Why It Matters
South Dakota’s business climate is facing renewed scrutiny after Colorado-based energy company Gevo redirected a major clean fuel investment away from the state and toward North Dakota. The decision carries economic consequences for South Dakota’s agricultural and energy sectors, while North Dakota stands to gain a significant expansion in low-carbon ethanol production capacity and a potential pathway to sustainable aviation fuel manufacturing.
For corn growers across the northern Plains, the expansion represents a major new demand center that could absorb tens of millions of bushels annually and influence regional commodity markets.
What Happened
Gevo, a Colorado-based low-carbon fuel company, announced this week that it will add a second ethanol production facility at its existing site in Richardton, North Dakota — the former Red Trail Energy ethanol plant the company acquired in 2024. The new facility will be capable of producing up to 75 million gallons of low-carbon ethanol per year.
The announcement comes on top of a previously disclosed plan to expand the existing Richardton facility’s output from 67 million gallons per year to 75 million gallons per year. Together, the two projects would significantly increase Gevo’s production footprint in North Dakota.
Gevo President Paul Bloom cited North Dakota’s agricultural base, energy-friendly regulatory environment, and existing carbon capture infrastructure as key factors in the decision to prioritize the state. The company has separately shelved plans to build a sustainable jet fuel plant in South Dakota, with Bloom previously describing South Dakota as “a difficult place to do business.”
By the Numbers
- 75 million gallons — Projected annual production capacity of the new second facility to be added at the Richardton site
- 67 million gallons — Current annual production capacity of the existing Richardton plant, already slated for expansion to 75 million gallons
- 52 million bushels — Estimated corn consumption per year if the new expanded facility operates at full capacity, based on a yield of 2.9 gallons of ethanol per bushel
- 711 million bushels — North Dakota’s total corn production last year, according to the U.S. Department of Agriculture
- 2024 — The year Gevo completed its acquisition of the Red Trail Energy facility in Richardton
Background on the Richardton Facility
The Richardton plant has a distinction that made it attractive to Gevo from the outset: it was the first ethanol facility in the United States to capture carbon dioxide from the fermentation process and store it underground. That carbon capture and sequestration capability allows the fuel produced there to qualify for federal low-carbon fuel tax credits and opens the door to sustainable aviation fuel production, which commands a premium price over conventional ethanol.
Bloom said in this week’s announcement that the North Dakota expansion is “building the foundation” for future sustainable aviation fuel production at the site. Sustainable aviation fuel, or SAF, has attracted significant investment interest globally as airlines face increasing pressure to reduce emissions.
Zoom Out
The Gevo announcement reflects a broader national push to scale up biofuel production amid evolving federal policy. The Environmental Protection Agency recently announced it will allow gasoline blended with up to 15% ethanol — known as E15 — to be sold during summer months, a departure from the standard seasonal restriction. The agency also set an all-time high requirement for the volume of biofuels to be blended into gasoline and diesel supplies nationwide.
Those policy shifts are expected to increase demand for ethanol across the country, making new production capacity more economically viable. States with established agricultural infrastructure and carbon storage geology, like North Dakota, are increasingly positioned as preferred destinations for this type of investment.
The sustainable aviation fuel sector in particular has seen rapid investment growth, with producers racing to secure feedstock supply chains and carbon-reduction credentials that allow them to qualify for federal tax incentives under the Inflation Reduction Act.
What’s Next
Gevo has not released a cost estimate or a construction timeline for the new Richardton facility. The company’s announcement framed the expansion as a strategic priority but stopped short of providing specific project milestones or financing details.
The buildout of sustainable aviation fuel production at the North Dakota site remains a longer-term objective, contingent on the completion of the ethanol expansion and continued favorable federal policy for low-carbon fuels. South Dakota, meanwhile, has not publicly responded to Gevo’s characterization of its business environment or announced alternative plans to attract similar clean energy investment.