Gevo has announced the sale of approximately $20 million in Investment Tax Credits to an undisclosed corporate buyer. This transaction monetizes Inflation Reduction Act (IRA) Investment Tax Credits generated from the commercialization of a renewable natural gas (RNG) production facility by Gevo NW Iowa RNG (Gevo RNG”) and provides net cash proceeds of approximately $17 million to Gevo after transaction fees.

The Gevo RNG asset has been optimized to produce approximately 400,000 MMBtus of RNG per year, and Gevo expects to further increase production over time. Additional RNG value could be unlocked through the monetization of Section 45Z Clean Fuel Production Credits under the IRA, once those rules are defined.

Gevo RNG generates RNG by collecting manure on dairy farms and placing it in anaerobic digesters installed on those farms, where biogas (also known as biomethane) is captured, then refined to replace fossil natural gas as a transportation fuel. Gevo’s commercial partner sells the RNG into California.

“We continue to seek out ways to unlock shareholder value from our operations,” said Dr. Pat Gruber, CEO of Gevo. “This is just one example of how our mission to optimize renewable energy and seek out efficiencies creates opportunities.”

Net proceeds from the monetization of these tax credits improve Gevo’s liquidity, increase cash flow from operations, and improve the company’s ability to fund strategic sustainable aviation fuels (SAF) and other growth projects that deliver value to shareholders.

“Gevo RNG began as a low-carbon source of heat energy for our facilities but has increased in value as it helps to reduce use of fossil energy in transportation while creating cash flow and driving further investment in clean energy,” Gruber said. “This is the kind of efficiency that Gevo’s circular economy fosters, and we expect it will continue to deliver shareholder returns as it grows.”