Biofuels Offer Low-Hanging Fruit in Nascent Carbon Capture Industry

May 02, 2024

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by Amena H. Saiyid (Cipher) Biofuel producers are taking up carbon capture and storage technology faster than any other industry in the United States as demand grows for cleaner fuels for shipping and aviation.

Four out of every ten carbon capture and storage projects announced since 2018 in the United States are for ethanol production facilities, according to Cipher’s Cleantech Tracker.

Many U.S. ethanol producers are betting on carbon capture technologies to reduce carbon dioxide emissions from making corn-based biofuels. Ethanol’s characteristics — smaller plants and denser streams of CO2 emissions — make carbon capture easier and cheaper compared with other industries, according to a recent Congressional Budget Office (CBO) study.

The ethanol industry has already set a precedent for using carbon capture and storage, said Shailesh Sahay, an attorney with the law firm Baker Botts who specializes in the biofuels industry. As an example, Sahay pointed to the multinational food processing company ADM, which has been capturing and storing carbon dioxide in Illinois for a decade.

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Cipher’s cleantech tracker shows at least 41 ethanol production facilities have announced plans since 2018 to install carbon capture technology at plants across the Midwest, Colorado and California but are yet to start construction. That’s out of about 102 announced carbon capture projects overall in the past six years, including 19 hydrogen production projects.

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To date, only two ethanol producers in the country, Red Trail Energy in North Dakota and ADM’s Illinois Industrial, are capturing and storing CO2 on site. Two facilities in Kansas are also capturing carbon but instead of storing the gas they send it out for use in nearby oil recovery operations, which the CBO notes is one way producers of ethanol, natural gas and fertilizers are making the economics of carbon capture work. To be sure, critics question the climate benefits of the practice.

(Our tracker doesn’t show data for all facilities built before 2018 because the primary focus of the underlying dataset is projects announced since 2018.)

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Carbon capture spending at ethanol facilities makes up just 3.5% of the $50.2 billion invested in this technology across all industries since 2018 according to Cipher’s analysis.

Because it’s easier and cheaper to capture carbon from making ethanol than in other contexts, a large gap persists between the high project number and low overall investment share.

Fermenting fuel from corn yields a largely pure stream of CO2 that can easily be captured. The CO2 released from other processes, like burning fossil fuels or taken from the air, must be cleaned because it’s mingled with other polluting gases. Those plants are also larger, requiring larger and more expensive capture equipment.

Capturing carbon costs about $15 to $35 per metric ton when making ethanol, processing natural gas and making ammonia for fertilizer, compared to an estimated $50 to $120 per metric ton for power generation and steel, iron and cement making, according to the CBO study.

To help keep costs down, a majority of Midwest ethanol facilities, including Sioux Corn Processors in South Dakota and Granite Falls Energy in Minnesota, are planning to send captured CO2 to a single storage site in North Dakota via a dedicated pipeline developed by Iowa-based Summit Carbon Solutions, said Sahay.

“Collecting the CO2 and sequestering at a single site distributes the cost of sequestration among all the plants, making the endeavor much more affordable,” Sahay said.

Building a pipeline can be expensive and run into local opposition, as recent developments indicate. The company Navigator CO2 canceled its planned CO2 pipeline in the Midwest in October due to permitting issues in South Dakota and Iowa. Summit Carbon is facing similar issues in these states.

But the ease of capture coupled with the ability to share transport and storage is “definitely pivotal” for ethanol producers, said Paola Perez Pena, principal research analyst for clean energy technology with S&P Global Commodity Insights.

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“CCS will play a key role to reduce the carbon intensity of ethanol producers, which increases their opportunities to play a bigger role in clean fuel production,” said Perez Pena. READ MORE

Related articles

Carbon Capture and Storage in the United States (Congressional Budget Office)
Corn price connection to carbon capture hard to pin down (North Dakota Monitor)
Efforts toward ethanol-fueled jets struggle amid opposition (Wisconsin State Journal)
Explainer: Why farmers hate a pipeline that could help their own cause — ethanol: What's at stake in the carbon pipeline argument, and what does it really look like on the farm? (Farm Progress/Prairie Farmer)

Excerpt from Farm Progress/Prairie Farmer: Back at the Farm Progress Show, the same group that flew the banner — the Coalition to Stop CO2 Pipelines — also had a booth, where they requested people to fill out cards asking the Illinois Farm Bureau to oppose eminent domain for a private project. Many did.

The pipeline they were opposed to was scrapped a couple months later. But what they were opposed to was a 1,300-mile, $3.2 billion proposed carbon pipeline from Navigator CO2 Ventures that would have moved 15 million metric tons of carbon dioxide a year from nearly three dozen fertilizer and ethanol plants in South Dakota, Nebraska, Minnesota, Iowa and Illinois — in a 20-inch pipeline buried 5 feet underground. The plan was to take CO2 to an underground sandstone formation in central Illinois, known as the Mount Simon Sandstone, where carbon can be sequestered.

What happens next is uncertain, as the company has already withdrawn its application with the state once, only to resubmit it with an expanded route. In June, Illinois lawmakers passed a moratorium on carbon pipelines for up to two years or until federal authorities pass new pipeline safety guidelines.

One thing is certain: Pipelines will continue to be proposed, because there’s too much money at stake for companies with shareholders to answer to. There’s also a lot at stake for the ethanol business.

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Navigator’s now-quashed pipeline would’ve come right through my neighborhood — in fact, right across the first farm my husband and I bought together in 2004.

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We could have with what Navigator offered us, if we agree to let the pipeline go through. We never signed on, but we talked about negotiating to have them lay mains on either side of the pipeline. Then, we could tie into them when we install drainage tile.

It was virtually a best-case scenario — for us. Not everyone would have been so lucky. Our neighbor had the worst-case scenario. He has a beautiful 160-acre field that he pattern-tiled a couple years ago. The pipeline would’ve cut across it, corner to corner.

He hates it and I don’t blame him. I hate it for him.

The company was also offering a lot of money to the counties the pipeline would cross. No one really knows if it’s worth it. But our county highway engineer did the math, and it was enough to tar and chip every county road that’s currently gravel, which is a lot.

But safety? Folks in opposition point to a pipeline that exploded in Satartia, Miss., in early 2020. Federal investigators determined that the pipeline operator, Denbury Inc., violated several regulations. Obviously, the chance of an explosion like that is lower than your chance of wrecking your car on the highway today — but it’s not zero.

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Sequestering carbon via pipeline will help ethanol plants dramatically lower their carbon footprint, which would mean higher biofuel sales in California and beyond. That could translate into better prices for Midwest corn.

Despite its 13 letters, eminent domain was the four-letter word for farmers along the proposed route, even the pro-ethanol farmers. And in Illinois, if the Illinois Commerce Commission had approved Navigator’s permit, the company would have received eminent domain authority.

That’s no good if you’re the last guy negotiating on the courthouse steps.

Weaning ourselves off fossil fuels

In the big picture, that carbon pipeline is a byproduct of an overarching effort to get the world off of fossil fuels and slow greenhouse gas emissions. The GHG issue has brought new pressure to adopt alternative energy options, which we can’t dismiss out of hand. Rod Weinzierl, executive director at Illinois Corn Marketing Board, is right when he says the trajectory of the conversation around greenhouse gases will only increase.

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If we’re going to do something for a common good, some people will win; some will not. Do we call for better regulations? Better safety measures? What about ethanol? It’s an honest question, and I’d love to hear what you think. But it’s often hard to have these rational discussions when outrage fills the countryside. READ MORE