Another Route

What options might ethanol producers consider to lower carbon intensity if pipelines don't work out?

- Cassidy Walter

The U.S. ethanol industry has identified carbon capture and sequestration (CCS) pipelines as a solution to achieve lower carbon intensity (CI), but not everyone impacted by the pipelines, such as landowners, is sold. In this installment of our CCS pipeline coverage, we explore why ethanol producers are pursuing pipelines and which other options are available if the pipelines fail.

CCS Pipelines: Silver Bullet or Misfire?

In 2022, former President Joe Biden signed the Inflation Reduction Act, which created the 45Z Clean Fuel Production Credit and upped the benefit for the 45Q tax credit for carbon sequestration.

The year before, the federal government announced the Sustainable Aviation Fuel (SAF) Grand Challenge to escalate SAF's market share in fueling American aircraft. SAF can be made from ethanol and is seen as a potentially immense new market for that cornstarch-based fuel. However, in order for a SAF producer to claim the 45Z credit, they must use ethanol with a carbon intensity (CI) score much lower than the current Midwest average of 55.2.

These factors, combined with growing societal interest in lowering carbon emissions and the looming existential threat of electric vehicles, signaled to the ethanol industry it needed to find a way to lower CI. CCS pipeline projects emerged as a favored solution.

Capturing CO2 from the fermentation process of ethanol production is estimated to reduce ethanol's CI by roughly 30 points, according to a study commissioned by Growth Energy, a national ethanol trade association.

Growth Energy's study looked into the various ways ethanol producers and corn farmers could help lower ethanol CI. Among the many steps a plant could take, the study showed CCS had the best balance between CI reduction and cost of implementation.