Tying Onto CO2 Utilization

Through a partnership with a South Dakota ethanol plant, Carbon Sink plans to utilize CO2 for the production of green methanol to power a shipping industry behemoth.
By Katie Schroeder | January 20, 2023
Through a partnership with a South Dakota ethanol plant, Carbon Sink plans to utilize CO2 for the production of green methanol to power a shipping industry giant. The company foresees huge demand for for pure streams of carbon dioxide in the future.

One third of the corn kernel—the CO2—goes up the stack as a gas. Some ethanol producers collect it and sell it for commercial use and others are beginning to sequester it underground, but energy development company Carbon Sink has a different purpose in mind. Carbon Sink wants to pay ethanol producers for that CO2 and turn it into eMethanol or “green” methanol, explains Randy Roy, co-founder and chief strategy officer for Carbon Sink.

Red River Energy, a 36 MMgy corn ethanol plant located near Rosholt, South Dakota, plans to partner with Carbon Sink under a long-term agreement to provide the CO2 needed for the latter company’s process. Warren Anderson, chairman of the board for Red River Energy, and Jay Sommers, the plant’s general manager, explain why they chose to partner with Carbon Sink and the benefits of carbon capture and utilization (CCU).

What is Methanol?
Methanol is produced all across the world in the amount of 100 million tons per year, according to Roy. “Gray” or non-renewable methanol is typically made using natural gas in the United States, and gasified coal in China. Methanol is widely used in the petrochemical industry as a feedstock to make products such as glue, paint, varnish, foam and fibers. It is also used as a fuel since it is nearly a drop-in replacement for diesel in the shipping industry. Methanol is also used in Europe as an octane enhancer. Since it is liquid at ambient temperature, it is able to be shipped by train like ethanol. Roy explains that ethanol plants are great partners because their CO2 is “biogenic,” or produced from plants, instead of “anthropogenic,” meaning originating through human activity, like gray methanol.

“We’re making the same molecule, but our methanol is manufactured using CO2 and renewable electricity, so it will have a net zero-carbon impact. And, as I mentioned, methanol is used in making a variety of things like plastic, glue, formaldehyde, paint, varnish—it’s a very popular chemical, and it’s traded worldwide,” Roy explains.

Carbon Sink plans to own and operate green methanol plants across the Midwest, co-locating with ethanol producers to buy and utilize the nearly pure streams of CO2 that come off of ethanol fermentation. Over the next eight years, Carbon Sink plans to build 10 plants across the Midwest. Though this is a high bar to strive for, Roy is confident that the company will meet its goals. He explains that the Midwest is an ideal area to develop this project because it has a high concentration of low-cost clean energy and pure CO2.

“The Midwest is a great location for Carbon Sink’s operations because of two things—an abundance of CO2 from ethanol plants and low-cost renewable electricity using wind. When you combine those two things, our business model allows us to be the lowest cost producer of green methanol in the world,” Roy says, explaining the company’s plan to co-locate its first project with Red River Energy.

First Location
In the spring of 2021, Carbon Sink contacted Red River Energy, initiating a conversation about a potential partnership for CCU, according to Anderson. Around the same time, interest in carbon capture and sequestration (CCS) was growing, however, Red River Energy viewed CCU as a better fit for its pursuit of reducing the facility’s carbon intensity.

“We wanted to understand how Red River could reduce its CI score, and we had been looking at pipeline alternatives, CCS, and all of a sudden here was a CCU project,” Anderson says. “And it sounds attractive to think of taking our CO2—which would otherwise be emitted into the atmosphere—and combine it with another product such as hydrogen [to] make a product that somebody could use, and at the same time reduce our CI score.”

The deciding factors for Red River Energy to choose CCU over joining up with a CCS pipeline was the greater feeling of control over its CO2, the opportunity to have more input on the design of the Carbon Sink project and the potential to gain an additional source of heat and energy, Anderson explains.

For Carbon Sink, Red River Energy was a good choice for a first supplier because it is in a great location for obtaining renewable electricity from wind power, along with concentrated, pure CO2 that is a byproduct from ethanol fermentation. “The CO2 emitted from an ethanol plant is over 98 percent pure,” Anderson says. “Higher purity CO2 means lower capital cost and lower operating costs for Carbon Sink.”

 Carbon Sink will own and operate a plant with a footprint of approximately 10 acres. The green methanol plant is currently in the early stages of development, with the plan to start construction in 2025, coming online in 2027.
 
“We identified that plant as being in a good location for rail and wind. Equally as important, Red River Energy was really interested in being good stewards of their resources, and they wanted to do something constructive with their resources,” Roy says. “And so, we started our conversation with them, talking about how we could help them monetize that one-third of the kernel that currently goes up the stack. That’s really where it started, and ... it’s a really great location for all the things that we need onsite.”

The methanol plant will use Red River Energy’s existing rail infrastructure to ship the finished biofuel as well. Roy explains that the methanol plant’s production capacity will be approximately two-thirds of the capacity of the ethanol plant they collocate with. For example, if the ethanol plant produces 50 MMgy, the green methanol plant will produce about 33 MMgy.

Process Details
Carbon Sink plans to buy the electricity needed for its process from a provider of renewable electricity. Roy explains that this location will get its power from a wind energy project currently under development and expected to be complete around the same time as the methanol plant.

The technology used to produce the methanol is already established and tested, coming with very little technology risk. Roy explains. “Methanol synthesis technology that utilizes various forms of hydrogen and carbon feedstock already exists. It’s been in operation for over 100 years. Two commercial-scale plants are currently operational that use CO2 and hydrogen exclusively, one in China and one in Norway,” he says. “The integration of a green methanol plant with an ethanol plant, that doesn’t exist, so we’re going to be doing something new.”

Carbon Sink will partner with catalytic chemistry company, Topsoe, utilizing its technology to produce the green methanol. The green methanol produced at Red River Energy will be sold to shipping giant, Maersk, as part of the company’s effort to reduce its carbon footprint. The methanol will be used in place of diesel in its ships. Roy explains that the methanol will be primarily used in newer ships, which use dual-fuel engines that can burn either green methanol, diesel or a blend of both. The three companies that manufacture dual-fuel engines for ships are MAN Engines, Rolls Royce and Wärtsilä.  

‘CO2 Scarcity Paradigm’
Roy believes that green methanol has the potential to help transition to a “CO2 scarcity paradigm” by making CO2 valuable. Right now, the focus is primarily on managing CO2 since there is an abundance of it from burning fossil fuels, he says. However, if technologies that utilize CO2 become more prevalent, that will have a bigger impact on reducing CO2 in the atmosphere because companies will have an incentive to capture CO2 and use it as a feedstock for an ever-growing list of products.

“Methanol has the opportunity to be the tip of the spear in that transition from CO2 abundance to CO2 scarcity,” Roy says. “That’s what excites me about green methanol is that it’s the tip of the spear. I think Red River Energy really understands that, and we’re pretty excited that they want to be at the tip of the spear with us as we help transition to that paradigm.”

The chemical makeup of green methanol allows it to be a good option for industries like the petrochemical industry, with difficult-to-decarbonize products such as plastics or paint, because the green methanol molecule has the same structure as gray methanol but is not sourced from fossil-based fuels.

Producer Perspective
For Red River Energy, CCU is a path to lower carbon intensity, allowing the plant to stay competitive and open new market opportunities for ethanol with a lower CI. “In the ethanol industry, it’s an energy industry,” Anderson says. “We’re very aware that we have a product that needs to be dealt with, and I think as an industry and as a country [we’re looking] at all the sources of CO2 and how it’s affecting climate change. Ethanol plants are aware of this issue and, thus, the concepts of CCS and CCU have come about.”

Red River Energy may have an opportunity to recapture the heat produced from the electrolyzer to reduce its natural gas usage, Sommers says. Along with the carbon-free heat, Roy says the Carbon Sink plant will also be able to provide Red River Energy with renewable electricity, dropping its CI score even further. These efficiencies would help the ethanol produced at the facility stay competitive in a market that increasingly values carbon reduction.

Roy emphasizes that Carbon Sink helps ethanol producers monetize their CO2 without any concerns about volatile pricing, since prices are locked in under a long-term, fixed price contract, creating a stable revenue stream. Producers also do not need to invest in any way to have a Carbon Sink plant co-located with their plant, “we’re the ones who are building the plant, paying for the plant, we own and operate the plant; they don’t have to make any investment,” Roy says.

For Red River Energy, the prospect of having its CO2 utilized to produce a fuel for use by a different industry is appealing. “We’re excited to be involved with this and think it’s great that we can reduce the amount of CO2 that’s emitted into the atmosphere and that we can make a product that can be utilized by third parties,” Anderson says.

Author: Katie Schroeder
Contact: [email protected]