Gevo Inc. on Sept. 12 announced it has entered into a definitive agreement to acquire the ethanol production plant and carbon capture and sequestration (CCS) assets of Red Trail Energy LLC for $210 million. Gevo plans to add net-zero sustainable aviation fuel (SAF) production capacity to the site.
Red Trail Energy is a 65 MMgy ethanol plant located in Richardton, North Dakota. The facility began operating its CCS project in June 2022. Gevo estimates the company’s existing CCS assets have a total sequestration capacity of 1 million metric tons per year. Approximately 160,000 metric tons of that capacity is currently being utilized.
The transaction is expected to close by the first quarter of 2025, subject to Red Trail Energy shareholder approval, regulatory approvals and other conditions. Gevo expects to retain all of the approximately 50 full-time employees currently operating the assets being acquired.
Gevo officials did not disclose a timeframe for the planned addition of SAF capacity at the Red Trail Energy site, but did discuss potential plans to future reduce the carbon intensity (CI) of the plant’s ethanol production during a conference call held Sept. 12.
Chris Ryan, president and chief operating officer of Gevo, said the Red Trail Eniergy plant currently produces ethanol with a 70% lower CI than the industry average. He also noted the plant site offers plenty of room for expansion, in terms of both production and CCS capacity. Once the transaction closes, Ryan said Gevo plans to immediately begin optimizing the asset with partners to further reduce the CI. He explained these improvements would not only further decarbonize the current ethanol production, but also enable the site for net-zero SAF and chemicals production. He noted that one option would be to install a combined-heat-and-power (CHP) system with carbon capture that could provide the site with near-zero carbon electricity and steam. Renewables, such as wind, solar and biogas, also offer options to further decarbonize the plant site.
Patrick Gruber, CEO of Gevo, discussed how the future Red Trail Energy site, referred to at Net-Zero North, dovetails with Gevo’s plans for its proposed Net-Zero 1 SAF production facility in South Dakota and other company initiatives. This includes the possibility of enabling a new option for CCS at the Net-Zero 1 site. Gruber said the excess CCS capacity at the Red Trail Energy site provides an opportunity to capture carbon from Net-Zero 1 should the proposed Summit Carbon Solutions pipeline project be delayed. The Red Trail Energy plant site is located approximately 400 miles northwest of the planned Net-Zero 1 site near Lake Preston, South Dakota.
