Gevo Inc (NASDAQ:GEVO) (FRA:ZGV3) announced Monday that Scandinavian Airlines System’s (SAS) minimum purchase obligation for its sustainable aviation fuel (SAF) has increased to 5 million gallons annually, after the parties signed an amendment to their fuel sales agreement.
With the deal amended, Gevo expects to supply SAS with SAF starting in 2024, from its Net-Zero 2 Project for the use and distribution in low carbon fuel regions of the US. The value of the agreement, as amended, is estimated at more than $100 million over its term, including related SAF and environmental credits.
Gevo and SAS signed the original fuel sales agreement in October 2019, the company said.
“With this amendment, SAS has significantly increased the amount of SAF that it is willing to purchase from Gevo,” Gevo CEO Patrick Gruber said in a statement. “This amendment is evidence of the strong and growing demand for Gevo’s renewable hydrocarbon products. We expect to ink additional offtake agreements later this year.
READ: Gevo flushed with $535M in cash and no significant debt as it announces key business updates and initiatives for 2021
“SAS have a vision and plan that they are executing, even in spite of the global pandemic,” Gruber added. “This additional volume will help Gevo grow its business and hopefully accelerate making real Gevo’s Net-Zero 2 plant.”
Gevo’s Net-Zero project series, announced earlier this year, is designed to create energy dense liquid hydrocarbons that deliver net-zero greenhouse gas emissions when burned. The process converts renewable energy into liquid hydrocarbons that, when burned in traditional engines, have the potential to achieve net-zero greenhouse gas emissions over the lifecycle of the fuel. That includes capturing carbon from the atmosphere, processing it to make liquid fuel products and burning it as fuel in cars, planes, etc.
“SAS has an ambitious goal in reducing its absolute climate-affecting emissions by 25% from 2005 levels by 2025,” SAS Head of Sustainability Lars Andersen Resare said. “This increase of Gevo SAF will help us to reach at least 20% of the SAF needed to reach our emission reductions goal. SAS chooses partners like Gevo that have the vision and ambition to support the aviation industry’s transition to net zero emission.”
Contact Andrew Kessel at email@example.com
Follow him on Twitter @andrew_kessel