Rayonier Advanced Materials: Pioneering the Green Fuel Revolution with Verso Energy – An Overlooked Infrastructure Gem

Rayonier Advanced Materials (NASDAQ: RYAM) is quietly positioning itself at the forefront of the global clean energy transition through its strategic partnership with Verso Energy. The June 2025 Memorandum of Understanding (MoU) to develop an electro-synthetic Sustainable Aviation Fuel (e-SAF) facility in Jesup, Georgia, marks a pivotal shift for RYAM—from a traditional cellulose producer to a leader in carbon-negative infrastructure. While the partnership's immediate focus is on decarbonization and renewable fuel production, its long-term potential as an overlooked “AI-infrastructure play” lies in its ability to leverage emerging technologies to optimize energy systems. Here's why investors should take notice.

The Strategic Pivot: From Cellulose to Carbon Capture

RYAM's collaboration with Verso Energy targets three interconnected projects at its Jesup, Georgia, site:
1. Biogenic CO₂ Capture and Storage (CCS): RYAM's existing manufacturing processes produce biogenic CO₂, a byproduct of its cellulose production. The CCS project aims to capture this CO₂, which is carbon-neutral due to its origin from biomass, and store it permanently.
2. Renewable Hydrogen Production: A green hydrogen unit will use renewable energy (likely solar or wind) to split water into hydrogen and oxygen. This hydrogen will serve as a critical feedstock for the e-SAF production process.
3. e-Fuel Synthesis: The final facility will convert captured CO₂ and green hydrogen into e-SAF via Power-to-Liquid technology. This fuel, with lifecycle emissions 90% lower than conventional jet fuel, could meet growing demand from airlines and governments under EU ReFuelEU and U.S. tax incentive frameworks.

The project's genius lies in its use of RYAM's existing infrastructure—a $1.6 billion asset base—as a launchpad for these new ventures. By repurposing its Jesup site, RYAM avoids costly greenfield construction and taps into a steady supply of biogenic CO₂, turning waste into revenue.

The AI-Infrastructure Angle: A Subtle but Strategic Edge

While the MoU does not explicitly mention artificial intelligence, the broader trend in energy infrastructure increasingly relies on smart systems to optimize efficiency, predict maintenance needs, and manage complex supply chains. For instance:
- Process Optimization: AI-driven algorithms could refine the electrolysis process for hydrogen production or fine-tune CO₂ capture efficiency.
- Grid Management: As renewable energy sources power the plant, AI could balance energy demand and storage to minimize grid strain.
- Carbon Accounting: Blockchain and AI could enable real-time tracking of carbon credits, a critical feature for compliance with global emissions targets.

RYAM's pivot to infrastructure—where scalability and operational precision are paramount—positions it to integrate such tools as the market matures. This could give it an edge over competitors still reliant on static, legacy systems.

Market Catalysts and Risks

RYAM's stock has lagged behind broader markets, trading at a valuation that ignores its clean energy potential. Key catalysts include:
- Feasibility Study Results (2025–2026): A positive outcome could trigger a final investment decision (FID) by early 2027, unlocking a potential 50–100% upside as CO₂ monetization begins.
- Regulatory Tailwinds: The EU's ReFuelEU mandate, which requires 2% SAF blending by 2028, and U.S. tax incentives for SAF producers create a $15–20 billion market opportunity by 2030.

Risks remain, however:
- Capital Costs: The project's estimated €1–2 billion price tag requires securing financing amid a volatile credit market.
- Technology Scaling: While Power-to-Liquid is proven in labs, industrial-scale deployment faces hurdles like hydrogen storage and grid integration.

Investment Thesis: A Hidden Gem in the Energy Transition

RYAM's undervalued stock and strategic foresight make it a compelling play on clean energy infrastructure. Investors should:
1. Buy on dips below $15/share: Current valuation does not reflect the CO₂ monetization opportunity or the scalability of Jesup's model.
2. Watch for FID announcements: A green light by early 2027 could catalyze a re-rating.
3. Consider ESG-focused ETFs: Pair RYAM with broader energy transition plays like NIO or Plug Power (PLUG) for diversification.

Conclusion: RYAM's Quiet Revolution

Rayonier Advanced Materials is not just a cellulose supplier—it's a pioneer in repurposing legacy infrastructure for the green economy. While AI may not yet be part of its toolkit, its strategic bet on carbon-negative energy systems aligns with the broader trend toward smart, data-driven infrastructure. Investors who recognize this shift early could benefit as RYAM transitions from a overlooked mid-cap stock to a cornerstone of the $1 trillion sustainable fuels market.

Final Note: Monitor Q4 2025 updates on the feasibility study for the next major catalyst. The Jesup project's success could redefine RYAM's valuation—and its place in the energy transition.