While many companies are developing ways to remove carbon emissions from the atmosphere and sequester them deep underground, other innovators are exploring ways to use carbon emissions, turning them into valuable fuels and chemicals.&nbsp;&nbsp; For decades, many ethanol producers have been selling their CO2 on the merchant market for uses such as freezing meat and carbonating beverages, but new processes and technologies are enabling producers to find even more attractive outlets for their CO2.Maintaining Momentum&nbsp; When Carbon Sink was founded in 2019, there were no green methanol-powered ships in the world’s oceans, explains Randy Roy, co-founder and chief strategy officer of Carbon Sink. Still, the company’s founders acted on the momentum toward a green fuel they identified in the marketplace. “We saw an opportunity to build a business around capturing very pure, abundant CO2 from ethanol plants in the Midwestern U.S. and combining that with hydrogen manufactured using relatively inexpensive renewable electricity, also located in the Midwest,” Roy says.&nbsp;With the passage of legislation like the Inflation Reduction Act as well as the presence of over 400 dual-fueled ships capable of burning green methanol and increasing demand for sustainable aviation fuel (SAF), the market has developed as Carbon Sink’s founders expected. “We believed the landscape would change in a way that would make our business model more viable when we embarked on his journey,” Roy says. “The shipping industry has embraced methanol as a replacement for diesel, and the airline industry has also embraced SAF as a replacement for fossil-based jet fuel. In addition, there is increased state and federal support for renewable energy and carbon capture and utilization.”The company has signed letters of intent with five ethanol plants to build green methanol facilities. Currently, the only publicly announced project is located at Red River Energy in Rosholt, South Dakota. Carbon Sink serves the role of a project developer, primarily using technologies created by other companies.&nbsp;Every 50 MMgy ethanol plant produces enough CO2 to make roughly 100,000 metric tons of methanol each year, Roy explains. The amount of methanol produced is equivalent to about two-thirds the volume of ethanol produced at the nearby ethanol plant.&nbsp;The project development process starts with negotiations with the ethanol plant on supplying CO2 and, in some cases, water and land. Negotiations are also made with technology developers for the various plant components, and terms for offtake agreements must be negotiated with the parties receiving the green methanol or SAF. After negotiations are completed and technology vendors are selected, the next phase can begin.“At that point, we would hire a third party to complete the engineering work and then raise the capital we need to construct the project,” Roy says. “Our typical project, which would be co-located with a 50 MMgy ethanol plant, would cost in the range of $150 million to construct.” Because Carbon Sink’s first facility is a “fairly early stage project,” and there are not many facilities like it in the world, Roy anticipates that the $150 million price tag will come down by nearly 25% over time after the first project is completed, reaching approximately $100 million by year seven. Carbon Sink’s first project is planned for completion in 2029.&nbsp;“As you can imagine, we are all for [CO2] transformation,” he says. “Because we know we can create a zero-CI score product, a real zero-CI score product, a form of SAF or methanol, and you can’t do that by putting CO2 in the ground.”Catalysts and Syngas&nbsp; HYCO1 uses its proprietary catalyst to convert carbon dioxide and natural gas into syngas (carbon monoxide and hydrogen). Kurt Dieker, co-founder and chief development officer of HYCO1, explains that the company’s name was born out of its technology’s capability to produce hydrogen and carbon monoxide at a one-to-one ratio. Greg Carr, Jeff Brimhall and Dieker launched the company in February 2021. The technology’s resulting syngas can be utilized to make a variety of downstream products via Fischer Tropsch technology, including low-CI hydrocarbon fuels and chemicals. &nbsp;Traditional hydrogen is made by steam methane reformers using more steam than is necessary for the chemical reaction to make the hydrogen. This “steam cleaning” of the catalyst prevents the reformer from coking—filling up with carbon. “The catalyst for HYCO1, that is the innovation … it’s a non-coking catalyst,” Dieker says. “That allows us to do … what’s called dry methane reforming or methane reforming without water at all. That’s been the Holy Grail reaction because it’s the most efficient reaction—the historical problem is coking.” The catalyst can be used for both dry methane reforming and steam methane reforming, or a blend of the two, improving the operator’s efficiency and flexibility in operations.Since HYCO1’s technology recognizes “carbon as carbon,” it converts CO2 into syngas at the same rate as methane, making CO2 an equivalent feedstock to RNG from a chemistry standpoint. The ethanol industry is “low-hanging fruit” for the company because, as Dieker explains, the industry is among the “most mature” in carbon market knowledge and produces biogenic, high-purity CO2 that is easy to capture.In July 2024, HYCO1 announced a 20-year CO2 supplier agreement with Kansas Ethanol in Lyons, Kansas. Dieker explains that HYCO1 plans to build a facility capable of making 5,000 barrels per day or 80 MMgy of synthetics using natural gas and CO2 as the feedstock. Currently, Dieker and his team are in the detailed design phase of project development, working with multiple technology providers for downstream refining of products. “There are actually four technologies on site—the first is ours, syngas which enables everything else to be more efficient, lower carbon intensity and therefore more sustainable,” he says. “The second is a Fischer Tropsch technology, and then there’s a refining section, or we’ll call it a distillation and isomerization section, to polish the molecules, and separating the products is what you’re doing on the back end.” HYCO1 plans to capture all emitted CO2 and use it as a low-cost feedstock in the production process.HYCO1 has three different vertical paths to profitability, explains Dieker. First, swapping out existing catalysts in steam methane reformers (SMR) within the syngas industry for HYCO1’s catalyst offers a significant increase in efficiency and allows for CO2 to be used as an efficient feedstock with HYCO1’s CUBE technology.&nbsp;The second vertical is licensing of the carbon utilization catalyst technology to next-generation facilities by adding carbon capture technology or building new facilities with third-party project developers. “Then you can actually use that CO2 as part of your feedstock and offset your natural gas or fossil fuel usage into that reformer,” Dieker says.&nbsp;Third, HYCO1 is exploring production of high-value specialty products through internal projects—like the one sited near Kansas Ethanol—making jet fuels, base oils (group IV alternatives) and light alkanes.The HYCO1 team keeps the economics in mind when designing their facilities, targeting low CI scores while keeping their products affordable for consumers. “If you’re looking at CI with renewable diesel or jet or base oils, base oils are 110 grams per megajoule—we’re under 30 without adding any carbon attributes to the gas,” he says. “You can add [low] carbon attributes, you can add renewable natural gas or landfill gas or others to that to even further improve it. What we’ve found is users really don’t want to pay for that premium.”Utilization Service&nbsp; The main goal for Jeff Bonar, CEO of CapCO2 Solutions, is to make a positive impact in addressing climate change while also supporting rural communities and bringing biofuels into the next generation. Through his company, he intends to take CO2 from ethanol plants and turn it into green methanol using low-cost renewable energy. CapCO2’s “capture as a service” business model captures and utilizes ethanol producers’ CO2, but owns and operates the equipment, giving the ethanol producer a share of the profits as well as tax incentives. Producers can also choose to invest in the infrastructure to get an increased share of the profits. Integrating CapCO2’s utilization into an ethanol producer’s system grants them an estimated 25-point CI reduction under the GREET model.CapCO2’s disruptive technology allows green methanol to be made in relatively small and compact units, explains Bonar. “Roughly nine or 10 feet in diameter, 25 to 28 feet long reactor vessels—you can put it on a skid and that is the unit of work,” he says. “It’s 1/20th the size of conventional methanol equipment and you can do it modularly, so we can manufacture them, deliver them on-site and hook them up.” The footprint for the green methanol equipment is roughly equivalent to 30 to 40 shipping crates, and the design is intentionally straightforward. “We’re not trying to build a whole new chemical factory next door,” Bonar says.&nbsp;The equipment can be run intermittently, optimizing the process for when purchasing green energy is most cost effective. “Our equipment works just fine if you turn it on and off, and in fact, we’ll see as we scale up the plants, but we think we can make green methanol for roughly the same price as regular methanol because we will take advantage of electricity when no one else wants it,” Bonar says. The other vital ingredient needed for making green methanol is water, roughly 25% the volume needed by an ethanol plant. Bonar explains that CapCO2 plans to look for ethanol producer partners in places where the local water supply will not be stressed by adding their facility.As of print time, CapCO2 had not yet announced an ongoing project, but Bonar explains that the company has identified some good candidates and anticipates a forthcoming announcement. A pilot plant currently under development will have one reactor, costing a total of $15 million. In comparison, a full-scale facility will cost $200 million to $300 million and be 30 to 35 times larger. The costs may vary depending on how consistently the plant is turned on and off, explains Bonar. If the producer takes the approach of running intermittently, a larger investment into CO2 storage infrastructure will be needed. A 100 MMgy ethanol plant would require 30 to 35 skids of equipment to produce around 63 MMgy of methanol.&nbsp;Bonar explains that, hypothetically, “we may only want to build it to handle 25% of the CO2 because there’s a new wind farm being put in, but it’s not going to be ready for another two years,” he says. “We’re going to have to kind of layer it into whatever else is being developed in the area, but, again, it’s modular so there’s no real significant cost to doing it a piece at a time.”As these new technologies gain a foothold, the options grow for ethanol producers to lower their CI scores while increasing their profit margins. With various providers and cost structures available, it has perhaps never been easier for producers to explore a new approach to CO2 utilization. &nbsp; Author: Katie Schroeder&nbsp; katie.schroeder@bbiinternational.com

2025-01-02 - The Case for Carbon Utilization (Ethanol Producer Magazine)

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New technologies are emerging with creative solutions that put carbon emissions to work for ethanol producers.

The Case for Carbon Utilization

The Case for Carbon Utilization

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