- Gevo signs seven-year agreement with Delta for 75M gallons of SAF per year
- The company expects the deal to bring in $2.8B of revenue, sending GEVO stock soaring 17%
- A wider net-zero approach to travel could throw companies like Gevo into the limelight
Gevo (NASDAQ: GEVO), a prominent supplier of renewable chemicals and advanced biofuels, announced today it has signed a ‘take-or-pay’ agreement with Delta Air Lines for the supply of 75M gallons of sustainable aviation fuel (SAF) per year, for the next seven years. GEVO stock soared just over 17% on the news that the deal could bring in around $2.8B of revenue. The decision from Delta is part of a wider move from popular airlines to ensure that the future of air travel is moving towards sustainability.
The $2.8B revenue projection factors in current assumptions, inclusive of future commodity pricing and the future values of environmental benefits. The renewable fuels sector is one that investors should be looking closely at as more and more multinational companies feel pressure from environmental degradation.
Read Also: Best Green Energy Stocks To Buy Right Now
Today’s deal surpasses a previous deal with Delta in 2019 for the purchase of 10M galloons of SAF; redefining Delta’s public image as a company clearly committed to the use of SAF, setting somewhat of a precedent amongst its competition. Clearly pointed out by Gevo CEO Patrick Gruber:
“On behalf of the entire team at Gevo, I want to congratulate our partners at Delta for their leadership in continuously pushing the aviation industry towards net-zero emissions”
“Delta makes for a great customer, recognizing that big change is needed. I also appreciate their faith in what we are doing at Gevo. Net-zero jet fuels matter.”
GEVO stock is up 10% YTD; with many more similar contracts to follow suit, Gevo is well-positioned as a leading provider of renewable biofuels. Green energy and sustainability will only increase in topicality, especially as further government funding is expected to bolster efforts.