Conveying Change

Green Plains Inc. CEO Todd Becker talks with Ethanol Producer Magazine about the company’s ongoing transformation, not away from its core products, but through them.
By Tom Bryan | January 24, 2022

When Green Plains Inc. embarked on its total transformation two years ago, its main business—fuel ethanol—appeared destined to become ancillary to other streams of production as the company shifted resources to higher-margin outputs. Protein, It seemed, would soon overshadow ethanol. 

But today, as the layers of its metamorphosis are manifesting through acquisition and investment, Green Plains is still largely defined by ethanol—not despite its makeover, but because of it. “We’re changing, but our baseload business is still ethanol,” says Todd Becker, CEO of Green Plains. “We are, and will remain, an ethanol producer.”

Becker explains that the company’s transformation was somewhat misunderstood as a slow retreat from ethanol while, in reality, it was a reimagining of corn dry milling. “The changes we’re making today give us an improved position in this renaissance of first-generation ethanol and everything associated with it—protein, oil, clean sugar, high-purity alcohol, sustainable aviation fuel (SAF), carbon capture and the drive toward low CI,” he says. “We look at it all, and what we’re doing with our gen-one plants—transforming them into true biorefineries—and we see all these new opportunities hinging around our baseload product, ethanol, which is becoming a true low-carbon, potentially zero-carbon fuel.”

Becker says Green Plains’ continued faith in ethanol production, in this contemporary context of biorefining, is not unrelated to the global dialogue around carbon reduction. “When you look at our opportunity, what’s happening around the world and this rapid movement away from fossil fuels, I think most agree that it probably isn’t happening fast enough,” he says, suggesting that ethanol offshoots like alcohol-to-jet fuel offer transformative openings for the ethanol industry to play a greater role in climate change mitigation. “There’s an opportunity with the fuel we produce now to move into higher-value fuels that are within reach.”

The springboard for Green Plains’ biorefining leap has unquestionably been the acquisition of Fluid Quip Technologies and its trademarked Maximized Stillage Co-products (MSC) technology, which enables ethanol plants to consistently produce a 50%-plus protein product that’s gaining footholds in the pet food, aqua, dairy, poultry and swine markets. Green Plains became majority-owner of Fluid Quip in early 2021, merging the companies to accelerate the installation and scale up of ultra-high protein production across Green Plains’ 11 U.S. ethanol plants. Ultimately, MSC has become not just an engine for Green Plains’ own transformation, but a catalyst of industry wide change.

“I think we’re a disruptor,” Becker says. “This is a disruptive technology, and when we think about where we’re going with protein, oil, carbon, specialty alcohols, SAF—and then moving into things like yeast, synthetic biology, bioplastics and biochemicals—it’s all, by necessity, going to come from dry mill facilities using a Fluid Quip-type technology to unlock new opportunities.”

Becker sees Green Plains diversification strategy as a journey into biorefining—full of twists and turns—and he believes corn dry mills can be incrementally retooled to do more than they were originally designed for. “We’re working on things virtually no one knows about, and the opportunities around what we’re doing are endless and ultimately culminate in the idea of our ethanol plants becoming bio-campuses, not dissimilar to what we’ve seen in wet milling for years.”

Beyond Protein  
While numerous future fuels and coproducts are in the pipeline at Green Plains, its current focus is building out ultra-high protein production capacity. The company continues to make progress deploying its protein technology within its fleet—a few plants at a time. Becker says Green Plains has repeatedly executed production runs of 58% protein or higher, and the company plans to routinely produce 60%-plus protein products soon.

Early last year, Green Plains announced that its Shenandoah, Iowa, and Wood River, Nebraska, biorefineries had successfully installed MSC, delivering initial quantities of the high-protein product to its pet food partners for use in formulation and palatability studies. Not long after, the company broke ground on MSC systems at its Central City, Nebraska, and Mount Vernon, Indiana, plants. And in late 2021, the company’s Obion, Tennessee, biorefinery broke ground on an MSC installation. All three projects are expected to be complete this year.  

As Green Plains’ methodical fleetwide adoption of MSC technology continues, the company is working intensely behind the scenes to scale and support the market for its new products.

“These relationships take time to build,” Becker says. “We’ve spent the last 18 months to three years making sure our product is accepted into the consumer value chain. Our customers are going to want a product that is made with the Fluid Quip system, that is consistent, that has redundancy, that looks the same, tastes the same, acts the same. … We’ve done the work.”

While continuing to build sales volumes, Green Plains has signed a multi-year MOU for its high-protein feed ingredients with a pet food manufacturer through 2023. The company continues to work with customers on product design and inclusion rates, while negotiating additional multi-year distribution and supply agreements in not only pet food, but dairy, swine and aquaculture.

Meanwhile, Becker says Green Plains is strengthening its ability to tailor its high-protein products to each customer’s specifications. “We are going to put this technology in all of our plants,” he says. “And we are creating redundancies and consistency, the ability to dial up or down—anywhere we want—at any of our plants, based on our customers’ needs. We can input technology to make the nutritional outcome different.”

Ultimately, Green Plains is trying to maximize the high-protein opportunity without allowing the pursuit to be their sole focus. “Yes, we’re focused on this protein story, but it’s really just one of four or five different stories unfolding here,” Becker says. “We like to talk about protein because it’s a metric that’s easy to understand. But I will tell you that we’re beyond thinking only about protein. What we’re doing is beyond just chasing a number. It’s about achieving nutritional characteristics, layering in desirable outcomes, using synthetic biology and exploring new methods of influencing the yeast toward outcomes ranging from nutritional products to biobased chemicals. That’s where we’re going.”

Protein Partnerships
Offering MSC technology to ethanol producers outside its network of plants might provide Green Plains with a new revenue stream while adding scale and redundancy to the relatively novel feed ingredients it’s producing.

Last summer, the company announced it was offering a turnkey solution for the installation of Fluid Quip systems to exclusive partners (i.e., other producers). The company said it would provide partnering ethanol plants with up to 50% of the capital needed for construction, as well as marketing, product development and an assortment of additional services. The first outside producer to sign on for an MSC partnership was Tharaldson Ethanol in Casselton, North Dakota. Green Plains and Tharaldson have formed a 50/50 joint venture to own and operate the MSC protein technology at the 175 MMgy facility, and construction is underway.

“In the end, we believe we have the winning formula for success, and we’re going to put our money where our mouth is and partner with anybody that wants to put [MSC] in their plant,” Becker says. “If you want to simply buy a Fluid Quip system, you can. But to be successful, we think you should be part of this consortium. The idea that Fluid Quip isn’t going to sell the platform to anyone else because we own it is just false. But yes, we would prefer to partner with you, so we’re all doing the same things together. The same quality control, quality assurance, opportunities to innovate, and redundancies—so other plants can ship if your plant is down.

“But again, internally, we are far beyond thinking about protein as a metric. We’ll just continue to innovate away from that with escape velocity. We believe we’re in a great position to continue to roll out our technology. We’re working with customers all over the world—collaborating with them on what they can do with it, how it works, what they need it to do, what characteristics we can maybe give them and what we can design into the project to help them. That’s step one for us: truly thinking differently about product innovation, product quality and product technology, and ultimately product application.”       
Sustainable Oil
If protein is the primary step in Green Plains’ total transformation, taking corn oil to new and different places is a close second. In its third quarter earnings report, Becker said a major benefit of MSC technology is improved corn oil yields. Pointing to Wood River’s DCO output, Becker said the plant is exceeding expectations, “providing additional confidence that we will see the expected increase in renewable corn oil production as we deploy MSC technology across our platform. We expect renewable corn oil’s financial contribution to remain strong, supported by both higher yields and higher prices.”

With the capacity to already produce over 300 million pounds of DCO annually (and soon 400), Green Plains is in a strong position to capitalize on the current high demand for the coproduct, largely driven by the U.S. renewable diesel boom. “It’s still a very fast-growing ingredient in a fast-growing market around low-carbon fuels from vegetable oils,” Becker says. “And since our sustainable oil is a waste oil, we have an advantage. Renewable corn oil is becoming a building block of a transformational moment for biofuels.”

Like ethanol’s principal role as a fuel Becker says the use of DCO as an input for renewable diesel elevates the coproduct's value and versatility to a new level. “This machine that we all put in a decade ago that gave us a welcome but very modest income stream is suddenly critical to renewable diesel’s rise, and an essential component of this next wave of low-carbon fuels,” he says. “All of a sudden, an ethanol plant is not just producing fuel alcohol, but a top input for renewable diesel and SAF.”      

Sugar, Specialty Alcohol, SAF
While protein and DCO are the centerpieces of its coproduct push, Green Plains is moving forward with additional forms of diversification. The company is building a commercial Clean Sugar Technology (CST) production facility at its Green Plains York (Nebraska) Innovation Center. The technology effectively transforms a corn dry mill into a clean sugar biorefinery where dextrose (i.e., commercial sugar) replaces ethanol as the primary output. Becker says Fluid Quip is leveraging its York Innovation Center to validate and develop this and other technologies. The company believes CST will provide industrial quantities of carbohydrate feedstock for manufacturing applications in the growing biochemical, renewable chemicals and synthetic biology industries at competitive prices.

“We believe we have a technology—with all the necessary protections around it—that will allow some of our plants to make less ethanol while producing streams of dextrose that can be used in everything from bioplastics and lactic acids to biobased chemicals,” Becker says. “When you look at the movement away from high-carbon PETs and toward bioplastics from PLAs, that’s all being driven by dextrose, sugars we can make out of the technology we’re currently scaling from the Fluid Quip portfolio.”

Meanwhile in York, Becker says, Green Plains is engaging in high-purity alcohol production, albeit not too aggressively. About a year ago, Green Plains announced the completion of its upgrade to United States Pharmacopeia (USP) Grade alcohol at the biorefinery. The York retrofit included the installation of a new distillation production unit capable of producing up to 50 MMgy of USP. “We haven’t been super big into specialty alcohols, but it’s something we are pursuing on a ‘not critical, but nice-to-have’ basis,” Becker says. “We have one plant that is producing very high-quality USP-grade alcohol. We believe it’s a great product—one of the best in the country—and yes, there is differentiation between products.”  
  
On another front, Green Plains sees enormous potential in sustainable aviation fuels, specifically the possibility of making bio-based jet fuel from low-carbon ethanol. “We believe alcohol-to jet pathways are coming that could lead rapidly to 3 billion to 5 billion gallons of ethanol being diverted to SAF, notwithstanding some of the rules that are in place,” Becker says. “I think we could be a building block for that.”  

Meanwhile, carbon capture and sequestration could take the carbon intensity of all these fuels and products ultra low. “We could really create an interesting industry.”

Green Plains announced in 2021 that all of its biorefineries in Nebraska, Iowa and Minnesota (eight plants, in total)  have entered into a long-term carbon offtake agreement with Summit Carbon Solutions, a subsidiary of Summit Agricultural Group. The agreement is part of an announced CO2 pipeline that will develop the infrastructure to capture and transport CO2 for long-term deposit into geologic storage in North Dakota. Three dozen U.S. ethanol plants have signed on.

“Expanding our partnership with Summit Carbon Solutions is critical to the ongoing transformation of our biorefinery platform,” Becker said last spring. “Dramatically lowering the carbon intensity of our plants is important to our ultra-high protein ingredients and renewable corn oil as customers are increasingly looking to improve the carbon footprint of their own products. The pure CO2 coming from our fermentation process is ideally suited for capture and long-term sequestration and we believe this carbon reduction could earn additional income from low carbon fuel standard credits, 45Q tax credits and voluntary carbon credit markets as they develop in the future.”

In the meantime, he says, Green Plains still has ethanol economics to deal with—the volatility of Ethanol 1.0, the pandemic, politics and trade. “I often say, ‘We have to still be really good at making ethanol,’” Becker says. “And we are, but when you start to layer in all of these opportunities, the economics of ethanol become less of a concern because you are diverting more of that bushel of corn to higher-value products: proteins, oil, clean sugar, sustainable aviation fuel and more—and all of it will ultimately be made more attractive by carbon sequestration.”

Across its four strategic areas of growth—protein, DCO, clean sugar and CCS—Green Plains is making progress on its transformation. “We’re moving forward, driving the value of our plants higher and bringing them closer to becoming the biorefineries, or biocampuses, that everyone has been talking about for a long time,” Becker says. “So, looking at the next two or three years, we believe this could be when ‘Ethanol 2.0’ finally starts to happen—a time of real transformation.”

Author: Tom Bryan
Contact: [email protected]