Biofuel company Gevo is aiming to bolster its network for low-carbon sustainable aviation fuel feedstocks through the $210 million purchase of an ethanol plant located on a North Dakota carbon capture site.
Gevo announced Thursday it was buying the 65-million-gallon-per-year Red Trail Energy ethanol facility along with its 500 acres of land, and would lease another 5,800 additional acres in the Broom Creek formation in southwestern North Dakota. The plant already sequesters around 160,000 metric tons of carbon annually, but has a total sequestration capacity of 1 million metric tons per year, Gevo said in a press release.
The acquisition secures a key source of low carbon intensity ethanol for Gevo, one of the companies angling to be on on the ground floor of sustainable aviation fuel production in the U.S. Red Trail Energy currently distributes low-carbon ethanol to Oregon, Washington, British Columbia and Alberta, Gevo said.
The location provides an "ideal" site for producing sustainable aviation fuel, or SAF, Gevo President and COO Chris Ryan said in the release.
"This site is extremely well set up," Gevo CEO Patrick Gruber said in a press call Thursday. "It has the [carbon capture and sequestration] already baked and it works, it's operating. It's one of three sites in the whole country that have ethanol CO2 capture. It's really good."
Gevo expects to close the transaction by the first quarter of next year, depending on regulatory approvals and closing conditions. It plans to pay for the plant and the land through both cash and asset-level debt, according to the release.
Gevo is planning to retain the 50 employees currently working full-time at the plant.
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