Red Trail Energy, an ethanol plant on a North Dakota carbon capture site, is one step closer to being bought by biofuel company Gevo following a vote by its equity holders approving the transaction.
Gevo, which is angling to be on the ground floor of sustainable aviation fuel (SAF) production in the U.S., last month announced its plans to buy the 65-million-gallon-per-year Red Trail facility for $210 million in cash. It would also acquire 500 acres of North Dakota land currently owned by Red Trail, along with leases for 5,800 additional acres in the Broom Creek formation in southwestern North Dakota.
Gevo, based in Colorado, is currently constructing a SAF plant in Lake Preston, South Dakota, called Net-Zero 1. It also owns renewable natural gas operations in Northwest Iowa and an ethanol and isobutanol plant in Luverne, Minnesota.
“With this investment, Gevo will be set on a path to becoming self-sustaining and profitable as a company in advance of our Net-Zero 1 project coming online," Gevo CEO Patrick Gruber said in a release. "This acquisition also enables an ideal location for a ‘Net-Zero North’ plant to produce sustainable aviation fuel. It also mitigates risk around carbon sequestration for our Net-Zero 1 plant site in South Dakota.”
The plant Gevo is acquiring currently distributes low-carbon ethanol to Oregon, Washington, British Columbia and Alberta.
The transaction is expected to close by the first quarter of next year, but the timeline depends on regulatory approvals and the procurement of financing for the acquisition, according to the release.
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