Business
Gevo, Inc. Announces Sale of Approximately $20 Million of Investment Tax Credits Generated by the Gevo NW Iowa RNG Facility Under Inflation Reduction Act, Helping to Drive Further Investment in Clean Energy
ENGLEWOOD, Colo., Sept. 19, 2024 (GLOBE NEWSWIRE) -- Gevo, Inc. (NASDAQ: GEVO) is pleased to announce the sale of approximately $20 million in Investment Tax
About this update from Gevo, Inc.
[{"type":"text","content":"ENGLEWOOD, Colo., Sept. 19, 2024 (GLOBE NEWSWIRE) -- Gevo, Inc. (NASDAQ: GEVO) is pleased to announce the sale of approximately $20 million in Investment Tax Credits to an undisclosed corporate buyer. This transaction monetizes Inflation Reduction Act (“IRA”) Investment Tax Credits generated from the commercialization of a renewable natural gas (“RNG”) production facility by Gevo NW Iowa RNG, LLC (“Gevo RNG”) and provides net cash proceeds of approximately $17 million to Gevo after transaction fees. The Gevo RNG asset has been optimized to produce approximately 400,000 MMBtus of RNG per year, and Gevo expects to further increase production over time. Additional RNG value could be unlocked through the monetization of Section 45Z Clean Fuel Production Credits under the IRA, once those rules are defined. Gevo RNG generates RNG by collecting manure on dairy farms and placing it in anaerobic digesters installed on those farms, where biogas (also known as biomethane) is captured, then refined to replace fossil natural gas as a transportation fuel. Gevo’s commercial partner sells the RNG into California. Using an estimated carbon intensity score that incorporates the methane avoidance crediting aligned in the California Air Resources Board Low Carbon Fuel Standard, the RNG produced by the Gevo RNG facility is expected to yield upwards of 175,000 metric tons of carbon dioxide equivalent greenhouse gas emissions reductions annually. Gevo continues to explore increased scaling and margin expansion opportunities for its RNG business, and how to leverage it synergistically with its other lines of business. “We continue to seek out ways to unlock shareholder value from our operations,” said Dr. Pat Gruber, CEO of Gevo. “This is just one example of how our mission to optimize renewable energy and seek out efficiencies creates opportunities.” Net proceeds from the monetization of these tax credits improve Gevo’s liquidity, increase cash flow from operations, and improve the company’s ability to fund strategic sustainable aviation fuels (“SAF”) and other growth projects that deliver value to shareholders. The IRA has changed the way federal clean energy tax credits are monetized and has altered the way companies approach how they leverage investment and production tax credits for renewable energy projects. The IRA permits the buying and selling...