Gevo’s, wholly-owned dairy manure-based renewable natural gas (RNG) project company located in northwest Iowa—Gevo NW Iowa RNG, LLC (NW Iowa RNG)—has signed binding, definitive agreements with BP Canada Energy Marketing Corp. and BP Products North America Inc. (collectively, “bp” ) for the sale of NW Iowa RNG’s production.

The NW Iowa RNG project (earlier post) is currently being constructed and is expected to commence production in early 2022. Upon project completion, NW Iowa RNG is estimated to produce approximately 355,000 MMBtu of RNG per year. The RNG is expected to be sold into the California market under dispensing agreements bp has in place with Clean Energy Fuels Corp., the largest fueling infrastructure in the US for RNG.

RNG-fueled vehicles are estimated to result in up to 95% lower emissions than those fueled by gasoline or diesel on a lifecycle basis, according to a US Department of Energy study.

It is anticipated that NW Iowa RNG will benefit from environmental product revenues under California’s Low Carbon Fuel Standard program and the US Environmental Protection Agency’s Renewable Identification Number (RIN) program.

Beginning in late 2022 upon stabilized operations and pathway certifications of its environmental products, NW Iowa RNG is expected to generate cash distributions to Gevo of approximately $9 to $16 million per year. Starting in 2024, Gevo will have the right to use a portion of NW Iowa RNG’s production as process energy at its Net-Zero 1 Project or other production facilities, including future Net-Zero projects.