Gevo (GEVO) Q1 2026 Earnings Transcript

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DATE

Thursday, May 7, 2026 at 4:30 p.m. ET

Call participants

• Chief Executive Officer — Paul D. Bloom
• Chief Financial Officer — Oluwagbemileke Agiri
• Vice President of Finance and Strategy — Eric Frey
• Executive Vice President of Operations and Engineering — [Name not provided]

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Takeaways

• Revenue -- $43 million, an increase from $29 million for the comparable period last year, reflecting volume and margin improvements.
• Net loss attributable to Gevo -- $22 million, or $0.09 per share, consistent with the same period last year.
• Non-GAAP adjusted EBITDA -- $9 million, a turnaround from a $15 million loss for the same period last year, primarily driven by performance in carbon capture, low carbon ethanol, and renewable natural gas.
• Cash and cash equivalents -- $39 million at period end, providing liquidity for operations and planned capital expenditures.
• Operating cash flow -- Negative $21 million, including $17 million in unmonetized tax credits and $4 million in one-time debt-related costs; cash outflow would be close to neutral excluding these items.
• Renewable natural gas production -- 92,000 BTUs produced, up 15% from 80,000 BTUs for the same period last year.
• Low carbon ethanol production (Gevo North Dakota) -- 18 million gallons produced, along with co-products of 16,000 tons of dry distillers grains, 51,000 tons of modified distillers grains, and 5 million pounds of corn oil.
• Carbon attributes sold -- 57% of carbon attributes attached to fuel were sold this period, contributing to overall margin performance.
• Engineered carbon dioxide removal credits (CDRs) -- Nearly 20,000 tons of CDRs generated with ongoing sales to customers in the voluntary carbon market.
• Full year and annualized run-rate adjusted EBITDA outlook -- $30 million expected for 2026, with a recurring target of $40 million annualized run-rate adjusted EBITDA from existing operations by year-end, prior to the impact of debottlenecking or expansions.
• Debottlenecking project (Gevo North Dakota) -- Expected to expand segment adjusted EBITDA by 10%-15% upon completion, with all tie-ins installed and full financial impact expected to commence at the start of 2027.
• Plant capacity expansion announcement -- Plans to double North Dakota plant ethanol capacity to 150 million gallons per year, from an expected post-debottlenecking capacity of 75 million gallons per year.
• Expansion financing -- Preliminary agreement signed with Ara Energy to co-invest, with the capital stack to be completed with a combination of cash-on-hand, internal cash flow, and project-level debt; 18-24 month construction timeline projected after final investment decision.
• Project NorthStar (ATJ 30) financing -- Company exited DOE financing process due to new requirements; multiple nonbinding private lender indications of interest received; targeting non-dilutive project-level debt and strategic capital, with financing goal by year-end.
• Project NorthStar (ATJ 30) offtake agreements -- Approximately 50% of financeable long-term synthetic aviation fuel and carbon attribute contracts secured; remaining at term sheet stage to meet lender requirements.
• FEL engineering progress (Project NorthStar) -- FEL 2 completed and FEL 3 on track for completion this quarter, to further refine capital cost estimates.
• Anticipated Project NorthStar adjusted EBITDA -- Management continues to cite an expected $150 million per year of adjusted EBITDA upon commissioning.
• Capital expenditures -- $26 million budgeted for debottlenecking and site improvements in 2026, funded internally through the North Dakota plant's operating cash flows.
• EBITDA Challenge initiative -- Launched company-wide to drive revenue growth and cost improvements beyond the $40 million adjusted EBITDA target, implemented via performance incentives for all employees.
• Verity platform -- Eight customers signed, recent partnerships with Bushel and Cboe to expand reach; full monetization contingent on anticipated 45Z agricultural benefits being included in relevant policy.

Summary

Gevo (NASDAQ:GEVO) provided explicit full-year EBITDA guidance of $30 million for 2026 and reaffirmed its target of achieving a $40 million annualized run-rate from existing operations by year-end, before any incremental benefit from plant debottlenecking or expansion. Management stated the North Dakota expansion project is already underway, and construction could begin this year subject to final financing with Ara Energy, aiming to double ethanol capacity by 2027. Withdrawal from DOE loan guarantee funding for Project NorthStar was attributed to new requirements described as misaligned with stakeholder interests; the company has since obtained private lender interest, expects to complete FEL 3 engineering this quarter, and targets a $150 million annual adjusted EBITDA contribution at full scale. CDR credit sales and low carbon ethanol margin expansion were highlighted as key drivers behind the improved operating and financial results, including four consecutive quarters of positive non-GAAP adjusted EBITDA. Sales traction and distribution partnerships for the Verity traceability platform showed operational growth, but management flagged that material upside depends on policy changes to include agricultural benefits under the 45Z credit.

• Oluwagbemileke Agiri clarified that project financing leverage for ATJ 30 targets a 60% debt-to-cost ratio, which is within current market norms discussed with potential capital partners.
• The company indicated that operating cash flow was significantly affected by the timing of $17 million in unmonetized tax credits and $4 million in debt refinancing charges, which if excluded would bring cash flow near breakeven for the period.
• Management noted that offtake agreement coverage for Project NorthStar may be within the 70%-80% range typical of commercial project lending structures, though the final proportion is yet to be determined.
• The quarter’s production exceeded nameplate ethanol capacity, with all physical tie-ins for the debottlenecking project completed during a planned outage, eliminating the need for further shutdowns in 2026.

Industry glossary

• ATJ (Alcohol-to-Jet): A process that converts renewable alcohol-derived feedstocks into jet fuel compatible with existing aircraft and infrastructure.
• CDR (Carbon Dioxide Removal Credit): A tradable credit representing the engineered permanent removal of one ton of carbon dioxide from the atmosphere, sold in voluntary or compliance carbon markets.
• FEL (Front-End Loading): A staged engineering design process that assesses and refines project costs, risk, and feasibility before major capital investment decisions.
• 45Z: A reference to the U.S. Inflation Reduction Act’s new clean fuel production tax credit section 45Z, which rewards low-carbon-intensity fuel production, with details pending for agricultural benefit inclusions.
• RIN (Renewable Identification Number): A unique identifier used to track renewable fuel production and compliance credits under U.S. Renewable Fuel Standard (RFS) regulations, including D4 RINs for biodiesel and renewable diesel.
• SAF (Sustainable Aviation Fuel): Renewable, low-carbon jet fuel alternatives meeting aviation standards and designed to reduce greenhouse gas emissions from air transport.

Full Conference Call Transcript

Eric Frey: Good afternoon, everyone, and thank you for joining us on today’s call to discuss Gevo, Inc.’s first quarter and full year 2026 results. I am Eric Frey, Vice President of Finance and Strategy at Gevo, Inc. With me today, we have Paul D. Bloom, our Chief Executive Officer; Oluwagbemileke Agiri, our Chief Financial Officer; and Unknown Speaker, Executive Vice President of Operations and Engineering. Earlier today, we issued a press release that outlines our first quarter 2026 results and some of the topics we plan to discuss. Copies of the press release are available on our website at gevo.com.

Please be advised that our remarks today, including answers to your questions, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those currently anticipated. Those statements include projections about the timing, development, engineering, financing, and construction of our alcohol-to-jet project; the potential expansion and debottlenecking of our Gevo, Inc. North Dakota plant; the potential expansion of our carbon sequestration well; our expected future adjusted EBITDA; our agreements with Ara Energy; and other activities described in our filings with the Securities and Exchange Commission, which are incorporated by reference. We disclaim any obligation to update these forward-looking statements.

In addition, we may provide certain non-GAAP financial information on this call. The relevant definitions and GAAP reconciliations may be found in our earnings release which can be found on our website at gevo.com in the Investor Relations section. Following the prepared remarks, we will open the call for questions. I would like to remind everyone that this conference call is open to the media, and we are providing a simultaneous webcast to the public. A replay of this call and other past events will be available via the company’s Investor Relations page at gevo.com. I would now like to turn the call over to the CEO of Gevo, Inc., Paul D. Bloom. Paul?

Paul D. Bloom: Thanks, Eric. Good afternoon, everyone, and thanks for joining us. This quarter was about advancing execution and strengthening the foundation for scale. Our team continued to build on the momentum of last year, strengthening our core business while advancing the next phase of our growth. We made measurable progress on our ATJ 30 project and our planned debottlenecking and expansion of Gevo, Inc. North Dakota. We continued to improve the performance of our existing business and refine our financing strategy. 2026 was our fourth consecutive quarter delivering positive non-GAAP adjusted EBITDA that reflected better than expected results with improved margins on top of solid production volumes. Our carbon business continued to deliver strong returns from low carbon ethanol compliance markets.

In Q1, we sold approximately 57% of our carbon attributes attached to fuel. We also generated nearly 20 thousand tons of engineered carbon dioxide removal credits, or CDRs, to be sold into the voluntary carbon market and continue to see steady demand and relatively strong credit pricing for low carbon ethanol sales in markets where we participate. Our customers for CDRs continued to grow in Q1, including purchases and retirements by Amgen, Bank of Montreal, and PayPal, while continuing to advance more sizable long-term CDR deals. Importantly, we see continued growth this year even before our debottlenecking at Gevo, Inc. North Dakota comes into effect. Last year, we reported approximately $16 million adjusted EBITDA.

For 2026, we expect approximately $30 million of adjusted EBITDA as we progress towards our previously stated target of achieving $40 million of adjusted EBITDA on an annualized run-rate basis from existing operations by the end of this year. The impact of our debottlenecking and other growth plans is incremental to this target. To further support our efforts, we have launched a corporate-wide initiative we are calling the EBITDA Challenge. This is about unlocking new revenue growth, improving operational performance, and managing costs across our organization. We look forward to providing more updates as we make progress on this critical initiative.

Now let me turn to our alcohol-to-jet project that we call Project NorthStar, since I know that is top of mind. As previously announced, we made the decision to withdraw from the DOE financing process following a conversation with them around certain new requirements for the loan guarantee, including enhanced oil recovery as a business objective. These requirements did not align with our duty to maximize value for our stakeholders, from both an economic and timeline perspective. Withdrawing from the DOE process allows us to fully engage with a broader group of private capital providers while adding greater certainty and flexibility to our financing efforts.

I am pleased to report that we have received nonbinding indications of interest from multiple lenders, which supports our goal of securing financing for Project NorthStar by the end of 2026. As a reminder, we are pursuing a combination of non-dilutive project-level debt and strategic capital options for Project NorthStar. Beyond financing, we are making good progress on our other key milestones that include engineering and offtake agreements. On engineering, we talk about front end loading, otherwise known as FEL, for which stage two has been completed. We remain on track to complete FEL 3 this quarter, which will further refine our capital cost estimates and position us to move forward to detailed engineering.

Regarding offtake, we have already secured approximately half of the financeable long-term contracts for synthetic aviation fuel and carbon attributes for the project. Currently, we are at the term sheet stage for additional contracts which, upon completion, we expect will meet our financing requirements. We see a clear path to final investment decision, or FID, and based on our progress, continue to believe that Project NorthStar can deliver approximately $150 million of adjusted EBITDA per year once fully commissioned and online. Switching gears to our expansion projects, on March 30, we announced our intent to expand the capacity of Gevo, Inc.

North Dakota by up to 75 million gallons per year, bringing our total capacity to an expected 150 million gallons per year. This expansion would effectively double the carbon capture and low carbon ethanol production and all the value that comes with that, from our original acquisition of the plant last year. To help finance the expansion, we entered into a preliminary agreement with Ara Energy, a global private equity and infrastructure firm focused on industrial decarbonization, to co-invest in the project.

We still have to finalize the details, but we believe partnering with experienced capital providers will allow us to move faster than our balance sheet alone would support, while maintaining a disciplined approach to capital projects, avoiding dilution, and optimizing risk-adjusted returns. We expect construction of that expansion to take approximately 18 to 24 months following final investment decision. Lastly, let me touch on the debottlenecking and other site improvements that are currently in progress at Gevo, Inc. North Dakota. As previously announced, the volumes unlocked by our debottlenecking efforts should expand adjusted EBITDA in the Gevo, Inc. North Dakota segment by an anticipated 10% to 15%.

We are on track to deliver the debottlenecking and operational reliability projects by the end of 2026. Site improvements are underway, and Unknown Speaker will talk more about that and our other operational and engineering highlights. But first, I will turn it over to Oluwagbemileke Agiri to run through the financial performance for the quarter. I will come back at the end to recap.

Oluwagbemileke Agiri: Thanks, Paul. During Q1 2026, we reported revenue of $43 million compared to $29 million in Q1 last year, net loss attributable to Gevo, Inc. of $22 million, or $0.09 per share, which is coincidentally the same as it was in Q1 of last year. I would emphasize that first quarter results include debt extinguishment and modification of $11 million, and non-GAAP adjusted EBITDA of $9 million compared to a loss of $15 million in Q1 last year. Adjusted EBITDA largely reflects contributions from our carbon capture, low carbon ethanol and RNG operations, and corporate expenses.

While our adjusted EBITDA for full year 2025 was $16 million, we continue to see adjusted EBITDA growth in 2026 and are excited to reaffirm our target of reaching an annualized run-rate adjusted EBITDA of $40 million this year. During the 12 months of 2026, we expect $30 million of adjusted EBITDA. Our first quarter results were better than expected due to strong production and margin performance, in spite of typical seasonal softness in ethanol margins. We are optimizing value from monetizing carbon, commodity, and tax credits, in addition to our strong focus on fiscal discipline and cost management. As Paul mentioned, we launched a corporate-wide initiative that we are calling the EBITDA Challenge.

This is not just a cost-cutting exercise. This is about unlocking new revenue growth, improving operational performance, and managing costs across our organization. Going forward, we continue to expect some quarter-to-quarter variability in adjusted EBITDA, but overall, we reaffirm our targets. I also note that we see some potential upsides to our targets across a number of fronts, including unlocking revenue from expected new low carbon fuel pathway approvals we have been working on for over a year. Turning to cash flow and the balance sheet, we ended the quarter with approximately $39 million of cash and cash equivalents. We reported negative operating cash flow of $21 million.

This reflects timing-related impacts, including $17 million of tax credits that have been generated but have not yet been monetized, and roughly $4 million of one-time costs tied to debt refinancing and extinguishment. Adjusting for these factors, operating cash flow would have been close to neutral, in line with our expectations and consistent with our path toward achieving our 2026 cash flow objectives. Refinancing our growth, we are taking a disciplined and methodical approach. Our priority is to ensure that any capital we raise aligns with our long-term strategy, preserves flexibility, and supports sustainable value creation for our shareholders. Regarding ATJ 30, we are actively evaluating indications of interest that we have received from private capital providers.

This process is focused not only on securing funding, but partnering with capital providers who understand the strategic position of our project, share a commitment to our execution timeline, and help minimize dilution. On debottlenecking and other asset enhancement projects, we expect to spend $26 million this year that we plan to fund internally, as we have said previously. And as Paul mentioned, we expect to finance our expansion project with capital partners like Ara Energy. Overall, we believe our cash and cash flow put us in a strong place to execute this year and confidently pursue our long-term objectives. And now I will hand it over to Unknown Speaker to talk about operations. Unknown Speaker?

Unknown Speaker: Thanks, Oluwagbemileke. From an operations standpoint, we saw consistent performance across our asset base in the first quarter. At Gevo, Inc. RNG, we produced about 92 thousand BTUs of renewable natural gas compared to about 80 thousand during the same quarter last year, or a 15% increase. Last quarter saw improved reliability as a result of our continued focus on operational stability. At Gevo, Inc. North Dakota, the plant delivered 18 million gallons of low carbon ethanol, plus 16 thousand tons of dry distillers grains, 51 thousand tons of modified distillers grains, and 5 million pounds of corn oil co-products. This was even better than expected as a result of our continued focus on operational excellence.

The team remains focused on executing the debottlenecking and asset reliability projects that are expected to unlock incremental volumes and expand margins. During a planned shutdown in April, we succeeded in making the process tie-ins we need for these improvements. We believe we will not need any additional or unplanned outages to complete and commission the debottlenecking. That is great because we can start adding long-term production capacity without sacrificing our short-term volume this year. We are currently in construction of a new fermenter, liquefaction tank, beer degassing system, and a new milling building, which are all part of our plans to increase the plant capacity to around 75 million gallons per year of low carbon ethanol starting in 2027.

For comparison, the current nameplate capacity is 67 million gallons per year, which we are already exceeding. We budgeted $26 million in capital expenditures this year for the debottlenecking and site improvements, funded by Gevo, Inc. North Dakota operating cash flows, as Oluwagbemileke mentioned, and we continue to expect about that level of capital spend. On our plant expansion from 75 to 150 million gallons a year, we are repurposing much of our work, design, and team from our previous ethanol project that was originally planned for South Dakota. We believe these efforts, while working with our existing network of partners, including Fluid Quip Technologies, will accelerate the expansion.

Finally, on ATJ 30, we are on schedule to complete FEL 3, which will bring us to a plus or minus 10% estimate on the capital cost of the project, including the modularization work being done by Praj along with the Gevo, Inc. engineering team in India. Our U.S. engineering team and engineering partners are focused on completing the balance of plant design and integration of the entire project. In summary, we are focused on delivering operational excellence while also positioning our assets to support the next phase of growth. Now I will turn it back to Paul.

Paul D. Bloom: Thanks. As you can see, we are in a much stronger position than we were a year ago. We have a solid operating base, a clear path to improving profitability, and multiple opportunities to scale our business in a meaningful and repeatable way. In addition, the conflict in the Middle East has highlighted, among other things, the relative inelasticity of jet fuel supply and demand, underscoring the critical importance of renewable alternatives like SAF. With the expected increase in global demand for jet fuel in the future, Gevo, Inc. has seen increased interest in our SAF and franchise strategy, both in our carbon management and our anticipated ability to supplement regional supply with our modular approach to deploying alcohol-to-jet capacity.

Let me finish by saying our focus is clear. First, expand our cash-generating business. Second, secure a durable capital structure. Third, deliver our first commercial-scale SAF project. And lastly, build a repeatable platform for growth. With that, I will turn it back over to the operator to take your questions. Thank you.

Operator: We will now open the call for questions. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Your first question comes from Amit Dayal from H.C. Wainwright. Please go ahead.

Amit Dayal: Thank you. Good afternoon, everyone. Thank you for taking my questions. Good to see all the progress, Paul. On the debottlenecking front, should we assume that the impact from these efforts will reflect in the financials in 2027?

Paul D. Bloom: Hi, Amit. Thanks for the question. Yes, that is the plan here because, like Unknown Speaker mentioned, we have already got the tie-ins done for the expansion. We are working on that construction today. That will be done at the end of the year, so that should immediately start in 2027 in Q1 to start delivering that extra 10% to 15% that we are talking about compared to where we end the year.

Amit Dayal: Understood. Thank you for that. And with the efforts with Ara, does that require any capital commitment from you, or will that also be project finance? I am just trying to think through whether that puts any burden on the balance sheet or whether you have optionality to fund that through project financing and outside sources.

Oluwagbemileke Agiri: Thanks for the question. High level, we are going to arrange project-level debt to complete the capital stack. So the combination of cash that we have on hand with capital from Ara Energy completes all the capital we need to complete that expansion project.

Paul D. Bloom: Yes, we were really excited about that, Amit, to say we found what we think is a really good partner in Ara Energy. We are looking forward to getting that finalized so we can get started because the clock is ticking, and we want to get that done as soon as possible. Like we mentioned, we have a timeline of 18 to 24 months to get that completed, and that effectively doubles what we have at Gevo, Inc. North Dakota. That is a pretty exciting project for us, and we just cannot go fast enough.

Amit Dayal: On that front, Paul, can we assume that if everything closes in a timely manner, work on the buildout starts this year in 2026 itself?

Paul D. Bloom: Absolutely. We have already started to work on this project because, Amit, we had a lot of the team working on ethanol plant design back when we had the South Dakota greenfield plant. We have done a lot already, so we are repurposing the team. Unknown Speaker mentioned we are already working with Fluid Quip, for example. So we have already started. How do we get this done? What does that engineering look like on site? We started talking about that right after we got the acquisition done of the Red Trail assets, now Gevo, Inc. North Dakota.

So this has been in the works and in the planning for some time, and we are ready to hit the ground running.

Amit Dayal: That is good to hear. Just last question. Did not hear too much about Verity. Just wondering how that is progressing and if you are seeing traction with potential customers on that front?

Paul D. Bloom: Sure. Thanks for the question on Verity. We love Verity. Verity has become part of our core franchise business for one because if you look at a bottle of Jet A and a bottle of SAF, they look the same because the molecules are essentially identical. The only difference is how we got there: what was the source of the feedstock, how we produced it, and the carbon intensity score, and customers want that proof. So as we build out our business, we will have Verity inside everything that we are doing, whether it is low carbon ethanol or on the SAF side. On Verity specifically, we have more customers.

We had a couple of partnerships that we announced over the past few months. One was with Bushel, who basically services about 50% of the grain elevators in the United States and Canada. We think that is a really good way to take Verity and combine it with another software platform and get out to the market faster. We have also been working with a company called Cboe, and Cboe really helps with data acquisition, boots on the ground. We have signed up 8 customers so far. We are really excited about this.

The one thing that we need to still see for Verity—because we designed this to take the benefits from the field to the fleet, or the field to the seat on the aircraft—is ag benefits, the 45Z ag benefits specifically included into 45Z. We have been waiting for that. We think we are getting closer, but we really need to see that, and I think that is a catalyst for Verity to really take off and grow in the marketplace because we have a tool that was designed to do that.

Amit Dayal: Understood. Thank you, Paul. That is all I have. I will step back in the queue.

Paul D. Bloom: Great. Thanks.

Operator: Your next question comes from Jeffrey Grampp from Northland Capital Markets. Please go ahead.

Jeffrey Grampp: Afternoon, guys. I am curious, with respect to the project finance opportunities for both the expansion project and ATJ, given that the timelines could potentially coincide a bit, are you evaluating perhaps a single source of capital for both projects? Does it make sense to have varying capital for different projects? Just curious how you are evaluating funding since it seems like there is perhaps some overlap.

Oluwagbemileke Agiri: Thanks for the question. High level, we are evaluating all executable project financing plans, and some of the current project capital providers that we are talking to have expressed appetite in both projects. At the end of the day, we have a decision to make in terms of how we prioritize the capital providers that optimize our return for each of the various projects we have in front of us. We are really excited about the opportunities and the engagement that we have so far. Stay tuned. We will be sharing more definitively in terms of what those selection criteria are and the parties that we are going to be developing those projects with, especially ATJ 30, in due course.

Paul D. Bloom: Thanks, Oluwagbemileke. Just to add on to that, Jeff, one of the things that we want to make sure of is we go as fast as we can on these projects. Making sure that we have the right options, whether they are together or independent, could change timelines on some things. Like we said, we are looking at all the options and are really excited and happy about the response that we have at this point.

Jeffrey Grampp: For my follow-up, somewhat related to the financing but more specific to ATJ. It sounds like you have half the offtake in place and you are working on additional offtake. Is it safe to assume that is a prerequisite to closing anything on that side? And are there any other major obstacles or negotiating points outside of the offtake beyond just normal terms and conditions?

Paul D. Bloom: The offtakes are the major gating item that we are still working through here, Jeff. We are focusing on delivering those bankable contracts that everybody is comfortable with on the financing side. We are pretty far along. We just need to finish up a few things that are at the term sheet stage. We will get that completed here, hopefully in the near future. I do not want to have everything under contract either for the ATJ 30 project.

Project NorthStar we believe is going to be very accretive, and we want to make sure that we have some free to sell in the market so we can be opportunistic with those sales because who knows what those carbon values and jet fuel prices are going to be in the future. We will get enough to get where we need to be for the financing and go from there.

Jeffrey Grampp: Understood. If I can sneak one more in related to that last point, what is that right mix? I understand there is not a single right number, but what kind of spot exposure makes sense for you?

Oluwagbemileke Agiri: Ideally, you effectively do the math to understand what amount of contracted offtakes underpin the investments from our capital providers. It is a negotiation that we are going through. Typically, when you look at capital projects like ours, you see facilities under contracted offtakes somewhere between 70% to 80%. Maybe we will be in that mix. Maybe we can expose our volumes to more spot offtake volumes. That is yet to be determined. Did I address your question?

Jeffrey Grampp: Yes, that is perfect. I will turn it back. Thank you, guys.

Oluwagbemileke Agiri: Thanks.

Operator: Before we proceed, again, if you would like to ask a question and join the queue, simply press star 1. Your next question comes from Derrick Whitfield from Texas Capital. Please go ahead.

Derrick Whitfield: Good afternoon all, and congrats on the strong quarter. Paul, I am sure a lot of this was in process with your team before, but you have hit the ground running with this release.

Paul D. Bloom: Thanks. We have been busy. It is a busy group.

Derrick Whitfield: On the EBITDA Challenge, could you speak to the scale and scope of the program and what it could reasonably yield on the current platform before accounting for debottlenecking and expansion?

Paul D. Bloom: Sure thing. We are pretty excited about this. It is focused on getting us to the run-rate of $40 million in adjusted EBITDA per year as soon as possible. We said we are going to do it, and the main thing is: how are we going to do it and measure it? We put process and an initiative in place for all Gevo, Inc. colleagues where we are capturing the metrics of what we are putting in place. It is part of an incentive plan that all employees have to drive EBITDA, not just to that $40 million but well beyond that. Think of this as phase one.

It is getting us all to think about how we work, how we do our jobs the most efficient way, and deliver value—whether unlocking revenue, managing our costs, or coming up with better operational projects. We have a whole list already, and that list will continue to grow. I think it will go well beyond the $40 million that we set as a target by the end of the year. If you look at the investor presentation, after $40 million, we will have the debottlenecking. After debottlenecking, we are looking at the terminal for third-party CO2, and then we have the expansion with Ara Energy, and then monetizing that pore space fully.

That gets to over $100 million in adjusted EBITDA that we are targeting. Again, think of it as a phased approach. We will continue this challenge. The challenge never ends; it will just go in phases as we work through it.

Oluwagbemileke Agiri: One of the key points is we are targeting sustainable EBITDA growth. As we look at cost management, we also look at opportunities for investment to expand margins. Those are aspects that we hope to translate into recurring EBITDA growth and drive shareholder value.

Paul D. Bloom: One other thing to reinforce: we have a number of fuel pathways today where we are selling low carbon fuel with the carbon attributes attached in compliance markets as part of our carbon business. Some of those recognize the value of carbon capture and sequestration, or the CCS value; some do not. We have made sure with our sustainability team that we have optionality to sell that value with or without the fuel, and we are getting more approvals. We expect additional approvals this year that should unlock substantial value. That is an example of a revenue unlock that could be quite substantial for us going forward.

Derrick Whitfield: Along the same lines, are you seeing opportunities to further improve your ethanol netbacks? Ethanol is, globally, the cheapest octane in the world at present, and the global product markets are exceptionally tight. It seems like there are ways to make more economics just on the brown molecule as well.

Paul D. Bloom: Absolutely. A couple of things are going on. We will see where the farm bill gets with E15, but that could increase ethanol demand by 5% just right there if we go to year-round E15. We have also seen other markets that are pulling for export, just extra demand. We see demand growth in Japan as they think about E10 and then moving on to E20. We look at marine markets where there has been a lot of talk and potential expansion. We are going to stay focused on the markets that we service really well because those are great markets for us, and we see new low carbon fuel markets open up.

Hawaii just announced a low carbon fuel standard. We have New Mexico that is starting to take shape. The Canadian market is really strong today on their credit pricing and demand, and they are a large importer of U.S. ethanol. We are well positioned to take advantage of that growth.

Unknown Speaker: I would add, as we look inside the fence and drive operational excellence, we are very focused on energy consumption—how we can be more energy efficient—and also how we can drive value in our co-product valorization. One project is how we can be even better with our corn oil recovery.

Paul D. Bloom: That operational excellence piece is important. The Red Trail assets and the team there have done a phenomenal job over time. We are bringing our team and combining forces now as Gevo, Inc. North Dakota to drive operational excellence. These are not just small incremental amounts. These are step-change kinds of improvements we could see. Corn oil recovery is a big one. As we look at things like D4 RINs, we will see how that continues to drive values for things like distillers corn oil as the D4 RINs in the recently announced RVO have gone up.

That is also good for potentially jet fuel in the future because we believe that RVO increase, with SAF anticipated to qualify for a D4, is all moving in the right direction.

Derrick Whitfield: With respect to project financing plans, how much of the total project CapEx could you reasonably cover with project financing? And should we think about the cost of financing as, let us call it, 200 to 300 basis points wide of DOE funding? Is that the right way to think about it?

Oluwagbemileke Agiri: We are targeting a leverage ratio of around 60% of the total project cost for ATJ 30. That is our target, and our engagement with private capital providers is on that basis. We think that tracks what the market will bear and what we are going to transact. On pricing, what you are triangulating is close to fair. The cost of debt that the DOE brought to us will erode a little bit as we engage with private capital providers. Some of those reasons you know: the subsidized capital and the guarantee structure that DOE had does not exist with other parties, and they have to charge closer to what the market rate is.

The range you gave is close to where we might end up.

Derrick Whitfield: Fantastic. Great update, guys. Thanks for your time.

Operator: There are no further questions at this time. I would now like to turn the call back over to Paul D. Bloom for the closing remarks. Please go ahead.

Paul D. Bloom: Thanks again, everybody, for joining us for this quarter’s update. We are really happy with the team’s performance. We are headed strong, and you will see continued focus on our EBITDA growth, which is one of the critical things for us. Stay tuned for more updates on our ATJ 30 financing—Project NorthStar—as we get that done by the end of this year. Again, great quarter. Really pleased with the progress that everybody is making, and thanks for joining us.

Operator: Ladies and gentlemen, thank you all for joining. That concludes today’s conference call. All participants may now disconnect. Thank you.

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