Gevo, Inc. (NASDAQ: GEVO) has signed a "take-or-pay" agreement with Delta Air Lines, Inc. (NYSE: DAL) to supply 75 million gallons of sustainable aviation fuel (SAF) per year for seven years. Based on current assumptions, including those around future pricing of commodities and the future values of certain environmental benefits, Gevo estimates that the Agreement should generate approximately $2.8 billion of revenue, inclusive of the value from environmental benefits, for Gevo over the seven-year term of the Agreement.
The Agreement replaces the existing agreement signed with Delta in 2019 to purchase 10 million gallons per year and bolsters Delta’s commitment to incorporating SAF into its operations.
Said Gevo CEO Patrick Gruber, “Delta makes for a great customer, recognizing that big change is needed. I also appreciate their faith in what we are doing at Gevo.
"Net-zero jet fuels matter. We expect production from our first Net-Zero plant to begin in 2025. To meet the demand that we now have under contract, we need to develop and build more than one Net-Zero plant. This is a happy problem to have."
Gevo says its mission is to transform renewable energy and carbon into energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for drop-in transportation fuels such as gasoline, jet fuel, and diesel fuel, that when burned, have the potential to yield net-zero greenhouse gas emissions when measured across the full life cycle of the products.
GEVO shares advanced 40 cents to $4.99, while shares in Delta jumped 41 cents, or 1.1%, to $36.50.
