Shares of Gevo and other biofuel makers pop on White House plan to permit more ethanol in gas

Shares of the biofuel maker Gevo Inc (NASDAQ:GEVO)  and some rival companies are climbing in the wake of the news that President Trump will unveil a plan that permits the year-round sale of gasoline that contains more ethanol.

Set to be announced today ahead of Trump’s visit to Iowa, the policy proposal from the White House, which is expected to lift the maximum of ethanol permitted to be blended into gas to 15%, marks a win for makers of biofuels like Gevo, which are likely to see a surge in sales of ethanol.

The new policy also represents a victory for US farm states like Iowa that have lobbied to see more sales of the corn-based fuel.

Read: Gevo shares still accelerating after EPA green lights increased mix of gasoline additive isobutanol

The news pushed up shares of biofuel makers up in Tuesday’s pre-market session. Gevo shares surged 23.6% to $5.50 while shares of Aemetis (NASDAQ:AMTX) added 10.7% to $1.55 and Pacific Ethanol (NASDAQ:PEIX)  rose 21.2% to $3.27.

At the moment, due to worries about its contribution to smog levels, the use of E15 or gas which contains 15% ethanol, is prohibited in the summer. The White House’s move would require the Environmental Protection Agency to permit the sale of E15 throughout the year. 

Most of the gasoline sold in the U.S. is still E10, which means it only contains 10% ethanol.

Contact Ellen Kelleher at [email protected]

Story by ProactiveInvestors