human food corn. Most of the corn in the United States is grown for animal consumption. You can mill corn, and you can mill lots of other types of crops to produce protein, vegetable oil, and sugar.
You can use the sugar, and the protein ultimately goes into the food chain to make food and feed for animals, as well as vegetable oil. You can also use that sugar and ferment it into alcohol. Once you get a clean alcohol, now you can do chemistry at scale. Now you have taken sort of a mixture, a biomass mixture that maybe is more sustainable, but it is not clean from a chemistry perspective, from an industrial perspective.
Fermentation leverages nature, leverages microorganisms. They do a lot of work, those cells, to take that sugar and metabolize it and then give what to them is a waste product, but to us is a clean product, which is an alcohol. You can make sterile medical-grade alcohol. You can make food-grade alcohol. You can make fuel-grade alcohol.
Once you have that clean molecule from a chemistry perspective, now you can do scalable catalytic chemistry to make hydrocarbons. Hydrocarbons are basically chains of carbon atoms, and ethanol is basically two carbon atoms with an oxygen atom. That is the high-level idea that ties everything Gevo does together. Again, I said that we're a diversified company that's integrated.
We have four boxes on this slide that are sort of the four buckets of things that we do. This first box that says Gevo Fuels has two projects in it. The first project is Gevo North Dakota. We acquired, as I mentioned, an ethanol plant that has operating carbon capture in North Dakota, and we closed on that in January. That is a very unique asset with a lot of acres and pore space that is doing carbon capture.
Today, i n fact it's one of only a couple of ethanol plants in the world that has operating carbon capture. Ethanol is a great business to do carbon capture, if you have access to the right geology to do carbon capture, if you happen to have an ethanol plant that sits on top of the rock to do carbon capture. The reason for that is because the other product that comes off of fermentation is a very high-purity carbon dioxide stream.
It is a very cheap, low-cost target for carbon capture from an industrial process. In fact, those carbon atoms came from the atmosphere because the process starts with biomass, and plants through photosynthesis take carbon dioxide out of the atmosphere and fix it into molecules. We are doing biogenic carbon capture at 160,000 tons per year at that site. That is very transformative for us.
Like I said, you will not see that in our 2024 results because we just completed that in January. Those assets historically have done anywhere from $150 million-$200 million of revenue. Gevo historically, if you look at last year, we are kind of a $16 million-$18 million revenue company from these other businesses that I will talk about. This acquisition was a big transformative scale-up for us, and we are really excited about it.
The second piece in this Gevo Fuels bucket is our—we have a couple of alcohol-to-jet products. We call them ATJ projects. This is where if you make ethanol or a different type of alcohol, you can convert it, like I said, using chemistry to jet fuel and renewable diesel and naphtha too, but mostly jet fuel. When you do it this way, you get SAF, synthetic aviation fuel or sustainable aviation fuel.
Our flagship new build project in that bucket is what we call ATJ 60. We call it ATJ 60 because it's designed to produce about 60 million gallons of jet fuel, sustainable jet fuel per year. ATJ 60 is a greenfield project in South Dakota. We are working on—we're in the financing stage of that and the design stage. We've almost completed all the engineering and design spend that we plan to do on that plant.
That's a very important asset for us because it's an electrified plant design. Just as to make electric vehicles, you need a good engineering design. This is an electrified alcohol-to-jet plant that requires a good engineering design. That project has a commitment of $1.6 billion from the U.S. Department of Energy. It's conditional.
There are some things that we need to do over the course of this year to close on that commitment. Once it's funded, our intent is to start construction on that project. That's sort of a flagship new build project. That's a capital-intensive new build project that we're working on. The one I described earlier is an operating project. It's not making alcohol-to-jet, but it's making—it is doing carbon capture and making a low-carbon ethanol.
The second box that I'll jump to in the bottom right corner that says Gevo RNG, that is a business that we have in Iowa. We have partnerships with three dairy farms in Iowa. What's being done there is similar to some other private and public companies, which is you can use anaerobic digestion to capture the manure from dairy cows and capture the methane that comes off that manure.
You are doing two things. You avoid the greenhouse gas emissions of the fugitive methane emissions, and then you clean it up and you inject it into the local natural gas utility, and you displace a little bit of fossil fuel. We are producing about 400,000 million BTUs per year of gas, of renewable natural gas from that facility. Just a couple of days ago, we announced that we got our final carbon intensity score approved in California.
The carbon intensity score, there is a negative 339, and that is in units of the sort of standard units of grams of carbon dioxide equivalents per megajoule. That negative number, that big negative number means that by producing that fuel and using that fuel in compressed natural gas vehicles or other uses, you are actually taking more carbon dioxide or equivalents, methane, out of the atmosphere than you put into it.
We think that that's pretty cool. That business did generate positive EBITDA for us historically, and we expect a significant increase this year because we got that final score, also because there are certain tax credits that take effect this year. Those are two operating businesses. Switching gears a little bit, the bottom left corner that says Gevo Chem, Gevo does have a large patent portfolio. While we're building this, this is a new industry. Making alcohol-to-jet and making sustainable hydrocarbons is new.
Even if the technologies exist, the design, the business system is new. What that means is that when you take ethanol and make certain drop-in petrochemicals out of it, olefins, you can make a wide variety of molecules like polypropylene in addition to jet fuel. Gevo has designed improvements on these technologies, and we have a partnership with Axens and with LG Chem to commercialize those improvements and make a variety of fuels and products at—and this is a critical point—at scale and at low cost.
The goal is to make the same products that you get from fossil fuels, whether it's polypropylene or whether it's jet fuel, that can use the same infrastructure that we have. We do not have stranded infrastructure, stranded products, but in a way that reduces the carbon footprint even to net zero or lower than net zero and make it cost competitive with fossil fuel by leveraging nature, by leveraging the cheapest, most scalable solutions to take biomass and make alcohols and fuels out of it, which we think is fermentation.
The last piece in the upper right corner here—sorry, I've kind of gone out of order—but in the upper right corner, it says Verity. Gevo also has a wholly owned subsidiary called Verity. It's got its own website, its own board of advisors, its own employees. That is a software as a service business, actually. It seems really different from the rest of what Gevo does, but it all ties together.
The reason it's different is because, like I said, it's essentially a software startup business that Gevo built in-house that makes a software platform that does inventory management and carbon tracking from field to fuel. When I say field to fuel, that's really important because there's a long value chain in agriculture, in the agriculture economy, and in fuels and chemicals and in feed, animal feed.
If you want sustainability, if you want customers to know that they bought something that was more sustainable, maybe it used less fertilizer, or maybe it had better tillage practices that have less soil runoff, and maybe these things lead to a lower carbon footprint, the software is designed to allow the ethanol plant operator or the soybean crush plant operator, farmers and customers ultimately to have an immutable blockchain token that tracks this gallon came from this plant on this day using this amount of energy from these renewable or non-renewable resources, and it came from that farm that used that amount of fertilizer.
All that detail as cheaply and efficiently as possible can be tracked and then auditable. That's the important thing. We built this software system, and we started this for ourselves because if we're going to make sustainable aviation fuel or synthetic aviation fuel, we knew that our customers would want this if corporate customers claim on their ESG reports that they've reduced their greenhouse gas footprint because their employees flew, let's say, on a jet aircraft, and that jet aircraft came from our plant and our plant uses more wind power or uses more biogas.
They're going to want to know that they could audit that at any time if someone challenges them. We built this for ourselves initially. Now it's taken on a life of its own, where Verity has seven customers and growing, core customers and growing, five ethanol plants and two soybean crush plants. We have 200,000 acres under what we call our grower program.
That means that farmers are collaborating with us and partnering with us to share their data so that we can track it. Verity does not take title to the farmers' products or the ethanol plant's products or anybody else's products. We just provide the digital solution to make it as push button and as auditable and as secure as possible to measure, verify, and track that value chain.
That was—it takes a while to go through this page because, like I said, we are a diversified business. When you do sustainable products, you cannot just do one thing. You cannot just produce the product and not track it. You cannot just produce it and not have energy sources like renewable natural gas available to trim the carbon intensity.
You cannot just start to produce it today and build a new plant design, but not follow that up with technology improvements. All those things are really complementary and synergistic when you look at these four boxes of what we do, even though these look like different things at first glance. I said that I am going to go through—this is a bit of an eye chart, and there is some more detail in the appendix.
I will not go through this in detail. What you are seeing here is how we get to positive adjusted EBITDA. We have said that we are targeting positive adjusted EBITDA this year. These green bars essentially are showing you the growth in revenue and bottom line that we are expecting, that we are targeting this year. There are some ranges to that. We have not committed to a particular EBITDA target.
We think it could be very large or it could just be positive. That's why you see this last bar here goes about just below zero, kind of negative to a large positive number. That's a range. In the appendix, we have details on these ranges. The most important point here is that little to no additional capital is required to be spent by us, by Gevo, to achieve this. That's number one.
Number two, even if we exclude the growth project, ATJ 60, that's the one that requires a DOE loan that we're working on, and we're making good progress on that. Even if you exclude that, even if you push that into next year, we still have a good path to be EBITDA positive. That's why we made that—we put out that target.
We're well capitalized. This slide walks through some details of that, but I would just say that we ended last year with $259 million of cash, and about $70 million of that is restricted cash. We do have plans to refinance some tax-exempt green bonds that we have that are secured by that restricted cash at one of our assets and thereby free up that restricted cash.
The last thing in this section that I'll mention is we have a very experienced team. I feel really fortunate to work at Gevo because we all kind of have a unique set of experiences that really are uniquely well-suited for what we're doing. You can't just know the fuel industry and the hydrocarbon fuel industry. You can't just know the agriculture industry, and you can't just know regulatory and software and project financing.
You have to bring all those things together in one team under one roof. We're really fortunate that we've done that here. Some of the few companies that have done fermentation at scale and biofuels at scale are the experiences of our executive management team with a combined more than 180 years of relevant experience. Most of our senior executives who have worked in bio-based fuels and chemicals have commercialized new bio-based fuels and chemicals in the past. This isn't actually the first time that they've done that.
This section, I'll skip over briefly because I want to wrap up and get to Q&A. We have several slides in the market backdrop that go into a lot of detail. I'll let folks look at this on their own. Like I said, this corporate presentation is posted on our website. A couple of points I'll make. In the United States and globally, obviously, but in the United States too, the majority of adults in every state, and a big majority, think that global warming is happening.
Our view is that the demand to reduce greenhouse gases is not going away. Now, we have a philosophy that you need to do it economically and as cheaply and scalably as possible. In this bottom left chart, which again, I'll kind of let you look at, the X- axis is showing the price of fossil crude oil, and the Y- axis is showing the price of jet fuel. This scatter plot, these blue dots, they're showing that if the price of oil goes up, the price of jet fuel goes up. That's not surprising. This green box is for our ATJ projects, our targeted cash cost of production.
In other words, if we're operating, what's the marginal cost to produce a gallon of jet fuel? You'll see that this is the beginning of a new industry, but at that beginning, it's competitive with fossil fuel, actually. We do need extra value, a premium to that, to pay the capital cost to build something new. That's true. Once that capital has been paid for and once that return has been made, we think that the industry is not a forever subsidy industry.
We think that that's a good investment for policymakers, and we think it's a good investment for ultimately the end customers, the corporate customers that want to reduce fossil footprint. They're going to be paying for a premium to fossil fuel that's based on carbon abatement and the price of carbon.
That premium is what allows us to build the capital, to put the steel in the ground to build plants that allows us to build something where once it's built, like I said, this is the thing that surprises a lot of folks. Its cash cost of production is competitive with fossil fuel, actually. And that's because plant sugars are so abundant and fermentation is so efficient that you can do that effectively.
In the past, it just wasn't needed or emphasized. It wasn't really fully exploited because there wasn't a drive to reduce greenhouse gas emissions. Once there is a drive to reduce greenhouse gas emissions, we think that this industry can scale up and be complementary, actually, to the fossil fuel industry and reduce its greenhouse footprint over time. I won't go over these other slides, although there's some really interesting data that we've put together.
Some of it comes from a consulting report that we also put out called the Deep Dive a while ago. I think you'll still see that on our website, but if not, you'll see it in this slide presentation too. Let me go to our assets. Just real briefly, this slide gives you an overview of the North Dakota asset that I mentioned that has carbon capture. Like I said, this is a transformative acquisition. The thing I'll just point out here is this chart's showing you a consistent operating history. We like that. We don't plan to change anything about that. It doesn't require a lot of capital. It's already operating, like I said.
This 21 right here is an industry-leading carbon intensity. The industry average ethanol carbon intensity is something like anywhere from 50-70, depending on your assumptions. 21 is way below the industry average. The reason it's way below the industry average is because it's a very unique asset. It sits on top of a rock formation called the Broom Creek Formation, and it happens to sit on top of one of the thickest parts of that formation.
Back in 2022, the seismic and the engineering studies were done to drill a well and a monitoring well and start the process of carbon capture. Again, like I said, 160,000 tons a day. The fermentation process gives you that automatically. It gives you a 99% pure biogenic carbon dioxide stream that came from the atmosphere. This asset sits on top of good carbon capture geology. It's a very unique set of circumstances that we're really excited about. Like I said, it's already operating.
I won't go over this slide in detail. This gives some more details about the ATJ 60 project that I mentioned. That's our greenfield new build project in South Dakota. Like I said, what this 3D engineering design is showing you is what we believe is a critical asset for us that we've created, which is an electrified integrated plant design that reduces energy consumption where possible and uses renewable energy inputs wherever possible instead of fossil energy inputs.
That combined with existing technologies, it's the design plus existing technologies gives you the whole package, which is you start with biomass and plant sugars. You end up producing an enormous quantity of feed, ultimately for human consumption. You end up producing sugar, and then from making that sugar and getting a jet fuel, that can be a net zero or even negative carbon intensity jet fuel. That is what we're aiming to do in South Dakota.
Like I said, that's the one where we have a Department of Energy loan guarantee. It is not in construction yet. We're still working on all the things we need to get in place to disperse that loan, which we're targeting by the end of this year. I won't go into more details about Verity. I think maybe I'll save most of that for Q&A.
The last thing I wanted to mention is just this page. I won't go through the things on the left side of this page, but I did want to highlight the things on the right side of this page because it's something that I'm really proud of working at Gevo, and I think can be easily missed, which is that this is part of a circular agriculture rural economy that we think can be rejuvenated and participate in clean energy transition.
A lot of folks think that clean energy transition is about everyone buying a really expensive electric car and building fancy new technologies that are also really expensive. That's part of it, for sure. Another part of it is growing biomass on the Earth's surface that takes carbon out of the air and then using it wisely. Using it wisely means efficiently, scalably, making it cheap so that it's affordable for people, helping rural communities earn a living, and then using it to make things that make our lives better, making protein for human consumption and making fuels so we can drive trucks and fly aircraft.
One thing I'm really proud of is the quotes on the right side. These are snippets from letters of support that some folks have written in South Dakota. I'm sure they're impatient with us to actually get started in that plan in South Dakota. Like I said, we're working on it. They did write these letters of support about how we work with rural communities, with farmers to grow their community and make it better, cheaper, more sustainable. We are proud of that aspect of it. I think that's something that needs to be taken into account. I think I'll stop there. Maybe, Julia, we can go to Q&A.
Excellent. Thank you, Eric, for the presentation. As mentioned, we will start the Q&A. Your first question for today is, when do you realistically expect a decision on Summit's pipeline application in South Dakota? How long are you willing to wait for that decision?
I can't give an exact answer. I think what the questioner is referring to is in South Dakota, we have an agreement with a company called Summit, and they are building a carbon dioxide pipeline that connects to several plants, takes their carbon dioxide through a pipeline, and then pumps it down hole to do carbon capture. We have an agreement with them that when our plant is built, they'll build a spur of that pipeline to our plant and connect it to their main trunk line so that the carbon dioxide of our plant can go downhole.
We have alternative options because we can't control the exact timing of when their pipeline gets built and when our plant gets built. We have plans B and C, basically. Plans B and C involve one of putting carbon dioxide on a rail and railing it up to North Dakota. Okay? North Dakota is where we have our own carbon capture.
Another option that we have is our renewable natural gas asset that I mentioned. We could haul biogas, a relatively small volume of biogas because it's negative carbon, from our Iowa plants to the Lake Preston plant to just trim the carbon intensity of that. Now, the questioner is asking, when will we know? We have the same question. We'd like to know and have certainty. It's critical that we have certainty one way or another on the timing of that pipeline because it helps us in our financing.
That's what lenders, even the U.S. Department of Energy, want is they want to know before they lend, which is totally understandable. Recently, South Dakota passed a law that basically inhibits eminent domain for carbon dioxide pipelines specifically. That needs to be worked through.
There are folks that do not want to see eminent domain in South Dakota, which is understandable. There are a lot of folks that feel like this has the majority of landowner support in South Dakota for the folks that are actually on the path of the pipeline and that it will bring a lot of jobs and growth to the community. That is also understandable. Gevo, our position is we will benefit from the pipeline. We will benefit from certainty on the pipeline. The sooner we get that, the better. Our CEO has mentioned this a few times, and I will reiterate it. It is not our only growth project.
If we don't have good certainty or if the returns aren't what we need to see or want to see, and we see a better return in North Dakota where we have our own carbon capture already and we have our own ethanol, low carbon ethanol already, we could build a smaller plant there that just takes that ethanol that's there and converts it to jet fuel. We're already in process of the feasibility study actually to do that project.
We're just going to have to see. I would say that we don't—it's a little bit nuanced because the carbon capture in South Dakota we view as if we don't have it, it reduces the returns there by a couple of points. Not knowing also reduces certainty and makes it harder to lock in the financing.
At the same time, it's still possible that we could get it done without the carbon capture there. Like I said, we have plans B and C. It's a little bit of a nuanced story, and it's not totally in our control. Having said that, our target is to wrap up our DOE loan and get into construction. It's been a while, but we want to get into construction by the end of this year, early next. That's kind of our target on the DOE loan. We'll see. Like I said, we don't control that legal process.
Excellent. Thank you for elaborating on that, Eric. Moving on to your next question. Given the current stock price, do you expect to continue stock buybacks?
Yeah, that's a good question. We do not have immediate plans to do stock buybacks, but we did do stock buybacks last year when our share price was what we felt unreasonably and unsustainably low. I am kind of proud that we were right about that because we did some things that we had said we were going to do, and our share price reacted, and we were happy to see that. We felt that that was inevitable because we just felt that we were undervalued.
We think we are undervalued now. A ctually, i do not think folks—I do not think the market has fully maybe digested our acquisition and RNG and Verity yet. We will just need to earn our way into that by printing results and by executing like we have always done. I think that we definitely will be looking at share buybacks. We continually sort of evaluate that. It is a great question. Like I said, we haven't made definitive plans to do buybacks, but it's something that—it's a good point. If our share price is, in our view, kind of unreasonably low and we're well capitalized, we're going to look at that.
Excellent. Thank you for your insight on that. Moving on to your next question, a viewer's asking, "As I'm new to the story, could you provide a bit more insight to the process of making ATJ fuel? How long of a process is it from start to finish?"
Oh, yeah. Great question. I think it's not a long process from start to finish. If you're familiar with the ethanol industry, that's sort of like the first half of it. The ethanol industry, our ATJ process is no different basically in the first half, except you design it to be low carbon. Biomass comes in the door. In the U.S. Midwest, the cheapest, most abundant source for plant sugar and that kind of biomass is corn. You have a corn milling process where you make basically three products: vegetable oil, protein, and sugar.
The protein goes back mostly into the local ag economy. In some cases, to the same farmers who sold you the corn, they buy that for animal feed and then ultimately for human consumption. It provides us with the protein that we need in our diets. Corn oil, you rail. There are a lot of different uses for vegetable oil. The sugar, you put in a fermenter with microbes. The microbes eat the sugar, and they make two things that to them are just byproducts or even toxic products for them. It is a product for us, which is alcohol and carbon dioxide.
People have been doing this for thousands of years, basically. I mean, you can put sugar, starch. You can do it in your garage, right? You can make beer and other things. Depending on how pure you make the end product, you can make hand sanitizer, right, using these alcohol products and other specialty products depending on how pure you want it. You make those in batches, and you can make that continually throughout the year.
The second part of our alcohol-to- jet process is catalytic chemistry. Okay? That is where you're doing industrial scale chemical processing. What you need to do there is you're taking ethanol carbon atoms and an oxygen and using catalytic chemistry to get chains of—sorry, chains of carbon atoms like 12 to make C12 to make jet fuel. You can do that.
There's existing industrial processes that convert ethanol to ethylene, convert ethylene to ultimately to these other molecules. All those unit operations, they've never been put together in one plant design that's designed to be energy efficient where you integrate the hot part and the cold part of the processes to reduce the energy footprint and therefore the greenhouse gas footprint and to ultimately get a low carbon result.
Just to give you an example, Gevo has a unique demo plant in Minnesota that has two wind turbines that power the plant. Now, it's not very common in the U.S. Midwest to have wind turbines powering an ethanol plant. There's a lot of wind in the U.S. Midwest. It's just the U.S. Midwest doesn't have a lot of the demand, the sink to use renewable electricity, right, because there's not large populations.
Our plant, one of the things that it's designed to do is use electricity wherever possible. It will be connected to the grid, to the electric grid. It will always have power. We are also building 20 or so wind turbines. This is sort of using the natural resources that exist in that area. That area has wind resource. It's not being used. If you build a plant that uses electricity, now you have a reason to build the wind farm. It is a wind-powered ethanol plant. In some ways, you get a wind-powered burger because the animal feed goes to feed cattle and ultimately people.
You also get a wind-powered jet fuel. That is the overall process. It is continuous. It is batch processing on the ethanol side, continual processing on the catalytic chemistry side. These plants would continuously produce. It's designed to produce about 65 million gallons a year. It would be sort of producing more or less continually throughout the year absent turnarounds.
Excellent. Thank you for elaborating on that. Your next question, a viewer commented, "Given the growing demand for sustainable aviation fuel and the challenges associated with feedstock and financing, what are Gevo's primary strategies to scale up production and meet supply agreements such as those with Delta and British Airways while remaining cost-competitive and reducing carbon intensity?"
Yeah, that's a great question. Just to highlight the last part of that question, many of the world's major airlines have signed offtake agreements with Gevo. Gevo's produced alcohol-to- jet, and it's flown on aircraft in the past. We know that the demand is there. In fact, we stopped signing offtake contracts because we know that our production has to catch up with the demand. The demand for jet fuel is not going away. It's growing. In particular, the demand for SAF is not going away. That's growing.
Those relationships with airlines are really a huge opportunity for us to grow into them. How do we grow into them? The industry to date is producing a little bit of sustainable aviation fuel. The broad industry, some fossil oil and gas companies have done it. You take an existing crude oil refinery, and you can make some tweaks and bring in French fry grease and used cooking oil. You can make biofuels from that. That's sort of the low-hanging fruit. That low-hanging fruit has been picked for the most part.
The reason I say that is because there's only so much used cooking oil in the world, and most of it's spoken for, especially in the United States. Plant sugar is different. Plant sugar, first of all, it doesn't cannibalize that used cooking oil. It can coexist, number one.
Number two, it's extraordinarily abundant and cheap to grow. In fact, we probably eat too much sugar, right? That's why in the United States, not only do we have an enormous amount of sugar, but we also have a lot of ethanol. That ethanol will need a home over time as vehicles are electrified. On the supply side, on the demand side, we can see that the demand is big and growing.
On the supply side, our feedstock is targeting plant sugars that are very abundant, very cheap, efficient, do not require new land because we are already producing these sugars and producing this ethanol and a lot of ethanol that is made from that sugar. There is this big supply. How do you connect to this big demand? That is where we want to be in the middle. We want to break down the barriers to connect that supply and demand. The way you do it is with fermentation and with alcohol-to-jet technologies that actually exist.
There were some slides that I skipped, but a portion of the world's jet fuel today already uses our partner's technology. We partner with a company called Axens to license their catalytic chemistry that goes from ethanol- to- jet. Their technology is already in use today. In fact, they won a Nobel Prize for it some years ago. That's not new. What's new is connecting it all the way from the field and where the bushels are grown, using renewable power, using a wind-powered plant, and getting a net zero result. That is the new piece.
Excellent. Thank you for shedding light on that. Your next question is, "Are your existing offtake agreements indexed to oil prices, inflation, or other variables? How do they compare to traditional jet fuel pricing in terms of long-term margin protection?"
Yeah, great question. Our existing offtake agreements, most if not all, are filed actually with the SEC. They're in our filings. What you'll see is that those existing agreements, typically, each one is different. They're not all precisely the same. Typically, they're indexed to the price of crude oil with an adder. There will be some premium above crude oil. That's typically what you'll see.
However, we talked about this on our earnings call for the South Dakota plant because that's a project financing. Project financing means that that debt, that $1.6 billion that comes from the DOE, it's secured by a special purpose vehicle. It's secured by that asset. It's not recourse to Gevo. Okay? What that means is that you have to have margin protection, as the questioner alluded to, in your offtake contracts.
We've been working with our offtakers to make some tweaks to provide more margin protection to satisfy lenders and equity holders. We're making progress on that. You can tell we're making progress on that because we were able to get the conditional commitment from the DOE last year. We still have more work to do.
Excellent. Thank you for your comments on that, Eric. Your next question, a viewer asks, "In regards to the secured site in Nebraska, is that site a greenfield or brownfield project?"
Greenfield.
Excellent. Thank you for the clarification. Your next question is, a viewer commented, "I was wondering how HB1052 passing in SD will impact Net- Zero 1 and the DOE loan. Now that the pipeline might not get built in South Dakota, and if the DOE will not permit moving the project to ND, how will Gevo respond to that scenario?"
I think the questioner is actually referring to a law in South Dakota that I referred to earlier. I think we can skip that question because I sort of answered it in that previous question. They're just referring to the same situation that I talked about earlier with the Summit pipeline.
Excellent. We will skip that question. Your next question is, "When can we expect further guidance on 45Z?"
We have quite a bit of knowledge of 45Z, actually. There was a model released that allowed us to calculate our carbon intensity score in North Dakota. We released what that is. When I said that our carbon intensity was 21 in North Dakota, that's based on the 45Z model. We've had that validated by a third-party consulting firm. You should see in the coming months, in the coming quarter or two, more updates from Gevo about how we intend to monetize the 45Z. We don't expect to have to wait until the year 2026 or until things are 100% certain.
We think that right now we have sufficient information over the next coming kind of months, quarter or two, that you'll start to see sales from us, actually. I think that may surprise people, but that is actually what we're targeting and where we're headed. Look out for those announcements. We're actually targeting anywhere from $30 million-$40 million per year for the next three years of gross value just for the 45Z for North Dakota alone. It's a large amount because that asset is so efficient at reducing carbon intensity because of the carbon capture.
Excellent. Thank you for your comments on that, Eric. Your next question is, "In the worst-case scenario where the pipeline doesn't get built, what happens? Will Net- Zero North be converted for SAF production? If yes, how much capital would be needed to retrofit the facility for SAF production?"
Yeah, that's a great question. Let me talk about Gevo North Dakota. In South Dakota, we call it the ATJ 60 project. You can scale that down by about half, and then we call it the ATJ 30 project. That would be a bolt-on in North Dakota. We're in the feasibility stage to see what the engineering would look like. Essentially, leveraging the plant design that we did in South Dakota, you have in North Dakota, we have in North Dakota operating ethanol and carbon capture. You don't need to build the ethanol plant.
You just need to build the part that takes ethanol and makes jet fuel. We are in a feasibility study doing that. I think one of the slides I showed shows that there's a lot of acreage at that site. The plant doesn't occupy the whole footprint of the acreage that we control. There's a lot of existing carbon capture as well as pore space to do more carbon capture.
All the ingredients are right to do an alcohol-to-jet plant, a smaller scale brownfield alcohol-to-jet plant in North Dakota compared to the larger scale greenfield alcohol-to-jet plant in South Dakota. That's one of the reasons why we acquired the plant in North Dakota, is actually it was strategic for us that it enables another growth project. Now, that project would require more capital because we'd have to build it. We're looking at how much that would be. It would obviously be a lot less than ATJ 60. We haven't made final decisions, but we would probably do it in some other financing structure rather than a DOE loan for that one. We'll see.
Excellent. Thank you for your response. Moving on to your next question, a viewer asks, "Has early adoption of this approach to renewable energy reached its end? When do you expect to see a wider adoption, more significant increase in production/sales?"
I think the answer is no. That's because even folks who, first of all, I think the world burning fossil fuels produces greenhouse gases. There's just no way to get around it. Greenhouse gases are increasing. Most Americans believe that climate change is happening. That's number one. Number two, even putting that aside, the world is growing, and more energy consumption lifts people's standard of living. The whole world wants access to the same standard of living that we have. Those of us who are fortunate to live in industrialized countries and even people who are in industrialized countries want to continue.
They want the next generation to have access to energy that doesn't pollute, energy that's abundant and cheap, that's safe so that the next generation can enjoy what we enjoy. Even if you just believe in growth, we need more energy. When you have wind resource in the Midwest, when you have methane being emitted in the Midwest, in the U.S. Midwest by manure, these are energy resources.
I think those communities want more investment to efficiently and scalably use those resources. Just like if you had fossil fuels on your property, if you had an oil reserve under your property, you want someone to come drill it and use it. Otherwise, it's not doing anybody any good. Same idea here. There are wind resources. There are biogas resources. There are carbon capture geologic resources.
In the U.S. Midwest and in lots of places around the world, there's an abundance of high-yield plant sugars. We typically grow corn for the protein, and people need protein in their diets. We have to have protein in our diets because we can't just produce the protein that we need. It also produces sugar. The American Heart Association had a report that maybe we should post to our website that talks about how Americans and lots of folks around the world have just too much sugar.
Companies are putting the sugar in our food against our will in some cases. What the U.S. has done is taken some of that sugar and fermented it to make ethanol. Now we blend ethanol in our vehicles. These are things that just have to be done, I think, no matter what your beliefs are about sustainability and climate change, even if you just think that energy is important. It is part of an all-of-the-above energy strategy.
In fact, even the Trump administration had an executive order in January that said declaring an energy emergency. In that executive order, it called out biofuels, ethanol, and aviation fuel as something that the U.S. needs more of. We think that there is no end in sight to the need for sustainable drop-in fuels. Energy broadly, but particularly sustainable drop-in fuels.
Excellent. Thank you for shedding light on that. Your next question, a viewer is asking, "Is isobutanol production still an important part of Gevo's strategy?"
I do not have a lot of comments to share on that. Right now, I think the high-level thing I would say about that is Gevo has its own patented technology to make isobutanol. Isobutanol is a four-carbon alcohol instead of a two-carbon alcohol like ethanol. That's really interesting for a variety of reasons. Two elements that I should point out about that is when Gevo decided to build the big project in South Dakota, the ATJ 60 project, the world really wanted sustainable aviation fuel, jet fuel in particular.
The world of project financing wants proven technologies. We made a choice, which we think was the right choice, which was to use ethanol- to- jet because that method is, number one, a proven technology. Ethanol, there's 180 operating ethanol plants, so no one thinks that you can't produce ethanol. Two, it's really good at making a high yield of jet fuel. That was the technology that was chosen for the ATJ 60 project. In the meantime, the isobutanol was put a little bit on the back burner.
I'm not saying we turned it off, but it's on the low heat back burner compared to that project. We've been focused on these larger-scale alcohol to jet projects that use the ethanol- to- jet pathway. We have our own technologies to improve those pathways with Axens. Meanwhile, isobutanol has kind of been over here. In addition to that, I should mention that we do have an agreement with a counterparty to produce racing fuels. For racing fuels, you need different molecules. You don't need jet fuel. You need octane. How do you make a low-carbon bio-based octane?
There are a couple of sort of projects that Gevo has that are separate and apart from the project in South Dakota. That project does not, right now, use the isobutanol technology. It uses ethanol- to- jet because, like I said, it's more financeable because there's 180 operating ethanol plants in the U.S.
Excellent. Thank you for your answer, Eric. Moving on to your next question, a viewer asks. My apologies. A viewer asks, "Please clarify the anticipated EBITDA for 2025 on a quarter-by-quarter basis. What do you expect the year-end 2025 net cash position to be? How will Gevo avoid the need for a dilutive raise of capital?'"
We have been trying really hard to release guidance and expectations that we think we can achieve and that are realistic in terms of what we know and not so precise that we're going to miss it. That's what we've tried to do. Last year, we said we'd do a couple of things. We said we would spend a certain amount of money on the South Dakota project. We said we'd get first revenue at Verity. We said we'd get our final carbon intensity score at RNG and that we would make progress on our alcohol to jet projects.
We did all those things. We've done all those things over the past sort of 12 to 15 months. Right now, what we're saying is we have a plan in 2025 to get to run-rate positive EBITDA. What you're seeing in the slide presentation is a range, several pieces that don't require a lot of capital, actually, this year. They just require execution commercially and in a regulatory way. That gets us there.
Now, there's some big ranges there, and we haven't provided the detail of how each quarter will look. We don't plan to provide that detail because we intend to get more precise and more detailed as we go. Remember, we just completed the acquisition of North Dakota at the end of January. As we see those results, we'll get more and more precise each quarter and each year about what our expectations are. We want to grow into that so that we create a track record of promises made, promises kept, if that makes sense.
Excellent. Thank you for elaborating on that, Eric. Due to the essence of time, I will ask you two more questions. Your next question is, a viewer commented, "Tell us more about Gevo North Dakota's growth prospects. How much would it cost to retrofit the plant with a Gevo modular design? What is the timeframe to complete the retrofit from start to finish? When Gevo ND is converted to an SAF plant, what is the plant size Gevo is targeting for this site? Example, 60, 120, 180 million gallons per year?
Yeah. To answer the last question first, we would target 30 million gallons a year of hydrocarbons. Okay? That's starting with about 67 million gallons a year of ethanol that's being made there today. To answer the other questions, the immediate growth is from targeting the low-carbon fuel standard markets like California, Oregon, Washington, British Columbia, and earning the 45Z tax credit that takes effect this year. Like I said, that tax credit alone is worth an incremental $30-40 million based on our estimated carbon intensity score. That's pretty significant. That doesn't require any capital or any engineering at all.
In terms of what's the growth after that, we have some ideas about how to unlock more carbon dioxide. Right now, the well is sequestering 160,000 tons of CO2 per year. It is permitted to go up to 180,000 tons per year. There may be some tweaks we can make to make more carbon dioxide. In the longer term, we are in the feasibility studies to do an alcohol to jet plant there that we call ATJ 30. It would be 30 million gallons of jet fuel design.
Excellent. Thank you, Eric. Your last question for today is, "What is Eric's preferred feedstock?"
I don't know. Coffee?
Excellent. I will ask one more in that case. Last question is, "Will you be increasing or reducing the labor force at Red Trail?"
We have the same labor force at Red Trail. I don't think we don't really plan to increase it. There are a couple of people that we had in-house that are now assigned to Red Trail full-time. I guess from that perspective, we slightly increased it. The functions that you've already had, government relations, community relations, sustainability, it does take people who know this kind of stuff to make sure that you're qualified for RINs and that you qualify for the British Columbia path carbon intensity score, the California carbon intensity score.
Those resources that Gevo already had, and Verity, by the way, Verity is another great example, Verity Tracking, we're deploying that at Gevo North Dakota. That software is going to be used at Gevo North Dakota. Those are all resources that we've added as sort of like ancillary to North Dakota. The staff, the people are great.
They've done an excellent job. They're pioneers in the industry. Our goal one when we acquired the asset was do no harm. We want the employees to be safe. We want the employees to keep doing the great job they're doing and then grow it over time. I should mention the farmers too, the community that lives in that area. We had a great event with them where our CEO and our COO spoke to them. That's important too. It's the plant employees, but also remember that plant is buying corn from the community, from farmers in that area. We want to be a good steward of the asset and a good neighbor.
Excellent. Thank you, Eric, for answering all of our questions today. Thank you to our viewers for submitting your questions. If you do not get a chance to submit your question, feel free to reach out to the appropriate account manager here at Renmark. This concludes our presentation for today. Before we go, I will turn it back over to you, Eric, for final remarks.
Great. Thank you so much. Thanks to the Renmark team for putting this together. I just remind you, our stock ticker is GEVO. I think that we're a pretty unique public company. I do not think that there are many public companies that give the same exposure to renewable energy and clean energy, but also to something that we think appeals to folks across the political spectrum, across the business spectrum.
That is not reliant on new technologies succeeding or failing. It is really reliant on the business case and making things that are both low carbon and also sensible. It's sensible to us to use wind in a place that's windy. It's sensible to us to do carbon capture in a place that has a really good thick rock formation right under it to do carbon capture.
It's sensible to use plant sugars when they grow in such abundance in the U.S. Midwest and cooperate with rural communities so that they can participate in clean energy transition and in growing energy. We think that we're doing things that are sensible, that make sense, that make people's lives better, both in the short term and long term. Like I said, this is a transformative year for Gevo. A lot has changed. Check out our March 7th business update and our corporate presentation on our website. It'll give you a lot more detail.
Thank you, Eric, for the presentation. Once again, this was Gevo, Inc. Trading on the NASDAQ under the ticker symbol GEVO. Thank you again to everyone in Europe for joining us today. The playback for this virtual non-deal roadshow will be available on our website 24 to 48 hours after the presentation under the VNDR library tab. Stay tuned for other presentations in your area. Thank you and see you next time.