Down to the Details

FROM THE JUNE ISSUE: EcoEngineers’ Director of Engineering Jim Ramm details Kernel Fiber Now, a service that helps producers navigate their options with corn kernel fiber-to-ethanol technologies, RINs and more.
By Lisa Gibson | May 24, 2018

With intense interest in corn kernel fiber-to-ethanol technologies, many producers are evaluating the investments, payoffs and risks of installing the systems. EcoEngineers has developed a program called Kernel Fiber Now, designed to help navigate the D3 renewable identification number (RIN) registration process. But beyond that, Kernel Fiber Now includes market analysis, pathway expertise and more.

In a Q&A with Ethanol Producer Magazine, Jim Ramm, director of engineering for EcoEngineers, details the program, the markets and the pertinent information producers should know about D3 RINs, corn kernel fiber-to-ethanol technologies, and how Kernel Fiber Now can help.
Here's what he says.

Q. What is the goal of Kernel Fiber Now?
A. The goal of Kernel Fiber Now is to partner with technology providers and the ethanol industry to support the seamless integration of the kernel fiber pathway and to facilitate the production of low-carbon cellulosic ethanol and generation of D3 RINs and California Low Carbon Fuel Standard credits. We do this by offering a complete line of services including market intelligence, regulatory guidance, feasibility analyses, pathway applications, facility registrations, ongoing quality assurance programs, and Greenhouse Gases, Regulated Emissions and Energy Use in Transportation (GREET) modeling.

Q. What services does it provide for cellulosic ethanol producers?
A. While ethanol producers have never realized much of the D6 RIN value, they can realize a high percentage of the D3 RIN value. Ethanol producers can work with their marketers to receive a fair price on D3 gallons. Delayne Johnson of Quad County Corn Processors, in Galva, Iowa, pioneered these efforts and has reported about a $1.95 to $2 additional value on sale of cellulosic ethanol gallons over the past two years. Ethanol producers may also choose to blend their own D3 gallons as E85 so they can separate and sell the D3 RINs, which have been valued at or above $2.50 per RIN for the past two years.

Kernel Fiber Now offers the seamless integration of kernel fiber processing to an industry poised for significant expansion. That integration has included concurrent D3 and Efficient Producer Pathway production and establishing separate California pathways for kernel fiber ethanol. Despite our efforts, coprocessing registration approvals are currently taking longer than expected at the U.S.

Environmental Protection Agency. Edeniq indicates that about three plants have registrations pending with EPA and an additional 10 or more plants have trials ongoing. Soliton Laboratories indicates multiple registrations are pending. The kernel fiber industry is mobilizing in response to these recent delays at EPA.

Q. Why is a program like this necessary? What factors might producers be missing?
A. Kernel fiber processes convert the lowest-value feedstock already coming into the plant into a high-value cellulosic ethanol gallon. Because it converts cellulose into ethanol, it results in higher protein level distillers grains, which have higher feed value for dairy cattle or monogastric hogs and poultry. Finally, it lowers the overall carbon intensity of ethanol being produced from a bushel of corn. Because 1 to 10 percent of the ethanol gallons leaving a plant can be demonstrated as D3, it has the potential to be a 1.5 billion-gallon annual market. We believe in the growth of kernel fiber for these reasons.

Q. What pathways are approved for D3 RINs currently?
A. EPA approved kernel fiber ethanol as D3 in the 2014 Renewable Fuel Standard Pathways 2 rulemaking.  Two types of kernel fiber ethanol production were approved including separate processing and coprocessing. In 2014, EPA approved QCCP as the first registrant in D3 kernel fiber ethanol using separate processing.

Also, in 2015, EPA approved Pacific Ethanol Stockton using the Edeniq Pathway as the first registrant using simultaneous coprocessing. Through December 2017, EPA registered the following producers to make cellulosic ethanol using Edeniq’s coprocessing technology: Flint Hills Resources Iowa Falls and Flint Hills Resources Shell Rock, both in Iowa; Little Sioux Corn Processors, Marcus, Iowa; Siouxland Energy, Sioux Center, Iowa; and Mid America Bio Energy, parent of Mid America. 

In 2017, EPA allowed producers to employ both D3 kernel fiber and efficient producer pathways, beginning with Little Sioux Corn Processors, and established more stringent variation criteria for registration of new coprocessing facilities. In the fourth quarter of 2017, Edeniq reported that overall plant trial and EPA registration was being accomplished in four to six months. Notably, the EPA took just seven weeks for the last registration approval in December 2017. 

In 2018, however, EPA has stopped posting D3 kernel fiber coprocessing sites on its pending registrations list and indicates that senior EPA officials are reviewing certain requirements for the kernel fiber registration process. 

Q. What is the difference between separate and coprocessing?
A. Separate processing uses a separate weak acid hydrolysis step which converts more of the kernel fiber and can allow for 7 to 10 percent kernel fiber gallons. The QCCP process uses Enogen corn, teamed with Syngenta under the Cellerate brand. To date, QCCP has led the country in cellulosic ethanol production. Other companies are developing their own separate processing technologies including the ICM Gen 1.5 kernel fiber technology being installed at Element in Colwich, Kansas, and D3MAX being evaluated at ACE Ethanol in Stanley, Wisconsin.

Coprocessing occurs in a plant’s existing conventional ethanol fermenter and can currently generate 1 to 3 percent kernel fiber gallons. Edeniq led the way in establishing a coprocessing pathway, which has been registered at six ethanol plants. In addition, Soliton Laboratories has developed its own starch and fiber assays to support coprocessing pathway applications that have passed peer reviews and can meet EPA variation criteria. 

Q. Will the Quality Assurance Program be important now? How?
A. The Quality Assurance Program, Q-RIN, will be important for D3 kernel fiber ethanol producers. Application of Q-RIN will be a market requirement when multiple D-code ethanol products with RINs are being furnished from the same production facility. In addition, Q-RIN will benefit those producers who wish to blend, separate and sell their own D3 RINs. We recommend including a Q-RIN program for ethanol diversification into D3 kernel fiber ethanol and RIN separation.

Q. How does kernel fiber ethanol work in the California LCFS market?
A. Kernel fiber ethanol works well in the California market because the farming practices and indirect land use change in the GREET model are applied to starch ethanol. As a result, the kernel fiber ethanol has low carbon intensities, typically in the 20s and 30s. Some of the first registrants of D3 kernel fiber ethanol in California are Little Sioux Corn Processors at 31 grams per megajoule and Siouxland Energy at 29 grams per megajoule. Based on recent OPIS pricing of $145 per megaton and $0.011860 per carbon intensity point from an ethanol baseline CI of 79.9, D3 ethanol could earn a $0.59 per gallon premium when used in California. As a result, D3 ethanol gallons have a strong attraction to the California market.

Author: Lisa Gibson
Managing Editor
Ethanol Producer Magazine
701.738.4920
lgibson@bbiinternational.com