2022 February Ethanol Producer Magazine

FEBRUARY 2022

ONE MORE

SPIN Idled Minnesota Plant Restarts Under Greenfield Global PAGE 22

PLUS

The Rise Of Data-Driven Decision Making PAGE 16

Green Plains’ Disruptive Transformation PAGE 28

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Contents

16

PHOTO: STOCK

22

PHOTO: TIM PORTZ

28

PHOTO: GREEN PLAINS INC.

34

PHOTO: STOCK

FEBRUARY 2022 VOLUME 28 ISSUE 2

DEPARTMENTS 4

AD INDEX/EVENTS CALENDAR

6

EDITOR'S NOTE Older Plants Give Us New Stories

FEATURES 16 DATA

Directed by Data

Deeper gains through process analytics

By Tom Bryan

8

VIEW FROM THE HILL Year-Round E15: There’s More than One Way to Peel a Banana

By Tom Bryan

22

A beleaguered Minnesota ethanol plant gets new life

By Geoff Cooper

10

GLOBAL SCENE Policy Development Remains Top Priority for USGC In Expanding Global Ethanol Use and Trade

PRODUCER

Winnebago Online

28

By Tom Bryan

ON THE COVER

PROFILE

The 48 MMgy ethanol plant in Winnebago, Minnesota, was idled in 2019. Canada-based Greenfield Global acquired the plant in late 2020, repairing and restarting the facility in about one year. The facility has two wind turbines on site that are currently not in use, but could be recommissioned.

Conveying Change

By Brian Healy

12

Green Plains CEO lays out transformation

BUSINESS BRIEFS

By Tom Bryan

43

MARKETPLACE

34

POLICY

PHOTO: TIM PORTZ

Reflections from the Hill

RFA’s Geoff Cooper assesses 2021, shares 2022 priorities

Q&A with Tom Bryan

Ethanol Producer Magazine: (USPS No. 023-974) February 2022, Vol. 28, Issue 2. Ethanol Producer Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

ETHANOLPRODUCER.COM | 5

Editor's Note

Older Plants Give Us New Stories It was a surprise in December when Greenfield Global, the largest ethanol producer in Canada, reached out to tell us its new U.S. ethanol plant—which is actually old but refurbished—is online in Winnebago, Minnesota. We covered the ribbon-cutting, and when Greenfield offered a more in-depth interview with the plant’s GM, we jumped on it.

You see, stories about new, or new again, ethanol plants are hard to find these days. They’re a throwback to an earlier time, 10, 15 years ago, when reporters with small notebooks and handheld recorders flocked to ethanol plant grand openings almost monthly. Those old stories were not full of technical details or real business intelligence. They were just earnest accounts of partnership, investment and opportunity told to small groups over the noise of rattling hammermills, buzzing centrifuges and whirring rotary drum dryers.

That storyline returns to us in “Winnebago Online,” on page 22. While our access to Greenfield Global Winnebago was admittedly limited, being able to tell the plant’s story of renewal—even without going inside—was, much like the restart itself, rejuvenating.

From Greenfield’s southern Minnesota rebuild, we turn to Green Plains’ fleetwide reimagining, as the company moves into more involved and potentially more profitable forms of biorefining. While still focused on ethanol, the company is embracing its role as a disruptor in what CEO Todd Becker calls a renaissance of ethanol production brought on by new derivatives—protein, oil, clean sugar, high-purity alcohol and more.

Becker provides candid details about the company’s ongoing metamorphosis in “Conveying Change,” on page 28.

As producers like Green Plains and Greenfield Global invest millions in their production assets, they deserve reassurance that our nation’s renewable fuel standard is safe and being administered fairly, steadily and on schedule. In “Reflections from the Hill,” on page 34, we catch up with Renewable Fuels Association President and CEO Geoff Cooper, who weighs in on issues ranging from the EPA’s latest proposed RVOs to finding a regulatory solution to E15’s summertime woes and reestablishing FFV incentives in the context of climate change. It’s a lot to unpack, and Cooper does it adeptly in this timely Q&A. Finally, flip back to the beginning of our feature well to read “Directed by Data,” on page 16, a conversive dossier on the rise of data-driven process optimization. Ethanol producers started becoming more reliant on data six or seven years ago. Today, as new gains become increasingly harder to achieve, process analytics are almost omnipresent in ethanol plant decision making. Data, we learn, is no longer just helpful, but tantamount to new optimizations.

Enjoy the read!

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View from the Hill

Year-Round E15: There’s More than One Way to Peel a Banana

Geoff Cooper

President and CEO Renewable Fuels Association 202.289.3835

gcooper@ethanolrfa.org

When the D.C. Circuit Court of Appeals sided with oil refiners last July and struck down EPA’s regulation allowing year-round sales of E15, it would have been easy for the ethanol industry to give up and throw in the towel. We could have decided to just walk away from the idea of year-round E15 and move on to other potential avenues for growing ethanol demand.

But that’s not what we do in the ethanol industry. We don’t take “no” for an answer. We pick ourselves up, dust ourselves off, and look for other creative ways to accomplish the mission. Rather than accepting defeat in the wake of the court decision, RFA immediately went to work developing alternative strategies to restore the marketplace’s ability to sell E15 year-round nationwide.

Extending E10’s RVP waiver to E15—the approach tried by EPA and rejected by the court—isn’t the only way to achieve regulatory parity and facilitate year-round sales for E15. As a modern take on an old saying goes, there is more than one way to peel a banana.

Recognizing this, the governors of seven Midwest states sent a letter to EPA Administrator Michael Regan in early November seeking guidance from the agency on how best to pursue a specific—and little known—provision of the Clean Air Act that allows independent states to establish a level playing field for E15. Governors signing the bipartisan letter were Kim Reynolds (R-Iowa), Pete Ricketts (R-Nebraska), Tim Walz (D-Minnesota), Tony Evers (D-Wisconsin), Doug Burgum (R-North Dakota), Kristi Noem (R-South Dakota), and Mike Parson (R-Missouri). In addition, Gov. Laura Kelly (D-Kansas) sent her own similar letter to EPA. These governors recognize just how important E15 market access is for the Midwest economy.

The bloc of eight contiguous states represented by the governors is home to 140 of the nation’s 206 ethanol plants, more than 200,000 jobs supported by the ethanol industry, and more than half of the nation’s retail stations that offer E15. The states combined consume approximately 13 billion gallons of gasoline annually. That means a universal move from E10 to E15 across these states would expand ethanol consumption by nearly 700 million gallons and boost corn demand by 225 million bushels.

As of late December, these governors—and the ethanol industry—were planning their next steps and anxiously awaiting a response to their inquiry from EPA. But RFA was not content to just wait for the agency to respond to the governors. So, we led a complementary effort to encourage EPA to use its legal authority to eradicate the RVP barrier nationwide once and for all.

In a letter to EPA in December, RFA—along with the American Farm Bureau Federation, Growth Energy, National Corn Growers Association, National Farmers Union, and National Sorghum Producers—requested that the agency begin the process to enact regulations requiring lower-volatility conventional gasoline blendstock in the summertime. Similar to the approach suggested by the governors, this would put E15 on equal regulatory footing with E10 and allow uninterrupted yearround sales of the higher blend.

Meanwhile, RFA continues to lend its support to legislation introduced in both the House and Senate to remove the arcane E15 RVP barrier. Attempting to fix the issue legislatively would take a heavy lift and could open the door to more mischief-making from refiners and their supporters in Congress; still, we continue to look for smart and safe opportunities to advance these commonsense legislative proposals.

Simply put, we’re not giving up on year-round E15. Far from it. We’re pushing harder than ever to restore fair market access for this cleaner-burning fuel. And we won’t stop until we’ve succeeded.

8 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2022

Global Scene

Policy Development Remains Top Priority for USGC In Expanding Global Ethanol Use and Trade Brian Healy

Director of Global Ethanol Market Development U.S. Grains Council 202.789.0789

bhealy@grains.org

This year will mark a growth period for global ethanol trade as demand returns to 2019 levels.

Expansion beyond pre-pandemic levels will rely primarily on policy outcomes in major markets including India, Japan, Brazil and Canada that expand global demand. In its December 2021 report, the International Energy Agency, agreed, saying “policy discussions … will have a profound impact on biofuel prospects over the next five years.”

Globally, the U.S. Grains Council is positioned to support these countries in fully implementing their biofuels policies; to recognize the role ethanol has in meeting net-zero emissions targets for the transport sector; and to ensure global product availability through trade by building strategic partnerships with local industry and government entities. With nine international offices and representatives in nearly a dozen other markets, the Council is the eyes, ears, and front-line champions for the global ethanol industry.

The United States remains the leader in global ethanol trade, supplying nearly 60 percent of import demand. For the U.S. economy, that translates to more than 16,000 jobs. Today, the U.S. exports about 10 percent of production, but that could grow further as more policies are put in place. The industry objective remains the same in 2022—continue the expansion and enforcement of global policies with a role for trade.

Sharing the benefits of expanded ethanol use remains a priority for the Council in its work around the world. The extensive lifecycle analysis work in the public and private sectors, as well as academia, and the greenhouse gas (GHG) reduction potential generated by expanding ethanol use are leading topics of many discussions. Countries responding to their Paris Agreement commitments, or their own national measures to reduce overall emissions, are better understanding the role for ethanol today and in the long term through our on-the-ground engagements. Obtaining broader endorsements and support at the national and multilateral levels remains critical in the years to come.

This year will be a bright spot in global ethanol policy expansion. India, in which the Council recently opened its ninth office, is looking to achieve its 10 percent blend rate; Japan is reviewing its ethyl tert-butyl ether (ETBE) cap set in 2009 with a potential to double its current rate; Brazil’s third year of RenovaBio is underway; Canada’s years-long Clean Fuel Standard (CFS) process is set to release a final regulation by the end of 2022; and Colombia is expected to return to the 10 percent blend rate it had reduced in early 2021. The growth of the global industry will rely on continued cooperation and collaboration, and the Council is poised to provide that support.

10 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2022

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BUSINESS BRIEFS PEOPLE, PARTNERSHIPS & PROJECTS

Wagner named Nebraska Ethanol Board administrator The Nebraska Ethanol Board has hired Reid Wagner as administrator of the agency.

Wagner joined the NEB in January, replacing former administrator Roger Berry.

“Roger [has been] a tremendous asset to the Nebraska ethanol industry, and we all benefited from his guidance and passion for agriculture and biofuels,” said Jan tenBensel, NEB Wagner chairman. “He’s a great friend who will be missed. We know [Reid’s] background and knowledge will take us,

and the ethanol plants we work on behalf of, to new heights as the future of the biofuels industry evolves.”

Wagner graduated from the University of Nebraska-Lincoln with a degree in chemical engineering. His professional experience includes engineering positions at Evonik, ExxonMobil and Cargill.

“I am thrilled to join a strong, cohesive team in the Nebraska Ethanol Board and use my diverse engineering background to foster growth and support innovation of an industry that is vital to my home state,” Wagner said.

Bayer, Bushel and AWS launch Project Carbonview Bayer, along with Bushel and Amazon Web Services, have launched a technology solution designed to help farmers and ethanol producers build more sustainable supply chains by aggregating the carbon footprint of end products.

The partnership, called Project Carbonview, will connect farmers more deeply in the agricultural value chain to better capture their carbon contribution and drive the entire value chain to net-zero carbon emissions. Farmers that enroll in the pilot program will ultimately receive compensation for participating. Project Carbonview will

also enable ethanol producers to track carbon emissions across the entire supply chain—from planting through production—and provide the data they need to make more informed purchasing decisions and reduce their carbon emissions.

“We are very excited to launch a solution to help transform the food and agriculture value chain by paving the way for a more resilient, regenerative and net-zero carbon future,” said Leo Bastos, global commercial ecosystems lead, Bayer Crop Science.

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Corn LP to install ICM technology for high-protein production Corn LP, a 72 MMgy ethanol plant in north-central Iowa, has signed a contract with ICM Inc. to install the technology company’s Advanced Processing Package. APP includes four patented and patent-pending ICM technologies that work together to mechanically separate corn into clean piles of fiber, oil, solubles, protein and enhanced protein with yeast. Producers can combine these components to create different feed products, including ProtoMax yeast-enriched 50 percent protein animal feed, to reach a variety of markets.

“After evaluating different technology companies on the market, we selected ICM,” said Chris Boshart, general manager of Corn LP. “The Advanced Processing Package will give us the flexibility to produce different feeds and maximize high-protein production, as well as improve operational efficiency.”

The APP also increases throughput by boosting fermentation capacity, while reducing energy use and lowering chemical costs.

The technology installation will begin in March and be in operation this year.

Summit to build wheat protein facility next to ethanol plant ICM has signed a design-build agreement with Summit Sustainable Ingredients, an affiliate of Summit Agricultural Group, to develop a wheat protein (vital wheat gluten) ingredients production facility in Phillipsburg, Kansas. The new plant will be located next to Prairie Horizon Agri-Energy, a biorefinery acquired by Summit earlier this year.

Summit committed to the project after recognizing that wheat protein, as an essential ingredient, is needed and in short supply. "Building this new facility will close the gap between the supply and demand of high-quality wheat protein ingredients and reduce our reliance on imports," said Bruce Rastetter, CEO of Summit Agricultural Group. "We chose ICM as a strategic partner because of their best-in-class expertise when it comes to integrating process technologies into a renewable fuel plant, and superior capability for optimizing plant efficiency."

ICM and Summit have selected Flottweg, a manufacturer of efficient liquid-solid separation technologies, to provide the gluten extraction process.

presents 2022 Faces of Ethanol

LAUREN KELLEN

CHS Lab Manager ROCHELLE and ANNAWAN, IL

Lauren Kellen is lab manager at CHS ethanol plants at Annawan and Rochelle in north-central Illinois. She balances her role as a ‘fermentation doctor’ during the week by pursuing intrepid outdoor adventures on the weekend.

Balance In Biofuels Born and raised just 30 miles south of CHS Rochelle, her workplace of six-and-a-half years, Lab Manager Lauren Kellen still feels at home in north-central Illinois, even though she no longer lives there. “Rochelle is close to so much,” she says. “Our employees come from all over. We’re just north of Mendota, my hometown, close to the western suburbs of Chicago and an easy commute to the Wisconsin/Illinois state line, where I recently moved to.”

For Kellen, southern Wisconsin is her basecamp for the active outdoors life she loves—backpacking, rock climbing, snowboarding and more. “I just enjoy being outside and moving,” she says. “I’ve been an athlete all my life, so when I got out of college and wasn’t playing competitive sports anymore, I needed something to fill the void. I found it outdoors.”

Climbing Up Kellen’s weekend warrior lifestyle helps keep her focused and ready for the daily challenges of her busy and challenging work week. “Running an ethanol plant lab comes with a considerable amount of routine—there are a lot of things you do every day—but each day is also different and I think that’s what I like most about the position.”

Kellen graduated from Monmouth College in 2014, majoring in biology and minoring in chemistry while playing soccer and basketball. Following an interesting laboratory internship after college (ask her about her work with mosquitos), she landed a full-time job with CHS in Rochelle, first as a process technician and, later, as lab tech.

“I moved over to the lab and worked my way up the ladder,” she says. “About five years later, I became lab manger.”

Dual Responsibilities Kellen’s role is unique in that she manages two plants in Illinois which are about 75 miles apart. “The responsibilities I have at each plant are quite different,” she says, explaining that she manages five lab employees in Rochelle and just one in Annawan. “It’s a unique setup that works well because of the way our plants are managed and communicate with one another.”

Kellen’s top priority each day is to make sure the plants’ fermentations are running well. “Being a ‘fermentation doctor’ is probably my favorite thing about this job,” she says. “Figuring out how fermentation symptoms affect the plant is a rewarding responsibility. I enjoy the challenge of looking at the signs of fermentation and digging into what is chemically and biologically happening in a fermenter so I can fix the problem and prevent it from happening again.”

Help When Its Needed Being a good problem solver, Kellen says, is about asking good questions and never being afraid of asking for help. “Don’t assume you have all the answers,” she says. “Ask questions. Reach out—both internally and to other plants—and ask vendors for assistance when you can. Vendor relationships are incredibly important. They essentially add capacity to our labs, so it is important to have a good working relationship with vendors. We have that with BASF, and it’s nice to know we can always rely on them.”

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Data

When data became vogue in ethanol production half a decade ago, producers quickly embraced newly available tools for capturing, viewing and analyzing their lab and control system intel. Process data, it appeared, might soon be the basis of all plant decisions. Every change would be guided by statistical analysis. Every trial would be immersed in data. Capital projects would be defined by it.

That future arrived only in part, says Joseph Reese, technical services manager at IFF. “When we look at data use in ethanol production today, we’re not seeing an all-in,

one-size-fits-all approach,” he says. “There’s no single data technology helping every plant make all their decisions. Each facility is on a different point in their journey into datadriven optimization. They’re in different places on the continuum.”

Reese says almost every U.S. ethanol plant is currently using data to make process decisions—and looking to do more.

But he also sees considerable gaps between producers with the most advanced analytical resources—like custom-engineered data platforms that integrate and conveniently dashboard process information from the lab and control system, or DCS—compared to those with only basic data regimens, using little more than spreadsheets to moni-

16 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2022

tor core process parameters. “It’s still a wide spectrum in terms of what some producers are doing with data compared to others, but I think they’re all asking, ‘What more can we do?’”

Anne Chronic, director of market analytics for Phibro Ethanol, says there has been an incredible amount of real-time process input that’s become discoverable and incorporated into data reporting at ethanol plants in the past five years, and a total transformation of process monitoring and analytics during her 15-year career in ethanol.

“When I started in this industry in 2006, many were entering data manually and there was very little data automation,” she says, explaining that virtually every area of an

DIRECTED BY

DATA

With support from fermentation product suppliers, ethanol producers are integrating process analytics into their decision making like never before.

By Tom Bryan

'It’s not so much about creating the infrastructure to collect data anymore, but querying the right data points for new and improved forms of analysis. That’s what we’re moving towards.'

Chronic

ethanol plant is now capable of producing potentially useful data. “Right now, I think field instrument mapping represents the largest opportunity for near-term growth in the data space. Because the functionality is already there. It’s not so much about creating the infrastructure to collect data anymore, but querying the right data points for new

Anne Chronic

and improved forms of analysis. That’s what we’re moving towards.”

Alex Sexton, technical service manager for Lallemand Biofuels & Distilled Spirits, agrees that a new reliance on data has caused a shift change in thinking about ethanol production. He credits early data capture platforms that made data more accessible for

the industry with high-impact dashboards and robust reporting features. “It’s been extremely useful to have all that data, from any time range, in one convenient place,” he says.

“Those tools not only help producers, but they also help us serve our customers better. There’s always room for improvement in terms of getting the data producers want and need—and doing it better—but there is no question that this industry is increasingly using data in more meaningful and powerful ways.”

Lallemand also has its own tools. Sexton says the company's Mobile Application Process System, or MAPS, which is housed in a 53-foot semi-trailer and used to test yeast strains under real-world conditions on site| at ETHANOLPRODUCER.COM

17

ETHANOLPRODUCER.COM | 17

Data

Sexton

'There’s always room for improvement in terms of getting the data producers want and need—and doing it better—but there is no question that this industry is increasingly using data in more meaningful and powerful ways.'

Alex Sexton

ethanol plants, complements Lallemand's data-driven approach to innovation. “It's quickly become a very useful R&D tool to help make the introduction of products both easier and faster through data-driven experimental approaches with real plant mash,” he says.

Reese agrees, explaining that some of the producers he works with are looking for ways to better house and engineer their data, if only to get it all into one convenient spot.

“And the more advanced plants are now looking for ways to move beyond entry-level data technologies,” he says. “They’re ready to take their data approach to a higher level. Ethanol producers no longer need to be convinced that data-driven decision making

is smart. They know it leads to better yield, better efficiencies, and greater profitability.

The fact is, ethanol plants are spending a lot of time and money on data already—from lab tests, running tests, instrumentation and recording data—so I think the question is how much more can they do with it?”

Encoding Knowledge Chronic, says it’s critical to recognize employees that help plants succeed through data-driven thinking. “In this era when everyone is placing a premium on employee retention and employee recognition, the more you can leverage information to empower employees, the better,” she says. “Too often with data, we think only about the process,

18 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2022

but people make these decisions, and even small everyday decisions driven by data can have a large impact on the plant.”

Pedro Peña, lab and R&D director at CTE Global Inc., agrees that enabling personnel to make data-informed choices is smart management, especially when done in parallel with vendor support programs like CTE’s trademarked InSight data service, which helps ethanol producers “connect the dots” in their data libraries to optimize production. “Capitalizing on data requires expertise—statistical analysis, modeling, and the know-how to analyze information—and you’re ultimately relying on people to get it done,” Peña says. “But ethanol plants are dealing with the same workforce challenges everyone else is, so we’re stepping up with InSight to bridge that gap and help producers navigate their data.”

IFF has a similar data solutions approach, its trademarked Xcelis AI, a platform the company offers to its ethanol industry customers to help them harness the power of data and predictive modeling. Reese agrees that data fluency can be lost through employee turnover. “Every plant has exper-

‘Most of the low-hanging fruit of optimization is gone. It’s time to get on the ladder and see what we can reach, and what more we can squeeze out by leaning into plant data.’

Peña

tise that tends to exit at different times,” he says. “But a sound data strategy like Xcelis AI can help encode and operationalize that process knowledge so that, even as you have turnover, that expertise remains built into your process. It’s so important not to lose that understanding and potential for optimization when a key person leaves.”

Data as a Service With enzymes, yeast and antibiotic providers all offering to help ethanol plants understand and utilize data more effectively, Peña says producers are increasingly looking for analytical support that casts a wider net

Pedro Peña

of process improvement potential. “Data is an area where we feel we can really help across the whole plant,” he says. “We’re always looking at what else we can do—even outside of enzymes—to help our customers do better. It’s more than just our products.

It’s about helping them optimize, helping them troubleshoot, helping them identify areas for improvement.”

Peña says CTE is even conducting comprehensive plant audits to more fully uncover areas of potential improvement within its customers’ facilities. “Helping producers optimize is our calling card,” he says. “Anything we can do to help them run more efficiently,

more consistently, more cost effectively, and ultimately, more profitably, we’re going to do.

Data is critical, because it’s how we begin to understand how the plant is running.”

Likewise, Reese explains, Xcelis AI is a service that can mean different things to different IFF customers, from helping them select and implement a data software package to consulting services or customized support. “It’s part of our broader Xcelis approach,” he says. “We try to work with our customers as closely as possible to deliver whatever services and technologies they need to be successful.”

Ultimately, data analytics as a service is a vehicle for providers of fermentation products to meaningfully engage with customers on both plant optimization and product maximization. “If we can better understand how our customers operate, how our products influence their operations, than we can offer improved products and better understand how existing products are working,” Reese says. “Anytime we can do that, the customer benefits.”

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Reese says data analytics also de-risks product trials. “Rather than going into trials blind, if we can understand these plants better before we develop products, or as we’re developing products, we’re helping to de-risk the whole innovation process while potentially delivering improved products to our customers at a faster pace.”

Sexton says Lallemand’s technical services team also places a heavy emphasis on being available to help interpret process data for customers, plugging data into JMP, for example, before, during and after a product or process change. “I think producers appreciate that added confidence, knowing they’re not alone trying to figure out a difficult challenge,” he says.

Detectable through Data As the ethanol industry incrementally achieves greater efficiencies, and improvement over time, gains of any kind are harder to uncover and pursue. Sexton says this makes data-driven approaches to innovation not just useful, but necessary to achieving the next hard-to-get process advancements.

“More than 90%, maybe 95%, of the industry is now using a biotech yeast that has a glycerol reduction pathway allowing more ethanol to be made by the yeast at a higher yield,” he says. “Only through data are we able to make sure producers are getting the best performance out of these yeasts with the best possible yields.”

Peña agrees. “Most of the low-hanging fruit of optimization is gone,” he says. “It’s time to get on the ladder and see what we can reach, and what more we can squeeze out by leaning into plant data. And when

‘The plants that are going to separate themselves from the competition in the future are those that will successfully implement these data-driven strategies to more deeply understand their processes.’

Reese

you’re up against theoretical maximum yield, it becomes a matter of not just hitting a number but doing it consistently. Can you do it day in and day out—99% versus 90% of the time. That’s the kind of fine-tuning we’re trying to get at with data.”

And Peña says producers sharing data among multiple facilities may ultimately benefit the most. “It will require a diversity of data, and more of an industrywide perspective, not just looking at the plant as an island, but looking at ethanol production data more broadly, more wholistically,” he says. “Producers that can do that will be able to squeeze out the most juice and get up the ladder a little faster, with less risk, and a little more efficiently.”

Chronic says that even though new efficiencies may be getting harder to achieve, even small improvements revealed through tiny variabilities in process data can make a big difference to a plant producing 50 to 100 million gallons of ethanol a year. “The great thing about eliminating significant process variability is that, as you tighten your process—and this is the beauty of statistics, too—there are still ways to mine out data, even when the variability is minute,” she says. “You can still see the nuances in

Joseph Reese

differential and incremental changes. It’s not going to be the 15%, maybe not even the 1% variability that it once was, but it’s going to still be something they can leverage for powerful results.”

Reese agrees that ethanol producers have gotten very good at understanding and controlling the factors that contribute to yield—or yield loss—and it has become tougher to tease out the real effects in the data that drive yield. “So, by better engineering the data, by bringing it all together in one place, these more advanced analytics tools can help analyze for the smallest effects in the customers’ processes—effects that have been missed in the past,” he says.

“The plants that are going to separate themselves from the competition in the future are those that will successfully implement these data-driven strategies to more deeply understand their processes. Even in a very well optimized environment, there will always be more levers you can pull to improve yield and profitability.”

Author: Tom Bryan Contact: editor@bbiinternational.com

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WINNEBAGO ONLINE After months of extensive repairs, a southern Minnesota ethanol plant—nearly three decades old and idled in 2019—is once again up and running.

By Tom Bryan

ON TRACK: The former Corn Plus ethanol plant in Winnebago, Minnesota, was acquired by Greenfield Global in late 2020 and brought back online this past fall, bringing three dozen jobs back to the area.

PHOTO: TIM PORTZ

22 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2022

Producer

Standing shoulder-to-shoulder with his team and local leaders on a crisp, early November morning—a revived biorefinery humming behind them— Greenfield Global CEO Howard Field beamed with pride as he cut a red ribbon to mark the restart of Minnesota’s oldest dry mill ethanol plant.

“This ushers in a new era of North American production for Greenfield,” Field said, highlighting the Canada-based company’s first move into biofuels production in the U.S. And Field knew the moment represented more than just a new chapter for Greenfield, but a renewed sense of opportunity for Winnebago, Minnesota, which had lost a major employer when the plant, formerly known as Corn Plus, shut its doors in 2019. Field and his team had heard firsthand how losing the plant didn’t just affect the people who worked there, but the hundreds of farmer-shareholders that sold corn to the plant—and owned a stake of it— along with every area business that benefitted from its presence for 25 years.

The opportunity to restore what had been taken away from Winnebago was a unique opportunity for Greenfield, and an action that seemed unlikely to the town’s residents after Corn Plus shut down. When the plant ceased operations amid difficult market conditions in August of 2019, disappointment permeated throughout the community of 1,417. The plant was mothballed, gated and put up for sale. And with an already doubtful fate, its chances of reopening dimmed when Covid-19 set in the following spring. Corn Plus sat empty and silent throughout most of 2020. And then suddenly, out of nowhere—but, as it were, Canada—Greenfield Global arrived, buying the beleaguered asset out of receivership and promising to bring the legacy biorefinery back to life.

The Plant's Condition and Fit Greenfield’s management team knew refurbishing the plant wouldn’t be easy, says McCord Pankonen, the plant’s new general manager and a key project lead on the refurbishment. The quarter-century-old plant was in rough shape, but if a company like Greenfield—

ETHANOLPRODUCER.COM | 23

Producer

with three decades of experience in biofuels and a name synonymous with “new construction”—couldn’t revive the 48 MMgy ethanol facility, who could?

Pankonen says Greenfield examined the Winnebago plant inside and out before the acquisition. “We assessed the condition of the whole plant, of course, but it was equally important to make sure it was a good fit with Greenfield’s existing biofuels portfolio,” he says, explaining that the company has four other ethanol plants (or “ethanol distilleries,” as Greenfield calls them) in Canada. “What we found was that the plant, its location, the way it’s set up, and the resources available to us in the Winnebago area—chiefly, the supply of corn—looked great and made sense for Greenfield.”

In addition to an ample supply of corn, Pankonen explains several additional factors supported Greenfield’s decision

VESTED MANAGEMENT: General Manager McCord Pankonen (far left) holds samples of corn oil and DDGS from the newly refurbished plant. The management team in Winnebago includes Paul Peters, senior engineering manager (middle left); Heidi Milczark, plant engineer (middle right); and Leane Courts, environmental health and safety manager (far right).

PHOTOS: TIM PORTZ

to purchase the plant, including its centralized location in southern Minnesota and its rail and logistics setup.

Greenfield made the purchase for an undisclosed amount, and after several months of repairing and replacing equipment, the facility has been revived as Greenfield Global Winnebago. The plant began commissioning

in November and was ramping up to full capacity at press time in early January.

While Greenfield has already invested millions in the Winnebago plant, Pankonen says further investment may be coming.

The company is continuing to evaluate new technologies that would further enhance the plant’s performance and efficiency, particu-

larly as it relates to achieving lower carbon intensity. For now, the team in Winnebago is focused on throughput and quality while bringing the plant up to Greenfield’s core expectations. “It has taken a considerable investment to bring this facility up to our Greenfield Global standard, and we still have a way to go in terms of reaching that

top-tier status,” Pankonen says. “We’ll get there in early 2022.”

Comprehensive Improvements The Winnebago restart was relatively swift given that the upgrades didn’t begin until the spring of 2021. Pankonen says activity at the plant peaked in the summer and

early fall before the plant was prepared for recommissioning in early November. While he wasn't able to provide specifics on the various improvements made at the plant, Pankonen simply says the work was “comprehensive” and he describes the plant’s refurbishment as not a single project, but many interconnected improvements.

ETHANOLPRODUCER.COM | 25

SIGN OF LIFE: On a cold January morning in southern Minnesota, steam rises from a stack at Greenfield Global Winnebago, reminding the town's residents and passers by that the ethanol plant is once again running.

PHOTO: TIM PORTZ

“Some were smaller projects, others were obviously larger and more involved, but almost every part of the plant had some kind of upgrade or repair,” he says. “These plants don’t like to sit, and when they’re idle for long periods of time you basically have to look at everything and assume the worst.

We went through the plant with a magnifying glass to understand exactly what it needed in terms of repairs. Honestly, the upgrades span through the whole facility.”

Pankonen, a 20-year veteran of the biofuels industry, has managed ethanol plant construction projects before and says the work in Winnebago was somewhat less intense than new plant construction, but nonetheless bustling at times. “I can tell you that it was certainly a busy schedule— a very busy place for months on end— with many contractors and vendors on site working,” he says, adding that Greenfield’s relationships with its core U.S. vendors were strengthened during the process.

“The companies that helped us have been outstanding, a real testament to how great people in this business are.”

New and Existing Partners Greenfield Global is the largest ethanol producer in Canada and, in addition to owning and operating five ethanol distilleries (including the Winnebago facility), the company owns four specialty chemical manufacturing and packaging plants and R&D centers in the United States, Canada

'Ultimately, we want to be a part of the ethanol industry's future, which we believe will involve carbon reduction strategies.'

McCord Pankonen General Manager Greenfield Global

and Ireland. Under its Pharmco and Commercial Alcohols brands, the company delivers hundreds of products to life science, food, flavor, fragrance, and beverage customers in more than 50 countries worldwide.

With a longtime presence in biofuels, Greenfield’s existing relationships with industry suppliers and service providers helped streamline the Winnebago restart.

“The partnerships we have in place with product suppliers and service providers did help tremendously,” Pankonen says. “All of our vendors have been there for us, making sure we have all the inventory and ingredients needed to get the plant up and running.”

New partnerships have been formed, too. Greenfield formed an agreement with Central Farm Service, a large regional grain cooperative, to source corn for the Winnebago facility. CFS has seventeen grain locations in southern Minnesota and northern Iowa. The partnership between Greenfield and CFS also includes an offtake agreement for the plant’s DDGS.

26 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2022

“When you’re restarting a plant, your goal is to achieve reliable, daily production.

Feedstock is obviously a fundamental part of that,” Pankonen says. “Partnering with CFS has allowed us to focus on restarting this plant while they procure our grain and market our DDGS. It’s a smart arrangement that really makes sense.”

CFS’ procurement reach also reestablishes the ethanol plant’s connection with area corn farmers. As Jean Roberge, executive vice president and managing director of Greenfield’s renewable energy segment, recently said, restarting the plant and procuring grain through CFS “reestablishes a market for Minnesota corn growers.”

New and Existing Tech Despite its challenges, Corn Plus had invested in numerous upgrades over the past decade, and Greenfield is now assessing several potential new technologies for the Winnebago plant. While no decisions have been made yet, the company is currently examining possible enhancements.

“Nothing we can share right now, but we’re

Producer

vetting everything that makes sense,” Pankonen says. “Long-term, low-carbon technologies and carbon sequestration are certainly of interest to us. Ultimately, we want to be a part of the ethanol industry’s future, which we believe will involve carbon reduction strategies.”

At the ribbon-cutting in November, Roberge said, “We are confident that our best practices, paired with the technology adaptation experience of our combined staff, will produce Greenfield’s industryleading, low carbon intensity biofuels from this facility.”

In addition to carbon capture opportunities, many North American ethanol producers are lowering the carbon intensity of the fuel they produce by using less fossil-based energy for process heat and power. CHP, biogas, hydro, solar and wind power are all being deployed. Notably, the Winnebago plant already has two wind

turbines on site that are not currently supplying power to the facility, but could possibly be recommissioned. In addition to a biomass boiler, Corn Plus installed the wind turbines about 15 years ago, generating 4.2 megawatts of power, or 45% of the plant’s electricity needs. Bringing them back into service is intriquing, Pankonen says. “It’s something we’re actively looking at.”

A New Team When Corn Plus shut down in 2019, all of the plant’s employees were laid off.

Since reopening, Pankonen says, roughly 25% of the plant’s legacy employees have come back to work at the facility, and while most positions were filled quickly, some openings still remained in late December.

“It’s exciting to be building this team,” Pankonen says. “We’re looking for the best and brightest people when hiring, and that’s exactly what this area has given us. It’s a great

talent pool, but also a competitive market, especially with the pandemic and the tight labor force we’re in right now, but we’ve been able to adapt and make positive adjustments.”

Pankonen says hiring new personnel, as well as former Corn Plus personnel, has been rewarding. “It’s a unique opportunity to bring a workplace back to life in a community like Winnebago,” he says. “We pride ourselves in making our facilities safe environments for our employees, but we also want them be fun, positive workplaces.

Making ethanol can be a joy, and people who have been a part of this industry for a long time understand that. The opportunity to hire back some of those veteran people has been a pleasure, as is seeing this plant once again become a positive force in the community.”

Author: Tom Bryan Contact: editor@bbiinternational.com

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Profile

CONVEYING C Green Plains Inc. CEO Todd Becker talks with Ethanol Producer Magazine about the company’s ongoing transformation, not away from its core products, but through them.

By Tom Bryan

When Green Plains Inc. embarked on its total transformation two years ago, its main business—fuel ethanol—appeared destined to become ancillary to other streams of production as the company shifted resources to higher-margin outputs. Protein,

It seemed, would soon overshadow ethanol.

But today, as the layers of its metamorphosis are manifesting through acquisition and investment, Green Plains is still largely defined by ethanol—not despite its makeover, but because of it. “We’re changing, but our baseload business is still ethanol,” says Todd Becker, CEO of Green Plains. “We are, and will remain, an ethanol producer.”

Becker explains that the company’s transformation was somewhat misunderstood as a slow retreat from ethanol while, in reality, it was a reimagining of corn dry milling. “The changes we’re making today give us an improved position in this renaissance of firstgeneration ethanol and everything associated

with it—protein, oil, clean sugar, high-purity alcohol, sustainable aviation fuel (SAF), carbon capture and the drive toward low CI,” he says. “We look at it all, and what we’re doing with our gen-one plants—transforming them into true biorefineries—and we see all these new opportunities hinging around our baseload product, ethanol, which is becoming a true low-carbon, potentially zero-carbon fuel.”

Becker says Green Plains’ continued faith in ethanol production, in this contemporary context of biorefining, is not unrelated to the global dialogue around carbon reduction. “When you look at our opportunity, what’s happening around the world and this rapid movement away from fossil fuels, I think most agree that it probably isn’t happening fast enough,” he says, suggesting that ethanol offshoots like alcohol-to-jet fuel offer transformative openings for the ethanol industry to play a greater role in climate change mitigation. “There’s an opportunity with the fuel we produce now to move into highervalue fuels that are within reach.”

28 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2022

The springboard for Green Plains’ biorefining leap has unquestionably been the acquisition of Fluid Quip Technologies and its trademarked Maximized Stillage Co-products (MSC) technology, which enables ethanol plants to consistently produce a 50%-plus protein product that’s gaining footholds in the pet food, aqua, dairy, poultry and swine markets. Green Plains became majority-owner of Fluid Quip in early 2021, merging the companies to accelerate the installation and scale up of ultra-high protein production across Green Plains’ 11 U.S. ethanol plants.

Ultimately, MSC has become not just an engine for Green Plains’ own transformation, but a catalyst of industry wide change.

“I think we’re a disruptor,” Becker says.

“This is a disruptive technology, and when we think about where we’re going with protein, oil, carbon, specialty alcohols, SAF—and then moving into things like yeast, synthetic biology, bioplastics and biochemicals—it’s all, by necessity, going to come from dry mill facilities using a Fluid Quip-type technology to unlock new opportunities.”

CHANGE FALLING INTO PLACE: Green Plains Inc. CEO Todd Becker says that while high-protein feed production is now the centerpiece of the company's transformation, additional biobased products are being manufactured and more are to come.

PHOTO: GREEN PLAINS INC.

Becker sees Green Plains diversification strategy as a journey into biorefining—full of twists and turns—and he believes corn dry mills can be incrementally retooled to do more than they were originally designed for.

“We’re working on things virtually no one knows about, and the opportunities around what we’re doing are endless and ultimately culminate in the idea of our ethanol plants becoming bio-campuses, not dissimilar to what we’ve seen in wet milling for years.”

Beyond Protein While numerous future fuels and coproducts are in the pipeline at Green Plains, its current focus is building out ultra-high protein production capacity. The company continues to make progress deploying its protein technology within its fleet—a few plants at a time. Becker says Green Plains has repeatedly executed production runs of 58% protein or higher, and the company plans to routinely produce 60%-plus protein products soon.

Early last year, Green Plains announced that its Shenandoah, Iowa, and Wood River, Nebraska, biorefineries had successfully installed MSC, delivering initial quantities of the high-protein product to its pet food partners for use in formulation and palatability studies. Not long after, the company broke ground on MSC systems at its Central City, Nebraska, and Mount Vernon, Indiana, plants. And in late 2021, the company’s Obion, Tennessee, biorefinery broke ground on an MSC installation. All three projects are expected to be complete this year.

As Green Plains’ methodical fleetwide adoption of MSC technology continues, the company is working intensely behind the scenes to scale and support the market for its new products.

“These relationships take time to build,” Becker says. “We’ve spent the last 18 months to three years making sure our product is accepted into the consumer value chain. Our customers are going to want a product that is made with the Fluid Quip system, that is consistent, that has redundancy, that looks

the same, tastes the same, acts the same. …

We’ve done the work.”

While continuing to build sales volumes, Green Plains has signed a multi-year MOU for its high-protein feed ingredients with a pet food manufacturer through 2023. The company continues to work with customers on product design and inclusion rates, while negotiating additional multi-year distribution and supply agreements in not only pet food, but dairy, swine and aquaculture.

Meanwhile, Becker says Green Plains is strengthening its ability to tailor its high-protein products to each customer’s specifications. “We are going to put this technology in all of our plants,” he says. “And we are creating redundancies and consistency, the ability to dial up or down—anywhere we want—at any of our plants, based on our customers’ needs. We can input technology to make the nutritional outcome different.”

Ultimately, Green Plains is trying to maximize the high-protein opportunity without allowing the pursuit to be their sole focus. “Yes, we’re focused on this protein ETHANOLPRODUCER.COM | 29

A LEVEL ABOVE: As Green Plains works on its latest Maximized Stillage Co-products technology installation in Obion, Tennessee, it is already producing MSC 50% protein in Shenandoah, Iowa (above) and Wood River, Nebraska.

PHOTO: GREEN PLAINS INC.

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story, but it’s really just one of four or five different stories unfolding here,” Becker says. “We like to talk about protein because it’s a metric that’s easy to understand. But I will tell you that we’re beyond thinking only about protein. What we’re doing is beyond just chasing a number. It’s about achieving nutritional characteristics, layering in desirable outcomes, using synthetic biology and exploring new methods of influencing the yeast toward outcomes ranging from nutritional products to biobased chemicals. That’s where we’re going.”

Protein Partnerships Offering MSC technology to ethanol producers outside its network of plants might provide Green Plains with a new revenue stream while adding scale and redundancy to the relatively novel feed ingredients it’s producing.

Last summer, the company announced it was offering a turnkey solution for the installation of Fluid Quip systems to exclusive partners (i.e., other producers). The compaL said it would provide partnering ethanol ny plants G with up to 50% of the capital needed for construction, as well as marketing, product development and an assortment of additional services. The first outside producer to sign on for an MSC partnership was Tharaldson Ethanol in Casselton, North Dakota.

Green Plains and Tharaldson have formed a

50/50 joint venture to own and operate the MSC protein technology at the 175 MMgy facility, and construction is underway.

“In the end, we believe we have the winning formula for success, and we’re going to put our money where our mouth is and partner with anybody that wants to put [MSC] in their plant,” Becker says. “If you want to simply buy a Fluid Quip system, you can. But to be successful, we think you should be part of this consortium. The idea that Fluid Quip isn’t going to sell the platform to anyone else because we own it is just false. But yes, we would prefer to partner with you, so we’re all doing the same things together. The same quality control, quality assurance, opportunities to innovate, and redundancies—so other plants can ship if your plant is down.

“But again, internally, we are far beyond thinking about protein as a metric. We’ll just continue to innovate away from that with escape velocity. We believe we’re in a great position to continue to roll out our technology. We’re working with customers all over the world—collaborating with them on what they can do with it, how it works, what they need it to do, what characteristics we can maybe give them and what we can design into the project to help them. That’s step one for us: truly thinking differently about product innovation, product quality and product technology, and ultimately product application.”

The Specialist in Biofuels Plant Appraisals • Valuation for financing • Establishing an asking price • Partial interest valuation REDUNDANCY IN HAND: At full scale, Green Plains’ anticipated annual ultra-high protein production capacity will be approximately 600,000 tons, and renewable corn oil capacity is anticipated to be approximately 400 million pounds.

PHOTO: GREEN PLAINS INC.

Sustainable Oil If protein is the primary step in Green Plains’ total transformation, taking corn oil to new and different places is a close second.

In its third quarter earnings report, Becker said a major benefit of MSC technology is improved corn oil yields. Pointing to Wood River’s DCO output, Becker said the plant is exceeding expectations, “providing additional confidence that we will see the expected increase in renewable corn oil production as we deploy MSC technology across our platform. We expect renewable corn oil’s financial contribution to remain strong, supported by both higher yields and higher prices.”

With the capacity to already produce over 300 million pounds of DCO annually (and soon 400), Green Plains is in a strong position to capitalize on the current high demand for the coproduct, largely driven by the U.S. renewable diesel boom. “It’s still a very fast-growing ingredient in a fast-growing market around low-carbon fuels from vegetable oils,” Becker says. “And since our sustainable oil is a waste oil, we have an advantage. Renewable corn oil is becoming a building block of a transformational moment for biofuels.”

Like ethanol’s principal role as a fuel Becker says the use of DCO as an input for renewable diesel elevates the coproduct's

value and versatility to a new level. “This machine that we all put in a decade ago that gave us a welcome but very modest income stream is suddenly critical to renewable diesel’s rise, and an essential component of this next wave of low-carbon fuels,” he says. “All of a sudden, an ethanol plant is not just producing fuel alcohol, but a top input for renewable diesel and SAF.” Sugar, Specialty Alcohol, SAF While protein and DCO are the centerpieces of its coproduct push, Green Plains is moving forward with additional forms of diversification. The company is building a commercial Clean Sugar Technology (CST) production facility at its Green Plains York (Nebraska) Innovation Center. The technology effectively transforms a corn dry mill into a clean sugar biorefinery where dextrose (i.e., commercial sugar) replaces ethanol as the primary output. Becker says Fluid Quip is leveraging its York Innovation Center to validate and develop this and other technologies. The company believes CST will provide industrial quantities of carbohydrate feedstock for manufacturing applications in the growing biochemical, renewable chemicals and synthetic biology industries at competitive prices.

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Technology

NEW POOLS OF PROTEIN: Co-located with its Shenandoah, Iowa, biorefinery, Green Plains subsidiary Optimal Aquafeed formulates highquality fish food from its own high-protein coproduct and other ingredients. In-house feeding trials are ongoing.

PHOTO: GREEN PLAINS INC.

“We believe we have a technology— with all the necessary protections around it—that will allow some of our plants to make less ethanol while producing streams of dextrose that can be used in everything from bioplastics and lactic acids to biobased chemicals,” Becker says. “When you look at the movement away from high-carbon PETs and toward bioplastics from PLAs, that’s all being driven by dextrose, sugars we can make out of the technology we’re currently scaling from the Fluid Quip portfolio.”

Meanwhile in York, Becker says, Green Plains is engaging in high-purity alcohol production, albeit not too aggressively. About a year ago, Green Plains announced the completion of its upgrade to United States Pharmacopeia (USP) Grade alcohol at the biorefinery. The York retrofit included the installation of a new distillation production unit capable of producing up to 50 MMgy of USP. “We haven’t been super big into specialty alcohols, but it’s something we are pursuing on a ‘not critical, but nice-to-have’ basis,” Becker says. “We have one plant that

is producing very high-quality USP-grade alcohol. We believe it’s a great product—one of the best in the country—and yes, there is differentiation between products.”

On another front, Green Plains sees enormous potential in sustainable aviation fuels, specifically the possibility of making bio-based jet fuel from low-carbon ethanol.

“We believe alcohol-to jet pathways are coming that could lead rapidly to 3 billion to 5 billion gallons of ethanol being diverted to SAF, notwithstanding some of the rules that are in place,” Becker says. “I think we could be a building block for that.”

Meanwhile, carbon capture and sequestration could take the carbon intensity of all these fuels and products ultra low. “We could really create an interesting industry.”

Green Plains announced in 2021 that all of its biorefineries in Nebraska, Iowa and Minnesota (eight plants, in total) have entered into a long-term carbon offtake agreement with Summit Carbon Solutions, a subsidiary of Summit Agricultural Group.

The agreement is part of an announced CO2

32 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2022

pipeline that will develop the infrastructure to capture and transport CO2 for long-term deposit into geologic storage in North Dakota. Three dozen U.S. ethanol plants have signed on.

“Expanding our partnership with Summit Carbon Solutions is critical to the ongoing transformation of our biorefinery platform,” Becker said last spring. “Dramatically lowering the carbon intensity of our plants is important to our ultra-high protein ingredients and renewable corn oil as customers are increasingly looking to improve the carbon footprint of their own products. The pure CO2 coming from our fermentation process is ideally suited for capture and long-term sequestration and we believe this carbon reduction could earn additional income from low carbon fuel standard credits, 45Q tax credits and voluntary carbon credit markets as they develop in the future.”

In the meantime, he says, Green Plains still has ethanol economics to deal with—the volatility of Ethanol 1.0, the pandemic, politics and trade. “I often say, ‘We have to still be really good at making ethanol,’” Becker says. “And we are, but when you start to layer in all of these opportunities, the economics of ethanol become less of a concern because you are diverting more of that bushel of corn to higher-value products: proteins, oil, clean sugar, sustainable aviation fuel and

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GREEN SPACE: Green Plains intends to turn its ethanol plant locations into biocampuses that produce a multitude of low-carbon, biobased fuels, feeds and industrial products, while keeping ethanol production central to its mission and purpose.

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driving the value of our plants higher and bringing them closer to becoming the biorefineries, or biocampuses, that everyone has been talking about for a long time,” Becker says. “So, looking at the next two or three years, we believe this could be when ‘Ethanol

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more—and all of it will ultimately be made more attractive by carbon sequestration.”

Across its four strategic areas of growth—protein, DCO, clean sugar and CCS—Green Plains is making progress on ETHANOL PRODUCER_HALF PG AD its transformation. “We’re moving forward,

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Policy

REFLECTIONS FROM

THE HILL

Renewable Fuels Association President and CEO Geoff Cooper talks about the state of ethanol, the industry's current regulatory priorities, and its footing under the Biden Administration.

Interview by Tom Bryan

In an exclusive interview with Ethanol Producer Magazine in late December, Renewable Fuels Association President and CEO Geoff Cooper shared his thoughts on the ethanol industry’s difficult period in 2020, its bounce back in 2021, and the litany of current and future regulatory outcomes the trade association is working to affect in early 2022. From the EPA’s latest multi-year renewable volume obligation (RVO) proposals to establishing a regulatory solution to E15’s vexing summertime restriction, Cooper laid out the RFA’s position and approach on each front.

Here’s what he had to say.

EPM: With most of the U.S. ethanol industry now producing at or near capacity—the weekly average ethanol production volume hovering around 16.5 billion gallons, and gasoline demand returning to normal—the industry seems to be humming along nicely once again.

What’s your early-2022 “State of the Industry” assessment?

34 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2022

Cooper: I would say cautious optimism has returned to the industry.

We’ve seen a return to fairly good margins—margins we haven’t experienced in a while—and there’s always a fear that the other Cooper shoe may drop, but I think the feeling across our industry at the start of 2022 is generally upbeat and optimistic. We had a strong rebound in ethanol demand starting in mid-2021, and producers responded to that surge by ramping up output very quickly, but also in a measured, responsible way that’s preserved a healthy industry dynamic.

We’re starting 2022 with a more optimistic market outlook than we’ve had in a few years.

Because remember, even before the pandemic, 2019 was a disastrous year for a lot of ethanol producers. And, of course, 2020 was an unprecedented situation with the pandemic—a complete wreck. When it’s all said and done, I think we’ll look back at 2021 as a good year compared to what we had just come out of.

ETHANOLPRODUCER.COM | 35

Policy EPM: And despite how difficult 2020 was, the RFA has gained some new members in 2021, with both producers and industry vendors joining the association. Has this surprised you, given the unique market strains and regulatory challenges the industry has been facing?

Cooper: We’ve weathered quite a storm over the past two years—Covid has been unlike anything we have ever seen.

And, in fact, we were dealing with small refinery exemptions (SREs), trade barriers and oversupply relative to demand caused by those barriers and regulatory abuses well before Covid hit. I think the industry really understands that the RFA has played a central role in helping producers weather those storms. They know we’re helping the industry find creative ways to not just survive, but thrive, under very difficult circumstances— Covid, tariffs in Brazil, SREs—whatever the case may be. They also know we’re always looking to expand the market for ethanol and grow the value of the products our members produce. The fact that we’ve been picking up new members after having gone through a very dark period in our industry, reflects that.

I also think the industry understands that we have a vision for the future of ethanol production that’s progressive and exciting. Too many people are pessimistic about the future of ethanol and obsessed with the rise of electric vehicles and the possibility of less gasoline consumption. Yes, those are real issues—and we’ve analyzed them as much as anyone—but we continue to see a world of opportunity for ethanol. I think we have really opened a lot of hearts and minds to the fact that ethanol’s future may not always be confined to being a motor fuel for light-duty vehicles. And last July when our members pledged to achieve a net-zero carbon footprint for ethanol by 2050, it got the attention of many others in the energy sector. They want to be part of that movement and so they joined RFA. The ethanol molecule is incredibly elegant and can serve as a building block for so much more, from aviation fuels to off-road, heavy transporta-

tion applications to becoming a feedstock for producing electrons that could ultimately power EVs. There’s a lot more we can do with this molecule. And we’ve got a tremendous infrastructure in place to produce it right now. We’re trying to help the industry find those new markets and new uses for products.

EPM: In early December, EPA announced the long-awaited proposed renewable volume obligations (RVOs) for blending years 2021 and 2022 at 13.32 and 15 billion gallons, respectively, for conventional biofuel. In an unprecedented move, the agency also proposed to retroactively revise downward the already-set 2020 RVO to 12.5 billion gallons. The EPA also announced it will add 500 million gallons of remanded 2016 volume to the 2022 and 2023 RVOs (with each year getting 250 million gallons of extra volume). How did the RFA react?

Cooper: First, it’s important to remember that we are coming off of a couple of really bad years of RFS management, with EPA having basically derailed the program with small refinery exemptions, missed deadlines for issuing RVOs, pathway petitions for cellulosic ethanol that have languished at the agency for years, and other regulatory changes—some proposed as far back as 2016—that were never acted upon.

So, given that we’ve been in a state of chaos with the RFS, this package of proposals gives us a road map for moving forward, and it brings some certainty and stability back to the program. Overall, we’re excited about the proposal, not just because it restores 15 billion gallons in 2022, but because it would restore 500 million gallons of lost volume, as court ordered, from the 2016 illegal waivers that we’ve been demanding action on for the past four or five years.

We are not, however, wild about the EPA’s proposal for 2021, and we will stand against any reopening of the 2020 RVO. In fact, we don’t think the EPA even has the legal authority to do it. They have been on

PLANT UPTIME IS IMPORTANT TO EVERYONE NEW NUMBERS: In early December, the U.S. EPA released its proposed renewable volume obligation, or RVO, figures for 2021 and 2022. It is also proposing to retroactively lower 2020 RVO figures, which the RFA and other trade groups strongly oppose.

PHOTO: STOCK

the record numerous times in the past saying they don’t have the authority to retroactively reopen standards that have been finalized. We’re going to hold them to their words, and we’re hopeful that during this public comment period we will be able to convince EPA that it would be the wrong move to make. Yes, Covid affected the market, but the RVOs are based on percentages of overall use, so the mechanism is already there to account for big swings in gasoline and diesel consumption. We don’t think any further adjustments are warranted or legal, and we’re pushing back hard on it.

When they finalized the 2020 standards, all the way back in December of 2019, they did so based on an expectation of what gasoline and diesel consumption would be in 2020. That expectation did not come to pass because of Covid. Gasoline and diesel consumption were about 12% lower than projected. But the actual RFS blending requirements were also reduced proportionately by 12%. That’s one of the elegant features of the RFS; it self-adjusts when those things happen, so 2020 should absolutely be left alone.

EPM: Mirroring legislation already introduced in the U.S. House, Sens.

Klobuchar (D-MN) and Grassley (RIA) teamed up with Sens. Duckworth (D-IL) and Ernst (R-IA) to introduce bipartisan legislation—the Defend the Blend Act—that, if passed, would prohibit EPA from reducing the minimum applicable volume of biofuels in transportation fuel once the

obligations are finalized for any given year. This legislative effort is in direct response to the EPA's proposal to revise downward the 2020 RVO. What are its chances of becoming law?

Cooper: The goal is to send a message to EPA that Congress is watching what the agency is doing with the 2020 RVO. With the Defend the Blend Act in both the House and Senate, Congress is reminding EPA that it was never their intent to allow EPA to go back in time and revise standards that have already been finalized.

The proposed legislation, above all, sends a signal to EPA, and the administration that our friends on the Hill are watching and willing to legislate if they need to.

EPM: EPA also announced a proposal to deny all 65 pending SRE applications, as well as announcing the adoption of more transparency for SREs granted in the future (based on the unappealed holdings of the Tenth Circuit Court’s decision in the Renewable Fuels Association et al. v.

EPA. How big is that win for ethanol?

Cooper: The categorical rejection of the SRE petitions that has been proposed is fantastic news. That is absolutely the right thing for EPA to do, and the right signal to send. On balance, we see these proposals as positive for the industry and potential actions that build more optimism into the near-term outlook for our industry.

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Policy EPM: What happens now, as the RFA and other trade associations prepare data and analysis to support your comments to EPA on this whole package of proposals?

Cooper: The work has already begun.

It’s an intense effort, because it isn’t just one year’s RVO. We’re looking at three years, plus the separate denial on SRE proposals. The proposals also include some things that were

floated and widely supported back in 2016, but were never acted upon by the Trump administration, such as the Biointermediates Provisions. Another is related to achieving improved transparency and disclosure on SREs. We’re very much supportive of both of those pieces and commenting on both.

COMING THROUGH: After months of waiting, biofuel producers that experienced pandemicrelated losses in 2020 will finally receive financial assistance from USDA, which will soon divvy up $700 million among affected plants.

PHOTO: STOCK

EPM: Just a few days after EPA released its proposed RVOs, USDA announced its long-awaited Covid assistance for biofuel producers that were impacted by the pandemic in 2020. In addition to $100 million in funds to support biofuel infrastructure, USDA announced up to $700 million in direct payments available for biofuel producers who faced unexpected market losses due to the pandemic. Is it enough make a real difference?

Cooper: The ethanol industry lost, or didn’t recognize, about $5 billion in gross revenues due to the pandemic, from both reduced demand and reduced prices. The RFA was very active throughout 2020 advocating for biofuel producers in the various Covidrelief packages that were moving through Congress. Unfortunately, biofuel producers were left out of every one of those until the very end of the year—the very last package signed into law in the last week of 2020, which included authorization for USDA to provide Covid relieve funding to biofuel producers. It took all of 2021 for USDA to get this program through the paces at the White House, but we finally have it, and we think that relief will be very useful in helping the industry continue to recover from Covid.

It doesn’t make the industry whole by any means. $700 million is far less than $5 billion, but it’s definitely a shot in the arm and should help restore some optimism. There 38 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2022

have asked EPA to get started on—a rule to effectively lower the volatility cap for gasoline blendstock, which makes the waiver unnecessary for not only E10, but E15 as well.

Because, after all, E15 is a lower volatility fuel than E10. So that would put the two fuels on equal footing and allow them to be sold yearround throughout the summer, nationwide.

That’s the approach we’re focused on right now.

A legislative approach to resolving the RVP barrier is also possible. There have been bills reintroduced in Congress that could fix this issue once and for all. But the odds of getting that type of legislation across the finish line in the near term, without opening the door to mischief on the RFS and other priorities we care about, are low. So, we’re focused first on the regulatory approach to solving this.

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are still some questions and concerns about how these funds will roll out from USDA, but overall, we are pleased that they have finally come through with this important relief.

EPM: This industry’s near-term growth strategy, E15, was dealt a serious legal setback in July when the D.C. Circuit Court of Appeals overturned the EPA’s 2019 decision to grant a 1-pound Reid vapor pressure (RVP) waiver to E15. In late 2021, RFA and five other national farm and biofuel organizations asked EPA to enact regulations requiring lower-volatility conventional gasoline blendstock in the summertime. A group of governors came forward, too. Talk about the regulatory approach to fixing our E15 problem.

Cooper: There are essentially two ways to achieve RVP parity for E10 and E15.

One way is to give E15 the same 1-pound RVP waiver that E10 gets, which is what EPA did in 2019—an action that President Trump personally championed. Unfortunately, that is also the action that the D.C. Circuit Court overturned in July. So, for now, that door is closed.

The other way to establish RVP parity for E15 is to eliminate the necessity of the 1-pound waiver for E10. That’s what the governors are asking for guidance on, and that’s what RFA and five other trade groups

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Policy

HIGHER RULING POSSIBLE: In mid-2021, the D.C. Circuit Court of Appeals over­turned the EPA’s 2019 decision to grant a 1-pound RVP waiver to E15. Since then, the U.S. Supreme Court has signaled that it may review the lower court's decision.

PHOTO: STOCK

EPM: Higher ethanol blends are also important. E85 and mid-level blends could play a big role in our industry’s growth, but according to a new brochure from RFA, only Ford and GM are offering FFVs for sale in model year 2022—and GM’s models are available only to fleet purchasers.

In fact, the two manufacturers will offer just 11 FFV models in 2022. That’s down from more than 80 different models from eight manufacturers half a decade ago. How concerned should we be about this?

Cooper: I’ll start to answer that by saying that President Biden has said we need to achieve net zero emissions by 2050. We think ethanol itself can get to net-zero carbon by 2050 or sooner with the addition of things like carbon capture and sequestration, low-carbon farming practices, substituting natural gas with biogas and other strategies that are either already here or coming.

We can get ethanol to a zero CI, but we’ve got to have more vehicles to put that ethanol into in order to have the impact on reducing carbon emissions at a level that’s going to be necessary. E15 can help us get started, but we’ve got to go that next mile and get more FFVs out there. FFVs are hugely important to the future of the industry, and that’s why we continue to make it a priority to try to continue to restore some fairness in how automakers are encouraged,

or incentivized, under fuel economy regulations to manufacture different alternative fuel vehicles. Right now, there is no incentive for automakers to make FFVs under current fuel economy regulations. But there are tons of incentives to make EVs. And if our goal is to reduce carbon emissions, there are lots of ways to do that. Let’s allow all fuels and vehicles that can reduce emissions to compete fairly, and lets reward those fuels and vehicles strictly based on the carbon reductions they achieve, not on what vehicle has the coolest commercial or celebrity endorsement.

Sens. Klobuchar and Ernst introduced legislation that would establish an alternative vehicle tax credit earlier this year. Unfortunately, it didn’t get wrapped into any legislation that has moved forward, but we see it as a football that could be picked up and run with in 2022.

EPM: You’ve been on the record in the past saying the previous administration left the RFS in disarray when it departed Washington. The latest package of proposals from EPA marks an important step toward finally putting the RFS back on track.”

Without trying to be partisan—or overlooking what Trump’s EPA did for E15—is it starting to look like the current administration will be better, long-term, for the industry than the last?

40 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2022

Cooper: When President Biden was campaigning, he came out with some very strong positions on the renewable fuel standard and small refinery exemptions, in particular.

We liked what we heard from then-candidate Biden when he was campaigning. And when he got elected, he appointed people like Agriculture Secretary Tom Vilsack—a person we’re very familiar with and excited to see land back in that position—along with EPA Administrator Michael Regan, who said all the right things about the RFS in his confirmation process. In fact, shortly after this new administration took office, we saw EPA do a hard turn on small refinery exemptions. They really laid out a radical change in position on how they were going to be handling SREs, as early as March, but then we didn’t see anything. We were waiting for the administration to follow through on all those campaign promises during the first few months. We knew this recent round of RVO proposals would be a very important indicator of where we stand, and for the most part, we are pleased with what we’re seeing.

What this administration proposed with its RVOs in December is, by and large, consistent with the things it said a year ago. I do think they’re trying to help this industry get back into growth mode in 2022 and beyond.

And I believe they’re trying to completely shut off the spigots on small refinery exemptions.

They’re trying to get some new and innovative pathways going again—through the Biointermediates process, so overall, we are encouraged by what we have seen from this administration on the RFS. Looking at the bigger picture on biofuels, however, we would probably give more mixed reviews. There is just such a disproportionate focus on electrification and EVs, and one of the biggest challenges for us is just breaking through that noise to remind the administration—in particular Administrator Regan and Department of Energy Secretary Jennifer Granholm—that we have a fuel that is ready today, in large quantities, that can help the country meet its decarbonization goals. So our message to them is to take a fair, market-based approach to carbon reduction and allow ethanol to play a larger role.

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