Englewood-based biofuel company Gevo said Tuesday that it has signed a joint development agreement with Beta Renewables to create a process for the production of bio-based isobutanol.
Analysts said the move makes sense for both companies.
If the two firms can successfully combine their technologies, Gevo can make isobutanol from switchgrass, miscanthus and agriculture residues, which are cheaper than commonly used corn. Gevo said it would locate production plants where such cellulosic feedstocks exist.
Mike Ritzenthaler, senior research analyst for Piper Jaffray, said the agreement gives Gevo a “turnkey process technology” for utilization of sugars, which is cheaper than corn.
“Gevo has already demonstrated that they can produce isobutanol on a commercial scale from corn,” Ritzenthaler said. “The real tricky part is how to get sugars from biomass — those sugars can be substantially cheaper than traditional sources of carbohydrates. So what Beta Renewables’ (sugar technology) has enabled is utilization of these cheaper sugars which lowers Gevo’s (cost of goods).”
Gevo said the agreement anticipates commercialization of the technology to produce competitively priced jet fuel as well as other chemicals and fuels made from isobutanol.
“It is very unique, very proprietary and very exciting,” said John Quealy, a research analyst for Canaccord Genuity. “Any new relationship at this stage of Gevo’s life is positive.”
Earlier this month, Gevo reported that a U.S. Air Force jet had a successful test flight using a cellulose-based alcohol fuel made by the company. Gevo last year received a contract to provide the Air Force with 11,000 gallons of its ATJ fuel derived from isobutanol for testing.
Gevo president Chris Ryan said that with the successful startup of the company’s bio-based isobutanol production plant in Luverne, Minn., combined with Beta Renewables’ cellulosic sugar technology, “we’re ready to position Gevo to be on the forefront of cellulosic isobutanol and isobutanol derivatives, such as jet fuel, through the integration of the companies’ respective technology platforms.”
Shares of Gevo gained 19 cents Tuesday to close at $4.37.
Howard Pankratz: 303-954-1939, hpankratz@denverpost.com or
