Gevo, Calumet Shares Jump as US Offers Loans for Biofuel Plants
(Bloomberg) -- Shares of biofuelmakers Gevo Inc. and Calumet Inc. surged after the companies were offered billions in financing for sustainable aviation fuel projects by the Biden administration.
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Gevo surged as much 60% in after-hours trading, before paring some of the gains. The Energy Department offered the Englewood, Colorado-based company a $1.46 billion loan guarantee for a large-scale facility that turns corn starch into jet fuel.
The company’s Net-Zero 1 project in Lake Preston, South Dakota, will also make renewable diesel and renewable naphtha, the government said in a statement.
Calumet gained as much as 20% after the close of regular trading. Its subsidiary Montana Renewables LLC received a $1.44 billion conditional loan guarantee to finance the expansion of a renewable fuels facility in Great Falls, Montana. The plant will utilize vegetable oils, fats, and greases to produce sustainable aviation fuel, renewable diesel and renewable naphtha.
The funding from the Department’s Loan Programs Office comes as the Biden administration has set a goal of increasing domestic production of sustainable aviation fuel, or SAF, to 3 billion gallons a year by 2030 and 35 billion gallons a year by 2050 as it seeks to decarbonize the hard-to-clean-up aviation sector. Current production is around 30 million gallons a year, according to the Energy Department.
As the aviation sector aims to meet its decarbonization goals, SAF will become “increasingly vital,” Jigar Shah, the director of the Loan Programs Office, wrote in a blog post.. “SAF is the only viable near-term option to decarbonize the airline industry.”
--With assistance from Bill Haubert.
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