Gevo and Lufthansa sign agreement for commercial supply of renewable Alcohol-To-Jet Fuel
Gevo has been producing Alcohol-To-Jet (ATJ) fuel
in its biorefinery at South Hampton Resources’ facility in Silsbee (TX) since
2011. The plant has an input capacity of approximately 5-10 thousand gallons of
isobutanol
(from Gevo’s fermentation facility in Luverne) per month and produces testing
volumes for commercial airlines. Simultaneously, it has been working toward
commercializing this ATJ fuel envisaging its potential to be an aviation
biofuel alternative at competitive cost. Below, a summary of some of the steps taken
in this road toward commercialization that culminates in an important fact
announced yesterday.
Figure 1. Gevo’s fermentation facility in
Luverne. Gevo’s first commercial hydrocarbons facility is intended to be built there.
After six years of rigorous performance
assessments conducted by ASTM International, Gevo received the ASTM
certification for its ATJ fuel in Q1 2016. ASTM International included alcohol
to jet synthetic paraffinic kerosene (ATJ-SPK) derived from renewable
isobutanol in the last revision of ASTM D7566 (Standard Specification for
Aviation Turbine Fuel Containing Synthesized Hydrocarbons). Gevo’s ATJ become eligible
to be used for up to a 30% blend in conventional jet fuel for commercial
flights.
Following the chain of events, Gevo announced
that the first two commercial flights using its ATJ fuel took place on 7th June
originating in Seattle and flying to San Francisco International Airport and
Ronald Reagan Washington National Airport, respectively. The two Alaska
Airlines flights utilized a 20 percent fuel blend.
And yesterday, Gevo reported that it had entered
into a heads of agreement (see press
release) with Deutsche Lufthansa AG to supply its ATJ from its first
commercial hydrocarbons facility, intended to be built in Luverne (MN). The terms of the agreement contemplate
Lufthansa purchasing up to 8 million gallons per year of ATJ from Gevo or up to
40 million gallons over the 5 year life of the off-take agreement. The heads of
agreement establishes a selling price that is expected to allow for an
appropriate level of return on the capital required to build-out Gevo’s first
commercial scale hydrocarbons facility. The heads of agreement is non-binding and is subject to completion of a
binding off-take agreement and other definitive documentation between Gevo and
Lufthansa in the next few months.
