Gevo, Inc. (GEVO) Earnings Call Transcript & Summary

Hello, and thank you, everyone, for joining us today. My name is Shawn Severson, Co-Founder and President, Water Tower Research and Head of Climate Tech and Sustainable Investing. On our ongoing series here, sustainable investing, we have Pat Gruber; and Paul Bloom, who is the recently added Chief Technology Officer. And so they're going to be covering the technology aspects of Gevo's business and the road map and a few of the topics that we'll get to. As a reminder, you can ask questions. bottom left hand corner, there's a box and you submit those. The questions will be submitted to myself and to Gevo. And as a reminder, this is also being recorded and available on demand. So with that, I'm going to go ahead and get things started. I want to start by introducing Paul Bloom and let him tell you a little bit about himself. So Paul, why don't you can talk about what brought you to Gevo?

Sure. Thanks, Shawn. Great to be here today. Great to be with Gevo. Again, I've been in the renewables space for about 20 years doing all kinds of things in renewable chemicals, renewable fuels, food and agriculture. And when I think about what brought me to Gevo, it's really a number of things. Obviously, Gevo has great technology, amazing people, a really great culture and a huge opportunity to grow potential product portfolio that's really will satisfy the needs of a number of things like the growing protein need to feed the world with proteins. and the increasing demand for renewable low-carbon fuels. So all those things are great. I think all that together, though, it was really the systems approach that Gevo is putting together to attempt -- to really cut down the greenhouse gas emissions That was the most exciting thing for me. I've worked on a lot of different products where you think about, okay, what can I do to decarbonize this product? And think about those inputs and what it's going to deliver. But -- and that's a great and worthy cause, but Gevo is really taking it to another level, right? It's a different scope. It's considering all the inputs, all the outputs to develop the concept in this very transparent way that is really unique. So that's what really grabbed my attention.

And just maybe a little background, where did you -- what your experience -- where it came from as well?

Yes, sure, Shawn. So I spent most of my career working for a great company, Archer Daniel's Midland Company. And a number of different roles. So I've been R&D groups, I ran the commercial chemicals business there for some time and then worked in some innovation roles as well.

Let's dig into a little bit more of what you specifically be focusing on at Gevo, what's your role. Obviously, you're coming into this only been there a short period of time what wasn't being done before that you're going to be doing, I guess, is what I'm trying to ask what the role entails and the objectives.

Yes. I'm not sure that wasn't being done before. I think it was definitely being done before. It's how can I help enhance it and brings more horsepower to the team. So I would break it down into 3 main things, right? As you may get from my first answer, what brought me here, it's really around that carbon accounting piece, right? So how do you get that carbon counting right? based it on solid science and provide a lot of transparency. So that's one. I'm a big believer in continuous technology improvement. So how do we have a continuous improvement in the technology portfolio that Gevo has and then really access new technologies that help us continue to enhance the Net Zero concept. So that will be a second thing. And then the third one is really starting to develop new opportunities for Gevo in the plant-based renewable chemicals arena And this goes hand-in-hand with the demands that are being placed on the circular economy, right? So you think about that, and it's just a big growth area for the company, and it's going to be an exciting space to develop.

Maybe take a step back and explain how -- where you fit in the carbon chain, let's call it, and then the products that can be made from that. I mean everybody and all investors were all familiar with noble jet fueling isooctane. But because that's where the demand has been now. But what are the things can you do or make starting with the process?

Right. So that's the great thing, right? Because we have got so much flexibility that we can target a lot of different materials. And when you think about the demand for renewable chemicals and materials. You think about how can we target some great drop in plant-based intermediates, just like we've targeted drop in replacements on the fuel side. So The intent is really to go after intermediates that can service the beverage and food packaging industry. So for packaging, models, things like that and make that renewable intermediates for things like tires and even products like Plexiglass and we could do this, we anticipate by thinking about that same net zero approach that we've described. And this is really big and exciting for me because when you think about those kind of things, and we've all seen more plexiglass screens and things like that in front of us with COVID times and all of that going on. And now applying that net zero approach as we anticipate, we can start to make these renewable intermediates that as you look through that plexiglass screen, just thinking about, at one point, that CO2 was in the atmosphere and we've sequestered it basically through the net-zero 1 process or the net zero process to basically put that into a material that we use that helps keep us safe. So I mean, those kind of things are just fascinating. We need to develop that. It's what we're going to be working on. And so we've done a lot of different targets. But it's a really exciting space as we think about that materials growth sector.

Yes. And I'll add that what it does is it leverages our -- we take a building block approach anyway. So when we build a fuel We're building our gasoline product or our jet products. So we're builders of molecules. And so when we have those building blocks If we just pointed them in a different direction, you get to a different market segment like Paul was just outlining. So it doesn't require new technology per se. The technology exists already. It's about developing the marketplace and customers and all the rest. and, of course, making sure that we've got that carbon counting under control.

That brings you back to my next question, actually, Pat, I want to go back to the Carbon County very interesting aspect of the business, a difficult 1 to obviously, to document and quantify many of these things. So Paul, I think that you mentioned that's part of what your function enrolls can be a focus on that. Could you Give us a little bit of color on what it is and why it's important because it's obviously at least that carbon value, which is a big part of the selling price.

Yes. Sure thing, Shawn. I mean -- and it is, it's a complicated scheme of putting things together and how the carbon goes in because you have to do -- you really do have to think about it from all the inputs and how this gets put together. It really starts with growers and what I would say, the regenerative agriculture practices. And what our hope is, is to really make sure that farmers get credit for the real soil carbon benefits that they're delivering all based on solid science, right? So those inputs really understanding that and making sure that we can get that right on the input side because that's what's going to be coming into our plans. Then it's also about trying to develop the Verity tracking program, which you may have heard a little bit about. And that's really where we can use blockchain to transparently track carbon and more importantly, track carbon reductions through the system. So it will be very exciting to work on developing that. And then I think everyone has heard a little bit about how we intend to capture and use fossil-free energy like wind and biogas throughout the complex. Again, we have to develop that, that we have to actually implement it and then we have to track it. And what this results in is that transparency that we can deliver and anticipate to have in the final products, but that's not just in the renewable low-carbon fuels, that's also in things like the high-protein animal nutrition products that will be coming out of the plant. And we talked about net zero, but the anticipated goal for this is not just net zero, but to push beyond that to go to basically net negative. So maybe that just gives you a few of the highlights of different areas that we'll be focusing on.

And that ends up being a product in and of itself, right? I mean this is like tracking the carbon chain and stuff. This is something you're developing internally to use for your own application, right? But is there -- is that something that any other products out there potential to expand that outside of Gevo?

Yes. I mean this -- I mean, the program is not just focused on Gevo, right? It could be a much broader platform that could be applied to carbon tracking across the board.

Yes. It's a little bit paradigm busting, So there are several people talking about how you're going to use blockchain to track fuels, and prove it. We already -- we've made prototype product -- prototype software. We did it with block size capital. That's our partner in -- they're from Germany. And you have to figure out how are you going to count the carbon on the farm really and verify it, document it, how you can do the mixing and matching of the various energies, then how you're going to lay it all transparent. We have a working prototype already. So Paul is right, this goes way beyond us, and we have to take a look at that carefully about how maybe we spin it out that might be something we have to do because our time frame for net-zero 1 is -- starts up in 2024. Our RNG project starts up next year, we could use the product there as well. But you know what? I got a feeling there's a whole bunch of other people who could probably benefit from this too, given the demands that people have about tracking carbon across the whole of these systems. Will everybody want to be as transparent as we are. That's a question that Paul has to go figure out. That's part of what the role is. He's going to be the key guy internally here, along with Tim Cesarek working on Verity tracking and make it all real.

And that goes back to a customer choice as well, for example, say, consumer company selling a consumer product may want to be able to say that their product is low carbon, right? I mean you see a little bit of green washing out there, but you see a lot of that happening. So this will be a way for them to actually document the carbon reduction that is in that product, right? So we -- they can use it to track their own supply chain, I guess, is what I'm getting at?

Yes, Shawn. I mean that's really the goal here, right? Because you need to make a real You need to make it so it can be documented and need to make it so it's transparent and auditable, right? Because those are all the key things that customers are looking for to make sure that when claims are put down, they -- we can stand behind those, right? So that's a key thing in this whole value chain.

So think about it this way. Please put a fine example on it, right? So if our Hydrocarbon fuels are net zero after they're burned. That means they left our gate at like minus 70 or so, okay? Negative at our gate. If those same to plexiglass or into polyester fibers clothing into durable -- car parts. You know what, is there anyone interested who really would like to have carbon negative stuff sequestered in their plexiglass or in their car, well, that's -- we're going to go test that question here. And that's a new paradigm for people. That isn't something people have given a whole lot of thought about because it didn't exist until we came along.

Let's talk a little bit about the plants in net zero. Is there any plans or can you go above the 45 million-gallon capacity, and especially if we're talking about some of these other potential products and applications. What are other technical issues to get bigger than that? Or is it really structured that are built in a cookie cutter fashion for expansion?

I think what we'll do initially is we're going to be focused on just keeping things consistent. I care about time lines a whole lot because, hey, man, we got to get these cash flow streams gone. So I want stuff pretty straightforward. Now The way that these materials and chemicals work is we can take side streams out and use those or we can add them into net-zero 2, net-zero 3. I'm looking -- I'm going to look over here on Tim sent me an update on the pipeline. The pipeline is getting way big. So it's way bigger than it had been before, which is really good. So we're talking about -- he had -- remember a few weeks ago, he talked about net-zero 6 even. You know what? Maybe. So it's -- we're going to have room to adopt these things. We got to do them quickly because that's what this game is all about is getting it's all deployed and making money from it. So we're going to have opportunities. We do want to mix in the chemicals because it's a huge opportunity, that's here, and we can do something about it. The big question will be, we know the money we make from making it into a hydrocarbon fuel, the question is, what's that profit look like if it goes into a chemical, do any -- does any one care? If it's very carbon-negative stuff carbon sequestered, CO2 captured and stored in a durable good. Does anyone care? We'll find out.

Paul, if you could go back to some of the co-products and particularly the corn feed as part of this. Can you just talk about how the co-products fit into the strategy. And last time when we when we had Lin, we were able to talk about some of the economics of the plant and the economics involved in getting the profitability and co-products were an important aspect of that. So maybe talk about a little bit about what that means and how it fits in the Gevo strategy?

Yes. Shawn, thanks. I mean, I think when we think about agriculture and co-products and corn feed is part of the strategy, right, it's really important to think also about over the years, the improvements in crop yields and agriculture productivity because it's been an amazing story, right? And a lot of times, people haven't told the story, the right way. And if you look at the USDA's website, you can find a lot of this great data that's available. And first and foremost, if you even look back to 1924, right? You can find the 99.6 million acres corn were planted in 1924. And fast forward to today or 2020, which was the last day that they've been reported, you've got about 91 million acres. So we're actually using less land today than we did in 1924 to grow corn. But on that same time, we need to think about what's the yield improvement that's been there for corn and just this goes kind of across the board. But in that same time frame, we went from 26 bushels per acre to 172 bushels per acre, right? So this is just phenomenal. And if you normalize that then to 1924 yields, That would be like agriculture creating the over 500 virtual acres from farm improvements, both on-farm practices paired with things like seed technology improvements. So the first thing is just this great improvement in ag productivity that's really allowed us to have this conversation and think about that. So That's one of the things that I think is just fantastic. And then I say, wow those improvements are huge. But okay, that just must mean that I've got a bigger tractor, I've got more fertilizer or all that kind of stuff. And then when I think about it, it's like -- but the USDA has also great data there that show that when you track the total factor productivity, what I talked about before on yield of corn, that's the -- that's a single factor productivity, but the total factor productivity for agriculture has gone up by about threefold improvement since 1948, while inputs have remained essentially the same. So it's real productivity that we're seeing. So now when you think about that, it's not just the core, it's not just the protein, it's not just the oil, but the part that we need to figure out, and Pat mentioned this, too, that we have to figure this out with verity and all the carbon tracking and scoring. But how much carbon can we actually sequester with the right farming practices and new advances in things like soil microbiome that you see? Because it's not just the corn grain yields have gone up, but the root mass has got bigger, the biomass has increased. So how much of that is going to play back into what agriculture can deliver for also carbon soil sequestration, things like that. We don't know. There's a number of studies that are ongoing right now. It's obviously a hot topic. So all those things are good. But it means that everything is moving in the right direction from the agriculture standpoint. And then when we think about the co-products and products, First and foremost, we're making protein to meet those demands. We're converting the starch residuals into things like hydrocarbon fuels. And then everything else, which is the great part of the net zero concept gets converted into energy, So we've got the biogas that's made off-site and on-site. We've got renewable electricity. So you put all that together, and again, That's that concept that some people say they're waste products, and no, that's not true, right? Because everything that's used to come up with the net zero concept.

Jumping back to getting to the farmer themselves, right? What -- I mean, do you -- are you working directly with farmers? Or is there an organization that you're working with jointly? I'm just trying to understand how this gets implemented in a real plan that then enables you to quantify this?

Well, I think there's a couple of things. One of the ones is that South Dakota uses really advanced in general now, they use really advanced techniques, lots of note or strip till farming. And I think that's almost 70% of the acres that are -- that -- where they grow corn, they use those techniques and those are the ones that are building up soil carbon and they have modern equipment, precision a culture and all the rest. It's one of the reasons we picked our net zero site up at like Preston. One of the things, though, the way to think about this is in a bigger picture is that the yields that we have in the U.S. are about 2x the rest of the world. You know what I'd like to see, everybody else have modern or cultural techniques available to them as well. There is no reason that they can't improve more on the same pieces of land. And this is one of these things that's lost in a lot of the discussions. It's about how do you -- we want to see those companies like think John Deere. You know what, John Deere go forth. And all the rest, the people who have seats go forth, get those out there and the other inputs that are required and let's go get productivity up. One of the other things that Paul mentioned that I'm just going to reiterate is that when we produce all this protein and oil, that offsets nearly 50% of the feedstock acquisition costs. In other words, that revenue from that offsets acquiring the corn in the first place for us. So it's a big deal. It's an important part of the business system for us.

Let's talk about some of the other, let's call them, competing technologies. I saw the other day, LanzaJet had a deal. And just trying to understand maybe you call it the competitive environment, but what's going on with other players in the space that are working towards renewable fuels?

Yes. I'll take that first, and then we'll kick it over to Paul here. But first, we like to see -- this problem is so freaking big, it's unbelievable. I was just looking at some data whereas if suppose we did all EVs from 2045 onward, and then we still got jets out to the future -- sorry, all EVs from 2035 onward, no combustion engine sold. Even then, it's several hundred billion gallons of hydrocarbon fuels required out to 2050. So this is such a freaking enormous problem, and in all solutions. LanzaTech, LanzaJet, good. They have -- they do a thing or the capture carbon monoxide, carbon dioxide, stuff like that. And you know what? We're all gamers for that, too. We produce concentrated carbonate oxide stream. We're going to be -- this is an uptake it over to Paul, and you can talk about it Paul because it's one of your things you've got to look at. But there's a variety of ways that we can capture carbon ourselves and lower our footprint even further. So Paul, do you want to go ahead and comment on it?

Yes, Pat. I mean there's everything from sequestration technology where we can capture that carbon. that is coming off of fermentations, then there's a lot of other really cool technology that's coming out where how do you combine renewable electricity with different types of electrolysis that you can not just convert that CO2 into other things, but you can convert it right into ethanol. So how can -- So Pat mentioned, we've got the concentrated CO2. What can you do with that? We need all the different types of form. This is a big, big issue. And so we need to check them out. We need to figure out which is going to be the best technology. We need to implement the best technologies. And so the nice thing about the net zero concept is that it doesn't preclude us from using the best technologies, how to mix and match these together to do the best bit.

So think of it this way. We have a big giant core production process that has integrated renewable energy. It's easy for us to add on stuff to it. And so we could add on capture of CO2 add on to it converting the CO2 into more hydrocarbon fuels or chemicals or whatever. One of the advantages that we have by doing what we're doing in comparison to these technologies is at a really fundamental level, is that if -- people talk about this as gas to liquids. Hydrocarbon -- or I mean CO2 to hydrocarbon liquids. And CO2 is in the atmosphere at what, 425 ppm. How the heck do you concentrate it? Well, that's what the agricultural process does. It concentrates CO2 through photosynthesis puts in the form of a carbohydrate, what are we doing? Take residual carbohydrates, we're taking a concentrated carbon stream that nature put together for us. Yes, during the fermentation, we produce a little CO2, we should capture it, make more money. So we're -- it's a big world out there, and we have an outstanding competitive position economically on a real fundamental level, These other things, hey, if they happen, they can add value to us too. I hope they're successful. And we're going to sure find out because we got renewable carbon with a really low carbon footprint going into it. And that's way better than say, burning some piece of plastic and trying to claim it is somehow sustainable or renewable. It's not. That's fossil-based carbon. It's easy to prove.

But where is the proprietary nature set? I mean we look at people who do RNG projects they can do WIN, they do solar understanding the renewable part of the value chain and the energy you're talking about. Where is really the proprietary nature that Gevo has relative to other technologies?

Well, it's hard to say relative to other technologies because when we're doing -- in the chemicals industry, you know what the end products are. So they're at the end, near the end, it's going to be some similar that's been out there before from the petrochemical years and years ago, decades ago, maybe. We have a patent portfolio that's enormous collectively with all the patents that we have and have in-licensed, it's 500 plus. So it's a pretty strong position. We also have a ton of know-how. These companies like us who work in all these water systems, and there are not that many where you cross over from a water system to an organic system or chemical production systems. There aren't that many. So it comes down to a large part of this is how do you set up and stage your business system. And that's what we've been focusing on. That's what Paul cited in the first place when you're asking them what it was a tracker about Gevo is that in order to be successful in this business, you can't just think about your own little portion of it and how you play. You got to think about the whole big thing and how to integrate. That takes a tremendous amount of know-how. Not who has that, not very many people. We -- why do we have it? Because we're trained at Cargill and we did this once before. So that's why we thought about it. We know we had a running head start on people.

I'm going to take -- we'll do one more question here, and then let's take some from the field from participants. But last one I'll leave you with is renewable natural gas RNG project. certainly some more near-term potential there than like that zero 1 in terms of producing revenue and cash flow. So maybe an update to get on that and thoughts there?

Yes, sure. The RNG, Lynn talked about it last week with us and it's making progress. There's a bond offering out there for $69 million that should close next week sometime, and it's going real well. And this is to do the financing. When that financing closes, we'll get money back from it because we were the developers. So that's all good. It's on track, looking great, and we should be breaking ground pretty soon on that. It should be fun. And of course, that production should start early next year and start to make real money for us by the end of next year.

All right. Thanks, Pat, and Paul, let me get a couple of questions here. There's a bunch on blockchain and carbon tracking. So I'm going to sort of combine those dozens of questions that we have on that to maybe get a little more color on that should be interested in hearing as well because the concept that's not super easily understood. So if you can maybe give the basic outline of that, it would be very helpful?

Sure. So here's our paradigm. And our problem is that we started thinking about blockchain as a technique to track carbon through our production process. We think that the world is headed this direction. So it's not that great of an insight that says, "Hey, gee, me, you should do that. So we started working on this over 1 year ago. It's an interesting thing. We had to prove that, in fact, we can pull the information off the plant sensors, I mean the production plant sensors, the instrumentation up from the cloud. Then we had to do the work of how do you certify farms? How do you track them? How do you put them into the system? Make it immutable and make sure that you can put all this stuff together? We have done that. It works. We're confident in it. We're going to refine it taming it in at zero. So remember what we're going to be doing here. We're going to take it in farmers. Each one of them might have done something a little bit different, right? We want to track that. We want it to come to our plant. We'll attach those inputs to their corn. Their corn gets processed. We want to keep track of it during the production process, and we might pool things. But then we'll also be mixing and matching energy. In any given day, maybe the wind is blowing hard so using more wind electricity and less biogas electricity maybe we're using less biogas and the boilers and more electricity. Anyway, we're going to want to pay attention to that and bundle it to optimize it because ultimately, we can get paid for it. We're doing this because we think it's the right thing to do and heck, we're going to make it transparent. Like we're not talking about what my vision is totally transparent, is lay it out there. Of course, it's going to give all of our competitors' heartburn because who the heck wants to lay out all the facts? Nobody. So we're going to go ahead and do that. That's what I want. And then it's going to be that we also see there's opportunities where some people want to pay more for products. They want the lowest carbon footprint stuff. We want -- they want -- might want it lower than their competitor. We could arrange that if we want. And so that's tracking comes into it. The other question I'm sure is on your list that you didn't ask yet, is that you're going to tokenize this stuff and what are you going to do about that? And the answer is, yes, we're not stupid. We're paying attention to that. Tokenization is one of those things that has potential. Gevo itself would have -- and that's a very complicated thing to do because of the SEC for Gevo itself to do a tokenization. However, if we spend a that's a possibility. And so that's not lost on us. Paul, is inherited this and have been working with Tim and I to get it done along with block size. And we see this as a tool that benefits the whole industry. And in fact, it goes beyond our industry into food production or anything else.

Did you have any thoughts coming in, Paul here when you're looking at this, I'm sure is one of the intriguing aspects. But I assume the industry is looking for some standardization, some way to do this because, obviously, other companies want to use this type of a product is accounting method, I should say. And is there Any other things you can add to that, Paul, in terms of where you saw this business earlier and where it's going?

Yes. Shawn, it's a great question. I think Pat really said it well, right, that I mean this is a big unmet need, right? How does this get done? How do you have the ability to audit something, how do you make it so transparent because that's going to be the whole key to success with this. And so that was the thing that was really captivating for me, not only was You've got all the Gevo technology putting together something for putting together something for net 0. But you've got this potential that really is beyond Gevo, that is this unmet need in the industry to put all this stuff together to aggregate data, to make it transparent to the consumers, to customers, to figure out what is the low carbon production process claims, right? That's a big area. So how do you substantiate claims. So I think it's just a fascinating development that we got to get right.

Yes. So imagine, if we're making a plastic, just suppose plastic is we're used making a building block that goes into plastics, the -- we track them, they're minus 70 , let's say, hypothetically. And that goes into the production process to make a bottle. like a soda bottle or pop bottle. Then what's that claim going to be in that bottle, it's kind of interesting because now you have a way of tracking the value rate straight through about what is its value at the consumer level and tracking it. And there's all kinds of things you can envision that are pretty interesting about how do you translate that to a consumer benefit. So we've got a lot of work to do here on the blockchain. Originally, we started off just simply as a sustainability tool at tracking tool. Think of it as a sustainability quality certificate, that's how we see it ourselves. And so we're working on it. And there's other pieces people who have tried some of this stuff too but If you've got to know -- and really willing to hang stuff out of the open and be transparent. So I think that's what sets us apart.

Let's move to again, consolidating a bunch of questions on international strategy, a from products to other locations, India, specifically, but what about other markets, international expansion, the net zeros. And again, corn being maybe the best commodity, how does that fit in?

Well, current is best commodity here in the U.S., it's not the best commodity in other places. That's clear. It all depends. So in Europe, it will be something different. One of the things that Paul has tasked with to work with Tim on is to figure out the isobutanol production that goes hand-in-hand with the Haltermann Carless deal that we announced to produce jet fuel in Germany for the German market. That shouldn't be lost on anybody. And so it's a question of how to do it. They don't have -- they have different rules there. than we have here in the states. So there's more flexibility on where one produces the isobutanol. You might want to comment on that, Paul. That's been a large part of your life is working in Europe.

Yes. So it's a great point, Pat, and it's one that's really important from a standpoint of making sure that you've got the right locally growing feedstocks that are going to match up with process that are used. And so that's the great thing about carbohydrates, right? Carbohydrates are going to be a ubiquitous feedstock anywhere in the world. And Gevo's process technology really leverages carbohydrates no matter what the source is. So that part, like Pat said, In Europe, it's going to be different from South America. It's going to be different from the U.S. So it's really about getting that right and putting together the right supply chain and the right feedstock to match up with the technology to give you the best output.

And then I think we'll see stuff in South America. It's a normal cast of characters. The pipeline -- remember how we're going about this. We're requiring take-or-pay contracts first, then we talk about how to fulfill them. We aren't trying to create a whole bunch of competitors that beat each other up in the marketplace, that would be stupid. And so what we're trying to do is do a very disciplined development of the market. As I mentioned, the pipeline has gotten bigger. This is good. It's in multiple parts of the world. This is good. Praj is plugging along, making progress. They're also working on their 2G stuff. I just talked to their CEO this morning, and he had some ideas for me, other opportunities. So the stuff is plugging ahead. A comment I think underneath this, though, Shawn, is this belief that investors have that licensing is somehow miraculous and makes a lot of money. I got news, you live in a pipe dream world. That happens once the marketplace is established and growing fast and the technology is being cookie cut, in which case then you can make a boatload of money from licensing. We're not at that stage. We're at the stage of building the first cookie That's net-zero 1. And then we're going to start cookie cutting. And then it's going to be interesting to see how the markets have grown and taken off and what the values are and as the confidence continues to build. There's going to be enormous numbers of licensing. In fact, I'm surprised we have licensing opportunities to the degree that we do in Europe already.

We'll take one last question here, a little bit past the half hour. What gives you the confidence, and this has got a couple of questions about this. The confidence from what you've done at Luverne that this can scale to a net zero plant of looking at 45 million gallons. And I think it's worth going back and talking about because it was a while ago since you kind of proved the production, right? That you can do it. So maybe as a reminder, go take a step back and roll off through that process that gives you that confidence.

Sure. So at Luverne, we built a fermenter and what we call the gift system. The gift system is integrated fermentation technology. It's a separation system for the isobutanol from the meter. It's an unusual piece of equipment, real simple in concept, It's ridiculous simple. People are stunned when they actually go and look at it because it's so dang simple. And what it does is it takes the isobutanol fermenter, collects it and then it condenses it and then it face separates into an isobutanol phase in a water phase. And that saves a lot of effort and money and it's counterintuitive in the course, it's patent that whole process area is. We proved it out at 1 million leader scale. So that's a net zero plant might be 3x bigger in for meter. That's all. And then we will have a lot more for It's a batch wise process on a retort end up taking on a retention as that gives you better biosecurity in case something is weird that happens along these ways, which sometimes that can happen in these biological plants. So you get better control of the process. So we like it a lot. And so we've already scaled up million leaders. We've done 9 different organisms scaled up. which we normally don't talk about that, but we're getting good at doing this from us to be able to do that. That's actually -- that requires biotechnology to be able to do that. So that's all kind of stuff that's proprietary to us, which sets us apart from others who've tried this and failed.

All right. That will do it for today. And again, thank you to all investors who signed on today and participated And I'll -- as a reminder, this will be on demand as well. And I'll turn it over to you, Pat and Paul for any closing remarks, and we'll end there.

Sure. I'll start off and Paul can finish. Yes. I'm glad to have Paul here. He's got a long experience of doing renewable resource-based chemicals. He's the guy who was at ADM. He's looked at gazillions of technologies. He's very familiar with the stuff that's been there, that people pitch to ADM. It's quite interesting. There aren't that many big solutions. We have a bunch of them here because we take this building block approach. We don't talk about it normally, but in fact, that's what we do. And I'm glad to have him. He brings a lot of expertise. He already knows the business from having been so skilled in this area, and so he hits the ground running and good. Blockchain, carbon counting, capturing more CO2 driving beyond net zero, Paul, I want way beyond net zero, I want negative fuels for the marketplace. That's what he's going to be focused on and, of course, improving the overall process and technology and taking a load off Chris Ryan, who've been managing some of the stuff.

Yes. Thanks, Pat. Those kind words, but I'd just say, look, it's great to be part of the Gevo team. It's an exciting time for this. Technology is great. And now it's about making things reality and get the stuff done. So like Pat said, a number of things that have to happen there, and it's a great time to be on this team. So very excited.

Great. Thank you, everyone.