Gevo, which develops net-zero hydrocarbon fuels and chemicals, recently agreed to acquire Red Trail Energy’s ethanol production plant, and carbon capture and sequestration (CCS) assets in North Dakota for $210 million.
The company said the acquisition, which is expected to close by the first quarter of 2025, will accelerate its mission to transform renewable carbon and photosynthetic energy into net-zero liquid transportation fuels and chemicals while abating carbon. The pickup also provides an ideal site for future sustainable aviation fuel (SAF) production to serve U.S. and Canadian markets, the company added.
“We accomplish several things with this investment,” Gevo CEO Patrick Gruber said in a news release. “It immediately puts us on a path to becoming self-sustaining and profitable as a company in advance of our ‘Net-Zero 1’ project’s commercial operation. Not only are we securing an excellent site for additional SAF asset deployment, but we also mitigate risk around carbon sequestration regarding our Net-Zero 1 plant site in South Dakota. This acquisition gives us the opportunity to build capability as a company and is a terrific training ground for our Net-Zero 1 project, as we inherit a trained cadre of employees who understand plant operations.
“Carbon abatement for fuels and chemicals is core to our business. This acquisition enables immediate market development for sequestered carbon. We expect our ownership of these assets to generate significant near-term and long-term value for our shareholders, while adding new jobs and economic growth to rural communities in the region.”
Red Trail’s 65-million-gallon-per-year ethanol facility is located on 500 acres with pore space lease agreements for 5,800 acres in the Broom Creek formation, which has pore space sufficient for 1 million metric tons of carbon capture and sequestration annually, the companies reported. The permitted CCS well currently sequesters approximately 160,000 metric tons of carbon annually. In addition, the facility generates more than 200,000 tons annually of distiller grains and vegetable oil co-products. The facility distributes its low-carbon ethanol across the U.S. and Canada, including low-carbon demand markets in Oregon, Washington, British Columbia, and Alberta. Gevo expects to retain all the approximately 50 full-time employees currently operating the assets being acquired.
“We are proud of what we have accomplished at Red Trail Energy and are excited about the future under Gevo’s leadership,” Red Trail CEO Jodi Johnson said. “Gevo’s vision for a sustainable future aligns with our philosophy of ‘our farms, our fuel, our future.’
“We are confident this acquisition will drive positive change in the renewable energy sector.”