In the United States (US), Gevo Inc., a leading developer of hydrocarbon fuels and chemicals with net-zero greenhouse gas (GHG) emissions, has announced that it has entered into a definitive agreement to sell Agri-Energy LLC, a wholly owned subsidiary of Gevo, to A.E. Innovation LLC (A.E.) for US$7 million.
According to a statement, the transaction includes Agri’s 18 million (US) gallon (≈ 68.1 million litre) per annum ethanol production facility located in Luverne, Minnesota (MN).
Gevo will retain ownership of certain isobutanol-production-related assets and a portion of the vacant land at the site for future use.
With these retained assets, Gevo could potentially produce up to 1 million gallons (≈3.8 million litres) per annum of isobutanol, which can be sold as a specialty chemical or converted into isooctane and jet fuel.
Restart ethanol production
A.E. Innovation is an agriculture-oriented buyer group located in Minnesota. The company will acquire the ethanol plant and a portion of the land with the intention of restarting ethanol production, which has been idle since 2022, and making the site available for other companies to scale up new technologies and ideas as an innovation hub.
We’re seeing rapid innovation in the direction of bio-based fuels and chemicals, and Agri-Energy has a demonstrated history that it can work on the cutting edge. We see Gevo and others making strides, and we know we’ll be a part of that. We are excited to host the next generation of biofuel innovations that need a friendly, practical place where they can scale them up. That’s Luverne, with its history of innovation, its low-carbon corn supply, wind power, and great people, said Dave Kolsrud, principal of A.E. Innovation.
Over the last several years, the Luverne plant, in conjunction with local farmers, has been used as a demonstration site for educating Gevo’s stakeholders about regenerative agriculture and the versatility of corn and its co-products, as well as biofuel production, including sustainable aviation fuel (SAF), isobutanol, and ethanol.
Gevo and A.E. look forward to continuing and expanding upon this valuable stakeholder outreach.
We see tremendous potential for future growth and new partnerships with A.E. Innovation. Minnesota’s farming communities, especially in places like Luverne, are leading the way with smart, sustainable agricultural practices. We believe it’s the perfect foundation for building innovative solutions in carbohydrate-based energy and chemicals that the world urgently needs, said Dr Patrick Gruber, CEO of Gevo.
Retain isobutanol capabilities
Gevo notes that the sale of Agri-Energy to A.E. Innovation provides US$2 million of cash upon closing and an additional US$5 million of future cash under the purchase agreement, along with an estimated annual savings of approximately US$3 million per year of current facility idling costs.
Gevo also anticipates potential future benefits from isobutanol fermentation through a side-by-side operational model with the ethanol assets.
Restarting ethanol production is expected to bring positive impacts to the City of Luverne, including support for local farmers and strengthening the regional economy.
Expected to close by the end of 2025, the transaction is subject to A.E. Innovation securing financing and the satisfaction of other customary closing conditions.
