Renewable fuels stock Gevo (NASDAQ:GEVO) popped in afternoon trading Monday and is up an astounding 13.6% as of 2:50 p.m. EST.
Why is Gevo stock up? This morning, the company announced a new "Net-Zero Projects" concept for producing "energy dense liquid hydrocarbons using renewable energy." Under the concept, Gevo says it will take renewable energy produced from solar, wind, or other power sources and use it to transform crops into transportable liquid fuel, with the by-product being only "high protein feed products for use in the food chain."
Thus, even burning the fuel will add no net carbon to the atmosphere, because carbon would have first been taken out of the atmosphere to create the fuel, and the combustion would simply be putting that carbon back where it was in the first place.
Gevo's first demonstration of the new concept will be Net-Zero 1, a wind-powered facility that will be built at Lake Preston, South Dakota. The company says Net-Zero 1 will have the capacity to produce 45 million gallons of renewable fuel per year, in the form of gasoline or jet fuel, and will process 350 million pounds of feed products in the process.
Gevo says it will need to invest $700 million to create Net-Zero 1. The company, which currently has about $80 million in the bank and is raising $150 million more from a stock offering, says it is "working ... with Citigroup to get [the rest of Net-Zero 1] financed."