(C) Iowa Capital Dispatch
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Biofuels leader warns ‘EVs are coming’ [1]
['Jared Strong', 'More From Author', '- January']
Date: 2024-01-12
ALTOONA — Ethanol producers must lower the carbon intensity scores of their fuels or face less demand for their products — caused by a combination of the rise of electric vehicles and increased ethanol production in Brazil.
That was the warning this week of Monte Shaw, executive director of the Iowa Renewable Fuels Association, which held its annual summit on Thursday.
“EVs are coming. We can argue about how fast, but they’re coming,” Shaw said of electric vehicles. “Brazil is ramping up past us as a foreign exporter. Domestically, U.S. corn production is rising faster than demand. … That’s why corn prices have dropped two bucks in the last year. There is no other ready-made market on the horizon that can not only prevent further erosion of corn profitability, but also drives the rural economy into a new era of prosperity.”
The new market, he said, is sustainable aviation fuel, which can be produced with ethanol. The federal government has a goal increasing the domestic annual consumption of the fuel to 3 billion gallons by 2030 and 35 billion gallons by 2050.
“Think how the creation of a 14-billion-gallon domestic ethanol market for light-duty vehicles pulled rural America out of the stagnation of the 1990s,” Shaw said. “Now, try to fathom the impact of adding a 35-billion-gallon sustainable aviation fuel market. It’s mind boggling.”
Ethanol production is an important market for farmers that has increased demand for their corn. More than half of the state’s corn is used to produce the fuel, and the state’s ethanol plants have a production capacity of more than 4 billion gallons per year.
Tapping a new market
Ethanol advocates and agricultural groups have warned that a declining demand for the fuel might be hugely detrimental to the state’s farm economy.
But to tap into the new aviation market, there’s a catch for ethanol producers: To meet the additional federal goal of a 50% reduction in greenhouse gas emissions in air travel, their ethanol needs to be considered low-carbon.
Fuels are scored for carbon intensity based on the amount of emissions that result from their production, transportation and consumption.
An ethanol plant can, for example, lower its fuel’s carbon score by buying corn from farmers who implement certain conservation practices or by using renewable energy to power their facilities. But a substantially greater reduction can be achieved by capturing the carbon dioxide they would otherwise emit into the atmosphere and pumping it into the ground, according to a study the biofuels association commissioned.
There are 13 ethanol plants in Iowa — about a third of the state’s total — that have agreed to connect to a carbon dioxide pipeline system proposed by Summit Carbon Solutions.
Another company, Navigator CO2, had agreements with a similar number of Iowa ethanol facilities for its proposed pipeline system, but the company abandoned the project in October. Summit has said it wants to add more facilities to its pipeline network.
Summit’s pipeline permit in Iowa is pending with the Iowa Utilities Board. A bipartisan alliance of environmentalists, farmers and land rights advocates has sought to stop the project, in part because Summit will need the power of eminent domain to obtain land easements from unwilling owners for about a quarter of its route in Iowa.
Absent a pipeline connection, there are other potential ways to capture and dispose of carbon dioxide. State geologists have said parts of Iowa might be suitable for underground carbon dioxide storage that could eliminate the need for a pipeline. And companies such as CapCO2 Solutions want to produce “green” methanol with carbon dioxide from ethanol plants, which it says will have similar carbon score reductions as underground sequestration.
Federal support for biofuels
Despite the Biden administration’s stated goal of having half of all new vehicles sold be powered solely by electricity by 2030, the administration’s Inflation Reduction Act has potentially billions of dollars of funding for biofuels industries.
The 2022 legislation extended biofuels tax credits and created new tax credits for low-carbon and sustainable aviation fuels. It also increased credits for capturing carbon dioxide that have fueled the pipeline system proposals.
Summit has said its five-state system will cost in excess of $5 billion, an investment it would recoup largely through the tax credits.
But the federal legislation also provides smaller amounts of money to increase the domestic consumption of biofuels. On Thursday, the U.S. Department of Agriculture announced $19 million of grants to businesses to install new fuel storage and distribution equipment.
Casey’s, for example, received $5 million to install ethanol blend dispensers at more than 100 of its locations in five states, including Iowa.
“By increasing the supply of biofuels made here in the U.S., we are strengthening our energy independence, lowering costs for American families, creating new streams of income for agricultural producers and bringing good-paying jobs to people in rural communities,” said Tom Vilsack, the country’s agriculture secretary.
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https://iowacapitaldispatch.com/2024/01/12/biofuels-leader-warns-evs-are-coming/
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