Gevo, Inc., a developer of net-zero fuels, is set to acquire the ethanol production facility and carbon capture and sequestration (CCS) assets of Red Trail Energy, LLC in North Dakota for $210 million.
The ethanol plant has an annual capacity of 65 million gallons and occupies 500 acres, along with pore space lease agreements covering 5,800 acres in the Broom Creek formation, which can accommodate 1 million metric tons of carbon capture and sequestration each year.
Currently, the permitted CCS well sequesters about 160,000 metric tons of carbon annually. The facility also produces over 200,000 tons of distiller grains and vegetable oil co-products each year, according to Gevo’s announcement.
This facility distributes low-carbon ethanol throughout the U.S. and Canada, targeting low-carbon markets in regions such as Oregon, Washington, British Columbia, and Alberta. Gevo plans to retain approximately 50 full-time employees currently working at the site.
The deal is anticipated to close by the first quarter of 2025, pending regulatory approvals and other customary conditions, including the consent of Red Trail Energy’s equity holders and financing arrangements. Gevo intends to fund the acquisition using a mix of asset-level debt and cash reserves.
Gevo stated that the acquisition aligns with its strategy and establishes an ideal net-zero site for future sustainable aviation fuel (SAF) production, well-positioned to serve U.S. and Canadian markets. It will also complement Gevo’s Net-Zero 1 SAF project in Lake Preston, South Dakota, by providing access to a fully owned CCS site and a reliable supply of low carbon intensity ethanol.
CEO Patrick Gruber remarked, “This investment achieves multiple goals for us. It places us on a path to self-sufficiency and profitability ahead of our Net-Zero 1 project’s commercial launch. We secure a prime location for deploying additional SAF assets and reduce risks associated with carbon sequestration for our South Dakota plant. Moreover, we gain valuable operational expertise from existing staff familiar with plant operations.”
Gruber emphasized that carbon reduction in fuels and chemicals is central to Gevo’s mission. He anticipates that owning these assets will create significant short-term and long-term value for shareholders while fostering job creation and economic growth in rural communities.
Red Trail Energy’s CEO, Jodi Johnson, expressed pride in the company’s achievements and optimism for the future under Gevo’s leadership. She noted that Gevo’s vision for sustainability aligns with their philosophy of “our farms, our fuel, our future,” and she believes this acquisition will positively impact the renewable energy sector.
Chris Ryan, Gevo’s President and COO, added, “As Net-Zero 1 and other production facilities come online, the infrastructure and resources we acquire in North Dakota will provide great operational flexibility. This site is ideal for producing sustainable aviation fuel using our integrated alcohol-to-jet technology, defossilized energy, and CCS. The CCS well offers options for our Net-Zero 1 carbon sequestration needs. The synergies with Net-Zero 1, our development facility in Luverne, Minnesota, and our renewable natural gas operations in Northwest Iowa are exceptional.”
Ryan also highlighted that the existing assets and operational team have demonstrated a strong track record in safety, reliability, and financial performance. Plans are in place to optimize the asset through combined heat and power initiatives, further reducing carbon intensity and increasing annual carbon sequestration. This approach not only enhances the current ethanol production’s sustainability but also positions the site for net-zero SAF and chemical production.
Gevo, based in Colorado, aims to transform renewable energy and biogenic carbon into sustainable fuels and chemicals with a net-zero or better carbon footprint. The company operates one of the largest dairy-based renewable natural gas facilities in the U.S.
