Amid growing climate change concerns, the demand for renewable energy in the form of biofuels has been increasing, especially in the road transportation market. So, biofuel-related companies Green Plains (NASDAQ:GPRE) (GPP) and Gevo (NASDAQ:GEVO) could witness increasing demand for their products and services. But which of these stocks is a better buy now? Read more to find out.A subsidiary of Green Plains Inc. (GPRE), Green Plains Partners LP (NASDAQ:GPP) provides ethanol and fuel storage, terminal, and transportation services by owning, operating, developing, and acquiring ethanol and fuel storage tanks, terminals, and transportation assets. It holds or leases 32 ethanol storage facilities and roughly 49 acres of land. In comparison, renewable fuels company Gevo, Inc. (GEVO) commercializes gasoline, jet fuel, and diesel fuel to achieve zero carbon emissions and reduce greenhouse gas emissions with sustainable alternatives. Its products include renewable biodiesel, isobutylene, ethanol, and animal feed.
Governments around the globe have been taking steps to transition the countries’ economies to a renewable-energy-driven sustainable future. While several advances are being made in solar and wind energy, among other renewable energy sources the demand for biofuel has been growing due to its applicability in the road transportation market. Biofuels are expected to help lessen dependence on fossil fuels significantly. According to a Market Research Future report, the biofuel market is expected to grow at a 7.81 CAGR to $245.48 billion in 2027. As a result, both GPP and GEVO could benefit.
GPP’s shares have gained 51.7% over the past year, while GEVO’s returned 896.6%. Also, GEVO’s 446.7% gains over the past nine months are significantly higher than GPP’s 37.8% returns. However, in terms of year-to-date performance, GPP stock is the clear winner with 43.9% gains versus GEVO’s 37.7%.