Gevo Inc (NASDAQ:GEVO) has developed a breakthrough process that converts a high-octane fuel called isobutanol into clean, renewable diesel which should spark high demand from the transportation and marine industries, according to the company's CEO Patrick R Gruber.
The Englewood, Colorado-based company said the green diesel can also be made from fusel oils, a mixture of several alcohols produced as a by-product of fermentation.
Shares in Gevo have climbed steadily since news about the low-carbon diesel product broke last week. Having closed 9.7% higher at $3.29 on Monday, the shares again climbed 2.5% higher to trade at $3.37 on Tuesday.
READ: Gevo surges after announcing isooctane agreement with HCS valued at up to $180M
In an interview, Gruber told Proactive that the renewable diesel is expected to compete head-to-head on price with natural and petroleum-based equivalents, while reducing particulates and CO2 emissions.
“Not only are we going after the whole gallon to replace fossil-based fuels, we are going after the whole slate of renewable low-carbon liquid fuel products. In addition to being a low-carbon intensity fuel, our product has no sulfur or particulates,” the CEO said.
“This technology leverages off our platform of low-carbon alcohols and I give credit to our catalytic chemistry team, led by Jonathan Smith, for this breakthrough,” he added.
Gruber explained that the “breakthrough process” is similar to processes that Gevo already has in place for making jet fuel and gasoline.
According to Gevo's boss, low-carbon renewable diesel is in “high demand” as clean transportation fuel in diesel engines.
California’s Low Carbon Fuel Standard
Gruber noted that demand has increased since California’s Low Carbon Fuel Standard came into effect, which is designed to decrease the carbon intensity of California’s transportation fuel pool and provide an increasing range of low-carbon and renewable alternatives, which reduce petroleum dependency and achieve air quality benefits.
The marine sector is also looking to reduce sulphur emissions ahead of new international water regulations that come into effect from 1 January 2020, and Gevo expects this compliance to open up another market for its products.
Gevo has developed proprietary technology that uses a combination of synthetic biology, metabolic engineering, chemistry and chemical engineering to focus primarily on the production of isobutanol, as well as related products from renewable feedstocks.
The group's stated strategy is to commercialize bio-based alternatives to petroleum-based products to allow for the optimization of fermentation facilities’ assets, with the ultimate goal of maximizing cash flows from the operation of those assets.
Contact Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive
