Gevo Shifting Sustainable Aviation Fuel Project to North Dakota

Written by Jesse Broehl for Industrial Info Resources (Sugar Land, Texas)

Summary

Faced with permitting challenges, Gevo is working to move its planned SAF operation from South Dakota to North Dakota.

Amidst Global Growth and Blend Mandates for Sustainable Fuels

Colorado-based Gevo Incorporated (Englewood) is maintaining momentum on a plan to produce sustainable aviation fuel (SAF) in the Dakotas. SAF is a low-carbon fuel that can receive tax credits similar to renewable diesel via the 45z section of the Inflation Reduction Act (IRA) of 2022. Gevo secured a $1.46 billion loan through the U.S. Department of Energy (DOE) in October 2024 on a project to build a SAF plant in Lake Preston, South Dakota. Subscribers to Industrial Info's Global Market Intelligence (GMI) Alternative Fuel Project Database can view the project report here.

However, state permitting challenges for a needed pipeline slowed prospects for the South Dakota plant to the point that in mid-October, Gevo told the North Dakota Monitor that it was planning to shift its SAF production focus to an ethanol plant in North Dakota it bought last year, the Richardton Ethanol (ATJ-30) plant. Gevo's South Dakota site had relied on a carbon dioxide pipeline system being developed by Summit Carbon Solutions (Ames Iowa). Industrial Info is tracking the active projects related to the pipeline.

DOE Provides Conditional Loan Extension in October

Gevo was working with the DOE to transfer the loan guarantee to the North Dakota site. A key step in that process was announced on October 14, when, according to Reuters, Gevo said it had secured a conditional extension from the DOE on its loan guarantee.

That is a notable lifeline for Gevo building SAF capacity, either in South Dakota or North Dakota, because the previous loan guarantee was awarded under the Biden administration. Many of the Biden administration's plans, especially in areas of renewable energy and low-carbon technologies, are getting the axe from the DOE this year under the Trump administration, despite many of the programs being appropriated by Congress.

So far, the loan has been spared the axe. If it has survived until now with a recent conditional extension, it has a reasonable chance of staying the course if it meets ongoing loan conditions and the DOE does not reverse its decision. There are steps remaining to secure the transfer of the DOE loan from the original South Dakota site to the North Dakota site. IIR Energy will monitor for updates.

Overall U.S. SAF and Renewable Diesel Market

SAF is a small niche market in the U.S. with growing capacity and over $40 billion in potential capital projects. SAF units often can overlap with renewable diesel production, ethanol and other biofuels production. Previously, SAF volumes received a up to a $0.75 premium to renewable diesel volumes according to the 45z enacted under the Biden administration. That premium was recently removed by Congress in the One Big Beautiful Bill Act (OBBBA). Despite the lower credit value for SAF, the OBBBA extended the 45z tax credit through 2029, potentially buying project developers more time.

SAF is Growing Internationally

Although the U.S. does not have mandates for SAF, the niche fuel is growing as countries enact mandates requiring small but increasing volumes to be blended into jet fuel. This year, the first mandates were imposed in the EU and the U.K., requiring 2% of jet fuel to be sustainable. By 2030, the blending mandate will reach 6% in the EU and 10% in the U.K. There are mixed opinions on whether the supply can meet the demand. A summary of the SAF mandates across the globe, including those counties that are considering blend regulations, is below.

EU Blend Mandate Schedule -- (Regular SAF/Synthetic SAF)

• 2025: 2%, 0%
• 2030: 5.3%, 0.7%
• 2032: 4.8%, 1.2%
• 2035: 15%, 5%
• 2040: 24%, 10%
• 2045: 27%, 15%
• 2050: 35%, 35%

Singapore

• 2026 initial target of 1% SAF
• Increasing to 3-5% by 2030

 Indonesia

• Indonesia government is considering a 3% SAF mandate starting in 2026.

 Malaysia

• Malaysian government is proposing a 1% SAF blending rate for international flights.

 Thailand

• 1% blend rate for SAF by 2026
• Increasing it to 8% by 2036

The airline industry is partly driving the market as it seeks to lower its carbon footprint. On October 20, Cathay Pacific, the flag carrier airline for Hong Kong, and aviation giant Airbus signed an agreement to jointly invest up to $70 million in a series of projects to ramp up the development and production of sustainable aviation fuels.

Synthetic fuels like Gevo's alcohol-to-jet fuel plant may get a needed demand boost from regulations in Europe, where mandates require both traditional and synthetic sustainable aviation fuel volumes. Synthetic fuel approaches (alcohol-to-jet, carbon dioxide-to-jet) are being planned across the globe but are not yet proven at scale.

Key Takeaways

• Gevo is working to move its planned SAF operation from South Dakota to North Dakota
• SAF is a small niche market in the U.S. with growing capacity
• More countries are mandating SAF blending in jet fuel

About Industrial Info

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