Ethanol Blog

LINCOLN, Neb. (DTN) -- Gevo, Inc. announced the sale of an 18-million-gallon ethanol plant in Luverne, Minnesota, while retaining some assets that eventually could be used to produce sustainable aviation fuel, the company announced on Wednesday.

Gevo has entered into a definitive agreement to sell Agri-Energy LLC to A.E. Innovation, LLC for $7 million, according to a news release from Gevo.

Gevo said it will retain ownership of certain isobutanol-production-related assets and a portion of vacant land at the site for "future use." With the retained assets, Gevo said it could potentially produce up to one million gallons per year of isobutanol, which can be sold as a specialty chemical, or converted into isooctane and jet fuel.

A.E., described in the news releases as "an agriculture-oriented buyer group located in Minnesota" is planning to restart ethanol production at the plant that has been idled since 2022. "A.E. also intends to make the site available for other companies to scale up new technologies and ideas as an innovation hub," Gevo said.

During the past several years, the Luverne plant in conjunction with local farmers, has been used as a demonstration site for "educating" Gevo's stakeholders about regenerative agriculture and the "versatility of corn" and its co-products, as well as biofuel production, including SAF, isobutanol and ethanol, Gevo said.

Gevo said the sale provides $2 million of cash upon closing and an additional $5 million of future cash under the purchase agreement, along with an estimated annual savings of about $3 million per year of current facility idling costs.

Gevo said it anticipates potential future benefits from isobutanol fermentation through a side-by-side operational model with ethanol assets.

"Restarting ethanol production is expected to bring positive impacts to the city of Luverne, including support for local farmers and strengthening the regional economy," Gevo said in the news release. The transaction is expected to close by the end of 2025, the company said.

"We're seeing rapid innovation in the direction of bio-based fuels and chemicals and Agri-Energy has the demonstrated history that it can work on the cutting edge," said Dave Kolsrud, principal of A.E. Innovation, LLC.

"We see Gevo and others making strides and we know we'll be a part of that. We are excited to host the next generation of biofuel innovations that need a friendly, practical place where they can scale them up. That's Luverne, with its history of innovation, its low-carbon corn supply, wind power and great people."

Gevo CEO Patrick Gruber said there is "tremendous potential" for future growth and new partnerships with A.E.

"Minnesota's farming communities, especially in places like Luverne, are leading the way with smart, sustainable agricultural practices," Gruber said.

"We believe it's the perfect foundation for building innovative solutions in carbohydrate-based energy and chemicals that the world urgently needs."

Gevo said its business model includes developing, financing and operating production facilities that create jobs and revitalize communities.

Todd Neeley can be reached at todd.neeley@dtn.com

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