Americas News
Biofuel Company Sees 'Very Encouraging' Marine Fuels Market
U.S. biofuel company Gevo Inc. [Nasdaq:GEVO] says that, despite some technical setbacks, the prospects for its product in the marine fuels industry are "very encouraging."
The comments came as it reported a fall in revenues to $24.4 million in 2012, from $64.5 million in 2011 as it ended production of ethanol products and moved toward beginning production of isobutanol.
"We are pleased with the progress we've made optimizing our technology over the past three months and remain on-track to restart isobutanol production," said CEO Patrick Gruber.
Gruber said the company is working with potential customers including the United States Air Force, Coca-Cola, Toray, and Sasol.
In the company's earnings call, Gruber said the National Marine Manufacturers Association is conducting a second round of testing designed to determine isobutanol's value as a blend stock, and the U.S. Coast Guard and Bombardier Recreational Products are also planning similar tests.
"Our work in the marine fuel area is ongoing and remains very encouraging," Gruber said.
"New manufactures and marine fuel suppliers are looking for a fuel blend [that] has oxygen in it that is non-soluble in water," he said.
"[Ethanol] doesn't meet this requirement, whereas gasoline blended with isobutanol eliminates the water solubility concern and ensures compatibility with a variety of engines already used in the industry."
The company began starting up production of isobutanol at a commercial-scale Minnesota facility in the fourth quarter of 2012, but paused production to improve the technology.
Gruber said the company is working to make sure it can produce consistent quantities and quality of isobutanol at economically viable rates, but he said temporary setbacks are typical for new products.
"There is a reality in bringing the first of a kind technology to full scale that can't be avoided," he said.
"It's normal; it's part of the game to make technologies real and successful at full commercial scale."
The U.S. Navy has said it plans to get half its fuel from renewable sources by the end of 2020, and the U.S. announced last year that it would make $62 million available to help develop biofuel technology.
