Green Plains reports progress with MSC, clean sugar projects

By Erin Voegele | November 07, 2022

Green Plains Inc. reported a challenging third quarter, with a consolidated crush margin of negative 9 cents per gallon. Moving into the fourth quarter, however, margins are positive and the company is continuing to benefit from coproduct developments.

During a third quarter earnings call held Nov. 3, Green Plains President and CEO Todd Becker explained that the company’s operations were impacted by high corn prices during the three-month period. Due to impact of high corn prices, Green Plains accelerated its planned maintenance shutdowns and completed maintenance at 10 of its 11 plants during the third quarter.

Moving into the final quarter of the year, Becker said the company is seeking strong run rates and record high renewable corn oil yields. With seasonal maintenance now complete, he said the company’ expects the fourth quarter to be the highest quarter of the year in terms of throughput and corn yields.

Jim Stark, chief financial officer of Green Plains, said Green Plains’ facilities operated at a 90.9 percent run-rate for the third quarter, up from 75 percent during the same period of 2021.

During the call, Becker discussed the company’s installation of Fluid Quip’s MSC technology at its plants. The technology enables the production of high-protein coproducts. According to Becker, the MSC system at its Central City, Nebraska, facility is complete. The MSC system at the Mount Vernon, Indiana, plant began commissioning in October, with commissioning scheduled begin on the system installed at the Obion plant in Rives, Tennessee, within the next few weeks. Green Plains is also expected to break ground on a MSC system at its Madison, Illinois, facility in early 2023. Permitting work is also underway to add MSC systems at the Fairmont and Otter Tail plants in Minnesota.

In addition to enabling the projection of high-protein coproducts, the MSC technology also boosts the production of corn oil coproducts. Green Plains set a new record for corn oil production in the third quarter and is set to surpass that record in the fourth quarter, according to Becker. He said the company expects to be able to produce 400 million pounds of corn oil per year by 2025.

Green Plains is also developing a clean sugar facility in Shenandoah, Iowa, to produce low-carbon dextrose using Fluid Quip’s CST technology. The company broke ground on that facility in August. The facility is destined to produce more than 200 million pounds of dextrose annually, with the ability to expand capacity to 500 million pounds. The clean dextrose produced at the facility can be used in food, chemicals, synthetic biology and industrial production processes, according to Becker.

In addition, Becker addressed the opportunity presented by carbon capture and storage (CCS) projects. He called the recently signed Inflation Reduction Act a game-changer for both Green Plains and the ethanol industry as a whole. The IRA, in part, creates a new clean fuels tax credit beginning in 2025. That credit provides a tax incentive of 2 cents per gallon for each point of carbon intensity (CI) reduction below 50 as computed by the U.S. Department of Energy’s GREET model, Becker explained. Becker said many of Green Plains’ facilities are already near the required 50 percent CI reduction. Once CCS allows the CI of Green Plains’ ethanol facilities to dip below 50, the company can look for ways to further reduce its CI score, Becker said. He offered combined-heat-and-power (CHP), biodigesters, and wind and solar as options to further reduce the CI score of ethanol produced at the company’s biorefineries, allowing Green Plains to maximize the impact of the clean fuels tax credit. A lower CI score will also benefit the potential use of ethanol as a feedstock for sustainable aviation fuel (SAF).

Green Plains reported a net loss attributable to the company of $75.5 million, or a loss of $1.27 per basic and diluted share, for the third quarter, compared to a net loss attributable to the company of $59.6 million, or a loss of $1.18 per basic and diluted share, for the same period of last year. Revenues were $955 million, up from $746.8 million. EBITDA was negative $35.6 million, compared to negative $16.6 million during the third quarter of 2021.