Participants

Eric Frey; Vice President of Finance and Investor Relations; Gevo Inc

Patrick Gruber; Chief Executive Officer, Director; Gevo Inc

L. Lynn Smull; Chief Financial Officer; Gevo Inc

Chris Ryan; President, Chief Operating Officer; Gevo Inc

Paul Bloom; Chief Business Officer; Gevo Inc

Amit Dayal; Analyst; H.C. Wainwright

Nate Pendleton; Analyst; Texas Capital

Ethan Fingerer; Analyst; Oppenheimer & Co. Inc.

Peter Gastreich; Analyst; Water Tower Research

James Arett; Analyst; Morgan Stanley

Karen McGinnis

Presentation

Operator

Good day, and thank you for standing by. Welcome to the Gevo Incorporated Q4 2024 earnings conference call. At this time, all participants in a listen-only mode. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to turn the conference over to your speaker for today, Eric Frey, Vice President of Corporate Development. Eric, you may begin.

Eric Frey

Good afternoon, everyone, and thank you for joining us on today's call to discuss Gevo's fourth-quarter and full-year 2024 results, as well as the business update and new corporate investor presentation that we published on March 7.
I'm Eric Frey, Vice President of corporate development at Gevo. With me today we have Patrick Gruber, our Chief Executive Officer; Lynn Smull, our Chief Financial Officer; Chris Ryan, our President and Chief Operating Officer; and Paul Bloom, our Chief Business Officer.
Earlier today, we issued a press release that outlines our fourth quarter and full year 2024 results. In addition, on March 7, we released a business update that outlines the topics we plan to discuss. A copy of these press releases are available on our website at www.gevo.com. You can also find a copy of our investor presentation on our website.
Please be advised that our remarks today, including answers to your questions, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those currently anticipated.
Those statements include projections about the timing, development, engineering, financing, and construction of our sustainable aviation fuel projects, our recently executed agreements, our renewable natural gas project, and other activities described in our filings with the Securities and Exchange Commission, which are incorporated by reference.
We disclaim any obligation to update these forward-looking statements. In addition, we may provide certain non-GAAP financial information on this call. The relevant definitions and GAAP reconciliations may be found in our earnings release, which can be found on our website at www.gevo.com in the Investor Relations section. Following the prepared remarks, we'll open the call for questions.
I would like to remind everyone that this conference call is open to the media, and we are providing a simultaneous webcast to the public. A replay of this call and other past events will be available via the company's Investor Relations page at www.g.com.
I'd now like to turn the call over to the CEO of Gevo, Patrick Gruber. Pat?

Patrick Gruber

Thanks, Eric. Good afternoon, everyone, and thanks for joining us on our call. We have filed our Form 10K today and we ask that you refer to it for more detailed information after this call.
We're here to talk about our results from the fourth quarter and for the full year 2024 and to discuss the business update that we released on March 7. There's lots to talk about. We want to leave some time for questions, so let's get at it.
2024 was a big year for Gevo. It set us on a path we believe for substantial growth this year targeting positive adjusted EBITDA. We explained this in our business update and our press release earlier today, and you'll also see these ideas laid out visually in our investor presentation on our website. Please go take a look. It's pretty darn interesting.
First up, Gevo North Dakota. This acquisition in Richardton, North Dakota is a game changer for us, and it's already contributing. The site is one of the two low-carbon ethanol plants with operational carbon capture and sequestration or CCS that are operating today. It captures over 160,000 tons of biogenic carbon dioxide a year and has one of the lowest carbon intensity scores in the industry.
The CI score at Gevo North Dakota is an estimated 21 grams of CO2 equivalents per megajoule under the Argonne GREET 45Z model. That's not including any benefits for regenerative agricultural practices. That's a big deal because it means we can start monetizing carbon abatement and the 45Z tax credit immediately. We're already working on it.
This asset alone has the potential to generate $30 million to $60 million of adjusted EBITDA annually, depending upon the price of ethanol, depending upon the full values of the 45Zs and all the rest and RINs. So it's very interesting opportunity for us.
On RNG we saw a strong production growth in 2024. We're on track to produce over 400,000 million BTUs in 2025. And with the Biogas 45Z tax credit, that business is shaping up to be a solid contributor as well. We expect adjusted EBITDA in the $9 million to $18 million range in the year 2025 from this project due to operational improvements securing the provisional California Air Resources Board or CARB, net carbon intensity score, and the monetization of Biogas 45Z tax credits.
We're excited that CARB has published our comment for low carbon fuel standard pathway application, and it has a weighted CI score of around minus 339. So that's right in line with what our expectations were. I'm feeling pretty good about that, and actually, we should get that any day now.
Our South Dakota project, which we're now calling Alcohol-to-Jet 60 or ATJ-60, that means, we're talking about Alcohol-to-Jet 60 million gallons, is progressing. Last year, we received a conditional commitment for a loan guarantee with disbursements totaling $1.46 billion excluding the capitalized interest during construction from the US Department of Energy, DOE, loan program office for our ATJ-60 project.
With capitalized interest during construction, the DOE loan facility has a borrowing capacity of $1.63 billion. We're pleased with the continued collaboration with the DOE loan office as we move forward to achieve financial goals for the project.
Now, lots of questions about what happens, were there any changes during the transition for the President and his new administration? Well, like I say, we haven't seen much of a slowdown. I know I see all these press reports, but they're not correct. They didn't -- we didn't see slowdown. They're plugging away; we are plugging away to do on our end as well.
Now, one good piece of news that I can point to that isn't -- that I think is worthwhile is that at CERAWeek in Houston a couple of weeks ago, Secretary Wright said in his presentation that the DOE loan office, the LPO, would be honoring the commitments made by them. That's good because I think that was his first wide public statement of that.
We are watching the Summit pipeline issue with interest. I would like to see what Summit does next regarding the pipeline before we finalize the economics for our project. While we do have our own sequestration site with our -- up at North Dakota at our Richardton plant, we can capture the CCS, bring it there, and put it downhole and capture value from it.
We could do that, and if we went this route, the project returns for South Dakota plant would still be attractive. However, doing that transfer without a pipeline hurts by a couple of IRR points.
Now Summit tells us that they still believe strongly that the pipeline is going to get done, and I do know this that CCS and CO2 are part of the energy infrastructure. CO2 absolutely is going to be needed in North Dakota for enhanced oil recovery in the Bakken. Getting more oil out of the Bakken strikes me as a priority.
Now it takes years to build that infrastructure. So we'll see what happens here is they're going to get incorporated part of the overall energy infrastructure. I'm interested to see how this all unfolds.
We also need to pin down some tweaks to off-take agreements with airlines to make them more compatible with project financing requirements put up by -- or put on us by the DOE loan office. We want to underpin carbon value outside of the regulatory value. We're making progress on this front. We'll announce details after it's done.
Now, recall that the jet fuel is -- that we'll produce is valued as a commodity like fossil jet. It's just jet fuel. It has to be that way for it to be a drop in. Now, there certainly is a regulatory value like RINs or the state level, and we expect 45Z, okay? All good. That adds value.
In addition to that, it's this voluntary carbon value that is worthwhile. We want to make sure that we're getting paid properly for the carbon value. So we're reworking some of the contracts, some of the deals, some of the approaches to make sure that we aren't giving money away. We're working at it.
In addition to Gevo's paid-in capital as we developed this project, we're going to need to raise roughly about $800 million of equity into a special purpose vehicle whose mission is to build that plant and operate that plant. This SPV would be a project-level company that would not -- and it would not be diluted to Gevo. It's not raising money at a Gevo level. It's at a special purpose vehicle level, project level, classic project financing for the DOE loan.
We are targeting financial closes for our project level capital raise by 2025 year-end. That includes the DOE loan, our project level equity capital raising, and then the start of construction of the facility. In order for us to get to financial close, we expect that we will need to spend maybe $40 million-more of development money inclusive of the whole year of 2025 actually to get all the way to FID, so even if it's stretched further.
Once we get the financial close, we'll be off to the races building this plant in South Dakota. It'll be heavily modularized, and it wouldn't require any further capital from Gevo. That's a pretty big deal to bake into your memory.
We're also doing the engineering work for our ATJ plant at our North Dakota site. This one's on the fast track because we can leverage the work that was done for our ATJ-60. North Dakota is an extremely friendly business state. We have great ethanol plant there. We've already got CCS, and there seems to be a lot of interest in this plant.
So we're going to try to move it along very fast, leveraging what we have already done. So more come on this as we progress. We also have two other plants in concept development based on what we're doing in North Dakota.
So what's interesting is I think we're getting this modularization model pinned down, here's how we can replicate things. Copy-paste is how Paul Bloom likes to refer to it, sometimes copy, edit, paste. But we're getting interest from around the world on this. So let's see what comes through in the future. We won't lose focus on getting the plant, get ourselves to EBITDA positive, but then also getting the CTG plant in North Dakota, getting the one South Dakota deployed.
Now stepping back for a second, the reason that we have interest in our plants and technologies is that we can produce this drop in jet fuel, and that on a production cost basis can be competitive with fossil-based jet fuel. That is a big deal in terms of concept.
It's not that it's one or the other of reducing the carbon footprint. You can actually make jet fuel for renewable resources like cornstarch that are competitive on a production cost basis with fossil-based jet fuel. That's a big concept. It's the capital that is the issue.
If our plant was paid off, then we just compete head-to-head, no substitute tax credits required. But we do have capital to pay back. Now, to pay back the capital and generate reinvestment returns, the tax credits for SAF, the RINs, they're certainly useful.
We are bringing this new attribute to markets. We're spending a lot of work on effort to make sure that we're -- how do we capture value from carbon abatement? That's separate than tax credit and RINs. There are people -- there's a market that people will pay for the carbon to be reduced.
A project like our ATJ-60 could abate 500,000 to 600,000 tons of carbon annually. I wonder how many dollars per ton can we get for that? And I wonder if there'll be different fractions that we might be able to market to add value.
Bottom line is, it's not that -- this project isn't about carbon reduction at any cost. It's about making a cost competitive jet fuel and cash rebounded from the new attribute we bring, which is the carbon abatement. It's carbon reduction done cost effectively.
So we're having to sort this out. It takes work, and I got to tell you that when you add it all up, you add up the tax credits, you add up the RINs, you add up the voluntary market, you add up the fact that it's dropping jet fuel, it makes for an exciting project.
That's why we're getting such broad support across the board, and I think it's that -- I think that there aren't that many approaches that can do this. We happen to have one of them. ATJ is going to be part of the product mix in the future.
We see -- now turning my attention to a little bit to 45Z, it's a common question we get asked. I got to say we see a lot of bipartisan support for 45Z extension. 45Z is set up so that it is truly a pay for performance. Right now, I'm only aware of two plants in the country that could qualify for a 45Z tax credit as of today. Both of them are in North Dakota, one is ours.
So that's good. And I think as CCS becomes more widely available, there might be some other plants, et cetera, that can be done, but it's not a government giveaway at all. You got to do something for it that's creative and helps set up infrastructure.
When it comes to jet fuel, jet fuel is now referred to by the new administration as synthetic aviation fuel rather than sustainable aviation fuel. I think that's actually closer to the name it was originally called synthetic kerosene. That actually is what it's called in the ASTM certifications.
So great, it's on their list. Awesome. And so I think 45Z is relevant for that and it's exciting because 45Z SAF allows a new market for ethanol. That's a big deal for when you're trying to develop our economy.
So when we do an ATJ plant, it's about energy security, real economic development, impact on commodity prices and jobs, all of that stuff together. Now, we did a study done by Charles River Associates looking at ATJ-60 plant in South Dakota, and it would be expected to create for 100 direct jobs, 700 indirect jobs right in the region. You have more than 1,000 highly paid construction jobs during the build out period of three years.
It'd be expected to generate when it's operating $100 million-plus per year of regional economic development right there in South Dakota for as long as the plant exists and operates. That's a huge economic impact. It lifts the prices of the commodities. It's like -- it makes cost competitive, production cost competitive fuels.
And the ATJ-60 plan to draw corn from roughly 230 farmers would help them. They'd expect to see the price rise in their corn because we're buying it locally and we have a business system that we expect will be able to capture value from the agricultural practices. We'll be able to differentiate it. This is what Verity is all about, tracking and tracing and taking it forth to the marketplace as attributes so we can find those people who value it.
And the other thing that Charles Rivers associates did is that they estimated that for every $1 tax credit in 45Z to return to the Treasury could be expected to be up to $6. For every $1 tax credit, $6 back to the Treasury. So even if you're a big skeptic and say, that's all those things that they take into account and all those soft things, even the hard things, you're still going to get a couple $3 back to Treasury per $1 of tax credit.
This matters. This is what economic development is all about, using government money wisely. But you've got -- it's pay-for-performance. You got to deliver something, jobs, energy security, cost-competitive products, address a new market.
So it's all about adding jobs, adding value for farmers, economic development, delivering the drop-ins, competitive with fossil-based jet fuel, and that abates carbon. Yes, cost competitive and carbon abatement are possible at the same time. I'm excited for the future and what's possible.
Now, imagine cookie cutter versions of our ATJ plants. This is actually the approach that we're taking. It's what we want to do. It's why we're pursuing the modularization approach. There's roughly 180 ethanol plants currently operating in the US. Imagine the impact by converting a chunk of these into ATJ plants. Think of the jobs created. Think of the ethanol -- think about how the ethanol market is in current overcapacity.
We could sop up that overcapacity, turn it into jet fuel, and lift ethanol prices and lift corn prices. It'd be a good deal, actually, and I think everybody would benefit. And of course, all this while we're adding to energy security, producing more jet fuel. And of course, whenever we say jet fuel, we could also produce diesel fuel too. These plants can do either one.
And these can be cost competitive with the fossil-based fuels. And don't forget, these business systems would produce about 3 tons of protein and feed products for the food chain for every ton of jet fuel produced. So it's not food versus fuel or anything like that. It's about doing both wisely and economically and making the overall business system better, the economy better.
And there's also no more need to draw in more land for agriculture. In fact, we're finding that the farmers are doing great. They can increase productivity. There's a lot of room to grow on the land that they already have. So all this talk that we occasionally hear about, oh, it's going to take so much more land. No, that's wrong. Let's go. We got data. It's an exciting time for us.
I really, really like President Trump's Executive Order called declaring a national emergency. Did you all catch that biofuels are listed right there with oil, that ethanol and aviation fuel are listed right there with refined products as priorities? That's very cool, very good for us.
I also like the Executive Order called Unleashing American Energy. This one talked about clearing the roadblocks for infrastructure deployment. It also called for removable political bias and assessments and models. That's huge because that's how there'd been a problem in the past with how environment groups do.
They say, hey, here's this really cool thing we can do. This is the government. We do a really cool thing; we're going to make this new thing. Oh, and then also there's 50,000 rules that make it impossible to take any action. Good, let's get rid of that stuff. A lot of those rules are put in there by environment groups. They're the ones who raised these issues with no data. Great, let's get rid of it. Look at the data and the facts. I'm all about that.
The other thing that I'm interested in is that -- this new administration is interested in leveling the playing field at the EU level. Good, you penalized agricultural products in the United States. They do that. They do it in their modeling and their scoring of carbon and all the rest. Good, that's been an issue. I want to see it get addressed. Let's go.
So all in all, I'm very optimistic, so I want to see what these guys can deliver. If they do what they say, it can be very good for all of us.
Now, before I turn over to Lynn, I want to give you some context as to what we're doing with Axens. No doubt you saw a press release about that and wondered. It comes down to this. We announced that we're broadening the relationship with Axens.
They've been a good partner. We started working with Axens a number of years ago because they have proven technology unit operations that can convert ethanol into jet fuel. There's several steps involved. They did them in the petrochemical industry. So by working together, we can put the whole process together.
The thing about them is that these technologies, these unit operations have been operating, for instance, ethylene to make butanes, then butanes to make the thing that's just real close to jet fuel. They've been operating for decades on a commercial basis in the petrochemical industry. They didn't make it from ethanol; they got their ethylene from a different source.
So that's why we could clear the technical diligence for the DOE launch, showing and proving to their independent engineers -- the DOE's independent engineers -- who are being paid to prove things to say no. We could prove to them that these technologies work.
That's why we're able to achieve this. Axens is the only company with each of the critical unit operations commercialized, albeit with fossil fuels, except for they have a project in that does ethanol de-aggregation and ethylene in Japan.
Having technologies for unit operations is only one piece of the puzzle, however, and that's where Gevo comes in. We know how to put it all together with renewable energy and how to integrate ethanol plants that drive both cost and CI down. The overall plant designs we own. Those are our property, our intellectual property.
We have the patents on how to achieve the very low CI footprint. We file those patents. We also know how to track and trace carbon as well as a deep understanding of the developing market, because the company that needs the jet fuel isn't necessarily the one who needs the carbon. It might be somebody else in the value chain.
We also have roughly over 100 patents covering the whole business system of ethanol to jet from end to end. They have technology, we have technology, we have quite a lot of it. So it makes sense to partner, to offer a more complete business offering to potential customers who want to build plants. And remember, we see ourselves as developing plants or even selling plants.
We're already down the road on this. We'll be a developer and a license to leverage what we learned in our South Dakota project. We believe that the market for alcohol to hydrocarbons will continue to increase fundamentally economically sound.
We've also licensed our ETO technology to Axens. So they've become a licenser from us, taking a license from us. I find this very significant. The reason is this. The Axens technology embodied in the first-generation processes, the ones we are planning to use for our HTJ-60 plant and for our North Dakota ATJ plant, they won a Nobel Prize for the critical step of converting ethylene to mixed butane.
This is a long time ago. This was like 40 years ago. They want it. That was a great breakthrough. That's why they're the only ones who -- they've led the way in that technology in the petrochemical industry. We see a lot of startups try to do this tech, and they're going to -- they fail, or they will fail or they're going to fail. It's a very difficult step.
That's why we finally got Axens to work with us after trying for 10 years. Axens has proven it out, it works. There's no question about it.
Now I take great pride then that these people with the Nobel Prize in their background think that our ETO technology is a breakthrough on this converting of ethylene -- ethanol to ethylene into the jet system, and that it simplifies steps, and it's expected to lower CapEx and OpEx by a ballpark of about 30%, beating their technology.
That makes me feel like maybe we're on to something here. So together, we're going to go finish it out. Scale it up, probably take about 18 more months, depending upon what we learn as we go or kind of roadblocks we run into. You got to go through and scale up this kind of these kind of technologies.
So for all of these reasons together, technology and business system that make for a great partnership. All right then, Lynn it's over to you.

L. Lynn Smull

Thanks, Pat. Let's go over some key numbers. We ended Q4 2024 with $259 million in cash, cash equivalents, and restricted cash. Combined operating revenue and other net income was $8.9 million for the fourth quarter, and $32.7 million for the full year.
Our RNG subsidiary generated $15.8 million in revenue during the year. We're working towards securing a final LCFS carbon intensity score from CARB, which we expect in the first quarter of 2025. As Pat said, that's any day now. That will unlock more value and better margins for the RNG project.
Company-wide, loss from operations was $19.6 million last quarter with a non-GAAP adjusted EBEA loss of $11.3 million. Given that the acquisition of Gevo North Dakota has closed and the ethanol 45Z and Biogas 45Z tax credits expected this year, and other factors, as Pat mentioned, we see a clear path to a positive run rate adjusted EBITDA in 2025. That's a major shift in our financial trajectory, and the updated investor presentation on our website provides more information on that topic.
We continue to be disciplined with our capital. We project 40 million of spend on the ATJ-60 project development from January 1 this year until we reach financial close. We expect total development cost at financial close to be well under previously announced high ends of potential ATJ-60 development spend.
At the start of last year, we said we planned to achieve first revenue at Verity, our software-as-a-service business for tracking and tracing of regenerative agricultural products. We achieved that in 2024, and we expect to grow the customer base in 2025. It's too early to provide specific guidance, but we have a unique software platform that provides much needed accuracy, transparency, and quality that is poised to grow into a very large total addressable market.
With that, I'll pass it over to Chris.

Chris Ryan

Thanks, Lynn. You'll find a summary of our Gevo North Dakota acquisition in our press release, and Pat also made some comments. So I'll just provide a brief update on that. Our operations team at the plant are doing a great job keeping the processes running smoothly.
They're producing about 67 million gallons a year of low carbon ethanol, which includes 2 million gallons of ultra-low carbon intensity corn fiber ethanol. We're capturing carbon and sequestering it on site, which gives us an important competitive advantage in the ethanol industry, while we generate valuable carbon dioxide removal credits, otherwise known as CDRs.
To put some carbon score numbers on this, our British Columbia carbon intensity is about 19 grams of CO2 per megajoule, and our CI score calculated according to the Argonne R&D GREET model, is about 21 grams CO2 per megajoule before we take into account the regenerative ag practices from the corn farmers that are supplying us. For those who are familiar, that's nearly the lowest carbon intensity in the ethanol industry.
As a result, as Pat mentioned, this acquisition immediately strengthened our ability to generate and monetize carbon reduction even without any major capital investments. In the longer term, we believe it's a great site to look at potentially converting that low carbon ethanol into synthetic aviation fuel or SAF.
In March, a group from Gevo management spent the afternoon with many of the farmers that supply our plant in Richardton. We talked with these farmers about our vision for growth at the site, including the potential for an ATJ plant, which represents a whole new use for American agricultural products.
We listened to the farmers talk about the regenerative ag practices that they're already using there. And we talked about ways those practices may translate into more value for them. These farmer relationships are critical for the success of our plant, and we all walked away feeling our interests were aligned with them.
We're excited about what this means for Gevo's future. With that, I'll turn it over to Paul.

Paul Bloom

Thanks, Chris. I'll be brief as well. Regarding Verity, we're growing fast. We're currently generating revenue and growing our customer base. We doubled our growers' program acreage since the second quarter of 2024 and tracked over 200,000 acres in 2024.
We signed agreements with five ethanol producers and two soy crush plants and have more on the way. Verity aims to help the industry measure and verify sustainable attributes from the fields to final products made from corn, soybeans, and other agricultural feedstocks for food, feed, fuels, and industrial products. The growing unmet demand for traceability in agriculture and energy is real, and Verity is proving to be a valuable tool.
Regarding our patented ethanol-to-olefins or ETO technology, as Pat mentioned, we expanded our strategic alliance with Axens to develop, commercialize, and license this technology globally for fuels. We also aligned our technology, business system, and know-how with Axens to drive alcohol to jet commercialization under a new alliance agreement.
We aren't just building our own ATJ projects. We have a robust IT portfolio to license technology and engineered solutions to the whole industry. In addition, we continue to make good progress with our ethanol-to-olefins joint development agreement with LG Chem to make bio-based chemicals, including propylene, which is a key building block in the petrochemical industry today.
The market opportunity here is large and could create more demand for US agricultural products. We're talking about technologies that can take corn and ethanol and convert into low carbon drop-in fuels and materials that match petroleum to help make all kinds of products from diapers to durable parts for our cars to jet fuel.
We're using our technology and business system to bring agriculture and energy together to drive growth for rural America. Back to you, Pat.

Patrick Gruber

Thanks, Paul. And with that, let's open it up for questions.

Question and Answer Session

Operator

(Operator Instructions) Amit Dayal, H.C. Wainwright.

Amit Dayal

Thank you. Good afternoon. Thanks for taking my questions. So Pat, with respect to the SPV side of the net 01 opportunity, what are the equity investor options in front of you? Are these potentially like, strategic folks already in that value chain? Or are these typical, financial investors like who are you speaking to right now? Any color on what those options in front of you are?

Patrick Gruber

Yeah, it's the normal set of characters across all, ranging from strategics to specialty funds to those classic financial funds. It's a whole spectrum of them. And just got to go work through it and see who's going to -- what's real. And we'll make it happen.

Amit Dayal

Okay. And does some of this need to be arranged to close the DOE loan, or can that come later when you start tapping into or drawing down on that loan?

Patrick Gruber

No, this would be a prerequisite to have the commitments. It's a prerequisite to have the commitments to get the FID. It would all come together at once.

Amit Dayal

So then in that context, what is the timeline to complete sort of this side of the process?

Patrick Gruber

I think the best that -- we're not supposed to talk about the details of the DOE loan process still. But I think it's -- to say that we get it done in 2025, that's what we're targeting, and it's in that timeframe that we would come together.
We've already been engaged obviously in Wall Street and talking to funds, so we already have a sense of interest, and we have a sense that things economics can work. I think at this point that we made about pinning down some of the carbon values that market is growing in in the voluntary carbon market, Scope 1 and Scope 3 emissions.
It's pretty interesting, and so we are tweaking some of our contracts because it makes a better project, and so we're doing that. So we're going to want to get that done, but it's just the practical reality is this going to be later in the year to get it all done.

Amit Dayal

Okay, understood. Then with respect to the carbon capture expansion opportunity at North Dakota, going forward as you, increase capacity over there, what are the options sort of to monetize that? Will you be sort of participating in the carbon trading markets? Or is there sort of a different, monetization strategy that is maybe easier and more -- or provides a better visibility for you guys?

Patrick Gruber

Paul, I'm going to let you answer that. This is your realm as the Chief Business Officer, and you're busy on carbon.

Paul Bloom

Yeah, sure, no problem. So we've got a couple of options here on how to monetize. Obviously, we can put that value from the CCS into an approved pathway with the renewable fuel. So think about just including that all bundled together. But then separately if we don't do that, we can take that CCS value into a market called CDRs, and Chris mentioned this, which are carbon dioxide removal credits.
And these are permanent carbon dioxide removals, right? They're going to be there for 100,000 of years, as we store that CO2 that used to be in the atmosphere. And that's a market that's developing today. And so we're actively participating there and working on, how do we market carbon either with the fuel or separately from the fuel into those markets. So more to come on that.

Amit Dayal

Understood, thank you. Just last one for me. The expansion on the RNG front, I know you were looking to increase volumes, et cetera. Is that already done or are you still in the process of executing on that?

Patrick Gruber

Well, we've already expanded it so it's the capacity 40,000 million BTUs. We're pushing up further how far we go beyond that. We put in some additional equipment and such, so we have to go do that work.

Amit Dayal

Okay. All right. So that's all I have for now. I will take my other questions offline. Thank you.

Operator

Nate Pendleton, Texas Capital.

Nate Pendleton

Good afternoon. Specifically looking at your first plant, can you share your perspective on how recent tariff announcements are impacting potential costs there as you approach financial close?

Patrick Gruber

Do you mean for the ATJ-60 in South Dakota?

Nate Pendleton

That's correct.

Patrick Gruber

Yeah. Hey, Chris, you want to comment on it? That's your bailiwick.

Chris Ryan

Those are not impacting -- if that was the question, really not impacting our project at all. We've got -- when you look at, say, project cost, for example, most of the project really wouldn't be subject to that.

Nate Pendleton

Okay, understood. Thank you. And then shifting over to the ethanol-to-olefins technology that you touched on in the prepared remarks, can you lay out future milestones that the market should be watching as that business scales?

Patrick Gruber

Paul, you want to take that one?

Paul Bloom

Yeah, sure. As Pat mentioned in his remarks, right now we've got the development -- we're in the development phase of that with Axens, so active project. We've been through a first pilot stage, so that was our real first milestone that we made after getting to our lab phase.
And now we're really in this stage, can we get this done in 12 months? Can we get it done in 18 months? It's all about de-risking that technology. So we're very comfortable with moving to scale. So that's kind of the timeframe that we're looking at to have our next milestone, which is really getting this ready for commercialization.

Patrick Gruber

And I'll add that is typical. This chemistry converting these what are called olefins into these fuel products, when you think about it at a really large scale, things that are PPM, parts per million, matter, because you're doing millions and millions of pounds.
And so what builds up? What happens? Do you really understand it in detail? This is the mistake that is classically made over and over and over. People will take something from the lab and just rush it in the scale up in these catalytic systems. These are catalytic systems, not fermentation systems, catalytic systems.
And they get burned by it, and stuff doesn't work, plugs the columns or the catalysts just don't work the way they thought. This is the beauty of what Axens has done in the past and why it's fun to work with them because they've seen lots of these things.
Between us, we've been working on these catalytic technologies since 2007. I think people have forgotten that we were the first to do ethanol to jet fuel back and even in 2007, 2008 timeframe, we did it.
It was just a very practical case of -- at that point, Axens didn't want to license their technology to us because they didn't believe you could get to a low carbon, a zero-carbon footprint. Well, we were pursuing isobutanol, which is a way of skipping the steps, and then we had ETO.
When everyone got focused on the jet fuel, on SAF and jet fuel, then Axens had been working with us on the isobutanol to jet and gasoline because we thought gasoline was going to be the big driver. Well, the market centered on SAF. Well then, together, we said they learned with us that, my gosh, you really can get to zero and below footprint on a CI score. So they licensed it to us. Good, I wish they had done it sooner or even further ahead on the ethanol front.
So the ETO thing is a breakthrough. It looks really good. It is this classic case of we don't know fully what we don't know and we're going to go look for things that go wrong and scale it up. And that's the approach you take on these kinds of scale-ups, try to figure out what breaks the system. That's what we have to go do. And when we learn something, then we'll adjust the conditions. So I hate to say that here's a hard and fast milestone of we're going to go through the scale ups.
By the way, this is the same technology that we're already working on scale up with LG Chem. So the LG Chem for propylene is a variant of the technologies. So we already have pretty good confidence that it works at reasonable size scale, but we need ginormous scale for fuels. Chemical products only need kind of medium sized scale; fuels, ginormous scale.

Nate Pendleton

Got it. I appreciate that detail. And then, just one last one for me if I may. Regarding your Luverne facility, do you provide any thoughts around how you may leverage that asset in the future?

Patrick Gruber

Yeah. I think it's a -- for us, running it as an ethanol plant doesn't make sense. Yeah, we have some ideas here, so you'll have to stay tuned. But it's a -- we got some really good ideas that are in play. We just can't talk about things yet.

Nate Pendleton

All right. Well, thanks for taking my questions.

Patrick Gruber

You bet.

Operator

(Operator Instructions) Ethan Fingerer, Opp Co.

Ethan Fingerer

Hi. Good afternoon, guys. Can you talk about what's been holding up the DOE process and what the timeline is? What have been the obstacles, and what have you accomplished, and what's still left to be done, please? That's question one.
And then the second question is you mentioned needing to raise $800 million in equity. One of the other questioners asked who the targets is in terms of the potential investors. I'm interested to know who's banking that for you. Who's helping you bank that? Which investment banks are you working with? Have you engaged anybody on that, and where does that stand, please?
(technical difficulty) Can you guys hear me?

Patrick Gruber

Hey, Ethan. So it's the same things we've been same things we've talked about in the past is that we have to go through and do some of the environmental stuff that's required for the DOE loan program that has to be done. That was slowed down probably by the transition. They just weren't people there to sign off on things.
That has to happen. We're tweaking some of these contracts. The uncertainty around the pipeline isn't helpful in that we just got to know which way it's going, which way it's blowing. We're still going to plan on that, the economics for the whole project work.
But none of us really want to take a hit of a couple percentage points on the IRRs. So that matters, especially for equity. So going slower on this, a month or two, I want to see what happens. What is Summit going to do next? I really would like to know that because it's a question that always comes up, and we always have to answer it.
This other thing that is interesting that I mentioned is the carbon markets by -- we have already talked that we're tweaking contracts. We've said this many earnings calls that we're tweaking contracts. Part of this is that if you just rush in and do a kind of a project finance contract the old way, just whatever, you're giving away a huge amount of value. I think it's really stupid.
So we're tweaking stuff to make sure the project economics work in our favor. All those things added up, plus the practical timing of things, just say that it will get done sometime this year. For us, we think the project is going to get done. It's just a question of when, and it'll be fine.
In terms of the bankers, we're still working with Guggenheim and Citi.

Operator

Peter Gastreich, Water Tower Research.

Peter Gastreich

Yes, thank you. Excuse me, Peter Gastreich here. So thanks for the presentation today, and congratulations to the team on executing your strategy. Just a couple questions for me. The first one is on Red Trail. Just in terms of cash coming from carbon credits there, has that started from day one?
And are you able to give any color on the broad assumptions for that $30 million to $60 million dollar adjust to the expectation and what the contribution of carbon credits might look like? Is that range more the results of a commodity variable, or do you have a range in credits in there as well? Thank you.

Patrick Gruber

Eric, I think you're probably in the best position to describe this. It's your chart that he's probably looking at, Peter's probably looking at.

Eric Frey

Yes, sure, Peter. So just to give you a sense, the carbon intensity using the 45Z GREET model for (technical difficulty) FFO plant and CCS is about 21 grams of future growth for (inaudible). And so the math, the way the 45Z tax credits works is basically you get $0.02 per gallon of tax credit per CI point that's below [50] -- okay, about.
And so at a 21 CI score, which is really industry-leading carbon intensity because this ethanol plant is so unique because it has carbon capture, and it's one of the few ethanol plants in the world that actually operates carbon capture. I think Pat mentioned that you think we want to basically (technical difficulty). That means that the 45Z tax credit loan is to get math on about 67 million gallons per year of volume. It is worth somewhere between $30 million to $40 million just that tax credit.
So there's other elements of value that we're targeting, but that's a big element of how you can get to kind of the range that we're talking about between $30 million to $60 million. That's a large range and as we kind of get more experience in your results as we go through the year, you can see that just that tax credit alone gets us a pretty good foundation to achieving that target.
And Chris, feel free to jump in if you want to add the detail of that as well, but that's kind of how we map, Peter.

Peter Gastreich

Okay, great. Thanks, Eric.

Patrick Gruber

Sorry, Peter, could you understand him?

Peter Gastreich

I got most of it, but yeah, it was not a good line. We could follow up afterwards as well.

Patrick Gruber

Well. Yeah, so the short version is this ethanol margins, they're low right now. So they should come back in the summertime like always to follow the normal cycle of ethanol, so that'd be the normal contribution you'd expect from us, 67 million gallons per year ethanol plant. It'll be the normalness there.
And then I think that a large part of what you see on that slide is the monetization of the 45Z. It's a fascinating thing. There's a marketplace for the 45Zs already, even though they're still -- their law, they have to do them. It's the la. And so people are betting on that already, and so it's very interesting and a large part of that is the 45Z.

Peter Gastreich

Okay, great, got it. Thank you very much for that. And just the second question I just noticed that in your 10K that there's disclosure about the weakness and controls. Could you just expand on this and what exactly is meant by the auditor there? Thank you.

Patrick Gruber

Yeah, this is one of these ones of as we're going through the end of the year stuff with the auditors and then also ourselves on our internal audit, we had a pattern of mischaracterizing. We're treating a transaction as expenses where they should have been capitalized.
So for me, this is one of these ones that I find very frustrating because we were mis-categorizing things. It was a couple of contracts and some just transaction expenses for capital or for projects that should have been capitalized.
So it turns out it doesn't hurt our cash, it doesn't hurt -- our earnings per share got better because stuff got capitalized. And so it's one of these very frustrating things where we made mistakes on the technical interpretation of the rules of what it is, we got it wrong. And so that's just part of it and it's irritating, but that's what that one's about.
We're already in the path through mediation for it as well. But because that's about training as you saw in the K, then you saw it's about training people, getting the right people, et cetera.

Peter Gastreich

Okay. Thank you very much, Pat.

Operator

James Arett, Morgan Stanley.

James Arett

Hi, guys, thanks for taking my question here. I was wondering about the Verity portion of the business. And I guess I'm curious about do you guys have any projections about revenue? I know that that would be very forward-looking and nothing in concrete, but any like maybe a three-year and a five-year projection about what kind of revenue that that could bring in?

Patrick Gruber

Yeah, Paul, how about that?

Paul Bloom

Yeah, it's a good question. And we're -- I mean, the good news is we got first revenue last year like we said we were going to do. And so now what we see is that, well, I don't have the three- and the five-year projections for you, but we're signing up more customers which come with typical subscription fees, so software-as-a-service.
And then some of the agreements that we have in place have a profit share, which we've talked about in the past, profit and revenue share. So some of those can be pretty sizable as we think about how this is going to grow and go forward. But yeah, still too early to say a lot of the same things when we think about calculating carbon values and doing carbon accounting and profit shares that we've got built into some of those agreements.

James Arett

Got you. Thank.

Operator

(Operator Instructions) [Karen McGinnis].

Karen McGinnis

Yes, good afternoon. I had a quick question. Given there's a number of issues around what we got to achieve for the DOE loan, how long does that commitment stay open?

Patrick Gruber

It depends on -- well, that's up to them. I mean, I've seen them extend them for years. So we'll see. The way we view this is there's -- we're going to -- we have -- for us, we don't view this as a binary thing and a lot of shareholders do. I don't view it that way. It's not binary.
This project makes a lot of sense. It'll happen. The DOE loan makes a lot of sense, project financing. In the meantime, I got other projects to build too. We're going to get those built, and we'll do them a little bit differently than a classic project finance.
So it's not a binary outcome. Our game plan is to be profitable irrespective of net 01. So this paradigm that people have that, somehow, we have to have that, it's going to be a miracle. And then -- and wow, we better get cash flow from it when you think about the timelines.
So our whole game is to not have to raise money again except for very creative reasons. That's our whole game plan here. So it's not at all that paradigm of one thing or the other. I am keen on setting the right precedents in the market, setting the right price points, setting the right -- all the precedents of value. I'm very keen on that because that sets the stage for going forward.

Karen McGinnis

Thank you. The second question, just a simple question. Just listening to the call, there's a lot of moving pieces here, and there seems to be a lot of -- we're going in a lot of different directions. What do you see is kind of the top two or three priorities as the CEO of the company?

Patrick Gruber

Are you kidding me? This is -- are you freaking kidding me? What do you think they are? Really? We're unclear? Have you been -- you read our presentations, go look at our documentation. Route to -- first, we're developing the marketplace for alcohols into hydrocarbons and commercializing those products. We're establishing the carbon value for those same products.
And along the way, we're building our network infrastructure in a property portfolio, so we have a serious competitive advantage. And you know what, we've got a strong balance sheet. Those are the things. Crystal clear. They're spelled out in our documents.

Karen McGinnis

Okay. Thank you.

Operator

That does conclude our Q&A session for today, and I would like to turn the call over to Pat for closing remarks. Please go ahead.

Patrick Gruber

It's been interesting times during the transition with the new administration. The number of questions that we're getting from the press is amazing. I think I've had something like 55 interviews with press. Usually, they have the wrong information about things.
And so what I find is the noise is going to have to settle down, and I think we'll see money flow back into our sector. It has gone away because people don't know what to make of anything. That's all part of it.
So I think we're in great shape. Our balance sheet is strong, our technologies are strong, our capabilities are strong. We continue to make progress in the marketplace.
This carbon value that we talked about is real, and it's separate than just regulatory value. That is the ultimate game is to make sure that you have technologies that are competitively making products on a cost basis, and there's a value-added attribute, and it's carbon.
So thanks for participating. Thanks for listening in.

Operator

Thank you all for participating in today's conference call. You may now disconnect.