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Verity Carbon Solutions: Tracking and Monetizing Low-Carbon Ethanol for Sustainable Aviation Fuel Production

Verity Carbon Solutions at Gevo has a tracking system to monitor carbon emissions throughout Gevo’s business system, from feedstock to end-use. This solution is highly sought after by airlines and other carbon-focused industries in their effort to reduce their carbon footprint. The system aims to reduce carbon intensity (CI) and track sustainability attributes, enabling compliance with initiatives like CORSIA. It adopted distributed ledger technology for efficient cross-supply chain carbon tracking, realizing its potential for all biofuel manufacturers. This led to the launch of Verity Carbon Solutions as a business. This report contains a transcript of the fireside chat from December 5, 2023, which can be accessed on-demand accessible in our full report. Verity Carbon Solutions works with ethanol producers to test and implement the system, aiming to simplify data collection and verification using distributed ledger technology. The system benefits biofuel producers and supports Gevo’s production of sustainable aviation fuel, with low-carbon ethanol playing a crucial role as a raw material. The various ways to monetize low-carbon ethanol include tax credits, compliance carbon markets like California LCFS, and the voluntary market. Verity aims to simplify the process and capture the value for ethanol customers and emphasize the importance of feedstock, such as corn, in reducing the CI score of ethanol. Verity presented real data from a 150-acre field, demonstrating the granularity of measurement and the impact of agricultural practices on carbon reduction, and also highlighting the potential for negative CI scores and the financial benefits, with each CI point worth around $0.03 per gallon in terms of tax credits. Verity has a profit-sharing model and offers Software-as-a-Service (SaaS), accounting fees, and throughput fees. The platform integrates with Argonne GREET and other policy overlays to calculate carbon attributes and rewards contributors along the supply chain, including farmers and renewable energy producers. The Verity ecosystem also attracts new customers interested in marketing low-carbon products and compensating for their contributions to carbon reduction. The program was designed with input from farmers to be user-friendly and automate data collection. Farmers are rewarded for their environmental benefits and their contributions to reducing the CI score. The program has achieved 100% farmer retention and will transition to compensating farmers based on CI performance. The potential market size is estimated to be a $3 billion addressable market by 2025 and $30 billion by 2030. The revenue sources include profit sharing, software subscriptions, and carbon accounting fees. Delivering this solution is essential for Gevo’s overall business, including its Net-Zero 1 and Net-Zero 2 projects and specialty chemicals division. Carbon tracking and traceability is an opportunity to turn a potential cost center into a profit center, making it an attractive and accretive business for Gevo and its shareholders.