Bloom: A Low-Cost Carbon Abatement Company for Hard to Decarbonize Sectors

Dr. Paul Bloom
Gevo
Tue., February 20, 2024 (10:45am)
Ready for Takeoff: An Update from Leading SAF Innovators

Transcript

1. A Low-Cost Carbon Abatement Company for Hard to Decarbonize Sectors NASDAQ: GEVO Ready for Takeoff NEC 2024 NASDAQ: GEVO NASDAQ: GEVO
2. Any statements in this presentation about Gevo’s future expectations, plans, trends, outlook, projections and prospects, and other statements containing the words “believes,” “anticipates,” “plans,” “estimates,” “expects,” “intends,” “may,” “will,” “would,” “could,” “can” and similar expressions, constitute forward- looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, including, without limitation, statements related to our growth and future operating results and trends, our renewable natural gas (“RNG”) project, our proprietary systems and technology, Verity Carbon Solutions, carbon intensity (“CI”), our Net-Zero Integrated Technology, our strategy, plans, objectives, expectations (financial or otherwise) and intentions, future financial results and growth potential, including our Net- Zero 1 Project, the timing and status of development of our projects, our ability to produce net-zero CI fuels and chemicals, our ability to finance and construct production facilities to produce products, intellectual property and other statements that are not historical facts. For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement. We cannot assure you that our estimates, assumptions and expectations will prove to have been correct. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including risks relating to, among others: financing and supply chains, and global and U.S. economic conditions (including inflation and rising interest rates); and factors discussed in the “Risk Factors” of our most recent Annual Report on Form 10-K and in other filings that we periodically make with the Securities and Exchange Commission (the “SEC”). In addition, the forward-looking statements included in this presentation represent our views as of the date of this presentation. Important factors could cause actual results to differ materially from those indicated or implied by forward-looking statements, and as such we anticipate that subsequent events and developments will cause our views to change. Except as required by applicable law, we undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, and readers should not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this presentation. Forward Looking Statement 2 Pictured left: R&D and demonstration facility in Luverne, MN.
3. 3 Carbon Abatement: The Economic Opportunity Is Now For the past 800,000 Years Source: https://climate.nasa.gov/vital-signs/carbon-dioxide/ Dashed line and label added to original to reflect CO2 levels during ice ages (around 200ppm). Label added to reflect beginning of industrial revolution / widespread burning of fossil fuels Atmospheric Carbon Dioxide Ice ages Start of Fossil Fuel Era
4. Hard to “Carbon Abate Sectors” and New Markets for Renewable Carbon-Based Products 4 Marine Heavy Duty On-Road Fuels Aviation Fuels Chemicals & Materials Seems to be a consensus that for these applications it may be ok to use caron based materials Market values tons of carbon abated, NOT gallons
5. The world needs low-carbon, drop-in: • Food, and an equitable energy transition which includes rural community participation • Fuel, in the form of energy-dense liquids that work in existing heavy-duty, long-haul engines and infrastructure • Materials, including everything from cosmetics, shoes, diapers to the bumpers on electric vehicles – currently made from the chemical products of fossil fuels Because Not Everything Can Be Electrified… Shawn Feikema, Leading Climate Smart Ag Farmer: “We can simultaneously grow products for the food chain, the raw materials for liquid fuels like SAF, while capturing carbon and improving our land, all while improving profitability.” 5 Agriculture potentially offers large volume and low cost carbon abatement
6. Sustainable Aviation Fuel
7. Alcohol-to-Jet (ATJ) is expected to fulfill most SAF demand, and this is our focus Forecasted SAF demand by 2050 in US alone equals: • 400 times the size of our first greenfield plant • 1,200 times existing supply Sources: US EIA, ICF Resources, LLC and internal estimates. ATJ Forecasted US SAF Fulfillment (billion gallons per year) Enormous Addressable Market – Ethanol Leading Growth 7
8. Our contracted customers include many of the world’s leading airlines ~350 million gallons per year Contracted demand for our SAF Contracted Demand 8 = More than 5 times Capacity of our greenfield SAF plant
9. • Location: 240 acres in Lake Preston, SD with room for future expansions • Products: Animal feed and vegetable oil, SAF, Renewable Diesel and Bio-Naphtha • Carbon Intensity: Targeting negative emissions(1) • Purpose-built, low-carbon design with direct wind and onsite green hydrogen • CCS, plus optionality for dairy RNG from our wholly-owned Iowa assets • Field-to-fuel traceability in climate-smart area • Distribution: • Railyard onsite for product distribution • Nearby state SAF credit markets (MN, IL) • Timing: Construction of ~24 months; to start after EPC contract price and schedule finalized and US Dept. of Energy loan secured (targeted in 2H 2024) 9 Our Greenfield SAF Plant: Net Zero 1 Completed Site control Major permits  FEED / plant design  Contracted demand  Gevo, Inc. equity capital In Process [ ] EPC fully installed contracted price and associated value engineering [ ] Construction financing FULLY FUNDED PROJECT DEVELOPMENT PLAN(2) US DEPT OF ENERGY LOAN GUARANTEE IN PROCESS (1) Carbon Intensity score using Argonne GREET 3.0 model across the whole lifecycle. (2) See slide 9 for detail. 9
10. Plant Design Enables Growth Why create a standardized design? • Benefits carry over to future Net-Zero ATJ plants • Focusing on units 1x and 3x size of Net-Zero 1 • Working with strong partners: FluidQuip, Axens, Praj and others • Capital formation optionality: plant design may be utilized by Gevo at future Net-Zero sites, licensed to third parties, or both Why use a modularized, pre-fabricated design? • Reduces on-site labor cost during construction • Reduces construction time • Reduces construction risk Plant Design Highlights • Proprietary Design Reduces Carbon Intensity by 60 gCO2e/MJ before CCS, RNG, climate smart ag – Improved energy efficiencies – Electrification reduces fossil fuel use – Ethanol and ATJ integration – 65% less natural gas use • Multiple patents filed 10
11. Most Competitive Cash Cost of Production Based on work done by an independent global consulting firm, Nexant, Cancawe-Aramco, and Gevo analysis. SAF production cash cost shown before Federal and state incentives such as RINs, LCFS, 45Z and other state SAF tax credits, and before new capital cost. ATJ SAF cost assumes approximately $5.00/bu corn for illustrative purposes; estimates dependent on feedstock prices and other assumptions. SAF Cash Cost of Production vs. Fossil Jet Fuel ATJ SAF production cash costs are expected to be competitive with fossil jet fuel, even though ATJ SAF can deliver 100% or more carbon abatement per gallon Gevo’s proprietary integrated process design and technologies lead to most favored competitive position The future of aviation is Alcohol-to-Jet; it’s the most competitive on a cash cost of production basis SAF Fossil Jet Fuel 11
12. Most Competitive SAF Carbon Abatement Cost of Carbon Abatement is low enough that the carbon value from environmental incentives (RINs, Federal, State level) can make the SAF affordable to airlines Agriculture benefits may further reduce carbon abatement cost at $20-60/MT CO2e6 Based work done by an independent global consulting firm which includes on external market data and internal estimates. (1) Carbon abatement cost = (Cost of SAF production + Cost of capital – Fossil jet price of $2.08/gal) / (Fossil jet Carbon Intensity 89 gCO2e/MJ – SAF Carbon Intensity) x Conversion Factor. Conversion Factor = 1,000,000 gCO2e per ton / 119,777 BTU per gal jet x 948 Btu per MJ. (2) State and Federal incentives include incentives such as the 45Z, California LCFS, RINs and state SAF tax credits, as applicable. Based on internal estimates for Gevo Net-Zero 1 greenfield SAF plant. (3) Soybean oil (43 CI), assumes brownfield HEFA facility $6.80-7.01/gallon production and capital cost. (4) Forestry residues (4 CI). (5) Combustion point source CO2 (12 CI). 6. USDA Carbon Abatement Cost ($ per ton of CO2 equivalent1) Power to Liquids5 HEFA3 Fischer-Tropsch Gasification4 +2,000 Power to Liquids5 HEFA3 Fischer-Tropsch Gasification4 ~$0 Without State and Federal Incentives(2) (RINs, LCFS etc.) With State and Federal Incentives(2) (RINs, LCFS etc) 12
13. 13 Putting it all Together with Argonne GREET: How we are Planning to Drive Carbon Intensity Down Why DOE Argonne GREET Model? • Best scientific model • State of the art • Updated regularly to reflect new science • Maximizes the carbon value from climate-smart ag to be shared along the value chain with farmers • Counts ag practices, CCS and has most up to date iLUC CI Score gCO2e/MJ H2 CCS Without De-carbonization ATJ = alcohol to jet De-carbonization Potential ILUC – Indirect Land Use. CCS – Carbon Capture Sequestration. CI – Carbon Intensity Agriculture is potentially the largest and lowest-cost carbon abatement opportunity
14. 14 (1) For illustration only - Assumes renewable energy is used in manufacturing and calculated using Argonne GREET, including other climate smart ag practices. (2) Thompson, N. et al. (2021) “Opportunities And Challenges Associated With “Carbon Farming” For U.S. Row-Crop Producers”, Purdue University Center for Commercial Agriculture. Accessed on August 12, 2021 at https://ag.purdue.edu/commercialag/home/resource/2021/06/opportunities-and-challenges-associated-with-carbon-farming-for-u-s-row-crop-producers/ . Image available on same site, powered by Bing, GeoNames, Microsoft, and TomTom Roughly 50% of cropland uses low-till or no-till. With 100% implementation, could sequester 2% of total US GHG emissions(2). With further advances in soil science and other climate- smart practices, even more is possible. We plan to reward growers for their contributions to CI reduction while improving soil health. DELIVERING FOOD, FUEL AND CARBON REMOVAL WHICH OF THESE FIELDS HAS A BETTER SUSTAINABILITY FOOTPRINT? Reduced Till leads to a -27 CI reduction in SAF or better (1) No-Till leads to a -33 CI reduction in SAF or better(1) Conventional Till Baseline Combination of practices, soil amendments and microbial solutions have potential to increase by over ~3x!
15. 15 Tracking Carbon Across the Business System Make Money Monetization of Attributes Savings with automation, smart contracts Traceable Auditable Avoid Green-washing and Double Counting Truck Scale Corn Storage Fermentation Hydrocarbon Production Storage Rail & Truck Milling and Protein Production Grower/Carbon Capture Cloud Proprietary DLT Based Reporting Engine Proprietary DLT based technology merged to carbon tracking, and delivering verified sustainability metrics and carbon intensity Field/Forest Level End Use Gevo has obtained a Climate-Smart Commodities grant with up to $30M award ceiling; rewarding farmers for low- CI corn through value chain to SAF Verified Sustainability Attributes (e.g., carbon value) that Can Be tokenized and traded Verified Info and Data for ESG or Other Reports, and regulatory reporting Synthesis of data captured across value chain and converted into information based on Argonne GREET model Immutable
16. WE BUILT THE SYSTEM FOR END-TO-END TRACEABILITY AND CARBON ACCOUNTING FOR SAF 16 Feedstock SAF *Digital Measuring, Reporting and Verification Farm to Flight Counting & Accounting of commodity production and sustainability attributes across the value chain. Attribute Tracking Attribute Tracking Audit Verification Reporting Audit Verification Reporting Audit Verification Reporting Airline: Scope 1 / Passenger: Scope 3
17. NOW EXPANDING TO PROVIDE END-TO-END TRACEABILITY AND CARBON ACCOUNTING FOR ETHANOL PRODUCERS 17 *Digital Measuring, Reporting and Verification Ethanol Plant CI Score Storage Corn CI Score Attribute Tracking Audit Verification Reporting Attribute Tracking Roadways CI Score of Full Product Lifecycle Field to Fuel Low CI Products • Ethanol • Coproducts • Tax Incentives • Compliance • Voluntary Carbon Markets Audit Verification Reporting Audit Verification Reporting
18. MEASURING, REPORTING AND VERIFYING FIELD DATA Entity Confidential Farm Confidential Grower Confidential Field Field 150 Field ID #001565 Acres 151.5 Season 2021 Yield (bushel /acre) 210.6 Bushels 31.906 (810t) CI from emissions 14.3 gCO2e/MJ CI including SOC -15 gCO2e/MJ Total potential CI contribution from feedstock -0.7gCO2e/MJ National Corn Average CI 30.1gCO2e/MJ Granular Software Fertilizer, Lime, Tillage, Herbicide, Insecticides, Yield, Moisture, Cover Crops Fertilizer Suppliers Chemical composition MyJohnDeere Platform Diesel, Gasoline Declarative Electricity, Nitrogen Management Laboratories/ Supplier Reports Manure, Soil sampling, Custom Applications, LPG Google Earth GIS Practice verifications, Land Use Change check Certification RSB Farm verified Field Overview Data Input Sources Carbon Intensity Score* gCO2e/MJ -0.7 Real field-level results showing potential -31 CI reductions in SAF with precision ag, cover crops and conservation tillage Now: Developing fully integrated and automated system for biofuels from field to gallon. 18 *Calculated as potential CI contribution in final SAF, excluding LUC **Source: Mi. Wang, Argonne National Lab, “Updated Life-cycle Analysis of Biofuels with the GREET Model” Presentation at Task 39 of IEA Bioenergy TCP, April 2, 2020
19. USDA GRANT FOR CLIMATE-SMART AGRICULTURE The GEVO Climate-Smart Farm-to-Flight Program The Project aims to create critical structural climate-smart market incentives for low carbon- intensity corn as well as to accelerate the production of sustainable aviation fuel to reduce the sector’s dependency on fossil-based fuel. This project includes an immediate market opportunity to sell climate-smart, low-climate-impact corn. Lead Partner Gevo, Inc. Other Major Partners: Southwest lowa Renewable Energy, LLC, Google, Farmers Edge, EarthOptics, South Dakota State University, Regen Ag Labs, Yard Stick, Double H Ag Services, Farmers Edge, AgSpire, PrairieFood, Stine Seed Farm, Holganix, Trace Genomics, MidState Agronomy, Double H Ag Services, Colorado State University, Iowa State University, Standing Rock (SAGE) Renewable Energy Power Authority Primary States Expected: MN, SD, NE, IA, Tribal Approximate Funding Ceiling $30,000,000 U.S. Department of Agriculture Chooses Gevo’s Climate-Smart Ag Proposal for Grant Worth Up to $30 Million Major Commodities: Corn 19
20. 20 GEVO ENTERS JOINT DEVELOPMENT AGREEMENT WITH SOUTHWEST IOWA RENEWABLE ENERGY TO MEASURE, REPORT & VERIFY CARBON INTENSITY – FIELD TO FUEL Using a Co-Development approach with Southwest Iowa Renewable Energy (SIRE) to launch the Verity Tracking platform for ethanol which benefits all stakeholders.
21. LARGE, GROWING BIOFUELS CUSTOMER BASE Source: Global Consulting Firm, IRA and CBAM tax credit and carbon tax value, Bloomberg. (1) US ethanol production plants market size is approximately 15 billion gallons per year. Potential value pool dollar amount lower bound based on assuming half of US plants achieving a 10 CI point reduction valued at $0.02 per gallon per CI point under 50 gCO2e/MJ under 45Z tax credit. 21 Potential Size of Value Pool for Customers Tracked and Enabled 3 ethanol producer customers contracted, and growing 2% of the total US ethanol market or +300 million gallons per year 100% farmer retention in the grower program comprising 65,000 acres and growing For comparison, total value pool of all major global compliance carbon markets in 2023: $800 billion Current Customer Base US ethanol producers ~$1.5-3 ​ billion(1) Potential Customer Value Pool Verity fees, profit share All crops Biofuel crops Biofuels crops used for biofuels All commodities
22. Current Target Markets Represent a Fraction of Total Markets Requiring Carbon Tracking Solutions Biofuels Ethanol, Renewable Diesel, Naphtha, Biodiesel SAF Sustainable Aviation Fuel RFNBOs* Hydrogen, eFuels, Green Ammonia, Methanol Agriculture Low-CI crops for food, feed, fuels and chemicals Feedstocks Waste Feedstocks for biofuels and bioenergy Developing Solutions RNG Biogas, Biomethane, Landfill gas *Renewable Fuels of Non-Biological Origin Current Target Markets We are actively commercializing solutions from feedstocks to biofuels and SAF Marine Marine biofuels 22
23. 23 Thank you