Gevo’s sustainable aviation fuel well positioned in light of new guidelines from the Ministry of Finance

Gevo, Inc. (NASDAQ: GEVO) has issued a response to the recently unveiled version of the Argonne National Laboratory Greenhouse Gases, Regulated Emissions, and Energy use in Technologies (GREET) carbon accounting methodology and model. This model will be used for life cycle greenhouse gas emissions calculations under the Sustainable Aviation Fuel (SAF) tax credits, Section 40B, of the Inflation Reduction Act (IRA).

“Today’s guidelines reinforce the importance of climate-smart agriculture and other decarbonization methods such as carbon capture and storage (CCS) – core tenets of Gevo’s business model for sustainable jet fuel and other products,” said Dr. Patrick R. Gruber, CEO of Gevo. “Our advanced programs source sustainable feedstocks produced using a variety of climate-smart agricultural practices, and our Verity carbon accounting tool allows farmers to incorporate and track emissions reduction practices tailored to their individual fields. We look forward to sharing key insights from anonymized data to inform the government’s upcoming 45Z SAF tax credit guidelines – and we will continue to advocate for science-based policies that support CCS and provide new markets for farmers focusing on reducing CO2 emissions from agricultural activities.”

For nearly two decades, Gevo has led the research and development of new fuels and products that support the decarbonization of transportation and help industries achieve their net-zero goals, including agriculture. Gevo has advocated the use of GREET as the science-based carbon accounting tool to determine the carbon intensity of SAF’s life cycle and ensure that important emissions reductions are taken into account across the SAF supply chain – including those from climate-smart agricultural practices and carbon capture and storage. and credited, while maintaining GREET’s data-driven integrity.

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Gevo’s wholly owned subsidiary, Verity, uses distributed ledger technology to enable accurate accounting of the emissions reduction efforts of on-farm practices, including at the field level. This auditable technology allows farmers to track and report the carbon reductions they achieve, including through climate-smart agriculture and other practices. Gevo partners with farmers using Verity to collaborate to identify emissions reduction opportunities tailored to field-level needs.

Dr. Gruber concluded, “Today, the Administration’s actions recognize the power of agriculture and lay the foundation for the implementation of future SAF tax credits. A science-based approach to the Section 45Z credit will ensure that biofuel producers, supported by American farmers, will play a critical role in scaling the hard-to-decarbonize aviation industry.”

SAF with greenhouse gas emissions at least 50% lower than conventional jet fuel is eligible for tax benefits created by the IRA. Gevo has long believed that the GREET life cycle assessment method and model enable the most up-to-date and accurate measurement of SAF carbon intensity, accurately counting the carbon reduction benefits of agricultural commodities, including at the field level. In December 2023, Gevo applauded the government’s announcement to include the Argonne GREET model as a “similar methodology” under the IRA Section 40B tax credit; and we believe that the current Section 40B model rightly places a premium on reducing carbon emissions across the value chain.

With the completion of the Argonne GREET 40B SAF tax credit model, Gevo expects the government to expand its climate-smart agricultural practices and flexibility in implementing the IRA Section 45Z SAF tax credit. Clear and timely rules for the 45Z clean fuel production tax credit, in effect from 2025 through 2027, will be critical to meeting carbon reduction targets and helping farmers plan for successful growing seasons without SAF investments fail.

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