Gevo, Inc. (NASDAQ: GEVO) is having an overwhelmingly strong start to the trading session this morning after the company announced a partnership for a project surrounding its alcohol-to-jet fuel, also known as ATJ. Of course, this led to excitement among investors, sending the stock screaming toward the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the movement. At the moment (9:47), GEVO is trading at $0.76 per share after a gain of $0.06 per share (7.80%) thus far today.
GEVO Gains On Collaboration Agreement
As mentioned above, Gevo is having an overwhelmingly strong start to the trading session this morning after the company announced that it has signed a partnership agreement surrounding ATJ and more. The company announced that it has entered into a partnership with Los Alamos National Laboratory. The two entites will work on a project to improve the energy density surrounding GEVO-made hydrocarbon products, including but not limited to, alcohol-to-jet fuel (ATJ). The goal of this project is to allow these products to meet specifications for tactical fuels for specialized military applications. Funding has been awarded by the United States Department of Energy to support the project.
If all goes as planned, GEVO and LANL will be developing a low-cost, catalytic technology that would be bolted onto Gevo’s existing isobutanol-to-hydrocarbons process. Ultimately, this will produce high energy density fuels, also known as HEDFs. Once completed, it is believed that Gevo will have the ability to produce HEDFs at a lower cost than petroleum-based equivalents, even considering the low current oil prices.
Today, HEDFs are being used in both air- and sea-launched missiles by United States military forces. However, if the cost of production of HEDFs was reduced through the LANL and GEVO partnership, successfully scaling HEDFs in a cost effective way could mean that there could be an even broader application for these fuels in the general aviation sector. Ultimately, it is believed that these fuels would provide better mileage when compared to traditional aviation fuels. In a statement, Dr. Andrew Sutton of Los Alamos National Laboratory had the following to offer:
“High energy density fuels have the potential to increase the range of an aircraft or increase the payload that could be carried… That gives an obvious tactical advantage, but if this could eventually be scaled for wider use then translating these benefits to commercial airlines would have an even greater global impact.”
The above statement was followed by Dr. Patrick Gruber, CEO at GEVO. Here’s what he had to offer:
“Currently, certain HEDFs are supplied by limited suppliers, so the DoD is interested in supporting alternative sources of these fuels, and potentially at a lower cost… The added benefit that this would be a renewable fuel that helps reduce greenhouse gas emmissions is just icing on the cake.”
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on GEVO. In particular we’re interested in following the ongoing work surrounding HEDFs and the partnership with LANL. We believe that this could potentially open a door to a massive revenue stream if all goes well. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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