Gevo Says Second-Quarter Moves Could More Than Double 2026 Ebitda

The Tip Desk · July 16, 2026 · 3 min read

The company said it is targeting more than $70 million in Section 45Z tax credits in 2026 after completing a Canadian CFR carbon pathway.

Gevo, Inc. (GEVO), a renewable fuels, chemicals and carbon-management company, said second-quarter 2026 actions unlocked better-than-expected growth that it anticipates will improve non-GAAP Adjusted EBITDA by potentially more than double its previous estimates for the year.

That outlook sits against a prior-quarter target of approximately $30 million of Adjusted EBITDA in 2026, up from $17 million in 2025, and a run-rate goal of about $40 million. Chief Executive Officer Paul Bloom said the company’s carbon strategy was working to deliver increased value from operating assets while advancing growth objectives.

The company completed a Canada Clean Fuel Regulation carbon-intensity pathway for low-carbon ethanol with carbon capture and sequestration and initiated sales of CFR credits on volumes previously delivered to that market. Sales under the new pathway are expected in third-quarter 2026 results.

Voluntary carbon dioxide removal credit sales continued, including 8,500 tons of carbon dioxide equivalent retired by Nasdaq, Inc. Gevo also launched direct voluntary CDR credit purchasing at www.gevocarbon.com. Continued growth in compliance and voluntary carbon market sales is supporting returns from its “carbon arbitrage” strategy.

Gevo is targeting monetization of more than $70 million in Section 45Z tax credits during 2026 from continued low-carbon ethanol and renewable natural gas production and improvements in the carbon intensity of those products. Cash proceeds from those monetizations are expected in second-half 2026 results. In 2025 the company sold $52 million of production tax credits relating to Gevo North Dakota and received about $41 million of cash proceeds, with the remainder expected in the first quarter of 2026.

Low-carbon racing fuel blendstock for high-end motorsports and demonstration-scale sustainable aviation fuel sales expanded the customer base. That business line is expected to generate positive operating margins this year. Development assets in partnership with Trecora Hydrocarbons in Silsbee, Texas, are in full operation, converting that activity from a cost center in 2025 to an expected profit center in 2026. Cost-optimization initiatives are expected to yield corporate run-rate reductions of greater than $5 million in 2026.

Debottlenecking of Gevo North Dakota to increase low-carbon ethanol production to 75 million gallons per year is underway, targeting completion in 2026 and expected 10-15% growth in low-carbon ethanol, coproducts, CCS and associated incentives starting in 2027. Expansion toward approximately 150 million gallons per year is expected to double output, carbon capture and revenue estimates from the existing segment, with targeted completion in 2028 once financing is complete and construction commences. Financing of the expansion is targeted for the second half of 2026, including the previously announced arrangement with Ara Energy.

RNG production exceeded budgeted amounts in the second quarter and is averaging approximately 106% of expected production for the year.

Gevo finished FEL-3 engineering for Project Northstar (ATJ-30) with estimated construction capital of approximately $600 million, plus or minus a typical 10% uncertainty. Alcohol-to-jet process modules were within 2% of the prior FEL-2 estimate. Site-specific capital expenses increased by approximately $100 million, which Gevo attributed to higher civil engineering requirements from the soil type at Gevo North Dakota and a significant increase in estimated shipping and logistics costs for equipment. Gevo is making progress toward achieving the balance of SAF contracts needed to achieve FID in the second half of the year.

Gevo is considering exiting and winding down all activities related to SAF production in Lake Preston, South Dakota, to focus on Project Northstar. For any wind-down, the company would expect significant non-cash write-downs and does not anticipate further cash expenditures on Lake Preston. Second-quarter 2026 earnings are scheduled for August 6.