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

Hello, and good afternoon, ladies and gentlemen. Welcome to today's Virtual Non-Deal Roadshow. My name is Julia Perron, a virtual event moderator here at Renmark Financial Communications. On behalf of our team, we'd like to thank everyone in San Francisco and surrounding areas for joining us today for the presentation of Gevo, Inc., trading on the NASDAQ under the ticker symbol GEVO. Presenting today is Eric Frey, Vice President of Finance and Strategy. And with that, I will hand it over to Eric.

Thanks to the Renmark team for setting up this virtual fireside chat. We've been doing a number of these types of things since we had our 2Q results come out, which were really transformative for us. Actually, the acquisition we did earlier this year that closed at the end of January was transformative for our company and the second quarter of this year was the first time that we had a full three months of those results, and we plan to grow quite a bit from there. That's a big change from where we were a year ago. So we're a company that has a vision for the future of synthetic aviation fuel and the ingredients to make that future a reality are something that we've really leaped forward and made profitable in the past year. So that's what I'd like to talk about. As Julia mentioned, our ticker is GEVO, we trade on the NASDAQ. Check out our IR website for this presentation and a couple of others, too. I want to just mention briefly, there will be some forward-looking statements in this presentation. Please check out our risk factors in our public filings, our 10-Qs and our 10-Ks. And there's also non-GAAP reconciliations in the back of this presentation on our website as well as in our 2Q earnings release. We're a company that takes renewable resources, uses existing technologies to convert them into fuels and chemicals that are the same as the fossil-derived alternatives, but they come from renewable resources, and they can reduce carbon footprint. But they have the same performance, same molecule, the engine doesn't know the difference. It's one way to reduce carbon footprint across the value chain. The other way is to electrify things. The first thing you need to accomplish this is a team with a unique set of experiences across different industries because historically, agriculture and biomass has been one industry and hydrocarbon fuels has been related to fossil fuels, and so it's been a different industry. But we have a lot of crossover experience and a lot of experience generally, and that's really necessary. So our team comes from companies like Cargill and ADM, and they've been doing bio-based fuel and chemicals their whole careers. You need to know about -- to do -- to be successful what we do, you need to know about fermentation. So if anybody brews beer in their garage, you know something about fermentation. You also need to know about agriculture, but you also need to know about catalytic chemistry. You need to take a page out of the petrochemical industry and think about how do you convert one chemical to another and make drop-in products, and we have all that under one roof, which is pretty unique. So what do we do? We're a diversified renewable energy company. What does that mean? It means we're geared towards making cost-competitive hydrocarbon fuels, think about gasoline, diesel for a truck, jet fuel for an aircraft and chemicals to reduce carbon footprint across the whole lifecycle. So our belief is that you can reduce costs to reduce carbon footprint by making things that are scalable, that are abundant that are low cost to convert the biomass to these fuels and chemicals, and that don't require expensive changeovers in fleets. It's especially difficult to change heavy-duty vehicles to electric, and it's difficult to change aircraft to electric. But we make products that are the same molecules that co-mingle with fossil fuels. But because of what they're derived, it reduces the carbon intensity of the whole system. And we basically segment our business in these 4 components that you're seeing here. Here, I'm going to get my pointer. So this Gevo fuel box up here, that's where we have a profitable platform to make ethanol and low-carbon animal feed co-products as well as carbon capture and sequestration that's operating today. I'll talk more about that. We also have a synthetic aviation fuel platform. That's essentially the engineered designs to take ethanol and make jet fuel. Now historically, Gevo, we as a company, we've made jet fuel from alcohols. In fact, we were one of the first companies to make it. Airlines have used our alcohol-to-jet fuel. It's been certified, and it's flown on a number of aircraft. So we've already done this at pilot scale historically. What we're doing today is trying to make it big and repeatable because we think now we want to have a durable business and make world-scale plants that then you can make many of them. And the way to do that is the first thing you need is the ingredients. The ingredients in our case, are alcohols and carbon capture. So that's what we're making here. We've also got 500 acres up there to deploy alcohol-to-jet. I'll talk more about that in a minute. The other operating business that we have is this one down here, Gevo RNG. We have 3 dairy farm partners with thousands of cows. We take their manure and instead of allowing the methane to be fugitive greenhouse gas emissions, we capture that methane, clean it up and make a pipeline quality and then inject it into the local gas distribution pipeline, and that's a profitable business actually. It can make anywhere from $5 million to $15 million a year of EBITDA. This one is a profitable business, too, by the way, I'll talk more about that. We also have a wholly owned subsidiary called Verity. Verity is basically a software start-up that Gevo has stood up. It's sort of not really in stealth mode, but it's -- we haven't released a lot of information about it, but it's been years in the making and essentially, we have a team of people who are software engineers and who grew up on a farm or own a farm. So they know about software engineering and they know about farms and agriculture. And we're deploying software to this very complicated agriculture commodity supply chain because there are millions of fields and farmers, there's thousands of grain elevators; there's dozens, if not hundreds, of processing plants that make everything from soybean oil to biodiesel and renewable diesel. And if we want the end customer, the brand owners, the Amazons of the world and the Google of the world, if they want to pay for carbon offsets and carbon reduction, they need to know with an immutable token, okay, we use DLT technology, the same technology that underlies things like Bitcoin. They want to know that, that product that was used in that truck or engine at the end of the day came from a field that used less fertilizer, used cover crops, complied with Canada's Clean Fuel Regulation, all that stuff. And so to do that, spreadsheets are not adequate. So we build berry for ourselves because we know that we'll need it, but now we have several customers that want it to. So we think that's a highly scalable software business that we're looking forward to talking more about. And then the bottom right here, what we call GevoChem. That's where we have our R&D effort because making alcohols today at scale is cheap and scalable. Converting alcohols to hydrocarbons has been done at scale and can be cost-effective with fossil fuels. But there's -- we believe in continuous improvement. So the fossil fuel industry is mature, making bio-based molecules that are dropping to fossil fuels is not mature. We can keep improving it even after we deploy the first generation of plants. So we have partnerships with really world-class companies like LG Chem and Axens to keep improving those technologies. The goal is to drive cost down because if we want to change the world, people need to be excited about using the product. If we want people to be excited about using the product, it's got to be the same product that gives you the same energy density and performance as fossil fuels but is derived from a lower carbon source. That's what we believe. So that's the common thread among these kind of four different activities is we're starting with renewable carbon that's growing at the earth’s surface and then have a cost-competitive route to convert that into drop-in fuels and chemicals that are comparable to petrochemicals. I think I already reviewed this, but we have employees all over the world actually, including some employees in India. And the reason for that is because if you want to leverage an asset like this one, where we have ethanol and carbon capture to make jet fuel, you need a good mousetrap. Like I said, the catalytic chemistry to convert ethanol and alcohols into hydrocarbons exists, but the engineered design is something that needs to be engineered. And we've taken 2 years and almost $200 million to engineer a really good mousetrap, actually a couple of different ones. So the technology exists, but the engineered design is something that we're working on, and this is where we have these plants. This is a picture of a facility we've used in the past. I mentioned in the past, Gevo has made jet fuel and other hydrocarbons from alcohols. This is a facility here in Silsbee, Texas that we've used to make that. The reason I emphasize that is because we ask all the time, well, how much SAF are you making today? How much jet fuel are you making today? We did that in the past. We've already made it. We've already certified it and proven it. What we're trying to do is we're now in Phase 2, which is can you make a large, profitable, durable business and then make it repeatable, so we can make large amounts of SAF. That's what we're trying to do. Right now, what we have is we've idled out our pilot facility that we used to use to make jet fuel and SAF. Now we have a world-scale ethanol and carbon capture facility and renewable natural gas facility that I mentioned to make the ingredients for SAF. The next step that we want to do is use this 3D engineered plant design to convert that ethanol to synthetic aviation fuel or jet fuel. This is a really lovely picture of the North Dakota site that I mentioned. It's making low-carbon ethanol today, 67 million gallons per year. We also have under that site -- ethanol is a great source for carbon dioxide because the bubbles in beer and champagne, if you brew stuff in a digester, you're taking sugar from crops or from biomass and microbes then basically eat the sugar and give you alcohol, okay, clean alcohol, so you can do chemistry. But the bubbles are carbon dioxide actually, very high purity, like 99% pure carbon dioxide and so nature -- mother nature is kind of doing a bunch of work for us to take that carbon dioxide that originally came out of the air, okay, when plants do photosynthesis, that's what they're doing. They're taking carbon dioxide out of the air. And then fermentation gives us back that high-purity carbon dioxide. That's one of the costliest things when you're doing carbon capture is how do you get a high purity stream of carbon dioxide. It's a very dilute gas. Here, we're leveraging nature, so the bubbles give us that gas. But also -- so we have a good source, but we also have a good sink. So about a mile under this facility under these 500 acres, we have pore space rights for about 1 million tons per year of carbon capture. Currently, we're using about 165,000 metric tons per year of that, that comes off of fermenter. So a lot of companies talk about doing carbon capture. We're doing it every day that we're operating. We're putting carbon dioxide that was in the atmosphere. We're putting it a mile underground where it's ready to stay, have a permanence of over 1,000 years. It's a 500-acre site, like I mentioned. So that gives us room to expand both the existing ethanol and carbon capture, and also bolt-on ethanol to jet. The raw material for this manufacturing process is not the kind of corn you eat. By the way, when you do fermentation, you can use any source of sugar. There's lots of different crops that you can use for this and biomass. But in the U.S., it's corn. It's not sweet corn or popcorn or white corn or the kind of corn that steps in for human consumption. It's field corn. This is corn that's milled. The protein that we need in our bodies is extracted and sold as high-protein animal feed and ultimately ends up in our body that way. We also sell corn oil. It's the sugar from this corn that's used to make -- to ferment into ethanol and carbon dioxide. And then ultimately, we want to convert that ethanol to jet fuel. If you look at how much corn was -- how many acres were harvested for corn, it's about 75 million. 100 years ago, it was about the same. It was about 75 million acres. That's because farmers have dramatically increased their yields. This is a great industry that we want to partner with the U.S. and global ag industry because in that industry, doing more from less means more money in farmers' pocketbooks, and it also means a lower carbon footprint. So it's synergistic with everything we do. What comes out of corn? Well, by way, it's about one-third, one-third, one-third ethanol fuel, high-protein animal feed and carbon dioxide. And so for us, carbon dioxide is a co-product. But the nutrients, the ethanol is coming from the sugar, remember, the nutrients, the amino acids, the protein, that goes on back into the food chain. When you look at the revenue streams, though, it's a little more complicated. So when you go from corn to ethanol, we get all these co-product revenue streams, okay? We make the corn oil, we make animal feed. We also get RINs, we get 45Z or clean fuel production tax credits, and there are state-level incentive and credits, too. There are low carbon fuel standard markets in places like California, Oregon, Washington, where low carbon fuels get a premium because they have a cap-and-trade system. If we extend that ethanol to jet fuel, there's more co-product revenue streams. We'll make a little bit of renewable diesel and Naptha. And again, you get synthetic aviation fuel credits, state-level incentives. To be successful at this requires the skills that we have. You have to know not only about agriculture, but about biochemistry, about the chemical industry and about the regulatory industry. Now all these co-product streams that I just talked about, they stack. So we can capture all of them. But there is one choice that we have to make that doesn't stack, which is every quarter, we choose where to point our ethanol gallons. We put them on a railcar, and they go to places like Oregon, Washington, British Columbia or regionally or Canada. And depending on where we point our gallons, we have 2 markets we can access. The first is if we go to a state or province that has a low carbon fuel standard, we can get about $50 to $200 per metric ton of the carbon that we're capturing at a premium to our ethanol, okay? So in other words, the carbon value is attached to the gallon. On the other hand, if we sell the gallons in a non-LCFS market, let's say, like in North Dakota, we can save a little bit on transportation cost, but also no one then has paid for the carbon reduction, the tons of carbon that are going down the hole. So in that case, we can detach that carbon abatement and sell it on what are called carbon dioxide removal or CDR markets. This website down here is a really cool website. If you click on that, it's tracking this market, and it's actually a $10 billion market. $10 billion of CDRs have been transacted mostly in the past couple of years. It's actually really remarkable. These are some of the companies that are looking to buy these credits. Now what makes this really interesting to us is on the one hand, we are -- carbon dioxide is a co-product, so we will deliver it to the highest value market. These state regulatory markets are compliance markets. If you comply, you get the credit. The credits go up and down, maybe $50 to $200 per ton. These are voluntary markets. This is a global voluntary market where brand owners want to reduce their carbon footprint and they're willing to purchase essentially carbon offsets from companies like ourselves. And here, the pricing is more like $100 to $300 per metric ton a day. So over time, we will deliver our carbon and our ethanol to the highest demand market, and we can optimize that way. We also think that in the very, very long run, this kind of market is a durable, long-lasting market because the fuel that we make, we can just sell as fuel. And if people just want to buy fuel, whether it's ethanol or jet fuel, they can pay the same price as any other fuel because it's the same molecule. And the markets that care about carbon reduction, we can then go on to a global marketplace and without double counting with high permanence, high confidence, sell that to these brand owners. And if they're the ones that are willing and able to pay for carbon reduction, then that's the best place to deliver that carbon value. So we [indiscernible] a presentation like this a couple of weeks ago, not long after our 2Q results came out. And an important thing we wanted to point out here is, as we exited the second quarter, we had about $20 million per year of run rate EBITDA. We think we can double that to $40 million per year just by optimizing our commercial structure from what we're doing today. So just by optimizing the value of our production tax credits, how we're marketing our voluntary carbon sales and RNG and ethanol, we think we can double that to $40 million per year. And we think we can almost triple that again to this $110 million a year number by doing debottlenecking at our site by doing minor expansions, think like 10%, 15% type of expansions of our volume of ethanol and carbon dioxide and by fully utilizing our 1 million tons per year of CCS in North Dakota. So what's important about this is that we think we can capture all this growth in addition to and before we deploy ethanol to jet. So even before we -- and this is something that's new that wasn't the case for our company a year ago. We now think that before we deploy large amounts of capital to build ethanol to jet projects, just by optimizing what we have and maybe doing minor expansions, we can and utilizing everything we have. This is the amount of growth that we can actually get to. And so that's something new that we're really excited about. We have a good balance sheet, $127 million of cash and restricted cash. This $100 million of debt is secured at North Dakota and was used to finance our acquisition. I talked about kind of where Gevo came from, what we're trying to do, why we want to make drop-in cost-competitive fuels and chemicals that come from biomass and where we are today and how we're going to grow. Now I want to talk about in the future, looking ahead, what really differentiates us and what we see is how we get really big, how we're trying to get really big and really serve a new industry, which is alcohol-to-jet and why we're so excited about it. This is the basic reason. Demand for U.S. jet fuel is going up. We need about 2.3 billion gallons per year more jet fuel in the next 10 years. But other fuels, the demand is not going up. It's stagnant or maybe even declining. This is just EIA projections. The reason for this is as people -- as population goes up, demand goes up, but that's offset by fuel efficiency, by electrification and by urbanization. Well, as people move into cities and drive a little less, that doesn't make them fly less. In fact, they fly more as GDP goes up, and it's difficult to electrify aircraft. Now the U.S. fossil fuel complex produces about 9% jet fuel, but 50% gasoline. So there's a bit of a mismatch here. The alcohol-to-jet process, what we're focused on makes 90% jet fuel in its product stream. So we can really target the jet fuel without exacerbating gasoline, which is not growing as much as jet fuel. And we can make it from an abundant renewable resource. We're not making it from the corn if you believe, remember, we're making it from the sugar and the ethanol, which we have plenty of sugar and plenty of ethanol. Now how much does it cost you? Well, on the X-axis, we have the price of crude oil, okay, fossil crude oil and dollars per barrel. And on the Y-axis is the price of jet fuel and dollars per gallon. And the blue is just a scatter plot. Our first-generation alcohol-to-jet is in here. It can be competitive on a cash cost of production basis with fossil jet fuel for serial #1. And the reason for that is because the business system is so close to the farm gate and you get all the co-product revenue streams that I mentioned earlier. That's basically why. Now this does require capital. And to serve that capital, we have to make an investment and to get a return on that investment, we need a [premium]. Our view is that things like the clean fuel production tax credit are great. That's a great way to spur this industry, but we don't need it forever, and we don't believe in companies that depend on tax credits forever. That's why in that previous slide, I talked about this, we're developing the voluntary carbon markets even as we also take advantage of clean fuel production tax credits to get the return on the capital. Once this is set up, our view is that oil and gas is a mature industry, this can get even -- this is a pretty good starting place to be cash cost production competitive on day 1. And it's cheaper than the other ways of making synthetic aviation fuel, which are the other green boxes here. Each ATJ-30, as we call it, that's a plant design where we take 50 million gallons of ethanol and use it to make 30 million gallons of jet fuel. That's what we want to deploy in North Dakota. Each one adds about $150 million of EBITDA to the ethanol site. So like I said earlier, our -- and we have a couple of plant designs. Another one is what we call ATJ-60. That's where you start with 100 million gallons of ethanol and you make 60 million gallons of jet fuel. This would use Gevo's technology. We have about 300 -- we have over 300 patents and we've also issued a number of patents over the last 5 years as we've engineered these plant designs. We've spent almost $200 million about that in about 2 years to engineer the plant design because it's not the technology, but it's the design of how you use energy in this plant and how it's integrated with ethanol that really matters to get a low greenhouse gas footprint. So how many of these can we deploy? Well, the goal is to deploy serial #1 in South and North Dakota, like I said, not to make jet fuel. Gevo has already made jet fuel. The goal is to make something big that's a durable business, okay? That's our goal. And then to repeat it. Well, how many times can we repeat it? This shows the 180 operating ethanol plants in the U.S. to meet future jet fuel demand growth in the U.S., the U.S. would have to build about 70 of those ATJ-30s that I mentioned. Will we build 70 in what time frame? We don't know. But even a fraction of that would be transformative to our company, and we think would make a new industry. So we want to be there. We want to be the company that's providing and licensing and investing in converting ethanol to jet fuel. And the way the ethanol industry got big was with a couple of standard ethanol designs. We want to have those set those standards and provide those designs, both by using it in our own projects and then also licensing it to others. That's how we think, we as a company get big and we make the industry big. We get a lot of questions about political risk essentially. Here's what I would say. Both parties have supported agriculture and biofuels. This was -- The White House's most recent executive order. It says we need more biofuel, ethanol and aviation fuel. That's exactly what we make. Biden and the Inflation Reduction Act essentially extended previous biofuel tax credits. Trump and the Big Beautiful Bill didn't cancel those tax credits, actually extended them until 2030. And even after they -- the 45Z clean fuel production credit expires, we would then claim the 45Q, the carbon capture credit if it's not extended. So we have support from -- our business system plays to both sort of side of the political aisle and through the election cycle, essentially because of this picture. It's good for U.S. energy and it's good for the planet. So what's our playbook? Our playbook is start with North Dakota, where we have the 500 acres, where we have the ingredients to do low carbon ethanol to jet. We've got the low-carbon ethanol. We've got carbon capture that we own and deploy our ATJ-30 there, probably sometime in 2026 will be the idea. Then use that as a showcase to go to the rest of the ethanol industry and say, "Hey, let us build more of these for you, let us partner with you, let us license this or co-invest with you to take your ethanol and make jet fuel out of it. And North Dakota will be the showcase.” We will also deploy things like Verity that I mentioned, that's being deployed at North Dakota, too. So in summary, what's our strategy today? It's very different than a year ago. We've kind of transformed as a company. Today, the goal is grow our EBITDA by optimizing what we have, which are the ingredients to do synthetic aviation fuel. Step 2, deploy our synthetic aviation fuel plant designs at our own sites. We have a site in South Dakota, but also our site in North Dakota and then copy paste. Can we do that 70x or could we do it some number of times around the U.S. to meet jet fuel demand? That's our overall strategy, and it's been -- we're quite a different company than we were 12 months ago. So with that, I'll pause and maybe take any questions.

Thank you, Eric, for the presentation. As mentioned, we will start the Q&A. Your first question for today is, on a previous call, you mentioned a plan of up to 70 plants. Can you tell us anything more about this?

Yes. I think I covered that. But what I would say is if you go to our IR website, there's another slide presentation called Refueling America, and it's got lots of data and charts from US EIA and USDA and so on, on both the demand for jet fuel and the supply of plant sugar and ethanol. And if you look at that, it's pretty compelling. I'd love to hear what people think, but I think I pretty much covered that. You need 70 of the plants of our size to make about 2.3 billion gallons of jet fuel and the U.S. needs about 2.3 billion gallons more jet fuel in the next 10 years. Where is that going to come from? We haven't built a new refinery in the U.S. in about a quarter century.

Given that [indiscernible] jet only had $37 million cash on hand at the end of Q2 and burns approximately $29 million each quarter, they seem to be nearing bankruptcy. Has Gevo management considered what opportunities may be available to capitalize on that bankruptcy if it occurs?

I think what I would say is we're very focused on our own strategy and our own technology. We're not deploying a new technology that's unique to Gevo, although we do have our own technologies that are unique to Gevo. It's really the plant design to take existing technology. We're trying to optimize it and make it big. So Gevo years ago made alcohol jet flew on aircraft. We're in a different phase. The next phase is, can you make the -- you need the ingredients to do it at large scale. And those ingredients are large amounts of ethanol and carbon capture and a big 500-acre site and the engineered plant designs. So we're really focused on what we're doing. What we're doing is not new technology, it's making existing technologies better and bigger. And we're pretty laser-focused on ourselves.

How is Gevo taking advantage of currently low corn prices in conjunction with the historically bountiful harvest? And is Gevo able to or planning to purchase or store significantly more corn this season than originally planned?

U.S. farmers have done a really good job. And in some ways, they're a little bit victims of their own success because farming is all about doing more with less. And American Agriculture has done a great job of increasing yields. Increasing yields means can you use less fertilizer, can you disturb the soil less to preserve it, use the same acres, not expand your acres and then make more and better products. And U.S. farmers have done a great job of that. The USDA, I think the recent projections were that there's like 1 billion bushels of corn that's being produced this year that needs a use. So we're really excited about providing more uses for U.S. corn and ethanol and plant sugars. And I would say, zooming into the -- I think the question, do we buy corn when we can and when it's cheap? Yes, we do. Do we store it in North Dakota? Yes, we do. And we're looking at ways to do that even better. But the farmers up there in North Dakota, they have a great relationship with the staff that are at our site. Many of them owned the facility before we acquired it, so they were former owners, but they also -- they buy the animal feed, they supply the corn. It's a really great circular economy story actually, agriculture and making animal feed and making ethanol. But yes, are we looking to buy corn where it's cheap? Of course, just like any plant like ours.

Is there a good likelihood that Gevo will be able to qualify for 100% equity ownership of ATJ-30, this would be ideal considering the ROI on ATJ-30 compared to ATJ-60?

We're working on it. One way it could work is, let's say, if you take our previous -- if you take our ATJ-60 plant, we talked about how much that would cost in kind of high-level terms. In North Dakota, it's half the size and it's half built. In other words, it's going to be 30 million gallons of jet fuel instead of 60 million, so it's half the size. And it's half built in the sense that the ethanol part of the facility is already operating and generating cash flow. And so you just need to build the ethanol to jet piece. So you can imagine it's like 1/4 of the size, okay? So a few to several hundred million dollars type ballpark is kind of what we signaled, although we haven't committed to a CapEx number. We'll see exactly how much it costs. Now the question is, could we finance that without contributing cash equity of Gevo? Well, I’ve said earlier that we spent a couple of years and something like $200 million or more million on the engineered plant design, that front-end engineering designing, that takes something, okay? It's important. It's like designing a new electric car. You don't invent the battery in the windshield, but you engineer a new design. And this is a huge chemical facility, okay? Like I said, it's a durable business. So [one], 200 modules, okay, would go into this plant design. So that took some effort. So now if you imagine Gevo takes the ethanol plant that's operating, the carbon capture plant that's operating and our engineered plant design and contributed that as noncash equity into the project, you could imagine that we could raise the debt, right, and be half levered and you'd have enough cash from the debt to then fund construction. Then Gevo could own 100% equity without raising cash equity. I say that because it's possible, we're working on it. We haven't laid out -- we haven't committed to what our plans are. But would we like to do something like that? Yes, we would.

What are the exact actionable tasks that need to be completed to get the DOE loan? What is the time line on each of those actionable tasks?

We'll have more updates as we're able to share them. But what I can say right now is we're working with the DOE. They've been great partners. They want -- they actually do want to see these types of projects, and they want to see this industry get kicked off because they know that the U.S. needs more jet fuel. They like that it puts money in American farmers' pockets. And they like that we're capturing carbon dioxide as a co-product because that has many uses. Right now, we're putting it down a hole because that's the best -- the highest demand marketplace. There's other uses for carbon dioxide like enhanced oil recovery, but others want to see that carbon sequester and so that's what we'll do with it. As far as your question, we're -- like I said, we've been working with the DOE. We do need to see progress on the Summit Carbon Solutions pipeline. That's a carbon capture pipeline that was supposed to get underway being built, and it was going to provide carbon capture for the South Dakota location. That pipeline has faced delays, and so we need more clarity on that. So this is one of the strategic advantages to the acquisition in North Dakota because now in North Dakota, we own our own carbon capture. We don't need a pipeline. So that helps us in multiple ways. One is we can build alcohol-to-jet up there with carbon capture. And two, we can rail carbon dioxide from other locations up to that site in principle because it's a good sink. So that's why the acquisition in North Dakota was so strategic for us.

If the $1 billion DOE loan doesn't work, what is Gevo's alternative for financing the development of the plant?

So it's actually a $1.6 billion conditional commitment in the DOE. And there are other options for us to finance that plant. There are other options we could consider in terms of working with the DOE, but that's about all I can say for now.

What would be the time delay for plant construction if Gevo had to get financing other than the DOE?

It's too soon for me to answer that. I think we'll have more updates about our DOE loan in due course. By the way, for those of you who are new to our story, these questions are about our South Dakota location where we have a conditional commitment for $1.6 billion to build a greenfield alcohol-to-jet facility, not to be confused with the North Dakota location, which is a brownfield site where we have the existing ethanol and carbon capture, and we also have a location to deploy ATJ there too.

What is the approximate time frame for doubling EBITDA to $40 per year?

Yes, $40 million per year. We didn't put a time frame on the slides for a reason because we want to be confident, right? We just reported our first full quarter of owning these assets. We -- I think we were -- this was the first ethanol plant. It's actually 1 of only 3 ethanol plants in the world that has carbon -- operating carbon capture. It was the first ethanol plant with carbon capture to list carbon credits on a public registry, okay? These are registries that verify your carbon credits for sale. And I think we were the first ethanol company to monetize the 45Z this year. And I think we were the first ethanol plant with carbon capture to sell voluntary carbon credits. We said we sold $1 million worth. We think we're going to get to $37 million worth by the end of this year is what we said in 2Q. How long until we get to $40 million? It's not going to take years for sure. It should be -- think of quarters because it doesn't require capital. We're talking about optimizing how we sell the carbon, optimizing how we monetize the clean fuel production tax credit. It's without capital, without changing the nut and bolt at the site. So that's how you should think about it in terms of timing. But our goal is to get it as soon as possible.

When will ATJ-30 be ready?

So ATJ-30, we haven't committed to a date certain. We're working on it. We are utilizing the front-end engineering design work that we did in ATJ-60 as well as some other plant designs. We had done some preliminary work on ATJ-30, and now that's kind of fully underway. You should think of it as happening sometime in 2026, but we haven't committed to a notice to proceed date.

How soon will we see development in Verity?

So we've already been developing Verity. We just haven't been super public about it. We did get first revenue at Verity, like we said we were going to at the end of last year. And we've deployed Verity to a couple of customers now, most especially our own facility in North Dakota is where we're now spending a lot of time deploying Verity so that, that could be the showcase. We think that if you -- so that software can serve grain elevators. There was a big announcement with Landus. If you go look it up with Verity, they think they can quadruple the premiums they pay their farmers because it helps them comply with these sustainability programs that are very complicated. And it's hard to track where grain comes from because it's all commingled. But we serve grain elevators, ethanol plants, soy crush plants and biofuel plants. Just within ethanol, just within the clean fuel production tax credit alone, we think there's $1.5 billion to $3 billion of value that we can help our customers unlock by using Verity's track and trace. If Verity can get a small piece of that in revenue as a Software-as-a-Service fee, that could be transformative for us. So we're very excited about Verity, but we're just not ready to break it out as its own segment yet. Maybe next year, we will.

Could Verity eventually spin off or be listed separately as an SAS-focused carbon verification company?

That's a decision for our Board, but we're a company whose goal is to maximize value for our shareholders and our stakeholders. And -- if you think about it, Verity has a different risk return profile than other parts of the company. So if you're doing R&D, that's got one risk return profile. If you're doing our renewable natural gas, that's like an operating asset. The goal there is operational excellence. And if you're doing sustainable aviation fuel, the idea there is you need hundreds of millions of dollars of capital to build a facility over years. Verity is a little different, right? It's a software tech start-up basically. So it could make sense from that perspective for it to be somehow separate from Gevo. How does that look exactly? Verity needs to grow up and get big enough before we figure that out. But yes, we absolutely will do what makes sense to maximize value for Gevo.

Are any major airlines currently using your sustainable aviation fuel? If not, why aren't they using it?

So many airlines actually have used our fuel, have signed contracts to buy our fuel in the future when we intend to produce large quantities. I think Gevo was the first, I'll call the jet company to sign a long-term offtake contract with airlines like Delta Air Lines. So many of the world's leading airlines actually have signed offtake agreements with us. Like I said, Gevo has already made in the past sustainable aviation fuel. We idled our pilot facility because now it needs to be big. It needs to be a big, durable business that's repeatable. So the phase we're in now is you need to make a lot of ethanol profitably and have carbon capture and a good site to deploy alcohol-to-jet. That's the phase we're in now. And we can grow just there. The next phase will be to produce large amounts of jet fuel. We don't just want to make jet fuel. We've already done that. The goal is to make large and make it a durable, repeatable business. So yes, lots of airlines have worked with Gevo. That occurred years ago and recently, too.

Great to see you starting to get revenues from the commercialization of carbon removal credits. Any insight into how this division will grow over the next few years?

Yes, yes. So in our 2Q earnings release, we said that we did $1 million of sales from that. Remember, we're operating that every day. Every single day that we produce ethanol, the bubbles off the fermenter are going a mile underground basically and storing that atmosphere carbon dioxide. And so these types of revenues enhance our business immediately, right? We said in our 2Q that we would try to get to kind of $3 million to $7 million of sales per year. And that if we maxed out, we could maybe get to $30 million per year at some point. So that's the goal. In that industry, that carbon dioxide removal industry, I mentioned this is a $10 billion transactions that occurred mostly in the past 2 years. Only 2% of those CDRs have been delivered to those customers, the Microsofts and the Googles of the world. We're delivering -- we're in that 2%. We're delivering CDRs every day that we operate. So this is a B2B sales effort. Once our sales team and the Customer Sustainability Officer have gotten to know each other, we've won their trust, we view that as a repeatable global sales effort, basically, selling what we're already doing. So that's -- those are some numbers behind that.

Thank you, Eric, for all your answers today. If you do not get a chance to submit your questions, feel free to reach out to the appropriate account manager here at Renmark. This concludes our presentation for today. But before we go, I will turn it back over to you, Eric, for final remarks.

I hope it's come across that we're a little bit of a unique company because we're making drop-in products that don't require electrification of things like aircraft, but we're making from things like biomass that reduce carbon footprint. Folks that want to buy energy can just buy jet fuel and ethanol for what we think is a cost-competitive cost of production, cash cost of production and then we can deliver the carbon reduction to markets that want to pay for it, whether that's places like California and Oregon and Washington or whether it's companies like Microsoft and Google and Amazon and NASDAQ and the companies that are in the CDR market. So that's the type of company we are. We're a company that's enjoyed support from -- through the political cycle, frankly, because we support domestic energy production and domestic producers. And that's something that appeals to basically everyone. So we're currently profitable. We're trying to grow that profitability and then extend even further by deploying the technologies that we think are unique to us. Check out our website. We have several presentations that we've saved and talks like this that we've saved on there in our Investor Relations portal and send an e-mail to our IR bucket if you have more questions. Thank you.

Once again, this is Gevo, Inc. trading on the NASDAQ under the ticker symbol GEVO. Thank you again to everyone in San Francisco and surrounding areas for joining us today. Stay tuned for other presentations in your area. Thank you, and see you next time.