Gevo Sees Carbon Credits, 45Z Incentives Driving $60M EBITDA Outlook

Key Points

• Gevo raised its adjusted EBITDA outlook to approximately $60 million from an initial $30 million target, driven by expanded carbon monetization opportunities, Canada’s Clean Fuel Regulations and higher expected 45Z credits.
• The company’s North Dakota facility combines ethanol production with an operating Class VI carbon-sequestration well, enabling Gevo to monetize both fuel output and captured carbon while supporting future capacity expansions.
• Gevo is expanding ethanol capacity from 67 million to 75 million gallons annually and pursuing an additional 75 million gallons plus a 30-million-gallon alcohol-to-jet facility, alongside its renewable natural gas business.

Gevo NASDAQ: GEVO is positioning its North Dakota ethanol and carbon sequestration operations as the core of a broader low-carbon fuels and carbon-management business, Chief Executive Officer Paul Bloom said during a Water Tower Research conference session.

Bloom said the company operates a 67-million-gallon low-carbon ethanol facility in North Dakota that is connected to carbon capture and sequestration infrastructure. The company is expanding the facility through a debottlenecking project intended to raise capacity to 75 million gallons by the end of the year. Gevo is also pursuing a larger expansion that would add another 75 million gallons of capacity, as well as a proposed 30-million-gallon alcohol-to-jet facility known as ATJ-30.

In addition to its ethanol business, Gevo operates a renewable natural gas platform in northwest Iowa that converts dairy manure biogas into renewable natural gas, which is primarily sold into California markets. Bloom also pointed to smaller emerging markets, including racing fuels.

Carbon and incentives underpin revenue model

Bloom said Gevo’s model differs from conventional ethanol production because the company seeks to monetize both the fuel and the carbon dioxide associated with production. At the North Dakota site, the company captures carbon dioxide from ethanol fermentation and injects it into a deep underground reservoir beneath the facility.

“For every ton of fuel we produce about a ton of carbon dioxide,” Bloom said. “We capture that carbon dioxide and sequester that in a deep well under our North Dakota facility.”

The company can sell carbon-related value into compliance markets, such as low-carbon fuel programs, or into voluntary carbon dioxide removal, or CDR, markets. Bloom described this flexibility as “carbon arbitrage,” noting that a carbon credit can only be sold once, requiring the company to choose the market offering the highest value.

Gevo also benefits from incentives including Renewable Fuel Standard RINs and the Clean Fuel Production Credit, known as 45Z. Bloom said the combination of carbon value and incentives contributes roughly $1.50 per gallon of additional value beyond the underlying fuel commodity component.

Since acquiring the facility formerly known as Red Trail Energy, Gevo has increased adjusted EBITDA from the site by approximately seven times, according to Bloom. He attributed the improvement largely to carbon monetization and incentives rather than changes in the commodity fuel business.

Updated EBITDA outlook

Bloom said Gevo ended 2025 with about $16 million in adjusted EBITDA. The company initially targeted approximately $30 million for the current year before increasing its outlook to $60 million.

He said the revised outlook reflects newly available carbon monetization pathways, particularly under Canada’s Clean Fuel Regulations. Gevo previously had a route into Canada, Bloom said, but it did not include carbon capture and sequestration value. The newly enabled pathway allows the company to monetize that value.

Changes affecting 45Z also increased the amount of credits Gevo expects to capture, he said, including changes related to indirect land-use change, or ILUC.

“These things don’t happen overnight,” Bloom said, adding that the company has spent two to three years working to establish additional pathways and develop carbon-market optionality.

Sequestration well viewed as growth asset

Bloom said Gevo’s North Dakota location includes a fully permitted operating Class VI carbon sequestration well and does not depend on third-party pipeline infrastructure. The carbon dioxide is injected more than one mile underground into a reservoir beneath the plant, where it is intended to remain permanently.

Bloom said the sequestration system can support future production expansion, including additional low-carbon ethanol or jet fuel capacity. He characterized the asset as a differentiator because it allows Gevo to capture, store and market carbon value at the same site where the fuel is produced.

CDR market remains early-stage

Bloom said approximately 50 million tons of carbon dioxide removals have been contracted industrywide, although only about 3% has been delivered. He said Gevo has been delivering carbon dioxide removals and has appeared on supplier leaderboards tracked by CDR.fyi.

According to Bloom, CDR.fyi data indicated an average price of roughly $200 per metric ton, though he noted much of the market remains subject to price discovery. Gevo has completed two years of transactions with Nasdaq and has also identified Whirlpool, Amgen and PayPal among organizations appearing in connection with its carbon registry activity through Puro.earth.

About Gevo (NASDAQ:GEVO)

Gevo, Inc is a renewable fuels and chemicals company that develops alternatives to petroleum-based products. Its technology platform is designed to convert renewable carbohydrate feedstocks into alcohols and hydrocarbon-based fuels and chemicals, including sustainable aviation fuel, renewable gasoline and other low-carbon products.

The company also produces ethanol, animal feed and corn oil through its Gevo North Dakota operations. Gevo has pursued technologies and projects intended to reduce the lifecycle carbon intensity of its products, including the use of renewable energy, carbon capture and sequestration, and renewable natural gas.

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