AGWEEK SPECIAL REPORT - BIOFUELS

Clean fuel standards could lead to higher prices for farmers

Jeff Beach — Wed, 26 Apr 2023 10:30:00 GMT

When a farmer hauls a load of corn to the ethanol plant, could he actually be rewarded for using practices that shrink the carbon footprint of that ethanol plant?

That should be the goal says Brendan Jordan, of the Great Plains Institute in Minnesota.

"It's complicated, sure, but we think we should figure out how to give credit to growers and compensate them for what they're doing to contribute to lower carbon intensity biofuels,” Jordan said.

Geoff Cooper, executive director of the Renewable Fuels Association, says progress is being made as more states look at implementing a clean fuel standard as California and Oregon have done.

“We’re not quite there yet,” Cooper says. “But we certainly see that future around the corner. And certainly there are some programs and some pilot programs and trials.”

He said support from the U.S. Department of Agriculture will help make that transition happen.

When California introduced its Low Carbon Fuel Standard in 2011, Jordan said there was interest in the Midwest, but seeing how the policy played out in California cooled that interest.

“There are so many issues with the California program that there was not a lot of appetite to pursue several similar policies in the Midwest,” Jordan said.

But that has been changing with Minnesota among the states farthest along in discussing implementing a clean fuel program.

Jordan said that while California uses dozens of employees to implement its system, Oregon manages its program with just four employees.

And of particular concern for farmers is the assumption under the California model that increasing corn output means putting more acres into production that negatively affect the environment and greenhouse gas emissions.

But Cooper says that assumption is flawed.

“The truth is, well, 15 years after a lot of these regulations were adopted … there's really no evidence that cropland has expanded,” Cooper said. “We're actually producing more corn and more soybeans, more everything on less cropland today than we were 10, 15, 20, 30 years ago.”

He said he favors programs implemented in Canada but that Oregon could be a model for other states.

“Here in the United States, we look at the Oregon program, as being the best example of a low carbon fuel standard done correctly,” Cooper said. “It really all boils down to: How are they doing the modeling? How are they doing the estimation of the carbon footprint of these different biofuels and different processes?”

He said Oregon uses the U.S. Department of Energy's modeling on biofuels, which is updated annually.

“It just does a better job of reflecting what's actually happening on the ground,” Cooper said.

Jordan said he is hopeful that there could be a regional approach to “harmonize” a clean fuel standard in different Midwest states.

“That can make it easier for both the regulated parties and for the administrators of the program,” he said.

He said there should at least be some sort of reciprocity agreement.

“If you get a pathway approved in Minnesota, you can use it in Iowa or you can use it in Michigan,” he said.

There is some concern from farmers that a clean fuel standard will give an unfair advantage to electric vehicles and create some burdensome reporting practices making it a non-starter for some.

Minnesota state agencies, including the Department of Agriculture, held a series of discussions on a clean fuel standard in 2022.

Bills in the Minnesota Legislature aimed at creating a clean fuel standard floundered in recent sessions when power was divided between Republicans and Democrats.

Jordan said there was some hope for more progress in the 2023 session with Democrats controlling both houses of the Legislature and the governorship. But he said other environmental bills were higher priority this year. A clean fuel standard will have to wait its turn.

In testimony about a clean fuel standard in Minnesota, Brian Werner of the Minnesota Bio-Fuels Association, had four main talking points.

Be technology and feedstock neutral: Meaning opportunities both for bio fuels and electric vehicles. “We oppose any policy that seeks to prohibit credit generation from low carbon biofuels or solely devotes credit revenue to one technology over another,” Werner said.

Proper accounting for production practices and evaluation of carbon intensity: He favors Department of Energy measurements “as long as its adaptation for state use does not incorrectly apply indirect land use change penalties or other penalties not applied to other low carbon fuel technologies that result in an unlevel playing field for biofuels. Any process must fully protect farm-level data, he said.

Increased market access for renewable fuels: This would include higher ethanol blends and funding for biofuel infrastructure.

Regional collaboration: “Early coordination and collaborative development on the policy design would help to ensure harmonization and efficient implementation in multiple Midwest states with similar economic characteristics,”

“If crafted properly, and combined with complementary policies, we believe that a low carbon fuel standard in Minnesota offers the potential to both lower greenhouse gas emissions from our transportation sector and support communities in greater Minnesota,” he said.

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South Dakota corn will be used to create sustainable aviation fuel

Ariana Schumacher — Mon, 24 Apr 2023 10:29:00 GMT

Sustainable aviation fuel is going to be created from South Dakota corn.

Gevo, a company making biofuel for jets, broke ground on its first commercial scale sustainable aviation fuel facility, Net-Zero 1, in Lake Preston, South Dakota in September 2022.

“Lake Preston is being designed to take carbohydrates made from corn, low carbon corn, and turn them into sustainable aviation fuel, jet fuel,” said Patrick Gruber, CEO of Gevo.

Chemically, the fuel is the same as what is in the marketplace from petroleum, except this fuel has a net-zero footprint.

“The way you do that is by designing a plant that has really every good concept of how to reduce energy inside of a plant built into it using all the best techniques,” Gruber said.

When choosing a location for the plant, Gevo decided on South Dakota because of its cost-effective, low-carbon corn, good wind sources and the railroads.

The plant will be powered by 100 megawatts of wind, it will have a hydrogen plant on-site and it has the ability to power displace natural gas with biogas.

“The over all energy efficacy makes it so it’s a really, really low carbon footprint,” Gruber said.

According to Gevo, every year the plant will use around 38 million bushels of corn to produce around 60 million gallons of sustainable aviation fuel, 800,000 gallons of renewable diesel and 4.4 million gallons of renewable naphtha. The plant will also produce low-carbon protein, feed and vegetable oil.

Gevo plans to use corn grown in South Dakota with soil health practices in mind.

“We know that not all corn is the same,” Gruber said. “It is possible and the farmers we are working with improve their yields and can do low-till, no-till, it’s not that it’s a sacrifice.”

Having a new plant will give corn producers another marketing outlet for their crop.

“South Dakota Corn itself has not run any kind of analysis yet on an improvement in basis in and around Lake Preston or that type of study, but we are very excited about the possibility longer term,” said DaNita Murray, executive director of South Dakota Corn. “Corn ethanol is something where demand needs to continue to grow. This is something that is a huge opportunity not just here, but across the country.”

Providing new ethanol outlets like this for producers is important.

“It’s changed literally the face of agriculture in South Dakota, in a good way, in a way that I think a generation ago was hard for those producers to envision and that’s great, that’s a wonderful thing, but it’s got to continue,” Murray said. “So that growth is important to keep that trend moving forward from generation to generation.”

The plant will also have the opportunity to expand.

“It will be a good industrial site because there are lots of people who need these kinds of products, so we see opportunities to expand further and make more products,” Gruber said. “We can make gasoline, or diesel fuel, or we can make chemicals and plastics. Those are all possible from the same exact technology.”

The target date for opening the plant is 2025.

“I think what’s exciting for us is to see the rubber hit the road,” Murray said. “At some point these contracts will become real and the potential for that premium becomes real to growers on the ground, and I hate to sound like we aren’t excited now, but that is truly where I think where growers will realize that increased demand at the farm gate and it will have an impact on their operations.”

Once in operation, the facility will staff around 90 full-time employees.

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Does E15 have a permanent place at the pump?

Emily Beal — Sat, 22 Apr 2023 10:30:00 GMT

With gas prices continuing to surge, it has many consumers looking for cheaper alternatives to fill up their tanks.

One of those alternatives could be E15 or perhaps an even higher blend of ethanol. However, the ethanol industry faces some challenges when it comes to offering these blends year round at gas stations around the country.

In many states, E15 is not sold at the pumps during the summer months. The summertime ban is enforced by the Environmental Protection Agency because of their concern that the fuel adds to smog in hot weather.

“It's a high value product that I think consumers are anxious to be able to access. We just have to make sure that the policy environment isn’t backwards and allows consumers to access this 12 months out of the year,” Emily Skor, CEO of Growth Energy, said.

U.S. Sen. Amy Klobuchar, D-Minn., has been openly advocating for the summertime sale of E15 not just in Minnesota, but the entire country. The ethanol industry has boomed in Minnesota and the state’s drivers continue to keep reaching for the E15 handle at the pump. E15 can be used in all vehicles made from 2001 to today, which is about 95-97% of all vehicles on the road in Minnesota.

“Last year in Minnesota we sold 105 million gallons of E15. The average savings per gallon for the consumer was 17 cents. Now if you do the math on that, that’s a lot of real dollars that stayed in some family’s pocket simply by choosing the E15 hose,” said Richard Syverson, president of the Minnesota Corn Growers Association. “We keep increasing the blend rate nationally and especially in Minnesota. Minnesota does lead the nation in a blend rate around 12.6% around all gas sold is ethanol.”

Syverson is a farmer himself, residing near Benson, Minnesota. He raises sheep, soybeans and corn on his acres. For him, the ethanol industry has been a game changer.

"I'm a true believer. It's been the best thing that's happened in our area, to our ag markets in my farming career,” he said.

According to the Minnesota Bio-Fuels Association, transitioning from the traditional E10 blend to E15 could tremendously help the state’s economy, bringing in over $1 billion in gross domestic product. Skor believes that E15 and higher blends of ethanol being readily available at the pump could also help the rural areas and those in the ag industry.

“If we as a nation were to drive on a 15% ethanol blend — right now we’re driving on a 10% blend — if you move to a 15% blend, that’s an increase in about 7 billion gallons of ethanol. That’s two to two and a half billion bushels of corn grind, so that’s the increase in demand for the rural economy,” she said.

Besides keeping more dollars in consumers' pockets, Skor says using E15 and other ethanol blends has other benefits, such as a lower carbon footprint.

“Give consumers the choice for fuel that’s lower price, lower carbon and I think you’re just going to continue to see it drive upward in sales,” Skor said.

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Ag, biofuels and retail groups sue state over Minnesota's zero-emissions mandate

Noah Fish — Thu, 20 Apr 2023 19:10:27 GMT

In a lawsuit filed last month, agriculture, biofuels and convenience store groups allege the state of Minnesota violated the U.S. Constitution and federal law in adopting California's zero-emissions vehicles mandate.

The Minnesota Soybean Growers Association, Minnesota Service Station & Convenience Store Association, National Association of Convenience Stores, Clean Fuels Development Coalition and ICM Inc. filed the suit against the state of Minnesota for its adoption of California’s “zero-emission vehicle” mandate.

The lawsuit, filed in the U.S. District Court for the District of Minnesota, challenges the legality of Minnesota Pollution Control Agency rules requiring that new cars, light-duty trucks and medium-duty vehicles in the state meet emission limits set by California and match California’s requirements for the sale of a certain percentage of so-called “zero-emission vehicles,” as defined by California regulators.

Minnesota is one many states that have followed California's lead in adopting more protective tailpipe emissions limits. The program is part of the state's Climate Action Framework that aims to cut greenhouse gases in half by 2030. The Minnesota Automobile Dealers Association fought the requirements but lost at the Court of Appeals last year, and petitioned the state Supreme Court to hear the case.

Lance Klatt, executive director of the MSSA, said the California mandate is bad for Minnesota consumers, businesses and the state economy.

The MSSA was founded in 1966 to represent independent retailers in the auto and petroleum industry in legal and legislative opportunities, he said, and it currently represents around 300 stations today.

"A lot of our retailers have adopted E15, E85, E30, and are all bought biofuels, and they've spent some money on infrastructure for biofuels," Klatt said. "They're concerned about all the money they put into the infrastructure, and then to see our governor adopt California Air Resources Board's (CARB) tailpipe emissions standards is just uncomfortable for them."

Klatt said many of the retail members of MSSA were among the first to offer E15.

"When you look at all the gallons sold in Minnesota of E15, sometimes I'd like to think that if it wasn't for members of my association, I'm not sure how far E15 would be here today," he said.

Klatt served on the Governor's Biofuels Council for two years, and said he listened to Minnesota Gov. Tim Walz tout his plan to increase biofuels in the state.

"How do you do that when you adopt CARB's tailpipe emission standards, when CARB doesn't recognize E15 as a fuel today in California?" Klatt said.

He said he has little confidence in the Walz administration stepping back Minnesota's pledge to adopt California’s mandate.

"That's why we've decided to go with this lawsuit, because it just doesn't make sense to have Minnesota blindly follow California's rules, and it gives up our ability to make our own decisions," Klatt said.

Bob Worth, president of the MSGA, said Minnesota's adoption of California's mandate will "sabotage" Minnesota growers and producers of liquid fuel.

“Minnesota consumers know better than California politicians what is best for their own lives," he said.

According to the MSGA, about $1.7 billion of Minnesota’s GDP comes from the biodiesel industry and biodiesel supports nearly 5,400 jobs in the state and 65,000 jobs in the U.S. Every 100 million gallons of production supports 3,200 jobs, and in total, biodiesel adds more than $1 to every bushel of soybeans, according to the MSGA.

“With profit margins being so close, if we lose our biodiesel market, it would be a serious matter for soybean farmers to face,” said Worth, who helped advocate for the passage of the original biodiesel law that Minnesota passed in 2002.

The lawsuit contends that Minnesota's adoption of the mandate violates the U.S. Constitution’s equal sovereignty doctrine because it grants California a greater degree of sovereignty and capacity for self-government than all other states.

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Biofuels timeline reveals 'incredible accomplishment'

Noah Fish — Wed, 19 Apr 2023 10:30:00 GMT

WASHINGTON — The biofuels industry has made incredible strides since Michael McAdams joined the sector in 1978.

McAdams, president of the Advanced Biofuels Association (ABFA), manages the voice in the U.S. capital for the advanced biofuels industry.

In 1999, he was working as a speechwriter and policy advisor for the British Petroleum (BP) CEO Lord John Browne. BP had just merged with Amoco in a deal valued at $48.2 billion, which at that time was billed as the largest oil industry merger ever, and was also the largest takeover of an American company by a foreign company.

In an interview with Agweek, McAdams recalled a lunch he had that year with Bob Dineen, who two years later would become the president and CEO of the Renewable Fuels Association (RFA). McAdams and Dineen met two decades earlier, sorting letters in the mailroom of the U.S. House of Representatives.

"And I said, Bob, I'm going to be the first guy in the oil industry to support an RFS program," said McAdams. "And we were off to the races."

1978-79

America's advancement in the biofuel production got underway when President Jimmy Carter created federal incentives for ethanol production.

Carter signed energy legislation that created the U.S. Department of Energy, provided incentives for renewables and coal, deregulated oil and natural gas prices and banned new power plants from using gas or oil.

"He was the first president to actually put a tax credit in place in 1978," said McAdams. "Between 1978 and 2000, we were at about 2 billion gallons of ethanol in the United States."

At the time, McAdams was working as a staff member for a member on the Energy and Commerce Committee.

"Let's just say the oil industry wasn't excited about ethanol," said McAdams of the late 70s.

He said from 1981-1985 there were attempts to do a rewrite on the Clean Air Act (CAA) that did not work.

1990-95

It wasn't until 1990 that the next demarcation point took place, said McAdams, when longtime member of the House Energy and Commerce Committee and then-chairman of the committee, John Dingell, and the minority came together to amend the CAA.

"Over 43 consecutive days and nights, the committee wrote the 1990 Clean Air Act," McAdams said. "I know that because I stood in the hall for 43 straight days and nights, and I'll never forget it."

He remembers members from each sector impacted by the CAA coming via corporate jets and into the rotunda of the Rayburn Building, to negotiate with top members on the committee who were trying to write the statute.

Through those efforts, the Clean Air Act Amendments of 1990 came to be, and with that came required reformulated gasoline (RFG), designed to reduce air toxins and emissions of volatile organic compounds.

"The RFG program was clean gasoline for two types of cities," McAdams said.

RFG was required to be used in nine major metropolitan areas of the country with the worst ozone air pollution. In addition, the EPA expanded the RFG Program — which began in 1995 — at the request of other state governors to allow areas with a history of ozone problems to voluntarily become part of the program.

But unfortunately for the ethanol industry, McAdams said the statute was written for an oxygenate, and not corn ethanol. There were four or five oxygenates that could comply with the regulation when it was written, he said.

"The oxygenate that won the fight, in terms of cost, was methyl tertiary-butyl ether (MTBE)," McAdams said. "And a lot of people in the ethanol industry really wanted to take down MTBE."

According to the EPA, a number of studies detected MTBE in ground water throughout the country, and in some instances contaminated drinking water.

"(The ethanol industry) targeted this and it became a national issue," said McAdams. "And that's what led to the conversation around creating an RFS instead of having just the RFP program."

2005-07

According to the definition from the U.S. Department of Energy, the Renewable Fuel Standard (RFS) is a federal program that requires transportation fuel sold in the country to contain a minimum volume of renewable fuels.

"The RFS granted 12 and a half billion gallons of renewable fuels that could come from the various sectors, and at that time, it was corn ethanol and soybean biodiesel," said McAdams.

The RFS originated with the Energy Policy Act of 2005 and was expanded and extended by the Energy Independence and Security Act of 2007 (EISA).

The RFS requires renewable fuel to be blended into transportation fuel in increasing amounts each year, and each renewable fuel category in the RFS program must emit lower levels of greenhouse gases (GHGs) relative to the petroleum fuel it replaces.

"Two years later, we passed RFS 2, and we raised the target from 12 and a half to 15 billion," McAdams said. "And we exceeded 13 billion by 2012 — so massive growth in the ethanol industry between 2005 and 2013."

McAdams said that when the RFS was expanded in 2007, it was really about the "innovative technologies of the future," and a "good deal" for the corn-based ethanol sector. In between the RFS expansion, he created the Advanced Biofuels Association in 2006.

Today-2025

"Today, we sit at about 17 and a half billion gallons of boilerplate capacity of ethanol, and stand somewhere around four and a half billion gallons of biodiesel and renewable diesel," McAdams said. "And by 2025, we should be somewhere close to 8 billion gallons of biodiesel and renewable diesel, which is eight times what the original statute called for. That is an incredible accomplishment."

Understanding biofuels

Renewable fuels fall under the following categories:

Conventional biofuel: Any fuel derived from starch feedstocks (corn and grain sorghum). Conventional biofuels produced in plants built after 2007 must demonstrate a 20% reduction in life cycle GHG emissions.

Advanced Biofuel: Any fuel derived from cellulosic or advanced feedstocks. This may include sugarcane or sugar beet-based fuels; biodiesel made from vegetable oil or waste grease; renewable diesel co-processed with petroleum; and other biofuels that may exist in the future.

Nested within advanced biofuels are two sub-categories: cellulosic biofuel and biomass-based diesel. Both biomass-based diesel and cellulosic biofuel that exceed volumes in their respective categories may be used to meet this category. Fuels in this category must demonstrate a life cycle GHG emissions reduction of 50%.

Biomass-Based Diesel: A diesel fuel substitute made from renewable feedstocks, including biodiesel and non-ester renewable diesel. Fuels in this category must demonstrate a life cycle GHG emissions reduction of 50%.

Cellulosic Biofuel: Any fuel derived from cellulose, hemicellulose, or lignin — nonfood-based renewable feedstocks. Fuels in this category must demonstrate a life cycle GHG emissions reduction of at least 60%.

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Biofuels growth is about 'adding value' for farmers and communities

Jenny Schlecht — Tue, 18 Apr 2023 10:30:00 GMT

MOORHEAD, Minn. — Valley City, North Dakota, farmer Monte Peterson, sees increased soybean processing — which provides soy oil for biofuels — as “adding value to what we’re growing.” And that’s important to farmers and the community at large.

“Whenever you process, you add value,” Peterson said. “Whenever you add value locally, you have more money that’s staying close by.”

The region — and North Dakota especially — is experiencing a boom in soybean processing potential. Two plants — one in Spiritwood and one in Casselton — are under construction, while another — in Grand Forks — has been announced. While 80% of a soybean goes to soybean meal used for livestock feed, the remaining 20% is oil. And that oil has found a market in biofuels.

Peterson was part of the Fargo Moorhead Chamber of Commerce’s April 11 “Eggs and Issues” event, called “Facing the Future Together: Energy and Ag.” Greg Lardy, vice president of ag affairs at North Dakota State University, emceed the event, which also featured Mike Keller, president of Green Bison Soy Processing in Spiritwood, North Dakota, and Matt Herman, senior director of renewable products marketing at the Iowa Soybean Association.

Peterson has served on the North Dakota Soybean Growers Association, North Dakota Soybean Council, American Soybean Growers Association and the Soybean Export Council, which he chaired. Many of those efforts have centered on finding new soybean markets.

China, historically, has been the biggest buyer of North Dakota soybeans, buying at least three-quarters of soybeans grown in the state. However, trade wars during the Trump Administration highlighted the need to find additional markets. While China buys whole soybeans and crushes them, crushing the soybeans in state opens new markets domestically and internationally, Peterson said.

Soybean meal is a sought-after protein source for animal agriculture, and having a more robust animal agriculture sector would increase local demand, Peterson said. But there also is international demand. The Philippines is the No. 1 importer of U.S. soy meal, he said, noting other countries might be in the market.

The biofuels industry has been a big piece on the oil side. Keller said the boom in biofuels right now in North Dakota is similar to the boom in ethanol growth early in the 2000s, and Herman pointed out that it’s driven almost entirely by policy, which he doesn’t think will change. The policies are coming from three fronts: the federal Renewable Fuel Standard, the state of California’s low-carbon fuel standard, and the Inflation Reduction Act’s new and expanded tax credits related to biofuels.

Without policies promoting biofuels, “we’d make a few tens of millions of gallons here or there,” Herman said. Peterson said that highlights the need for continuous work on policies that impact biofuels.

Peterson said other uses for soybean oil also continue to grow, including polymers, coatings, paints, and many rubber products.

Green Bison plans

The Green Bison Soy Processing plant is a joint venture between Archer Daniels Midland, 75% owner, and Marathon Petroleum, at 25%, Keller said. The oil from the Spiritwood plant, which is on track to be operational by this year’s harvest and is the farthest along of the planned North Dakota plants, will go to the Marathon refinery in Dickinson, where it will be made into biofuel for the California market.

Keller said the $352 million Green Bison project will employ 75 people and support other positions in the community, but its most significant impact will be in purchasing the 150,000 bushels of soybeans per day it plans to process 12 months of the year. That will provide a “more consistent market to the local farmers” than the current period of demand, which generally has run from October to February, he said.

“Anything that would provide a little certainty is certainly welcome at the farm level,” Peterson said.

Lardy asked Keller what impact the soybean processing plants might have on basis, which is a factor in the price farmers receive.

“That’s always a pretty popular question,” Keller said.

Green Bison is bidding for November 2023 crop, and Keller said there was a 30-cent basis, which compares favorably for farmers to an 80-cent to $1 basis that has been typical.

“As you bring more competition to a region, generally speaking, that should indicate that basis levels could be firmer than they have been historically,” he said.

That’s exciting to farmers like Peterson.

“Mike’s going to have to bid up” to fill the plant’s 12-month need for soybeans, he said. “There’s no question about that.”

Keller thinks soybean production in North Dakota is sufficient to feed Green Bison, but he also is confident farmers will grow more if the demand is there. Soybeans have been spreading farther west and north in the state, and he credits the work of the North Dakota Soybean Growers Association for that.

A look to the future

Herman said despite a push toward electric vehicles, he thinks biofuels are here to stay. For one thing, a significant portion of vehicles still rely on petroleum products, and biofuels like biodiesel and ethanol still can help meet demand for low-carbon energies.

“I don’t see a world … where we start to really lose demand for biofuels to EVs unless we don’t have a good faith conversation,” he said.

And even if all vehicles switch to electric, there still is a growing demand for renewable aviation fuel and the possibility for higher concentration biofuels.

Aviation fuel had seemed like the next big thing for biofuels, but Herman said the war in Ukraine changed that. With less diesel coming out of Russia, high diesel prices have meant more demand for biodiesel while jet fuel prices stayed lower, he said.

Herman also sees opportunities in renewable fuels that can be traced to farms and farm practices, showing low-carbon farming methods, and he thinks things like carbon pipelines are going to be key to the future, too. But there will be challenges, including infrastructure needs.

And perceptions that growing crops for biofuels competes with growing food for human consumption are wrong, Herman said.

“Farmers go out in the field, they grow what they can grow given their climate, their land, what they can work,” he said.

Products grown in fields supply sugar, fat or protein, he said, giving soybeans as an example of grown proteins and fats. From those soybeans, processing plants are able to create not just soybean oil that feeds biofuels but also an animal feed that supplies the livestock raised for human consumption.

“Animal agriculture is a soybean farmer’s No. 1 customer,” Peterson said. “It has been that way for a long time. I think it will still continue to be that way.”

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Are carbon pipelines the future for ethanol?

Jeff Beach — Mon, 17 Apr 2023 10:30:00 GMT

Nearly half of all the corn grown in the United States goes to producing ethanol, with the industry capable of producing more than 17 billion gallons each year, and ethanol is blended into just about every gallon of gasoline sold at the pump.

So is spending billions of dollars to build thousands of miles of capture pipelines really necessary for the future of the ethanol industry?

Companies behind the multi-state pipelines have already invested millions of dollars in projects they say are needed to shrink the carbon footprint of ethanol plants and open up low-carbon fuel markets.

Some staunch opponents, including some farmers, say the projects are just a money-grab at federal tax credits for carbon capture and landowners in the path will be stuck with a hazardous liquid pipeline and the ethanol industry and corn growers will have little to show for it.

Geoff Cooper is president and CEO of the Renewable Fuels Association, representing ethanol plants and other renewable fuels. While he calls carbon capture important, he says it’s not do or die.

“There's going to be markets for all forms of ethanol produced — with carbon capture and sequestration and without carbon capture and sequestration,” Cooper said. “We remain very optimistic and very bullish about the future of ethanol. Yes, carbon capture is a huge opportunity. Yes, these pipelines are critically important to helping the industry lower its carbon intensity. But there's lots of other ways to do that as well.”

Some of those other ways include using solar and wind energy to power ethanol plants and having corn growers be more energy efficient, by using biodiesel or renewable diesel on the farm, for example.

“Using biodiesel or renewable diesel in your farm machinery — that's a great way to start. Using renewable electricity when available for irrigation, other things on the farm drying, things like that,” Cooper said.

Seven steps

A study done for the Renewable Fuels Association by Informed Sustainability Consulting, looked at ways for ethanol to achieve net zero emissions by 2050. The author of the study, Isaac Emery, said he ranked the action items based on effectiveness (the size of the carbon reduction), cost (carbon reduced per dollar spent), and feasibility (is the intervention on the market now or still in the research stage).

The rankings were:

Renewable energy at plant: Using renewable electricity at 50% of ethanol plants by 2030, up to 90% in 2050. Fiber fermentation: Corn kernel fiber fermentation at 20% of dry mills by 2030, up to 50% by 2050. Efficiency: Better-than-business-as-usual industry-wide efficiency improvements and ethanol yields based on the historical trends of industry leading producers. Renewable energy on farm: Adoption of renewable electricity by 25% of corn suppliers in 2030, up to 90% in 2050. Carbon capture: Installation of carbon capture and sequestration technology at 40% of ethanol facilities by 2030, up to 90% by 2050. Manure power: Sourcing of bio-methane from manure biogas at 28% of ethanol facilities in 2030, up to 78% by 2050. Reduced tillage: Expanding reduced tillage practices to an additional 7.5% of corn farmers in 2030, 30% by 2050.

In an interview with Agweek, Emery explained that using a renewable resource like corn is good, but carbon capture makes it better.

“Yeast break down corn into CO2 and ethanol, and when that happens, you basically have half the carbon that ends up in the fuel and half the carbon that ends up going up as CO2. And that's not necessarily a problem for emissions by itself, because that CO2 started up in the atmosphere, got taken up by a corn plant doing photosynthesis and now it's just going back, so it's not like digging up oil and burning it and putting it in the atmosphere,” Emery said. “But it (carbon capture) gives us an opportunity to take that half the carbon from the corn plant basically and put that underground.”

Renewable energy ranks the highest, he said, because it is proven technology known to be cost effective.

“You don't have as many safety concerns or land ownership concerns,” Emery said. “It's much more straightforward than some of these kinds of pipeline projects.”

Other practices such as reducing tillage and improving soil are harder to quantify on carbon impact. But Cooper said that’s part of the future too.

“We see a tremendous amount of innovation and new technology coming around nutrient management and fertilizer application and reducing nitrous oxide emissions and other greenhouse gas emissions at the farm level. You tie all those things together and pretty soon you've got a low carbon corn or low carbon soybeans going to these facilities for further processing, and you end up with a renewable fuel that's got a very low or zero carbon footprint,” Cooper said.

Emery’s rankings were for the ethanol industry as a whole. He also ranked the action items for an individual ethanol plant, and in that scenario, carbon capture came out No. 2, still behind renewable energy.

One plant that has been able to implement carbon capture on its own is Red Trail Energy at Richardton, North Dakota. Its location in oil country is an advantage.

“Sometimes it's good to be lucky,” Gerald Bachmeier, CEO of Red Trail Energy, said during a tour of the plant after it started pumping CO2 underground in 2022. “If you threw a dart on a map and were looking for a place to do carbon sequestration, you couldn't find a better place.”

Bachmeier said companies buying low-carbon ethanol pay 20 to 30 cents more per gallon.

The premium price comes from markets, such as California, that have instituted a clean fuel standard, creating a higher demand for low-carbon fuels.

Market opportunities

“The driver is California state policy,” said David Ripplinger, associate professor at North Dakota State University, who focuses on energy.

While other states and Canada have started following California’s lead on low-carbon fuels, Ripplinger said there are opportunities for traditional ethanol elsewhere.

“Many other markets have significant opportunities,” Ripplinger said. He said that includes jet fuel.

Colorado-based Gevo is building a sustainable aviation fuel plant at Lake Preston, South Dakota. Gevo plans to use renewable energy and be net-zero on carbon emissions.

Cooper notes that there also is the push to up the standard ethanol blend from 10% to 15% in each gallon of gas, which will increase demand.

Other than a hiccup for the COVID-19 pandemic, ethanol production and consumption have been rising steadily in the United States.

“Ethanol is a great product, and it's got a lot to offer, and we believe that ethanol is going to be competitive and have strong demand worldwide for many, many years to come,” Cooper said.

Beyond ethanol

Brendan Jordan, vice president of transportation fuels at the Great Plains Institute, said while the focus is on carbon capture for ethanol now, it’s needed for other industries, too.

He used concrete production as an example.

“There's parts of the industrial sector that we just cannot decarbonize without carbon capture,” Jordan said. “Unless we're going to give up concrete, if we want to reduce emissions, we've got to do carbon capture, and so that's true for a number of industrial sources.”

The projects

The perceived need for carbon capture, and the federal tax credits that help encourage it, have spawned several pipeline projects in the upper Midwest.

Summit Carbon Solutions: The five-state $5.5 billion Midwest Carbon Express would connect 32 ethanol plants to underground storage in North Dakota.

Navigator CO2: Navigator’s Heartland Greenway includes the ethanol plants owned by South Dakota-based POET, the world's largest biofuels producer. It would send liquid carbon dioxide to Illinois.

Wolf Carbon Solutions: Wolf has partnered with ADM to connect two ethanol plants in Iowa to underground storage in Illinois.

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In an EV revolution, ethanol advocates say they have the advantage

Michael Johnson — Mon, 17 Apr 2023 10:30:00 GMT

The Build Back Better agenda has a goal of 50% of new car sales to be electric vehicles (battery electric, plug-in hybrid electric, or fuel cell electric vehicles) by 2030.

It seems like a lofty goal as electric vehicle sales made up just about 6% (800,000) of the total 13.7 million sales in 2022. But if the goal is realized, the impact on the gasoline and ethanol industry would be felt in the not too distant future.

It stands to reason that some groups are investing time and resources not fighting the move to electric vehicles; rather they are looking at how they can continue to play an important role towards a common goal of emission reduction.

Take for instance the Minnesota Corn Growers Association, which supported University of Minnesota research that would use ethanol to power a range extender.

It takes into consideration that electric vehicles have their environmental and economic benefits but have their disadvantages when it comes to long-range trips. The United States Office of Energy Efficiency and Renewable Energy promotes that the median driving range was 250 miles for electric vehicles in 2020. But a secondary ethanol-powered engine on board an EV can be used to charge the battery — on the move — in case charging stations are few and far between or you just don’t feel like stopping.

The team at the University of Minnesota’s Department of Mechanical Engineering went to work trying to determine if corn-based ethanol could offer a solution in allowing electric vehicles to travel longer distances. They worked with a BMW i3 REx engine generator, powered by E85. This engine would be under the hood of future electrical vehicles, but not connected to the wheels. It would serve as a battery charger using the power of thermochemical recuperation (TCR).

https://www.facebook.com/MinnesotaBioFuelsAssociation/posts/pfbid0G3W5yd58mv9rxmJmn297gpkJgEpqVC5yG3hnq1LjwMq3AhJh2Ydi8rjuzBtsXon1l

The study concluded that computer modeling showed “using ethanol blends is a viable way to increase the efficiency of spark-ignited engines. Engines running at limited operating points are an efficient way to extend the range of electric vehicles,” according to Northrop’s final report. More research may be coming soon in this area, according to Devin Hoffarth, director of Market Development & Industry Relations for Minnesota Corn Growers Association.

Minnesota Corn also worked with Agricultural Utilization Research Institute (AURI) to study the development of ethanol fuel cells, developing ethanol as a carrier for green hydrogen. That research, completed in 2022, showed that ethanol fuel cells on light-duty vehicles “does not appear to be a near term opportunity.” But that doesn’t mean it’s not an option worth exploring.

Hoffarth said that AURI concluded the first round of research, and Minnesota Corn just approved a second round where they will dig deeper into the potential market use. Hoffarth said further research will continue into these realms as they are still new, like much of the EV industry.

Flex ethanol’s muscle

In Hoffarth's and Ron Lamberty’s opinion, moving more vehicles toward being flex fuel compatible, capable of using E85, is the fastest way to lower carbon emissions — far faster than the gradual move towards electric vehicles. (E85, or flex fuel, is a gasoline-ethanol blend containing 51% to 83% ethanol, depending on geography and season.)

Those marketing ethanol now and into the future say they have the tools to make change right now.

“It’s reminding those who want the environment to be better, those who want to reduce carbon pollution, that the best way to do it quickly is here, right now,” said Lamberty, chief marketing officer for the American Ethanol Coalition, of the use of ethanol to help power the transportation industry. The American Ethanol Coalition, is headquartered in Sioux Falls, South Dakota.

To demonstrate his beliefs, Lamberty bought a 2019 Ford Fusion Hybrid and had a flex fuel conversion kit installed. Because of the hybrid’s lower fuel consumption per mile and ethanol’s lower carbon output than petroleum-based fuel, his math tells him that mile-to-mile, his car puts out only a small amount more greenhouse gas emissions than a battery electric car.

Some of the best readings have shown electric vehicles in California putting out 80 grams of C02 per mile. On average, that number is closer to 170-180 grams per mile, Lamberty said. The numbers coming out of his demonstration vehicle are around 200-220 grams per mile. Meanwhile, the average passenger vehicle emits about 404 grams of CO2 per mile, according to the EPA.

That being said, as a guy who has made his living in the ethanol industry, he’s not afraid to see the electric vehicle industry succeed if that’s the right direction to go. What he tries to get people to recognize is that he believes ethanol can get to zero emissions before electric can.

“If you’re talking zero emissions vehicles, which is what a lot of the legislation is, then really, we can probably beat electrics to zero emissions before they actually get there with the electric grid the way it is in the U.S.,” Lamberty said.

He said if the rules and legislation are “non-denominational” then ethanol is the way to go with the existing infrastructure and fleet.

“If environmentalists are serious about cleaning up the environment they should rely on the

right now

, today, 288 million vehicles out there that still use liquid fuels as much as they’re relying on the 2 million battery electric vehicles that are out there,” he added.

He references a study by Energy Information Administration that estimates that 85% of vehicles on the road in 2050 will still be powered by liquid fuel. He feels it’s illogical to discount the strides that could be made toward net zero emissions by utilizing ethanol — right now.

“I’m not saying it's a perfect product … but if you look at the logic and the science and the math, it just makes sense to use more of it,” Lamberty said.

While a push for more EVs continues, there will remain a market for ethanol in the transportation industry in places where electrification is not yet ready or able to compete. Biodiesel is expected to fill the gaps that electrification won’t reach, such as heavy-duty trucks, non-road vehicles, aviation, and shipping, according to the Advanced Biofuels Association.

Hoffarth said that’s an area of focus for ethanol to invest in. One such investment is Minnesota Corn’s investment with ClearFlame Engine Technologies.

“They are modifying heavy duty engines from Class 8 semi trucks to farm equipment to run on 100% renewable energy. So they are running on E-98, which is denatured ethanol,” Hoffarth said. “And that shows considerable promise.”

That’s technology they hope to have to market by the end of 2023.

In yet another area supported in part by Minnesota Corn Research and Promotion Council, the Renewable Fuels Association converted a plug-in hybrid electric vehicle (a 2022 Ford Escape) to run on flex fuels like E85. It’s promoted as the world’s first of its kind. It is said to have lower carbon intensity, along with cost, than pure electric.

Robert White is RFA's vice president for industry relations and took the lead on the concept car. The car received a conversion kit with the help of students from the University of Nebraska’s Husker Motorsports Team, which took about one hour. White then drove the vehicle to Kansas, then California, where it underwent extensive testing at the University of California Riverside, at their emissions laboratory.

Results of those tests are expected to be out around Memorial Day 2023. White is very excited to get the results but knows that this is going to take time because they want extensive results that they can stand on to show the opportunities that ethanol fueled vehicles can provide.

"What we're trying to do is, the government and corporations can set emission goals, or carbon intensity goals, or carbon reduction goals, but don't tell us, don't handcuff us by telling us there is only one technology that can get is there," White said. "We are ahead of schedule in many cases of the goals set by the federal government. And to somehow restrict ethanol from playing an important role in that would be heavily short sighted, and we can prove that with this vehicle ... we can compete with a full battery electric vehicle today."

White said the benefits of this vehicle are impressive. It really has three power options. It can go over 400 miles without concern of range. It can go without charging the battery due to on-board recharging from braking and can even go with fuels other than E85 if that fuel is unavailable.

"It is not a hot rod, but that's not what most people are looking for anyway," White said.

Once all data is in, White plans to make sure this vehicle is seen far and wide. You can see it at one of the following upcoming locations in our region.

Future Events

Biofuels Academy, West Des Moines, IA, May 9-11, 2023 Fuel Ethanol Workshop, Omaha, NE, June 12-14, 2023 Minnesota Farm Fest, Morgan, MN, Aug. 1-3, 2023 Iowa Science & Sustainability Tour, Aug. 15-17, 2023 Iowa State Fair, Aug. 18, 2023]]>