By Sam Boughedda
Investing.com — Gevo Inc (NASDAQ:GEVO) opened 22% higher Tuesday after it announced a fuel supply agreement with Kolmar Americas.
The deal is labeled the largest to date for Gevo, with the company set to supply 45 million gallons per year of renewable, energy-dense liquid hydrocarbons.
Gevo shares opened the session at $6.25, $1.15 above Monday's close.
Gevo transforms renewable energy and carbon into energy-dense liquid hydrocarbons used for transportation fuels such as gasoline, jet fuel, and diesel.
Kolmar is a subsidiary of Kolmar Group AG, a service provider, manufacturer, and marketer of renewable fuels in Switzerland.
The hydrocarbons — which include sustainable aviation fuel and isooctane, a key part of renewable premium gasoline — are expected to be produced from Gevo's second Net-Zero production facility, Net-Zero 2, which is currently being developed in the U.S. Midwest.
Gevo stated that deliveries to Kolmar represent the entire plant output based on the production facility's current design, with the deal generating approximately $300 million per year of gross revenue, including revenue from environmental benefits. The eight-year agreement is expected to generate roughly $2.8 billion in gross income.
"With this agreement, Kolmar is investing in the future, and this kind of foresight makes for another excellent partner and should make clear to our investors that we have traction in the market," said Dr. Patrick R. Gruber, Gevo's CEO.