2021 November Ethanol Producer Magazine by BBI International

NOVEMBER 2021

CARBON PAY DIRT Farm-Level CI Reduction Within Sight PAGE 24

PLUS

Rail Safety Guidance Amid Change PAGE 16

Exports On Rebound Trendline PAGE 30

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Contents

PHOTO: THE GREENBRIER COMPANIES

PHOTO: CARBON HARMONY/RICH MURPHY

PHOTO: USGC

NOVEMBER 2021 VOLUME 27 ISSUE 11

DEPARTMENTS 6

EDITOR'S NOTE Ag Carbon Accounting—Coupled with CCS—Changes the Game

FEATURES 16 RAIL

Remaining on Track

AD INDEX/EVENTS CALENDAR

GRASSROOTS VOICE What the HEFF?

By Holly Jessen

DRIVE Biofuels Key to Lifting Up Sustainable Aviation By Emily Skor

GLOBAL SCENE Canada's Big Election Winner: The Climate By Andrea Kent

BUSINESS BRIEFS

MARKETPLACE

CARBON

Carbon Counting On the Farm

By Mallorie F. Wilken

How ag-based GHG accounting can bring corn ethanol's CI down

By Ron Lamberty

Separation for Oil, Fractionation for Protein, So What about the Fiber?

Rail safety best practices, maintenance and change

By Tom Bryan

CONTRIBUTIONS 36 COPRODUCTS

By Susanne Retka Schill

LAB

The Basics of Ethanol Plant Laboratory Quality Management By Tom Bryan, with Phibro Ethanol

WORLD

Export Expectations

Non-domestic U.S. ethanol and DDGS sales near normal levels

NOVEMBER 2021

By Matt Thompson

CARBON PAY DIRT Farm-Level CI Reduction Within Sight PAGE 24

PLUS

Rail Safety Guidance Amid Change PAGE 16

Exports On Rebound Trendline PAGE 30

www.ethanolproducer.com

ON THE COVER Ethanol Producer Magazine: (USPS No. 023-974) November 2021, Vol. 27, Issue 11. 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.

Ron Alverson, farmer and Dakota Ethanol LLC board member, examines soil in a ridge-tilled corn field in South Dakota. He believes the corn produced on his family farm each year sequesters roughly 1.5 tons of carbon per acre. PHOTO: CARBON HARMONY/RICH MURPHY

ETHANOLPRODUCER.COM | 5

Editor's Note

Ag Carbon Accounting—Coupled with CCS—Changes the Game If you’re a regular reader of Ethanol Producer Magazine, you know we’ve been covering carbon capture and storage (CCS) extensively for months, from the 30-plus facilities signed on to participate in the Summit Carbon Solutions pipeline to Valero’s agreement with Navigator CO2 Ventures and the dozens of independent ethanol plants moving forward with CCS around the country—from Richardton, North Dakota, to Keyes, California. We share the industry’s enthusiasm for CCS, and we plan to continue covering it heavily in 2022 with bimonthly articles that dissect and explain how ethanol plant CO2 will be captured, compressed, transported, injected and monitored. Our reporters will look at how different geologies are assessed for carbon storage suitability, how the logistics and economics of CO2 aggregation work, how ownership and liability issues are being hammered out in advance of sequestration, and how injection sites will be managed long term. If you’re interested in being a part of our 2022 Ethanol Industry Carbon Capture and Storage series, contact me at editor@bbiinternational.com. No doubt, the potential of CCS to dramatically reduce the carbon intensity (CI) of grain ethanol production— cutting today’s CI scores in half—should alone make the Biden administration reconsider its entranced march toward electric vehicles. And, of course, CCS is only part of our story. As U.S. ethanol producers continue to achieve greater efficiencies and higher output with less energy and water, corn farming is at the threshold of finally getting the credit it deserves for sequestering CO2 within soil. The quest for net-zero carbon that Poet and other U.S. ethanol producers have committed to—mirroring President Biden’s call for net-zero emissions by 2050—suddenly appears possible with technology-driven efficiencies, CCS and agricultural GHG accounting being mathematically amalgamated to produce carbon-neutral or even carbon-negative biofuels. In “Carbon Counting on the Farm,” of page 24, we catch up with industry farmers and advocates on the leading edge of this agricultural GHG accounting movement. They are creating tools—and proof—to justify credit for the soil carbon sequestration that results from climate-smart farming practices like no-till, ridge tilling, cover crops and advanced nutrient management. The end goal—and to some extent, it’s already begun—is that low-carbon biofuel markets, starting with California, will give ethanol plants using low- and negative-carbon corn a reduced CI score, making farm-level carbon accounting pay. The industry has known for years that it would need to transition from the old DOT-111 rail cars to the much safer DOT-117s. While the deadline for completing that transition, just months away, is firm—there will reportedly be no flexibility for non-compliance—the ethanol industry is ready for the switch. In “Remaining on Track,” on page 16, we report that over 75% of the ethanol industry’s tank cars are now 117s, and the rest should be transitioned over by next summer. Ultimately, the tank car transition that had everyone worried a few years ago turned out to be kind of a non-issue, while rail safety and track maintenance will always require vigilance. Finally, check out “Export Expectations,” on page 30, which presents a hopeful outlook on the reemergence of our critical foreign markets for ethanol and distillers grains. Even as stubborn Covid variants and unresolved trade issues with China linger, exports of both products are trending toward pre-pandemic levels—and good news like that is always worth sharing.

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6 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

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Upcoming Events 2022 Int'l Biomass Conference & Expo

Advertiser Index 2022 Int'l Fuel Ethanol Workshop & Expo

2022 National Ethanol Conference

BASF Enzymes LLC

D3MAX LLC

22-23

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Fluid Quip Technologies, LLC

Growth Energy

ICM, Inc.

IFF, Inc.

PUBLISHING & SALES

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CEO Joe Bryan | jbryan@bbiinternational.com

Lallemand Biofuels & Distilled Spirits

2022 Carbon Capture & Storage Summit

Phibro Ethanol

Salco Products, Inc.

Minneapolis Convention Center, Minneapolis, MN (866) 746-8385 | FuelEthanolWorkshop.com

Texas International Terminals

Thermal Kinetics

Trinity Rail Group

Victory Energy Operations, LLC.

March 14-16, 2022

The Prime F. Osborn III Convention Center, Jacksonville, FL (866) 746-8385 | BiomassConference.com Entering its 15th year, the International Biomass Conference & Expo is expected to bring together more than 900 attendees, 125 exhibitors and 100 speakers from more than 40 countries. It is the largest gathering of biomass professionals and academics in the world. The conference provides relevant content and unparalleled networking opportunities in a dynamic business-to-business environment. In addition to abundant networking opportunities, the largest biomass conference in the world is renowned for its outstanding programming— powered by Biomass Magazine—that maintains a strong focus on commercial-scale biomass production, new technology, and nearterm research and development. Join us at the International Biomass Conference & Expo as we enter this new and exciting era in biomass energy.

June 13, 2022

Capturing and storing carbon dioxide in underground wells has the potential to become the most consequential technological deployment in the history of the broader biofuels industry. Deploying effective carbon capture and storage at biofuels plants will cement ethanol and biodiesel as the lowest carbon liquid fuels commercially available in the marketplace. The Carbon Capture & Storage Summit will offer attendees a comprehensive look at the economics of carbon capture and storage, the infrastructure required to make it possible and the financial and marketplace impacts to participating producers.

EDITORIAL President & Editor Tom Bryan | tbryan@bbiinternational.com Online News Editor Erin Voegele | evoegele@bbiinternational.com

DESIGN Vice President of Production & Design Jaci Satterlund | jsatterlund@bbiinternational.com Graphic Designer Raquel Boushee | rboushee@bbiinternational.com

Vice President of Operations/Marketing & Sales John Nelson | jnelson@bbiinternational.com Senior Account Manager/Bioenergy Team Leader Chip Shereck | cshereck@bbiinternational.com Business Development Director Andrea Anderson | aanderson@bbiinternational.com Sr. Account Manager Marty Steen | msteen@bbiinternational.com Account Manager Bob Brown | bbrown@bbiinternational.com Circulation Manager Jessica Tiller | jtiller@bbiinternational.com Marketing & Advertising Manager Marla DeFoe | mdefoe@bbiinternational.com Marketing & Social Media Coordinator Dayna Bastian | dbastian@bbiinternational.com

2022 Int'l Fuel Ethanol Workshop & Expo

June 13-15, 2022

EDITORIAL BOARD

Minneapolis Convention Center, Minneapolis, MN (866) 746-8385 | FuelEthanolWorkshop.com

Ringneck Energy Walter Wendland Little Sioux Corn Processors Steve Roe Commonwealth Agri-Energy Mick Henderson Aemetis Advanced Fuels Eric McAfee Western Plains Energy Derek Peine Front Range Energy Dan Sanders Jr.

From its inception, the mission of this event has remained constant: The FEW delivers timely presentations with a strong focus on commercialscale ethanol production—from quality control and yield maximization to regulatory compliance and fiscal management. The FEW is the ethanol industry’s premier forum for unveiling new technologies and research findings. The program is primarily focused on optimizing grain ethanol operations while also covering cellulosic and advanced ethanol technologies.

2022 Biodiesel & Renewable Diesel Summit

June 13-15, 2022

Minneapolis Convention Center, Minneapolis, MN (866) 746-8385 | BiodieselSummit.com The Biodiesel & Renewable Diesel Summit is a forum designed for biodiesel and renewable diesel producers to learn about cutting-edge process technologies, new techniques and equipment to optimize existing production, and efficiencies to save money while increasing throughput and fuel quality. Produced by Biodiesel Magazine, this world-class event features premium content from technology providers, equipment vendors, consultants, engineers and producers to advance discussion and foster an environment of collaboration and networking through engaging presentations, fruitful discussion and compelling exhibitions with one purpose, to further the biomass-based diesel sector beyond its current limitations.

Customer Service Please call 1-866-746-8385 or email us at service@bbiinternational.com. Subscriptions Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and handling charge for anyone outside the United States. To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or service@bbiinternational.com. Advertising Ethanol Producer Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to lgibson@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

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Please check our website for upcoming webinars www.ethanolproducer.com/pages/webinar

ETHANOLPRODUCER.COM | 7

Grassroots Voice

What the HEFF?

Ron Lamberty

Senior Vice President American Coalition for Ethanol 605.334.3381

rlamberty@ethanol.org

A couple years ago, the coolest thing you could be was a “disruptor.” Eventually the term was completely watered down as every minor change or update was called a “disruption.” And then a global pandemic showed everyone what real disruption looked like. The term is now old and uncool enough for me to use, so as one who has been a disruptor since childhood (with report cards and notes from teachers to prove it) I’m happy to lead ACE's effort to disrupt—or at least interrupt—the current conventional wisdom about net-zero vehicles. Conventional wisdom (generally more conventional than wise) understands “net zero vehicles” to mean plug-in electric vehicles. ACE is disrupting that narrative with a real-world demonstration that low- to net zero-carbon vehicles already exist—or could, with minor changes—and those very lowcarbon vehicles are ethanol-powered. EPA assigns carbon intensity (CI) scores to vehicles based on grams of CO2 per mile emitted while operating the vehicle. An all-electric car has zero emissions from vehicle operations, but the electricity used to power those vehicles is not zero emissions, and in many parts of the U.S., according to a recent study, plug-in electric vehicles almost always have higher lifecycle greenhouse gas emissions than flexible fuel vehicles (FFVs) operated on E85. Apparently, plain old E85-powered FFVs having lower emissions than Teslas and other electric cars isn’t disruptive enough to garner attention. Fortunately, the GHG study mentioned above also showed a plug-in electric hybrid vehicle running on E85 would also have lower lifecycle emissions than full electrics. More interesting was the fact the largest part of the plug-in hybrid’s emissions came from ... being plugged in. So, why not E85 in a standard hybrid vehicle? There are four times as many standard hybrids already on the road than any other electric vehicles, and four times as many FFVs as hybrids. Why hasn’t anyone combined those top two categories of U.S. alternative fueled vehicles? CI scores exist for hybrids, plug-in electrics, plug-in hybrids, and standard vehicles, yet a combination not represented, and apparently not attempted in the U.S., is the one that seems to make the most sense: a hybrid electric FFV. Charging an electric motor battery during normal ICE operation is a sensible way to maximize the available energy in a liquid fuel, and from a carbon reduction standpoint, the fuel for when it’s not running on electricity should be the cleanest liquid fuel available: E85. Yet, no major automakers have ever offered a flex-fuel hybrid vehicle. So, ACE made our own. Pearson Fuels in San Diego introduced us to eFlexFuel Technologies, which installed a flex fuel converter on my 2019 Ford Fusion Hybrid, making it a Hybrid Electric Flex Fuel vehicle, which I named “HEFF.” We will be tracking HEFF’s mileage, maintenance, and estimated CI scores for the next three years. To date, E85 fuel cost is about a penny a mile less than gasoline and we’ve estimated current CI at 60 to 85 grams per mile. The lowest Tesla 3 CI score—in the summer, in California—is 70. The U.S. average is 140. With help from CI Guru Ron Alverson, various studies, CARB CI pathway scores, and fueleconomy. gov, we’ve modeled this hybrid electric FFV with a total GHG score as low as 24 to 28 grams per mile running on E85 made with low CI ethanol blended with renewable naptha. That's lower than a Tesla Model 3. Plus, when EPA or CARB properly assess carbon intensity with current climate-smart farming practices, ethanol plant efficiencies, and give credit for soil carbon capture and sequestration, we’ll reach net zero far before Elon Musk. Stay tuned.

8 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

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Drive

Biofuels Key to Lifting Up Sustainable Aviation

Emily Skor

CEO, Growth Energy 202.545.4000

eskor@growthenergy.org

As the White House and leaders in Congress take aim at the climate footprint of the aviation sector through sustainable aviation fuel (SAF), Growth Energy is working hard to ensure that farmbased biofuels are positioned to lead this charge on aviation fuel decarbonization. Farm-based feedstocks—including ethanol and corn oil—are the only source of renewable energy available in large enough volumes to meet the demand for SAF. However, SAF production is not currently available at commercially viable levels, but could be with good policy and the right innovation. The game-changing solutions the White House seeks cannot happen unless we have a healthy and thriving corn ethanol industry to make the long-term investments needed to turn SAF production into reality. SAF is no substitute for the motor fuel market, but biofuels must have a seat at the table or the nation risks missing a huge opportunity for the future growth of SAF. Indeed, with the appropriate investments and policy environment, our industry will continue to play an important role in decarbonizing the entire transportation sector, from passenger vehicles to the aircraft fleet. In addition to a strong Renewable Fuel Standard, new SAF tax incentives must be guided by technology-neutral life-cycle assessments (LCA) on the carbon intensity of biofuels examined by scientists who understand the U.S. biofuel sector and the U.S. agriculture sector. Over the last few months, Growth Energy and other biofuel champions have pushed Congress and the administration to ensure that burgeoning SAF policies accurately reflect LCA models that incorporate the most up-to-date science and research. In a letter to Congress this summer, we wrote, “As climate-smart agriculture practices continue to improve and expand, and as new fuel production technologies for SAF are developed and scaled to market, a regularly-updated LCA is essential to the success of a SAF tax credit and its ability to incentivize new fuels and reduce emissions.” For the U.S. market, that science has been led by researchers at the Department of Energy (DoE), with real-world expertise examining both the domestic agricultural supply chain and the latest hard data from the U.S. Department of Agriculture (USDA). DoE’s Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model is the gold standard for LCA, harnessing the latest data on everything from indirect land use change to fertilizer inputs. GREET should be the basis for determining any U.S. incentive payments based on the greenhouse gas (GHG) reductions in aviation fuel. Of course, these clearly positive scientific and technological developments haven’t stopped our critics from pushing misinformation about biofuels and undercutting U.S. climate goals. In response, we’re working hard to ensure that the facts remain front and center for regulators and policymakers alike. Thanks to continuous innovation by American farmers and biofuel producers, we’re lowering the carbon intensity of ethanol year after year, and USDA data show that we are producing more corn while using less acreage. In fact, ethanol reduces lifecycle emissions from motor fuel by an average of 46 percent, as demonstrated most recently in groundbreaking research led by David MacIntosh, chief science officer of Environmental Health & Engineering Inc. and adjunct associate professor of environmental health at Harvard.  Growth Energy represents the full diversity of the industry, and with that, the most innovative and climate-forward biofuel producers. Today, the U.S. biofuel sector is ready to put that expertise to work expanding SAF production, reducing carbon emissions, meeting climate goals, and creating jobs for U.S. workers along the way.

10 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

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Global Scene

Canada's Big Election Winner: The Climate

Andrea Kent

Board Member, Renewable Industries Canada Vice President of Government and Public Relations, Greenfield Global 833.476.3835 andrea.kent@greenfield.com

In late September, Canadians went to the polls in what many regarded as a snap election called five weeks earlier by Prime Minister Justin Trudeau. The choice before voters: re-elect Trudeau's Liberals, possibly with a stronger mandate, or elect another party to power. What voters chose was to return the government mostly unchanged. Media, pundits, and political analysts were quick to dub it an election of "losers." Trudeau called an election to win a majority and made only marginal gains. Conservatives had a new leader and favorable conditions but fared no better than they did two years earlier. Two national party leaders failed to get elected at all. But what this short election lacked in personal and political victories, it made up for in substance. And the biggest winner wasn't a name on the ballot but rather an issue; climate.

All Had Climate Plans

With a growing number of Canadian voters identifying climate as a top concern, every major party released a robust climate plan in its election platform. Of course, every party having a plan does not mean clear differences do not still exist; they absolutely do. But instead of the voter’s choice being whether a party has a plan or not, the choices are now specific. For example, climate policy analyst Mark Jaccard, a professor at Simon Fraser University, produced a comprehensive economic and emissions modeling cited widely by media and politicians alike. There were also others by climate advocates and scientists, all equipping voters with a new level of nuance and detail. The Liberal and Conservative climate plans received the most favorable reviews from Dr. Jaccard and both included flexible biofuels regulation as a central policy tool for decarbonizing transportation.

Beyond Paris

Some parties proposed higher targets than others, but there was no question about introducing more climate policy to reach emissions reductions targets under the Paris Climate Agreement and net-zero. Notably, both the Liberals and the Conservatives promised to implement the national Clean Fuel Regulations (CFR)—Canada's national low carbon fuel standard for liquid fuels currently in development. It shows how critical a well-designed, low-carbon fuel policy is to reducing emissions in a cost-effective (and politically viable) way.

Pricing Carbon Emissions

For the first time, all major parties supported putting a price on carbon emissions. The Liberals introduced the country's first national carbon tax on greenhouse gas-emitting fuels just before the 2019 federal election but faced pressures on how high to raise it. While an anti-carbon tax campaign worked for some provincial leaders, it fell flat for the Conservatives in 2019. So, this time, federal Conservatives changed their tune. Their proposed carbon levy may have been lower than the current national carbon price. Still, the shift in their policy spoke volumes in reaching climate commitments and appealing more broadly to Canadian voters.

What’s Next?

Overall, Justin Trudeau's re-elected Liberal minority is a status-quo scenario for Canada. Key policies that are currently in development will likely continue to fruition. New political leadership for some parties is possible by the next federal election, expected in roughly 18 months. However, what is clear is that biofuels will continue to be an essential part of climate policy portfolios, from increased blending in gasoline (projected to be E15 by 2030 as a pathway under the proposed CFR) to green hydrogen, green methanol, and sustainable aviation fuel. As one columnist wrote, "Now, every election is a climate election and every vote, a climate vote." Canada's summer election was fast but substantive on climate. The elevated discussion and detailed debate finally turned the political page, changing the climate from a "what" issue to a "how" issue for voters. Fortunately for political parties of all stripes, renewable fuels producers continue to innovate and produce sustainable biofuel needed to take us towards a better climate and future.

12 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

presents 2021 Faces of Ethanol

REBECCA LEHNDORF Lab Manager Fox River Valley Ethanol OSHKOSH, WISCONSIN

Rebecca Lehndorf is Lab Manager at Fox River Valley Ethanol LLC in Oshkosh, Wisconsin. She joined the company five years ago with a broad scientific, chemistry and quality management background.

On Finding Ethanol Lehndorf honed her chemistry and instrumentation skills in the Southwest but found her calling in ethanol a few years after moving home to Wisconsin. “Living here is great,” she says. “I’m in the country, so I can have my horses, yet I’m only 20 minutes from work and a short drive to everything in town. It’s perfect.” A devoted owner of three horses—"they’re like my kids,” she says—Lehndorf has been a casual equestrian all her life. “My mom rode, too, so I like to joke that I was born on horseback,” she says. Relatively early in her career, Lehndorf worked at Los Alamos National Lab in New Mexico, which broadened her science background and inspired her to pursue degrees in chemistry and chemical technology. Moving to Texas, she worked in a clinical lab, gaining valuable experience with instrumentation. A self-described “lab rat,” Lehndorf learned the crafts of chemistry scale up and statistical tool analysis. Later, she worked in genetic testing and, upon returning to Wisconsin, quality auditing. “Those combined experiences—quality, chemistry, science, instrumentation—prepared me for the opportunity to run the lab here at Fox River Valley,” she says. “I’ve been doing this for five years now, and I love it.”

Her Morning Routine A lab manager’s a.m. routine can be “a blur,” but Lehndorf thoroughly enjoys the pace and impact of her role, as well as the reach it gives her within the facility. Her morning regimen begins with a look at what happened overnight. • She examines samples provided by the plant’s night operators. • Paperwork is reviewed and lab instruments are checked. • She walks the plant and checks chemistry inventories. • Lab technicians run instrument calibrations while Lehndorf evaluates new data. “I enjoy creating charts and graphs—my world is very colorful,” she says, explaining how she tries to bring actionable data to her daily 8:30 a.m. manager’s meeting. “I bring any data that stands out, any data that has changed or has an outstanding feature.” With her morning checklist complete, Lehndorf is ready for the day.

On Women in Science Lehndorf doesn’t think about it often, but recognizes the significance of being a woman in ethanol. While at Los Alamos National Lab, she was awarded a “Women in Science” scholarship, which helped propel her career. She hopes more women are given similar opportunities and encouraged to pursue science-oriented degrees and professions. “Women have always worked in quality, but we still have progress to make in science,” she says. “We need to encourage more women to go into occupations that are math and science heavy.” On Industry Partners Lehndorf works with outside vendors often and relies on suppliers like BASF for support, troubleshooting and training. “I’ve been fortunate to work with a number of people at BASF, including Amanda Huber,” Lehndorf says. “Amanda was a lab manager herself, so she understands the crunch we’re sometimes in. The BASF team is great. I collaborated with Amanda on a presentation for a lab managers’ conference a few years ago, and BASF even flew me out to San Diego for an enzyme training seminar. They’re a good partner.”

BUSINESS BRIEFS PEOPLE, PARTNERSHIPS & PROJECTS

USDA funds ACE-led project to help farmers access LCFS markets The USDA recently awarded $7.5 million to a Regional Conservation Partnership Program led by the American Coalition for Ethanol. The program will help secure farmers premier access to low carbon fuel standard (LCFS) markets through the adoption of USDA climate-smart agricultural practices. The ACE-led project will create a strong market-driver for progressive agricultural practices like no-till, cover crops, and nutrient management for farmers in the grain shed supplying corn to Dakota Ethanol LLC in Wentworth, South Dakota. Other partners

include South Dakota Corn Growers, South Dakota State University, Cultivating Conservation, and collaborator Sandia National Laboratories. The project will quantify the resulting soil health and GHG benefits, correlate them with existing models, and develop a non-proprietary verification system. This data will then be used to secure farmer access to clean fuel or LCFS markets—for the first time—based on the GHG benefits of USDA climate-smart practices.

Poet pledges carbon neutrality by 2050 Poet, the world’s largest ethanol producer has announced its intention to achieve net-zero carbon status at its bioprocessing facilities by 2050. The commitments were made as part of Poet’s inaugural sustainability report, which outlines the company’s focus on environmental, social and governance (ESG) initiatives. Poet established several ESG goals, including reducing greenhouse gas emissions by at least 70 percent, compared to gasoline, by 2030. “Sustainability has always been at Poet’s core. We recognize that our planet urgently needs bolder solutions and better results

if we hope to restore harmony between human and nature and sustain Earth’s fragile balance for future generations,” said Poet Founder and CEO Jeff Broin. “Now more than ever, it is critical that we embrace the bioeconomy, significantly reduce our dependence on fossil fuels, and harvest our energy from the surface of the Earth.” The report’s initiatives include investing in new technology, advancing operational efficiencies and promoting a sustainable society through both Poet’s business ventures and its philanthropic endeavors.

USDA awards $25M loan to Red Trail Energy for CCS project The USDA has awarded a $25 million loan under the Rural Energy for America Program to Red Trail Energy LLC to support the construction of a carbon capture processing and storage facility at the company’s ethanol plant near Richardton, North Dakota. The 65 MMgy ethanol plant has been pursuing the development of a carbon capture and storage (CCS) project for several years. The company previously submitted a North Dakota carbon dioxide storage facility permit application to the North Dakota Department of Mineral Resourc-

14 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

es. If approved, the permit will allow Red Trail Energy to permanently store carbon dioxide captured at the ethanol plant in deep underground rock layers. According to the USDA, the CCS project is expected to reduce the carbon intensity (CI) score of ethanol produced at the Red Trail Energy plant 40 to 50 percent and enable the company to sell its fuel into low-carbon fuel standard markets.

EIA: US nameplate ethanol capacity expands by 168 MMgy U.S. fuel ethanol nameplate production capacity increased between 2020 and 2021 despite a slight decrease in the number of operating ethanol plants, according to data released by the U.S. Energy Information Administration in September. According to the EIA, U.S. is home to 197 ethanol plants, down from 201 facilities in 2020. Nameplate production capacity expanded to 17.546 billion gallons per year, up 168 MMgy compared to the 17.379 billion gallons of capacity reported for 2020. Ethanol Producer Magazine’s own plant

data collection effort in September concluded that there is currently 17.467 billion gallons of U.S. ethanol production capacity. Most U.S. ethanol plants are located in PADD 2, which is located in the Midwest. According to the EIA, the number of ethanol plants in PADD 2 fell to 178 in 2021, down from 180 the previous year. Capacity in PADD 2, however, increased to 16.271 billion gallons, up 289 MMgy compared to 15.982 billion gallons in 2020.

Hayburn joins USGC as global ethanol program coordinator Zac Hayburn has joined the U.S. Grains Council as global ethanol program coordinator at the organization’s Washington, D.C., headquarters. Hayburn will support the global ethanol team; organize staff and member travel; facilitate program planning, correspondence, reports, data and information management; assist in contracting; and make arrangements for visiting teams. “I am excited to have Zac join our team,” said Brian Healy, USGC’s director of global ethanol market development. “His experience and positive energy will make him a great asset to our

global ethanol market development program.” Hayburn joins the Council from AmeriCorps, where he coordinated food supply shipments and created curriculum for in-class learning. He also served as a legislative intern following his time at Miami University in Ohio, where he obtained a bachelor’s degree in international studies. Hayburn moves into this role following the promotion of Joana Hassan to manager of global ethanol programs in June.

Verbio reports record revenue, provides update on former DuPont plant Germany-based Verbio recently provided an update on its ongoing conversion of DuPont’s former corn stover ethanol refinery in Nevada, Iowa. While reporting record sales revenue for the 2021-’22 financial year—attributing its success to favorable EU policy, strong performance within its biodiesel and ethanol segments, and robust demand for advanced biomethane—company officials said steady progress is being made in Iowa. Verbio reached an agreement to buy the former cellulosic ethanol plant from DuPont in late 2018. At the time of acquisi-

tion, the company said it intended to install facilities to produce renewable natural gas (RNG) made from corn stover and other cellulosic crop residues. In its latest announcement, Verbio said it is expanding biomethane capacity in the U.S. from 20 MW to 80 MW, and that biomethane production feedstocks will include both crop residue and residual waste from ethanol production. The Nevada facility is scheduled to be complete by the end of 2022.

ETHANOLPRODUCER.COM | 15

Rail

REMAINING ON

TRACK Rail safety and compliance are issues ethanol producers can’t aﬀord to ignore. Whether on private property or moving down the track, even small errors can be costly. By Holly Jessen

16 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

The phrase train wreck can be used to describe an accident involving a train, of course, but also anything from a relationship gone bad to a political crisis. In fact, the second definition of train wreck is something that is “an utter disaster or mess: a disastrous calamity or source of trouble,” according to the Merriam-Webster dictionary. “It’s used a lot and that’s because there are few things that are more catastrophic,” says Chuck Leonard, principal and founder of Rail Safe Training Inc., which offers track inspections as well as onsite and online training for the ethanol and other industries. Rail transportation is a significant part of day-to-day operations for most of the ethanol industry, says Kelly Davis, vice president of technical and regulatory affairs for the Renewable Fuels Association, which also offers rail-related training. Specifically for ethanol plants located on a rail line, an average of three dozen

117S ON TRACK: The Greenbrier Companies, headquartered in Lake Oswego, Oregon, is one of the companies building DOT-117 tank cars to replace the DOT-111 tank cars. PHOTO: THE GREENBRIER COMPANIES

railcars get moved daily, including receiving materials as well as shipping out ethanol and distillers grains. In all, about 70 percent of ethanol is transported to the marketplace via rail. “We are the largest hazmat moving on the rail,” Davis says. “We are, by far, shipping more hazardous material as ethanol than any other flammable, including crude oil.”

Regulatory Compliance, Training

Since December 2010, the RFA has held 355 ethanol safety training events with more than 14,000 participants, says Missy Ruff, director of safety and technical programs for RFA. Due to Covid, the organization has now held 31 of those training sessions online. The shift actually allowed more people to take advantage of the training. “Instead of being in one location, training one town and maybe some people from the outskirts coming in, we’re getting people from other countries attending,” she says, adding that, to-date, RFA has trained people from a total of 29 countries. In addition to training, the RFA has a 33-page manual called

Best Practices for Rail Transport of Ethanol. It can be found at RFA’s website under Resources/Producers/Safety Information. The manual has never been restricted to RFA members only, Kelly said. One of the things the manual outlines is the importance of regulatory compliance. Shippers, such as those in the ethanol industry, risk fines and penalties if they are non-complaint. The manual lists some of the most common regulatory violations, the highest fine for which is $10,000 for leaking product. The lowest fine on the list is $1,000 for a placard that isn’t visible, located or displayed properly or in a deteriorated condition. Another thing for producers to pay extremely close attention to is the shipper checklist, Kelly says, which must be used for every carload. “The Federal Railroad Administration (FRA) is definitely visiting our plant sites routinely to assure that our shippers are following these very strict regulations,” she says. Leonard of Rail Safe Training, a past locomotive engineer, puts it another way. He believes private industries with onsite railroad tracks have a compliance problem. In visits to places that load ETHANOLPRODUCER.COM | 17

Rail

DON’T DERAIL: These tank cars tipped off the track. When traveling at a speed of only 10 miles per hour a tank car has the same momentum as an automobile traveling, in theory, 650 miles per hour. PHOTO: RAIL SAFE TRAINING INC.

Leonard listed off some key things to keep in mind when dealing with manway covers. First off, the bolts used to keep it shut must be tightened in a specific pattern, not just around in a circle. Secondly, sparkproof wrenches must be used. Finally, it’s important to pay attention to the required amount of torque, which depends on the various gasket materials. “Quite often we find a guy up there with an air wench that’s just putting them on as tight as he possibly can,” he says.

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equipment. “I’d say it’s probably 20 times as dangerous to go in a private facility as it is to stay within the railroad,” he says, adding that’s his estimation based on anecdotal evidence. He pointed to the tank car manway as one example of an area where more training is needed. There’s a gasket under the hatch cover which keeps liquid from escaping. “There’s been a pretty high incidence of those found to be leaking by the FRA,” he says.

flammable liquids, including but not limited to the ethanol industry, the company has observed plenty of issues. “Virtually none of them have 100 percent compliance with FRA mandated procedures,” he says. He believes there’s a strong need for more railroad safety training among private industries, including ethanol. Looking at just accidents suffered by Class I railroads, the seven railroads with operating revenues of $490 million or more according to FRA, Leonard says data shows one in six of those accidents happen on private industry land. “Which is actually a staggering number when you consider that they probably spend less than 1 percent of their time servicing industries,” he says. “… It’s exponentially larger than it should be.” The one in six number doesn’t include incidents suffered by smaller Class II and Class III railroads, which, he reasons, spend more time on private industry land and therefore likely have even more accidents there. Then there’s the rail-related accidents that happen to private industry employees or involve private industry ETHANOL PRODUCER_HALF PG AD

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DAMAGED TRACKS: Regular track maintenance is important and can help prevent derailments. This image shows tracks without a tie plate and a low joint, which has caused hydraulic pumping. PHOTO: RAIL SAFE TRAINING INC.

Another issue Leonard sees frequently on private industry land is cars that aren’t properly secured with a handbrake. An approximately 130-ton tank car may not seem like it’s going to roll anywhere when parked, but a thunderstorm can prove that assumption wrong. “A 60 mile an hour wind can move a rail car,” he said, adding that the resulting accident has the potential to cause a lot of damage.

Maintenance in Mind

Track maintenance is another thing Leonard sees as an area of concern. Ethanol plants that had brand new tracks installed when the facility was built now face the challenge of aging infrastructure, including rail lines. Repairing a railroad track can be relatively inexpensive, he says. Sometimes all that’s needed is a load of crushed rock and the labor to put it into place. Unfor-

tunately, he’s seen examples of this type of maintenance being ignored. The tracks may pass inspection, he says, but more proactive maintenance can increase longevity and help avoid accidents. “There are very few things that are more costly to neglect than a railroad track,” he says. “So many places wait until they have cars on their side and that can run into the tens if not hundreds of thousands of dollars.”

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Rail Kelly pointed to maintenance issues related to tank cars. In the ethanol industry, the producer typically leases tank cars rather than owning them outright. That means the tank car owner is the one responsible for maintenance and repair. “That quality management aspect has been one of the latest FRA activities out there,” she says. “They want the owners to understand their responsibility.” Another layer is that not just anybody is allowed to make repairs to tank cars. “That’s probably one of the growing things in the industry,” she says. “Our guys in the field, even though they might be able to fix the car, they aren’t allowed to because you have to send it to a certified shop.”

Out With 111, In With 117

Ethanol producers are also facing a May 1, 2022, deadline to update the remaining legacy DOT-111 tank cars to DOT-117 tank cars, as required by the 2015 Fixing America’s Surface Transportation (FAST) Act. CPC-1232 tank cars, a voluntary standard adopted by the industry prior to the FAST Act, have different deadlines. Non-jacketed CPC-1232 tank cars must be updated to the 117s by July 1, 2022, while jacketed CPC-1232 tank cars have until May 1, 2025. “For the most part, they’re thicker cars or they have safety features that the DOT-111s don’t,” says John Byrne, vice chairman of the Committee on Tank Cars for the Railway Supply Institute (RSI). “Some of them are very close to the 117s.” While there was concern at one point about the rail car industry’s ability to build enough tank cars fast enough to meet the deadline, that didn’t turn out to be the case. One thing that helped is that about half the 111 tank cars have been retrofitted to 117 standards while the other half are new builds. “We’re about 75 percent turned on the cars,” Kelly says. “I’m very comfortable with that progress.” That’s good news, considering there’s zero wiggle room in the deadline. Any producer that still has 111s in service after the deadlines will be out of luck. “You won’t be able to ship by rail,” she said. “There’s no loophole on the rail. They won’t even pick it up.”

SAFETY FEATURES: The new DOT-117 tank cars have multiple added safety features. Ethanol 117s have all the pictured safety features except (C) insulation, which is not required for ethanol. SOURCE: RAILWAY SUPPLY INSTITUTE, TANK CAR RESOURCE CENTER

Byrne agrees things look good. With 7,000 new or retrofitted 117 tank cars needed before the deadline, the rail car industry definitely has the capacity to meet the demand despite the fact that fewer retrofits and new builds are currently being completed due to the pandemic. He highlighted RSI data that shows the number of retrofits peaked at 750 cars retrofitted in October 2018 while only 32 were completed this July. For new builds, the peak was in August 2015 at 1,919 new FAST-Act compliant tank cars built. Compare that to this June when a total of 262 new tank cars came off the production line. That puts the average number of new 117s built in the first six months of the year at 208 per month. “We have the potential to produce a lot of cars, so the capability isn’t an issue,” he says. Something else to consider is that as of the second quarter of this year, there were a total of 2,825 idle 117 tank cars, according to information from the Association of American Railroads. These tank cars are probably leased by crude oil shippers that don’t currently need them due to declining demand, Byrne says, adding that when they come off lease they can be moved into ethanol service. “A lot of that’s driven by change in demand, surplus of cars,” he says. “We’re not going to produce a lot of cars when you still have cars sitting in storage. I think we’re tracking pretty well.” The 111 tank cars were designed before ethanol was transported in large unit trains. Those tank cars are “plain-Jane, bare tank shell” cars with very few safety

20 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

features, Byrne says. The 117 cars take the same bare shell and add on multiple new safety features. The first is a layer of ceramic for thermal protection to help reduce heat transfer to the tank in the event of a fire. By federal law, the material must prevent the car from exploding for 100 minutes, he says. The 117 cars also have a 1/2 inch steel head shield, which protects a car from punctures. “Years ago, one of the most common tank shell breaches would be a head puncture caused by another car’s coupler or something like that,” Byrne says. “The half inch head shield reduces the probability that you’re going to experience a puncture given a derailment.” Next up is the bottom outlet valve, which includes a disengaging handle to prevent the valve from opening in a derailment. The top fittings protection prevents a release at the top of the tank car, in the event of an accident. All 117 cars, whether newly built or retrofitted, have the same safety features. The only difference is that retrofitted 117s have a 7/16 inch tank shell while the newly built 117s have a 9/16 inch tank shell, Byrne says. Both tank cars are complaint with the FAST Act, however. Data comparing 111s to 117s shows a marked improvement, he says. The numbers for conditional probability of release (CPR), a statistical analysis of the probability of a tank car releasing more than 100 gallons of product, show 111 tank cars have about a 20 percent chance of a spill in an FRA-reportable derailment. The new

Current Ethanol Industry Tank Cars by Type

VALUE IS... NEW CARS DOMINATE: At the end of the first half of this year, the majority of tank cars on the rail were DOT-117s plus some 120 tank cars, both of which are compliant with the FAST Act requirements. One-fifth of the cars were still DOT-111s, but they will be transitioned out by summer 2022. SOURCE: ASSOCIATION OF AMERICAN RAILROADS

117 tank cars, however, have reduced that probability of product release by 85 percent to a CPR of only 3 percent. The RSI also calculates a yearly fleet average CPR, Byrne says. For the 2013 fleet, the average CPR was almost 20 percent. The numbers in 2020, with a lot of 117s in service, showed a significant decrease in CPR. “When we compare the last full year, 2020, it’s basically gone down to 8 percent, or a 60 percent reduction in the probability that a car will lose product,” he says. The RSI isn’t the only organization noticing safety improvements with more 117s in service. Kelly points to a derailment involving ethanol tank cars in Fort Worth, Texas, in 2019, in which the older 111 tank cars were the only ones that spilled product. “We definitely feel better about the 117s,” she says.

In fact, as a result of that accident and another one in 2020 the National Transportation Safety Board asked RFA to update its best practices manual. The RFA announced it had done that in June, encouraging ethanol producers that are able to rearrange their tank cars to put the older tank cars in the back. “In the last two accidents that happened they noticed that when we’re shipping mixtures of 117 cars and 111 cars, they want the 111 cars toward the rear of the train, Kelly says. “Because in a long unit train when cars derail they are usually toward the front of the train.”

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Carbon

CARBON COUNTING ON THE FARM As ethanol producers set their sights on net-zero CI, they’re calling for an accurate reconciliation of corn production’s CO2 balance.

By Susanne Retka Schill

For the past decade, Ron Alverson has been on a mission to get corn properly accounted for in the lifecycle analyses (LCA) of ethanol made from it. Corn has been vastly undervalued for its ability to sequester carbon, he says.

Alverson figures the corn fields on the farm he and his son Keith operate in southeastern South Dakota sequesters carbon to the tune of 45 grams of CO2 per megajoule every year, on average—calculated as the carbon intensity when applied to an ethanol

LCA. That amounts to roughly 1.5 tons of carbon per acre. When Alverson converted the farm over to ridge tillage in 1983, he did extensive soil testing to establish a baseline to measure the effect of the new practice, following the advice of his college professor in soil science. Soil organic matter levels grew from 3.2%, on average, at the start to about 5% now, just under the 6% tested in an adjacent unbroken pasture. In 2015, the Alversons decided to hire a third party to analyze their data and conduct more soil testing. Alverson wanted the independent data to back up his contention that corn is undervalued as an ethanol feedstock.

24 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

Alverson got interested in the life cycle analyses of corn when the Dakota Ethanol board he served on considered the requirements of the Renewable Fuel Standard and the California Low Carbon Fuel Standard—he was one of the organizers of the ethanol plant at Wentworth, South Dakota, not far from his farm near Chester. “I started looking at the models and asking, ‘How do you determine that? What are the factors that make it low carbon?’” Alverson says. “I started reading up and cracked open the GREET model. It was super intimidating for a long time, but I kept at it persistently, talking to the guys at Argonne Lab and asking a lot of questions.”

CARBON CARETAKERS: The climate-smart farming practices Ron Alverson (left) and his son Keith use on their South Dakota farm not only sequester carbon, but build more soil organic matter. PHOTO: CARBON HARMONY/RICH MURPHY

Among the things he learned was that the GREET (Greenhouse Gases, Regulated Emissions and Energy Use in Transportation) model developed by the DOE’s Argonne National Laboratory assumes the worst-case scenario for nitrogen loss, resulting in a stiff penalty for nitrous oxide emissions. “They make the assumption that we’re losing 40% of nitrogen we apply to fields to volatilization and leeching. That’s just crazy. There’s not any modern research that’s been done that would suggest we’re losing that much nitrogen,” he says. Nitrous oxide emissions from the projected nitrogen losses make up a big portion of corn’s carbon intensity, as the greenhouse gas im-

pact is nearly 300 times more powerful than an equal amount of carbon dioxide. Alverson questioned multiple other factors and began working on getting the modeling improved, working with the American Coalition for Ethanol (ACE) where he’s a board member and past president. Among the things he takes issue with is that the modeling doesn’t account for the differing soil carbon impact of feedstocks. “They treat soybeans the same as corn, sorghum or sugar cane,” he says. “If you said that in a room of soil scientists and crop scientists, they’d laugh. There’s a dramatic difference and corn is head and shoulders above every other crop.”

In 2012, Alverson worked with Dakota Ethanol to put together a pathway application to the California Air Resources Board, enlisting the aid of experts such as South Dakota State University soil scientist David Clay and University of Illinois-Chicago’s Steffen Mueller. They made an application for a 15 gram reduction in their pathway with CARB based on the soil test results in the plant’s corn draw showing consistent better-than-average soil organic matter levels. CARB gave them a fair hearing, Alverson recalls, but in the end, it was rejected. Uncertainty over the reliability of measuring soil sequestration from year to year is part of the problem, Alverson admits, ETHANOLPRODUCER.COM | 25

Carbon although accurately documenting average soil carbon sequestration over a span of several years is possible. He’s investigated how soil carbon is modeled using factors such as beginning soil organic matter, soil type, rainfall, crop types, yield. “Put those in and it will kick out a number and that’s exactly how they come up with penalty for land use change with soil carbon loss,” he says. “For them to penalize us for land use change using soil carbon models and not doing the same for when soil carbon is going the other way in these models is a double standard.”

Tools for Ag GHG Accounting

RIDGE RUNNER: In ridge till systems, specialized planters skim the top off permanent ridges to plant the seed, rebuilding the ridge as it passes over.

The USDA has been working to reliably quantify the benefits of climate smart farming practices, says Bill Hohenstein, USDA director of the Office of Environment and Energy Policy. “We’re doing a lot of work on farm scale greenhouse gas accounting, so we can document if you shift practices, how much you can improve your

PHOTO: USDA NRCS

greenhouse gas profile.” For nearly two decades, the National Resources Conservation Service has been fine-tuning COMETplanner on its website, a tool for farmers to evaluate GHG benefits from conservation practices. More recently in the GRACEnet

program, a network of scientists at USDA’s Agricultural Research Service have been developing standard ways of evaluating and reporting both carbon sequestration from farming practices and reduced emissions from efficient fertilizer management.

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RESIDUE RECYCLING: High yielding corn produces heavy crop residues, which Ron Alverson says nurtures organic life, from earthworms to microbes, in the untilled portions to the point where little residue remains on the surface by the end of the following summer. PHOTO: USDA NRCS

“We’re working with the folks at GREET right now to incorporate these climate smart farming practices into GREET,” Hohenstein says. Specific practices include tillage, cover crops, buffers and nutrient management practices.

There is intense interest in finding ways to incentivize farmers to improve farming practices, he says. Last spring’s request for public input on USDA’s Climate Smart Agriculture and Forestry initiative generated over 2,000 responses, 500 coming

from groups and association. “We heard a lot about various strategies for conservation programs, but also strategies to partner with industry,” Hohenstein says. The agency is working through the suggestions and considering how it might work with industry and the private sector. One of the questions he sees needing attention is how to handle farm level data to quantify GHG reductions for the emerging carbon markets. “Do you use averages, or do you try to do soil testing on each farm and use the real data?” he says. “The challenge with using real data is it’s expensive to do that kind of testing, and there are expenses with compiling and reporting the data.” In late September, the USDA awarded $7.5 million to a conservation program led by ACE that will help secure farmers access to low carbon fuel markets through the adoption of climate smart agricultural practices. Notably, Dakota Ethanol and its corn suppliers are involved (see news on page 14).

ETHANOLPRODUCER.COM | 27

Carbon

Verification Models

California’s Air Resources Board has begun allowing some biofuel producers to demonstrate their feedstock supplies to achieve better-than-average carbon intensity, says Kari Buttenhoff, director of the compliance program and a partner at Christianson PLLP. The way the program is structured offers some clues as to how systems that reward farmers for CI reductions might evolve. Feedstock suppliers could be classified two ways, one as intermediate facilities delivering to multiple biofuel producers, passing along all their information to each biofuel producer and becoming part of each producer audit. Another option is to become a joint applicant, where the feedstock supplier submits data directly to CARB and is responsible for reporting and securing audits. In that case, the only information passed along to the biofuel producer is the CI score itself. On the first round under the revised rules due August 31, Christianson audited renderers supplying feedstocks to biodiesel plants. “We’re just starting to see some of the hurdles,” Buttenhoff says. “If a joint applicant doesn’t meet a verification deadline or has issues, what does that mean to the biofuel producer they’re attached to? We’ve had some of this happen where the producer is saying it’s not their fault, it’s the renderer’s fault.” Fewer issues have emerged for intermediate facilities, which is the more likely model for corn producers, she adds, “but the way the California rules are written would have to be tweaked for farming. If a biodiesel plant has three renderers signed up with them, we have to visit each of the three renderers as well as the biodiesel producer.” With the biofuel producer responsible for coordinating the audits and the cost, it could become cumbersome with hundreds of corn suppliers. While California’s LCFS offers a glimpse at how farm-level carbon accounting might unfold, there are other models, Buttenhoff continues. The International Sustainability and Carbon Certification program allows an aggregate approach. A third-

BUILD AND REDUCE: No till and ridge till systems not only build soil organic matter through crop residues, but also reduce energy use on the farm. PHOTO: CARBON HARMONY/RICH MURPHY

party aggregator collects the data and is responsible for reporting, with only a portion of the individuals audited each year alongside the aggregator. “So over a three or five year period everyone gets audited, but not everyone gets audited every year,” she says. While that would lighten the audit load on farmers, the scores would likely be averaged and “they might not get the CI score and premium they would get if they went in as an individual.”

Gradable Aggregation

Poet is partnering with Farmers Business Network to develop an aggregate approach, starting with a pilot project three years ago at the 110 MMgy Chancellor, South Dakota, facility. The goal for FBN was to tap into digital technologies to verify a CI score without boots on the ground, says Steele Lorenz, FBN head of sustainable business, using everything from receipts to precision agriculture data collected by equipment. Weather and satellite data are used to confirm a yield claim and artificial intelligence is used to spot errors and potential fraud. The collected data gets plugged into GREET to generate a CI score. Following the successful pilot, Poet and FBN launched the new program, dubbed

28 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

Gradable, last year with all the farmers participating in the pilot signing on, with the exception of one who retired. The CI scores for the farms in the program average 20% lower than the national average, reports Doug Berven, Poet vice president corporate affairs, and spans 7.5 million bushels from 126,000 acres. With all of the Chancellor ethanol going into the California LCFS market, Poet was able to pay farmers premiums ranging from $35 to about $50 an acre, he adds. Lorenz is enthused about the progress being made on several fronts to make ag carbon accounting pay. In October, he presented FBN’s work with variable feedstock scoring to CARB at a public workshop discussing potential LCFS revisions. “We were very well received,” he says. The next set of LCFS rules aren’t due to come out until 2023, but he’s optimistic field level practices will be incentivized. In addition to California, Lorenz reports developers of Canada’s national clean fuels policy appear to be open to including feedstock scoring. He’s also encouraged by the discussions of a Midwest Clean Fuels Policy in several states that seek to include incentives for farm-level CI reductions. In addition to low carbon fuel markets, volun-

UNBROKEN GROUND: Twenty inches out of every 30-inch row have not been disturbed in Ron Alverson’s fields since he switched to ridge tilling in 1983. PHOTO: CARBON HARMONY/RICH MURPHY

tary markets are emerging in the feed sector for corn, soybeans and coproducts, Lorenz reports. “There is going to be increased demand to provide quality attributes around the environmental impact of animal protein products.” That, in turn, may broaden the focus of CI reduction efforts from just western-facing producers to eastern Corn Belt suppliers to poultry and swine feed markets.

As Poet sets out to achieve net-zero emissions by 2050 (see news on page 14), Berven expects the company to expand the Gradable program to more facilities, as soon as approvals are in place. Farmers want to improve and promote good soil, crops and the environment, though it often costs more to employ climate smart practices, he says. “This program incentivizes them to make those investments and get a

return they might not have had in the past.” He points out that 40,000-some farmers deliver grain to plants in the Poet family. “If we could employ this throughout our entire footprint, just imagine what we could do with the CI score of farming overall.” Author: Susanne Retka Schill Contact: editor@bbiinternational.com

World

EXPORT

EXPECTATIONS

At the beginning of the pandemic, U.S. exports of ethanol and dried distillers grains with solubles declined. While exports haven’t reached pre-pandemic levels, data show the numbers continue to rise. By Matt Thompson

In early 2020, with the U.S. in the grips of the early stages of the Covid-19 pandemic, ethanol production slowed, as stay-at-home orders curbed demand for gasoline. While there were domestic implications to the slowdown in production, the pandemic also affected the industry’s exports. Globally, less driving “really weighed on fuel ethanol demand around the world,” says Brain Healy, director of global ethanol market development for the U.S. Grains Council. “In marketing year 2020-’21 (Sept. 1-Aug. 31), we finished off at 1.3 billion gallons,” he adds. “That’s our fourth largest export year for ethanol. In terms of a global production standpoint, production was down about 13 percent in calendar year 2020 and it hasn’t recovered yet, even in this

year, to the 2019 levels that were at a historic high,” Healy says. According to the USDA’s Foreign Agriculture Service, the U.S. exported $2.3 billion worth of ethanol in 2020. The volume of ethanol exported was 9 percent lower than 2019. Through July of this year, the U.S. has exported 2.7 billion liters of ethanol, or 713 million gallons. In 2019, the total exported was 5.4 billion liters, or 1.3 billion gallons—and the July pace that year was north of 870 million gallons, 18% greater than this year’s mark. Exports of U.S. DDGS also declined, says Cary Sifferath, senior director of global programs with the U.S. Grains Council. He notes though, that the slowdown in ethanol production had a bigger impact on DDGS exports than any declines in demand. “Obviously, certain markets were having their economies being affected by Covid, which may have affected overall meat consump-

tion,” he says. “But just the slowdown in ethanol production with less actual supplies of DDGS was probably the biggest slowdown factor for DDGS exports.” While the ongoing pandemic adds uncertainty to the future of ethanol demand and exports, Healy and Sifferath say the volume of ethanol and DDGS exports have begun to rebound. “The data I have now, for September through July of the 2020’21 marketing year, says we’re actually up 17 percent on exports of DDGS to Mexico versus a year ago,” Sifferath says. Exports of DDGS in calendar year 2019 were 10.8 million metric tons, and 6.2 million metric tons by July of that year. Through this July, the U.S. had exported 6.4 million metric tons, a good calendar year figure, even if the marketing year number paints a slightly different picture. “We’re not quite back to normal yet,” Healy says. “If you look at market year

KEEPING IT MOVING: Despite the pandemic, U.S. ethanol producers exported 1.3 billion gallons of ethanol in marketing year 2020-2021, the fourth largest annual volume on record. PHOTO: STOCK

30 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

World

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2020, that still had several months of normal demand included in that year’s numbers. I would say we’re on track to getting back towards the same level we were at last year,” Healy says, adding that at the end of this marketing year, ethanol exports will be 5 or 6 percent lower than they were the previous year.

Eyes on China

Late in 2019, during the very early stages of the outbreak, the phase I trade agreement with China was signed. At the time, it was unclear just how Covid-19 would affect the country’s commitment to purchase U.S. agricultural goods, like ethanol and DDGS. Two years on, Healy says, China has imported 130 million gallons of U.S. ethanol this marketing year. “That’s not quite near the levels that had been expected under a full phase I agreement, or under their full E-10 implementation,” he says. But there is reason to be optimistic about the role China will play in demand for exports. He says that while the nation-wide E-10 mandate has been delayed, there are still policies on the provincial level in the country that drive demand for ethanol. “I think there’s still optimism about fulfilling phase I agreement and I think it’s pretty well predicated on how these administrations interact with each other,” Healy says. DDGS is a different story, Sifferath says. Because of anti-dumping and countervailing duties placed on U.S. DDGS, along with retaliatory tariffs, the cost of getting distillers grains to China is prohibitive, and Sifferath adds, the phase I agreement didn’t address the duties and tariffs. “Right now, there’s limited amounts of DDGS going to China because of those anti-dumping and countervailing duties

MATCHING PRE-PANDEMIC NUMBERS: Exports of DDGS in calendar year 2019 were 10.8 million metric tons, a number that could be exceeded this year. PHOTO: USGC

32 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

REBUILDING A BRIDGE TO CHINA: Getting China to drop its anti-dumping and countervailing duty remains a key trade priority for the U.S. ethanol industry. PHOTO: CHS

World

that were not resolved as part of the phase I agreement,” he says. But imports of DDGS into China have the potential to increase, if the country decides not to extend those duties. Sifferath says he expects China will make that decision this year.

Continued Commitment

While exports of U.S. ethanol and DDGS continue to climb following the lows reached during the height of the pandemic, Sifferath and Healy both say the Grains Council remains committed to expanding markets abroad, despite the challenges Covid-19 has brought. “Our greatest strength is that we are in countries that we have programs in,” Healy says. While the council has transitioned to fewer in-person events in favor of more Covidfriendly online events, its mission remains the same. “We just wrapped up a carbon summit in Australia as they look to change their fuel standards, as an example. Korea just had another summit looking at how ethanol can contrib-

U.S. Exports: First 7 Months of Year 2019-2021 (January-July)

2019

Distillers Grains Ethanol

2020

Distillers Grains Ethanol

2021

Distillers Grains Ethanol *million metric tons

WHEN PRODUCTION PULLED BACK: Experts say the slowdown in ethanol production during the pandemic, with less product on the world market, played a bigger role in decreasing DDGS exports than any real demand slackening. PHOTO: USGC

6.2* 873**

6.0* 789**

6.5* 713** **million gallons

ute to their 2050 net-zero carbon emissions goals. So, for us, it’s been business as usual, just a new platform to do so,” he says. Sifferath agrees. “Going back to March and April of 2020, we’ve transitioned our programs globally into a virtual type of programming and our international staff has just come up with great and creative ways to do things virtually,” he says.

Onward and Upward

Exports are not yet back to what they were prior to the pandemic, however both Sifferath and Healy agree that they’re headed in the right direction. “We’re just under 10 percent ahead of exports shipments where we were a year ago,” he says. “We’re still probably down a little bit from the peak of the 2018-’19 marketing year. Having China being able to come back without having that anti-dumping and countervailing duty would definitely help increase exports and even a continued healthy ethanol market here in the U.S.,

THE LONGVIEW: U.S. ethanol exports are expected to grow in the years ahead as nations around the world set ambitious carbon reduction goals. PHOTO: MARQUIS ENERGY

34 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

which keeps production moving or even expanding, because we can only export and ship as much DDGS as gets produced and isn’t consumed domestically.” Healy says that while the pandemic certainly played a role in a slump in ethanol exports, another important factor is policies that restrict the entrance of U.S. ethanol. “When a country like Brazil sets a 20 percent tariff on a U.S. product, that’s extremely disruptive to trade, it’s disruptive to the global narrative around using ethanol and working together in collaboration, and it impacts our exports,” he says. “It’s the same in any other country that either delays a policy, reduces a blend rate in-country, or the inability to have bilateral trade deals, or multilateral trade deals. That’s problematic in terms of market access. It remains critical that those tariff issues are resolved with certain markets.” And Healy is optimistic that policies that aim to reduce carbon emissions worldwide will help drive ethanol demand in the future. “A number of countries are creating policies to eliminate carbon or reduce carbon emissions from the transport sector,” he says. “These policies that countries are setting today, this global attention to carbon and the need to monitor and reduce its overall emissions, is going to be key for driving demand for a product that’s proven itself in the U.S. market, the EU market, the Brazilian market—wherever they’re using ethanol—that it’s able to make these carbon emission reduction contributions.”

CHINA'S DROP: While China has, in the past, been the top importer of DDGS, taking as much as 6 million metric tons in 2015, levies have prohibited sales in recent years. PHOTO: USGC

Author: Matt Thompson Contact: editor@bbiinternational.com

ETHANOLPRODUCER.COM | 35

Coproducts

Separation for Oil, Fractionation for Protein, So What about the Fiber? By Mallorie F. Wilken

Protein, protein, protein … Distillers grains and protein are a major focus for feeding the world’s growing population and middle class through animal agriculture. The focus is for good reason—in recent years, distillers grains have proven to be an animal feed commodity with its own supply and demand curves that are no longer tethered to corn like they used to be. The cattle industry is the original user of distillers grains. The producers, feeders and nutritionists learned how to feed this ethanol coproduct before universities even had funding for the research. The leaders in the cattle industry used lab-reported product composition to determine the first inclusion levels in commercial settings. They experienced firsthand the benefits and challenges offered by feeding distillers grains. The differences in animal performance observed from feeding wet product (35% solids) versus modified product

(45% solids) versus dried product (90% solids) initiated questions for the preliminary research trials. When the trademarked Base Tricanter System (BTS) was available for installation to pull distillers corn oil (DCO) from the feeds, the cattle feeders discovered that the reduced fat content caused feed efficiency to decline slightly. This shift in product composition had a negative impact on their bottom line due to cattle staying on feed longer and a need to increase the inclusion levels of more expensive feeds in the diet to maintain growth and performance. Cattle feeders today often purchase DCO to obtain growth rates similar to those observed in animals prior to BTS. These actions display the importance of distillers grains and their components as a major feed ingredient in meat animal rations. Fat found its way to the market very easily via the demand for corn oil in the feed and diesel markets. Protein is in high demand globally for livestock production. However, corn remains an imper-

CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

36 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

BOOSTING BRAN: ICM’s front-end fiber separation technologies allow fiber to pass through the process unadulterated. This clean, fractionated fiber is combined with syrup to create Solbran, a competitive, highly digestible source of energy in cattle rumen. PHOTO: ICM INC.

fect protein in some animal diets because it doesn’t contain enough of the amino acid lysine in relation to the other essential amino acids like leucine. Oversupplying some amino acids can be just as damaging to the animal as undersupplying their first-limiting demands. For instance, swine are limited by the amino acid lysine. Poultry are limited by methionine, followed by lysine. Cattle are more complicated because their supply of ruminal bacterial protein offers some 60% of the animals’ requirements. From a diet concentration standpoint, aquaculture require the highest amount of protein at 50% of their dietary needs, followed by cats (40%), dogs (40%), broiler chickens (20%), dairy cows (17%), hogs (16%), laying hens (16%), sows (14%), feedlot cattle (13%), and beef cows (8%), all on a dry matter basis (source: National Resource Council reports). These protein requirement variations certainly prove the need for continued education and research to maximize diversified distill-

ers feed products. Protein separation offers ethanol plants opportunities for expanding into new feed and food sectors, meeting demands at more feeder-friendly prices compared to traditional protein sources, and even helping the ethanol industry mature through innovation. Still, when it comes to delivering full feeding value, distillers grains are more than protein and fat.

Understanding Fiber

Traditional, unfractionated distillers grains products have been highly demanded as an inexpensive protein additive in livestock diets, with the energy from the included fiber and fat as secondary benefits. Through fractionation, the fiber component is washed clean in a counter-current process via ICM’s trademarked FST/FST Next Gen, which allows the soluble portions to remain in the process and continue to the fermenters, while the fiber bypasses the plant as a

ETHANOLPRODUCER.COM | 37

Coproducts

whole and does not experience the ethanol production process. The unadulterated fiber from front-end separation is cleaner and offers a larger particle size. A portion of the syrup can be added back to the fiber to create a product ICM calls Solbran. While corn fiber is not an effective source for supplying the “scratch factor,” like alfalfa or corn stalks that scratch the rumen wall to maintain gut health, it is still a readily fermentable source for energy in the rumen. As illustrated in Table 1, Solbran is highly competitive against other digestible fiber sources in the feed industry. The largest advantage of Solbran is the additional digestibility over other ethanol coproducts from the wet milling industry, such as wet corn gluten feed. Understanding the digestive process in cattle rumen explains the good digestibility of Solbran. The cattle rumen contains specific Fibrobacter and Ruminococcus bacteria, which prefer to consume and break down fiber structures over other carbohydrate sources. These types of bacteria are not used in the ethanol production. Only Saccharomyces cerevisiae is used; it digests the starch components in corn. For this reason, the fiber is neither helped nor damaged by going through the ethanol fermentation process. Therefore, the frontend fiber separation with ICM technologies allows Solbran to remain intact and ready for consumption by cattle, where it is best digested and utilized in protein production for human consumption while providing operational benefits to the plant. As the industry continues to mature and consolidate, those willing to face the challenge of finding a market for fiber-rich products in order to produce more high-protein feed will reap the most benefits. Research done by feeding distillers grains to cattle has proven the feeding value of protein, fat and fiber. This research has shown more than just improvements in feed efficiency by maintaining a healthier ruminal population in the gut. Healthier animals remain more consistent in intake, gain, growth and production as a whole. Research also repeatedly proves that the cattle rumen is able to maintain a lower, more consistent pH allowing for improved feed efficiency and overall gut health. The diet is easier to feed, and the animals are more productive even when distillers grains are fed at levels less than 10%

38 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

of the diet. As a combination of the fractionated fiber and syrup, Solbran meets and exceeds these expectations. In a recent study conducted on feeding yearling steers during the winter of 2020 at South Dakota State University (Table 2), Solbranfed animals were able to match the performance of control-fed cattle at 20% replacement for corn in finishing diets. This means that Solbran was able to maintain performance, even without the other 1012% of protein contained in distillers grains. The extra 10-12% of protein is the 3-4 pounds of protein fractionated with the new ICM technologies, which allow the plant to sell a protein-driven, yeastenriched product that will bring a premium price compared to traditional DDGS. The installations of feed separating and concentrating technologies transform ethanol plants into biorefineries. Ultimately, biorefineries can produce feed products that have greater feeding value and more advantageous component combinations for different animal species, creating more revenue opportunities. As the price of feed increases, cattle producers will try to identify cheaper sources of protein. They will try to keep a portion of distillers grains in the diet because of the intrinsic values offered in improved gut health, consistent bunk management and intake, and

increased rate of growth. Solbran maintains all the benefits of feeding distillers grains and is the solution to the fiber concern whether sold wet, dry or pelleted. Solbran will certainly be able to meet the feed demand of cattle producers. Yes, it will be a change. Change can be challenging. However, this change represents the advancement of feed products into the marketplace to meet each species’ specific nutritional demand. Distillers grains fractionation is available, and the options of feeding the protein portion are endless and often determined by feed composition and price. In addition to protein, ICM has developed a beneficial solution for the fiber. Overall, we are reaching our goal of supplying protein to the world population while providing an additional product to plants for generating more revenue.

HOW IT’S MADE: The fiber separated via ICM’s FST technology is processed through a proprietary rotary press to achieve roughly 40% to 41% solids. The non-fermented fiber separated by FST meets the legal definition of bran—a well-understood feed ingredient— which is combined with solubles to create Solbran. PHOTO: ICM INC.

Author: Mallorie F. Wilken, PhD PAS Technical Service Nutritionist mallorie.wilken@icmfeed.com 402.936.1943

Lab

REPEATABLE PERFORMANCE: Whether working with high-tech lab instruments or everyday lab products like pipettes or sample bottles, adhering to standard operating procedures ensure that each lab team member knows how to perform a procedure independently and reproducibly without error. PHOTO:PHIBRO ETHANOL

The Basics of Ethanol Plant Laboratory Quality Management Ethanol Producer Magazine talks with Phibro Ethanol’s Dr. Andrew Hawkins about the essentials of top-tier LQM, including good training, recordkeeping, SOPs and more. By Tom Bryan

40 | ETHANOL PRODUCER MAGAZINE | NOVEMBER 2021

Ethanol plant labs are the nerve centers of modern biofuel production: they are data generation hubs, troubleshooting resource centers and product quality check points. Producing ethanol and coproducts to today’s exacting specifications, with optimal efficiency and uptime, requires facility-wide discipline and, in the lab, steady adherence to a comprehensive quality management program. Ethanol Producer Magazine recently caught up with Dr. Andrew Hawkins, director, laboratory services, Phibro Ethanol—who presented on laboratory quality management (LQM) at the International Fuel Ethanol Workshop & Expo in July. Here’s what he had to say about LQM. EPM: Dr. Hawkins, at the 2021 International Fuel Ethanol Workshop & Expo in Des Moines, Iowa, you spoke about the keys to successful LQM. Briefly, what are the basic tenets of a lab quality management program, and how is the history of LQM—which you discussed at the FEW—relevant to today's lab practices? Hawkins: We can learn from other industries that have applied a holistic approach to quality. LQM is a system that takes a 360-degree view of quality so that products and processes are of the highest standards possible. The basic principles of a good LQM program are not just solid procedures, but also well-trained staff, data recording, validation and calibration, and clear communication amongst all involved. EPM: Explain the role of QA/QC in an ethanol plant LQM program. Hawkins: Quality assurance (QA) and quality control (QC) are two major components of a successful LQM program. QA covers in-process steps taken to ensure the process being monitored is as good as it can be. Things like well-trained staff, standard operating procedures, regular instrument validation and calibration—all are QA tasks. This systematic approach assures us the process is operating the best it can (i.e., the plant is efficiently making high quality ethanol). QC is a checkpoint to make sure the products—ethanol and each coproduct—meet all the specifications that customers expect when they receive that product. EPM: Explain the importance of SOPs in the U.S. corn ethanol industry. Why are they a vital component of training, and ultimately top-tier LQM? Hawkins: Standard operating procedures (SOPs) are a way to clearly communicate and document all steps necessary to perform a procedure or task. SOPs are like a recipe for a cake—they tell us all the steps needed, in sufficient detail, so the outcome is a good cake! In the ethanol plant, SOPs ensure each staff member knows how to perform a procedure independently and reproducibly. Let’s say that procedure is measuring the amount of water in final ethanol product. A good SOP ensures each person does that measurement the same way, that the result is accurate, and that the same result would be had if a different staff member did the test. Along with training (i.e., how to use, validate and calibrate an instrument), SOPs are an essential backbone to a good LQM.

EPM: Ethanol plant labs are the data hubs of the facility. Data recording is obviously a critical best practice in the lab. What are some of the top reasons for recording data, either by hand or digitally? Is it done correctly enough of the time? And what are the risks of not doing it consistently or accurately? Hawkins: Data recording is a crucial component to good LQM. If it isn’t written down, it didn’t happen! Good data recording means as we learn more about our process, we have all the data needed to go back and do a deep dive for analysis and improvement. Sometimes, data recording is our best defense at solving a complex problem that we didn’t even notice until later. Let’s say we need to determine the root cause of an infection. Sometimes, solving that issue means gathering timing of valves, operations in the process from control room notes, and lab data all together to understand how to avoid the issue in the future. Good data records extend beyond just writing information down—they include an organizational scheme that is easy for others to understand so that data can be retrieved and accessed again in the future. EPM: Talk about how the LQM best practices you discussed at the FEW, in essence, define and govern Phibro’s own LQM program—Phibro CertiPhiedTM—which ensures that your own products meet exacting levels of quality and consistency when they arrive at an ethanol plant’s gate. Hawkins: LQM practices are the backbone to Phibro’s trademarked CertiPhied program. In our Phibro Ethanol laboratory, we have our own metrology program and electronic data records to ensure our equipment is always working. Accurate data is the foundation of consistency and reliability. Once we know we can measure things accurately, we measure key properties of our products to ensure they meet specifications. The specifications were in turn developed to ensure that a product performs exactly how a customer expects in their plant, each time it is used. ETHANOLPRODUCER.COM | 41

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