Gevo expects to double 2026 adjusted EBITDA on carbon credits

Gevo expects to double 2026 adjusted EBITDA on carbon credits

U.S. futures hold on to gains after data shows producer prices cooled in June ENGLEWOOD, Colo. - Gevo Inc. (NASDAQ:GEVO) said today it expects its non-GAAP adjusted EBITDA to more than double previous 2026 estimates, driven by new carbon credit sales and operational improvements, according to a press release statement. The company reported EBITDA of $18.5 million over the last twelve months, with a market capitalization of $339.6 million. The stock currently trades at $1.43, down 29% over the past six months, though InvestingPro analysis suggests the company remains undervalued relative to its Fair Value.

The renewable fuels company completed its carbon intensity pathway for low-carbon ethanol under Canada’s Clean Fuel Regulation during the second quarter. Gevo has begun selling CFR credits for volumes previously delivered to the Canadian market, with sales expected to appear in third-quarter 2026 results. The company targets monetization of more than $70 million in Section 45Z tax credits during 2026 from continued production of low-carbon ethanol and renewable natural gas.

Cash proceeds from these monetizations are expected to be reflected in financial results for the second half of the year. Gevo is debottlenecking its North Dakota facility to increase low-carbon ethanol production to 75 million gallons per year, with completion targeted for 2026. The project is expected to deliver 10-15% growth in production starting in 2027 without requiring unplanned downtime.

The company is also working on a larger expansion of the North Dakota facility to produce approximately 150 million gallons per year of low-carbon ethanol, with targeted completion in 2028 once financing is complete. Financing is targeted for the second half of 2026. Gevo completed FEL-3 engineering for Project Northstar with an estimated construction cost of approximately $600 million, plus or minus 10%.

Site-specific capital expenses increased by approximately $100 million due to soil conditions and higher equipment shipping costs. The company said it is considering winding down all activities related to sustainable aviation fuel production in Lake Preston, South Dakota, to focus on Project Northstar at its North Dakota location. Gevo expects significant non-cash write-downs if it proceeds with the Lake Preston wind-down.

Renewable natural gas production exceeded budgeted amounts during the second quarter, averaging approximately 106% of expected production for the year. Gevo is scheduled to report second-quarter 2026 earnings on August 6. In other recent news, Gevo Inc. reported its first-quarter 2026 earnings, which fell short of expectations.

The company posted an earnings per share of -$0.09, significantly missing the forecast of -$0.01. Additionally, Gevo’s revenue came in at $43 million, below the anticipated $44.65 million, resulting in a revenue surprise of -3.92%. Despite these results, H.C. Wainwright reiterated a Buy rating on Gevo, maintaining a price target of $14.00.

This decision was influenced by the potential expansion of Gevo’s North Dakota facility and favorable renewable fuel policy developments. The U.S. Environmental Protection Agency’s recent Renewable Fuels Standard rule supports Gevo’s position, with increased volumes projected for the coming years. H.C. Wainwright’s confidence in Gevo is also backed by the company’s existing and planned infrastructure enhancements.

These developments highlight ongoing interest in Gevo’s strategic initiatives and market positioning. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.