Carbon America to develop CCS project at Nebraska ethanol plant

By Erin Voegele | October 04, 2022

Carbon America on Oct. 4 announced an agreement with Bridgeport Ethanol LLC to develop a carbon capture and storage (CCS) project at the company’s 53 MMgy ethanol plant in Nebraska. The project is currently expected to be operational in 2024.

The agreement with Bridgeport Ethanol is the third such agreement announced by Carbon America this year to finance, build, own and operate CCS systems at ethanol plants. In May, the company announced similar agreements with Sterling Ethanol LLC and Yuma Ethanol LLC to develop CCS projects at their respective Colorado-based biorefineries. The Sterling and Yuma projects are also expected to be operational in 2024. All three ethanol companies are affiliated with Colorado Agri Products, which oversees plant operations and commodities marketing.

At the Bridgeport Ethanol facility, Carbon America plans to install carbon capture equipment that will extract carbon dioxide from the ethanol production process and transfer the gas via a new carbon dioxide pipeline to an underground geologic sequestration site near the plant. Brent Lewis, CEO and co-founder of Carbon America, confirms that the Bridgeport project is a standalone project that will not share infrastructure with either the Yuma or Sterling projects.

Once fully operational, the Bridgeport CCS project is expected to capture and store approximately 175,000 tons of carbon dioxide annually, equivalent to 95 percent of total emissions from the ethanol plant’s fermentation operations.

Lewis said the Carbon America team is working to secure a Class IV permit for the CCS project. The company aims to have the permit application submitted to EPA’s Region 7 office early next year. If permitting proceeds as planned, the CCS project will be operating at full capacity in 2024.   

The process to connect an ethanol plant to a CCS system is simple and straightforward, according to Lewis. The equipment that will be used to capture carbon dioxide from the Bridgeport plant’s fermentation process will be similar to systems currently deployed at many ethanol plants to capture carbon dioxide for use in the beverage industry. The captured carbon dioxide will be compressed and dehydrated to make it suitable for pipeline CCS injection. The required CCS equipment can sit within an acre site, Lewis said, making the footprint of the project suitable for most ethanol plant sites.

Most of the equipment needed to implement the CCS project will be manufactured offsite and delivered to the ethanol plant location. One that equipment is installed at the plant site, the process to connect the CCS system with the ethanol plant should take less than a day, according to Lewis. In addition, expected maintenance for the CCS equipment should coincide with planned ethanol plant maintenance. As a result, ethanol plant operations are not expected to be significantly impacted by either CCS equipment installation or ongoing maintenance needs.

Lewis was unable to disclose the details of the commercial deal Carbon America has signed with Bridgeport Ethanol. He did, however, explain that there are a number of different business models that ethanol plants interested in CCS projects can pursue. On one end of the spectrum, ethanol plants interested in CCS could minimize risk by acting solely as a carbon dioxide provider to a third-party CCS project. On the other end of the spectrum, a plant could develop a CCS project completely on its own. Lewis said Carbon America is open to a variety of project structures that allow it to contribute as a developer, owner and operator. The company, however, is not interested in acting a consultant in a fee-for-service arrangement. “We prefer to part of the capture system just because we know how to structure 45Q tax credit deals pretty well,” Lewis said.

The recently signed Inflation Reduction Act included a significant extension and modification of the Section 45Q tax credit for CCS. In part, the modification increased the value of the credit for industrial facilities and power plants that capture their carbon emission to $85 per metric ton of carbon dioxide stored in secure geologic formations. The credit was previously set at $50 per metric ton.

Lewis called the 45Q provisions of the IRA “a gamechanger.” The increased value of the credit has opened up a much larger universe of prospective economically viable projects and project development opportunities, he explained. Many projects that were on the margin at $50 per ton are now economically viable at $85 per ton.

In addition to the value of 45Q credit, ethanol plants that sequester carbon dioxide from the fermentation process also lower the carbon intensity (CI) of the fuel they produce, allowing the ethanol producer to benefit through the California Low Carbon Fuel Standard and similar LCFS programs. While the value of LCFS credits has softened over the past year, Lewis said the increased value of the 45Q credit could help some projects offset the value of lower LCFS credit prices.