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Gevo suspends ethanol production and pushes forward on project funding

US-based bioprocess- and renewable fuel developers Gevo, Inc. has announced that due to the impact the COVID-19 outbreak has on the economy and Gevo’s industry, it has suspended ethanol production operations at its facility in Luverne, Minnesota (MN) for the foreseeable future. In connection with the suspension of operations, the company has found it necessary to terminate 30 employees, cutting across Agri-Energy’s operations in Luverne and Gevo’s headquarters in Colorado (CO).

Gevo's commercial bio-based Isobutanol plant in Luverne, Minnesota (photo courtesy Gevo).

Due to the impact that the COVID-19 outbreak has on the economy and the ethanol industry, Gevo has suspended production operations at its facility in Luverne, Minnesota (MN) for the foreseeable future. In connection with the suspension of operations, the company has found it necessary to terminate 30 employees, cutting across Agri-Energy’s operations in Luverne and Gevo’s Colorado (CO) headquarters (photo courtesy Gevo).

The remaining employees that earn above a certain dollar threshold, including senior executives, have agreed to take a 20 percent salary reduction over the next three months, with the 20 percent portion to be paid in stock. With these steps, Gevo expects to save several million dollars of cash burn during 2020.

The COVID-19 impact on ethanol prices gives a clear view that in the near term we, unfortunately, needed to lay off employees. This was an extremely hard decision, but these steps will provide us with additional runway and optionality without losing focus on what makes Gevo unique, namely our technology and business systems, said Dr Patrick Gruber, CEO, Gevo.

Retain the focus on SAF

Gevo expects to continue the production of renewable isooctane and sustainable aviation fuel (SAF) from the plant in Silsbee, Texas (TX). Additionally, Gevo intends to continue developing its hydrocarbon business, including the planned expansion of the Luverne Facility and will continue to move forward in securing the project funding needed.

The expansion is designed to allow Gevo to produce large quantities of low carbon isobutanol, SAF, and renewable isooctane.

Gevo also expects to continue engineering efforts for the expansion of isobutanol production and the construction of a commercial renewable hydrocarbon production facility, as well as additional decarbonization projects at the Luverne Facility.

Furthermore, Gevo plans on continuing the development of its biogas projects in Northern Iowa, ensuring it is available for the plant expansion.

We are going all-in on pushing to secure the funds for the buildout of Luverne, and we expect a second site to produce the quantity of gallons we already have and expect to have under contract for delivery in the 2023/24 timeframe. Contract negotiations for large quantities of hydrocarbons are continuing to move forward. This tells us that customers are looking past the current market disruption to the future, where de-fossilized fuels would be in demand. We expect to soon announce the hiring of a strategic advisor investment bank that will help us raise money for our expansions at the project level, ended Dr Patrick Gruber.

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