The door is open for ethanol producers and CCS

Carbon capture and sequestration (CCS) is receiving a lot of traction thanks to two exciting developments in 2018 and 2019:

1)      California’s Low Carbon Fuel Standard recognized CCS as a viable pathway to reduce emissions from transportation fuels.

2)      The United States Congress passed legislation expanding a performance-based tax credit for carbon capture projects under Section 45Q of the U.S. tax code.

The combined impact of these two legislations is significant and will result in many carbon capture projects in the next few years. For example, a 100 million gallon a year ethanol plant produces around 300,000 metric tons of carbon dioxide per year. If this CO₂ is captured and sequestered, it could be worth anywhere from $15-65 million in annual revenues.

Under CCS pathways, carbon dioxide is taken and ‘sequestered,’ hence the acronym ‘CCS.’ Carbon dioxide is secured from the atmosphere and reinjected back into the lithosphere.

Capturing carbon dioxide (CO₂₎ is a matter of concentration. Taking it out of the air is difficult, as it exists at a low concentration level. The Keeling curve shows that the average atmospheric concentration of CO₂ for March 2020 is 414.5 parts per million (ppm). Concentrating that to over 99 percent purity and then injecting it into the ground takes lots of energy. Fortunately, we have naturally occurring solar power CO₂ concentrators in plants, and corn shows excellent promise for industrial-scale CO₂ concentration.

Corn is grown extensively to make both food and fuel. Corn plants take CO₂ from the atmosphere to produce starch, sugars, and cellulose. During fermentation, corn sugars are turned into ethanol, and highly concentrated CO₂ is created as a byproduct. Capturing and purifying CO₂ from fermenters is relatively straight-forward. The complicated part is how to inject it into a geological reservoir and ensure it doesn’t escape back into the atmosphere.

The California Air Resources Board published an extensive protocol on CO₂ sequestration. It involves understanding how underground geological reservoirs work. Fortunately, the oil industry has been injecting CO₂ for years. The behavior of CO₂ in oil reservoirs is well understood, as oil companies use fossil CO₂ for enhanced oil recovery (EOR). Sequestering CO₂ involves operating a Class VI injection well — one that can handle the acidic CO₂ and has extensive monitoring.  Operators drill wells for injection and monitor the storage; both actions ensure the CO₂ doesn’t escape or impact aquifers.

The 45Q tax credit from the IRS provides incentives for both EOR and for storing CO₂: up to $50 per ton of injected CO₂ for CCS and $35 per ton of injected CO₂ for EOR. A 100 million gallon a year ethanol plant produces around 300,000 metric tons of carbon dioxide a year, which worth $15 million annually in tax credits alone. Using sequestered carbon dioxide to reduce the carbon intensity of an LCFS pathway is even more lucrative. A CI drop of 30 gCO₂e/MJ, for a 100 million gallon a year ethanol plant could be worth another $50 million per year. Even with the expense of creating CCS storage, the ROIs for these projects are very compelling.

EcoEngineers is well-positioned to help ethanol plants with developing CCS assets. We have decades of experience and highly respected pathway and asset development consulting capabilities. We can assist ethanol plants in realizing the benefits of these changes under the LCFS, and in doing so, help mitigate climate change and create a clean energy economy.

Roxby Hartley is a senior regulatory consultant and team lead for our compliance management services at EcoEngineers. He has expertise in biofuel production, carbon capture and sequestration, compliance management, and sustainable program development. Hartley holds a doctorate in geophysics and a bachelor’s degree in geology, both from Oxford University.You can reach him at [email protected].