Bloomberg: Butanol heading to U.S. as ethanol substitute

|By:, SA News Editor

Today's strength in Gevo (GEVO +9.7%) is attributed to a Bloomberg story that butanol may be in U.S. pumps as soon as next year in a challenge to ethanol’s domination of the $26B renewable fuels market.

Butamax Advanced Biofuel, funded by DuPont (DD) and BP, is retrofitting an ethanol plant in Minnesota to begin making butanol in commercial volumes in 2015, and Gevo, backed by Total (TOT) and billionaire Richard Branson, already runs a distillery in the state; both groups say they’ve lined up clients for large-scale deliveries.

“With ethanol dominant as a gasoline additive, the U.S. fuel industry simply hasn’t had much reason for adoption of butanol, [but] that may be starting to change now that ethanol is hitting a blend wall," says Raymond James analyst Pavel Molchanov.