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Gevo Part 3- ESG Hound Trips On a Sudden Unit Change
Well, well, well. I made a mistake. To my readers I apologize and thank you to Gevo IR to pointing out the discrepancy in units.
CLICK HERE FOR PART 1: Covers the negative Carbon refining/distilling claims as well as base financials.
CLICK HERE FOR PART 2: Goes into specific claims regarding the NetZero plant, including claims about corn farm sequestration
I posted the below chart on 8/31/21 in a piece released to subscribers
It appeared to me that the projected throughputs presented on Gevo’s earning presentations and call represented an increase in projected volumes that was greater than the permit application they submitted to the state 6 days later. Turns out Gevo changed units on me. As such, the facility as submitted in a permit application is only marginally more “productive” and not 40% greater as I had assumed.
So what happened?
I’ve been doing mass balances and calculations on Gevo for awhile now, going back to Data from 2018. Every single time Isobutanol or Ethanol is mentioned in Gevo’s presentations or SEC filings, it’s represented in Gallons. Some examples:
June 2021 Investor Presentation
Q4 2020 Earnings Report
Q2 2021 Earnings Presentation
So when Gevo Presented the Updated Net Zero outputs from the most recent slide, I messed up on Units, big time.
This appears to be the first time the company has ever spoken about Isobutanol (IBA) on a mass basis and not on a volume basis. I was doing a mass balance on their production and plugged the 44 million IBA number on a gallons basis, not a pound basis into my spreadsheet.
I incorrectly surmised that the facility production throughputs were higher than they were. As such, there is no reconciliation required between the earnings call (on 8/12) and the permit application submittal (8/18) and there are no obvious State or Federal codes in violation here
However, this makes the Projected Carbon Intensities from the plant even more egrigious, and I firmly stick with my calculations in Parts 1 and 2, linked at the top.
Part 4 of my series on Gevo is going to go right back to Carbon/LCFS credits. Spoiler: the data submitted in their permit application matches my estimates from Part 2. This is not a NetZero or negative carbon process, not by a long stretch.
Until next time…
I do not trade individual stocks. I have no position in GEVO, either in common stock, options, grants, bonds, NFTs, lootboxes and have no intention to do so anytime in the future. This post is extremely not investing advice.