FCStone launches carbon entity

By Jessica Ebert | January 01, 2008
In addition to helping its customers and client base mitigate environmental risk, FCStone Carbon LLC, a wholly owned subsidiary of the risk management company FCStone Group Inc., aims to create, represent and market technologies that improve efficiencies in the renewable energy sector.

"Ethanol and biodiesel producers are showing a tremendous amount of interest in making sure they get ahead of the curve and manage their total environmental risk," explained Mike Knobbe, president of FCStone Carbon. "They're showing a lot of interest as margins compress in that industry. They want to become the most efficient player on the block and be low-cost."

To that end, the company has been working to develop a portfolio of services and technologies that can help ethanol producers better understand their energy footprint, carbon emissions profile, and the tools available to mitigate costs and environmental risks, according to Mike Kinley, vice president of technology for FCStone Carbon. "We're going to them not with just a carbon marketing platform, but with a suite of technologies and services that will help them find a pathway to being a low-cost producer and a low emitter," he said. "We're the only company that we're aware of that's linking both technologies to reduce costs and risk to the creation of greenhouse gas emission credits or environmental emissions credits."

On the technology side, the company recently announced a partnership with engineering company Harris Mechanical; AE&E Von Roll, an equipment provider; and Alliant Energy, a Midwest power provider, to develop, scale up and market a fluidized bed reactor technology for the renewable fuels industry. "They have without a doubt the best design, and we've partnered with them to market that technology," Kinley explained. The reactor can be used by an ethanol plant to incinerate its low-cost, low-value coproducts like the syrup left over from the thin stillage stream. The process steam that is created can be used to replace natural gas. "The technology has been used in other industries and has been extremely beneficial," Kinley said. In addition, the reactor that FCStone Carbon will market has been scaled up and run pretty much nonstop at Corn Plus LLLP in Winnebago, Minn., he said.

Cost-reducing and energy-saving technology isn't the sole focus of the company. As ethanol producers and others in the renewable fuels industry work to reduce their carbon footprints, FCStone Carbon will usher those companies into the carbon market and help them to trade their emissions. "I think that in the current environment and as we go forward, ethanol plants have to identify ways to become more competitive," Kinley said. "We see this technology and greenhouse gas platform as another area of opportunity to reduce risk and reduce cost, and it's definitely the right time to bring this to the table."