Gevo Inc (NASDAQ: GEVO) is having a strong start to the trading session in the premarket hours today, trading on gains of more than 12%. The gains come after the company announced a purchase and sale agreement. Here’s what’s happening:
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GEVO Stock Pops After Announcing A Purchase And Sale Agreement
In a press release issued early this morning, Gevo announced that it entered into a partnership agreement to produce and supply sustainable aviation fuel. The fuel will be used and distributed in France and throughout other parts of Europe.
GEVO said that under the agreement, sustainable aviation fuel produced in its facility in Silsbee, Texas and later in its Luverne facility, will be supplied to the customer, Air TOTAL.
Air TOTAL is a company that specializes in the manufacturing and marketing of jet fuel and aviation gasoline. The company has operated in the space for more than six decades, supplying the commercial, business and general aviation sectors with fuel.
In fact, Air TOTAL supplies its customer with fuel at more than 300 airports across 72 countries and five continents.
In a statement, Timothy J. Cesarek, Chief Commercial Officer at GEVO, had the following to offer:
We are pleased to work with Air TOTAL as they join the crusade to decarbonize aviation fuel in France and other parts of Europe. This agreement with Air TOTAL is a crucial first step as we ramp up supply to the environmentally conscious EU aviation sector.
Understanding Gevo Aviation Fuels
Gevo’s aviation fuel is a 100% green product. Produced from grain, the product starts as a compound known as isobutanol. From there the isobutanol is chemically transformed using a hydrocarbon processing facility. The end product is a very low sulfur, low particulates, and slightly higher energy density jet fuel.
GEVO isn’t only producing better quality fuel. With each gallon of fuel produced, the company also produces 10 pounds of protein that goes into the food supply and sequesters approximately 2 pounds of carbon dioxide. This makes Gevo the maker of the only renewable jet fuel that produces both food and fuel while sequestering carbon dioxide and lowering the GHG emissions when compared to traditional jet fuel.
This Is A Big Step For The Company
At the end of the day, the agreement announced today is a big step in the right direction for Gevo. The company is working to become the world’s number one source of renewable fuel and has an impressive product that’s commercialization ready.
The big factor now is sales and revenue. As the company enters into more sales agreements, it will generate more revenue, giving it the financial ability to expand further. So, the announcement of today’s agreement is a big step in the right direction for the company!
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