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The Biodiesel & Renewable Diesel Summit is a forum designed for biodiesel and renewable diesel producers to learn about cuttingedge process technologies, new techniques and equipment to optimize existing production, and efficiencies to save money while increasing throughput and fuel quality. Produced by Biodiesel 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.
Now in its 16th year, the International Biomass Conference & Expo is expected to bring together more than 800 attendees, 140 exhibitors and 65 speakers from more than 21 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 near-term research and development.
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ETHANOLPRODUCER.COM | 5 42141210864DEPARTMENTSADINDEX/EVENTSCALENDAREDITOR'SNOTELookingBackatWhatLiesAheadByTomBryanGRASSROOTSVOICEConvertsaretheWorstByRonLambertyDRIVESpeakingUpforBiofuelsByEmilySkorGLOBALSCENEIt’sTimeforEuropetoDoBetteronBiofuelsByDavidCarpinteroBUSINESSBRIEFSMARKETPLACE Ethanol Producer Magazine: (USPS No. 023-974) September 2022, Vol. 28, Issue 9. 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. 16FEATURESEVENTRhythms of Reinvention: FEW General Session Highlights Takeaways from the big summer show’s main stage By Katie Schroeder 26 ByforCyberDigitalBUSINESSDefensessecurityadviceethanolproducersKatieSchroeder 32 AddingCARBONUp CCS Revenue Streams The financial equation behind carbon capture By Luke ContentsGeiver ON THE COVER Ethanol plants are getting serious about cyber security. Threats like ransomware can result in operational disruption, information breaches and financial loss. Defending against bad actors requires third-party support, internal training and a proactive IT/OT approach. PHOTO: STOCK SEPTEMBER 2022 VOLUME 28 ISSUE 9 16 26 32PHOTO: STOCK PHOTO: STOCK PHOTO: BBI SARAH M PHOTOGRAPHY 40CONTRIBUTIONDIVERSIFICATIONDrinktheBestandSelltheRestRegulatoryconsiderationsforhigher-gradealcoholByJessicaBuckley
Aspects of Skor’s talk were echoed by Becker, who discussed the importance of reinventing ethanol plants into modern day biorefineries.
Editor's Note
Finally, be sure to read “Drink the Best and Sell the Rest,” on page 40. Jessica Buckley of RTP Environmental offers succinct and easy-to-understand guidance on what facility changes and regulatory reporting ethanol producers should be aware of when considering higher-grade alcohol production.
With the likelihood of permanent, year-round E15 on the horizon—Midwest states insist on it and California may be leaning in—along with favorable 2022 RVOs, an apparent reversal of SRE abuse and other big wins, ethanol industry leaders had plenty to laud at the International Fuel Ethanol Workshop & Expo in June. The show, back in Minneapolis without a hitch, had a decidedly good vibe in its 38th year, but it wasn’t policy or marketplace achievements that captured the imagination of its producer crowd. It was ethanol’s long-game—new tech and products, new alliances and whole new Inmarkets.“Rhythms of Reinvention,” on page 17, we provide highlights from the FEW’s general session, the big-stage event, which featured a notable speaker lineup including Emily Skor of Growth Energy, Todd Becker of Green Plains, and Bruce Rastetter of Summit Agricultural Group, parent company of the planned Summit Carbon Solutions (SCS) CO2 pipeline. The trio of CEOs book ended a policy roundtable, giving the plenary session a rich blend of association, producer and developer perspectives that orbited around decarbonization, diversification and growth.
Running an ethanol plant isn’t entirely about seizing opportunities. Producers have to protect themselves, too. In “Digital Defenses,” on page 26, we report on how cyber security threats like ransomware can not only cause operational disruption, but serious financial loss. There’s no silver bullet for stopping cyber attacks, but experts in the space suggest a layered approach: third-party support, internal training and proactive IT security. It can be as simple as doing regular data backups and asking employees to use better passwords, or as involved as calling in “detect, respond and recover” technicians to mitigate a cyber breach. Doing the former can often prevent the latter.
Enjoy the read!
Looking Back at What Lies Ahead
6 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022 FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: TWITTER.COM/ETHANOLMAGAZINE
Skor is among industry leaders who recognized early on that ethanol has a big role to play as a feedstock for sustainable aviation fuel (SAF)—at least two of her producer members are going hard at it. So, it was fitting that her keynote followed an announcement from Southwest Airlines, which is supporting an ethanol-based SAF venture called SAFFiRE Renewables. While laying out policy priorities like next year’s RFS “set,” near-term RVOs and uninterrupted E15, each segment of Skor’s speech made a connection between today’s policy and tomorrow’s production: biointermeidates and SAF, carbon capture, renewable power, enhanced coproducts and more.
As SCS continues to secure voluntary easements with landowners, more than 30 Midwest ethanol plants stand ready to join on, drawn to the project by the allure of earning a premium for their ultra-low-carbon ethanol in LCFS markets and leveraging the value of 45Q tax credits. As we explain in “Adding Up CCS Revenue Streams,” on page 32, those financial incentives should stack up nicely when SCS and other pipeline developers reach the finish line.
“I truly believe there’s a renaissance that’s coming for our industry and our companies,” he said, adding that Green Plains is ready to provide the feedstock for “the bio-revolution that is coming.” Closing out the 2022 FEW general session, Rastetter framed the SCS pipeline as a continuation of the value-added agriculture that’s defined American ethanol production over the past quarter century.
But that’s not happening now, and I can’t avoid calling out retailers when E85 is priced with margins of a dollar to $1.50 a gallon or more, while gas is marked up 15 to 25 cents. You don’t have to be a convert to be outraged by that. Instead of locking in new flex fuel customers, helping the ethanol industry shatter ethanol cost myths and establishing E85 as affordable low carbon fuel, too many retailers have decided to—I’m gonna say it—gouge E85 customers. That’s just wrong. Do better.
8 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022
Everyone’s heard similar comments about people who quit smoking or drinking, or lost a lot of weight, and then became zealots with deep disdain for those who hadn’t yet “beaten” the thing they recently overcame. All those observations were undoubtedly in the back of my mind when I came from the “dark side” of petroleum marketing to help other fuel retailers see the light of higher ethanol blends and promised myself I wouldn’t call out retailers on pricing of ethanol blends.
Converts are the Worst Grassroots Voice
“Converts are the worst!” My Grandpa Joe used to say that about Grandma Norma, who became Catholic before they married. And by “worst,” he actually meant best, or most dedicated, as he usually said it about her insistence on attending daily mass or finding a church for Sunday mass during vacations, or not eating meat on Friday. Any Friday. Even after the Church changed its “no meat” rule to apply only to Lent.
Instead, I informed ethanol people the advantage they thought they should see at the pump wasn’t as big as they “knew” it was. When state and federal tax credits reduced E10 tax five to seven cents, ethanol supporters would sometimes complain the credits weren’t being passed on to consumers. At the time, however, ethanol usually cost more than gasoline, making E10 a few cents higher than “regular” at the rack, with lower taxes bringing the net price back to a penny or two below regular at the pump. Ethanol folks’ saying E10 should be five cents less because of a five-cent tax credit didn’t inspire marketers to lower “gasohol” price, it inspired them to not sell E10, and avoid being accused of cheating their customers.
That last one was the first time I heard Grandpa tell Grandma, “You converts are the worst.” Norma said she signed up for no meat on all Fridays, and Grandpa wanted steak. So, most Friday nights, one steak and one fish filet went into the rotisserie broiler. Did I mention Grandpa was a butcher?
Ron Lamberty Chief Marketing Officer, American Coalition for rlamberty@ethanol.orgEthanol
As E85 appeared on scene, retailers sold it based on the cost of their most recent load, which, because the fuel was new and vehicles scarce, could be weeks or months earlier. Other fuels would rise or drop dramatically while E85 prices sat completely still, becoming a bargain or a rip-off. The retailers made the same profit regardless of whether ethanol supporters thought E85 was a rip-off or a bargain—although they rarely heard from anyone when it was a bargain. More FFVs hit the road and E85 volumes and frequency of deliveries increased to be more in line with gasoline deliveries and pricing, and big swings in price differential were reduced. Retailers have always adjusted other product prices when they changed regular, whether costs of the other products changed or not, because customers judged value of other grades on expected differentials with regular. We encouraged retailers to do the same with E85, noting when they made extra margin, remembering those profits, and maintaining differential when margins weren’t as good. Those who followed the strategy usually built a good, consistent, profitable E85 customer base.
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High on that list is the Renewable Fuel Standard “Set.” 2023 is the first year where required volumes of renewable fuel are not specified by Congress and must be set by the Environmental Protection Agency, in coordination with the secretary of energy and the secretary of agriculture. That decision will be based on six statutory factors like fuel savings, environmental benefits and commercial production— among other items.
In just a few short weeks, biofuel industry advocates from every corner of the nation will descend upon Washington, D.C., for the 13th annual Growth Energy Biofuel Summit. We are excited to welcome the industry’s best and brightest back to Washington for our first fully in-person advocacy event since 2019. This year’s fly-in, held September 12-15, could not arrive at a better time, as it marks the end of the summer driving season. Over the past few months, American families have faced record-high gas prices at the pump. Fortunately, President Biden lifted a seasonal barrier to the sale of E15, and drivers were able to turn to higher blends of biofuels like E15 for a lower-cost fuel option, which offered savings of almost a dollar compared to E10 in some areas of the country. However, this waiver only applied to the 2022 summer driving season, and we must continue to work hand in hand with our congressional champions to secure a permanent place at the pump for lower-cost, earth-friendly bioethanol blends.
Getting this process right will be vital to meeting our nation’s climate and energy challenges. That’s why we’re demanding a stronger RFS—one that will move America closer to a net-zero carbon future, deliver savings at the pump for working families, strengthen U.S. energy security and drive investment in rural communities. Among other things, that requires setting implied requirements for conventional biofuels for 2023 and later at no less than 15 billion gallons, and ensuring that total and advanced Renewable Volume Obligations (RVOs) are high enough to meet current and future market capacity while spurring technological innovation and market growth. EPA also must update its outdated lifecycle carbon model to reflect the best available science on the contributions of low-carbon bioethanol to the nation’s climate goals.Keeping these issues front and center—no matter what happens on the campaign trail—is vital to America’s energy future. Fortunately, our industry has an incredible story to tell about the technological advancements, environmental benefits and energy security only we can provide. And no one is better poised to share that message with members of Congress and their staff on Capitol Hill than the industry leaders attending this year’s Biofuel Summit.
We’re grateful to all those who are making the trip, and we look forward to arming our champions with a deeper understanding of the full value this industry provides and why we need congressional support to fully unleash the power of biofuels.
Speaking Up for Biofuels
10 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022
Drive Emily Skor CEO, Growth
eskor@growthenergy.org202.545.4000Energy
Of course, year-round E15 is just one of many industry priorities on the docket, and big policy changes could arrive any time before or after the midterms.
in rh ythm with natur e
The question is whether EU policymakers are willing to stop sending mixed messages and be clear that biofuels have a role to play in the drive to carbon neutrality in European transport.
The GHG emission-reducing performance of EU renewable ethanol is significant and keeps improving every year, to the current level of 76.9% on average compared to fossil fuel. Importantly, ePURE members’ biorefineries in the EU produced more animal feed than fuel that year—simultaneously creating food, feed and renewable fuel while boosting rural economies and providing secure and affordable energy.
One example is the agreement reached by EU Member States in June on a de facto ban on sales of cars with internal combustion engines in 2035. Basically, EU policymakers have placed all their bets for transport decarbonization on one technology that is growing but still not widespread: electrification. In doing so they have further minimized the role that renewable ethanol could play in reducing emissions from the petrol and hybrid cars that Europeans continue to buy and drive.
In recent months, the EU has taken important steps towards strengthening energy independence and food security while sticking to ambitious commitments in the fight against climate change. But it keeps sending mixed signals when it comes to making the best use of an immediate, cost-effective and socially inclusive solution to all these challenges: sustainable biofuels.
Now it is up to the full European Parliament to decide in plenary in September on a final position. With so much at stake on the issues of EU energy independence, food security and climate change, it is clear the Parliament needs to recognize the potential of sustainable crop-based biofuels as an important component of EU renewable energy policy until 2030 and beyond.
The equation is simple: Crop-based biofuels such as renewable ethanol are by far the main renewable energy source in EU transport. Restricting the contribution of such biofuels to climate targets only opens the door for even more reliance on fossil fuel. That’s something no one wants.
12 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022
Europe needs a range of solutions to decarbonize transport—including renewable ethanol—not just one technology that isn’t yet fully attainable for all segments of society. A more realistic EU approach would make it clear to EU citizens that there are no “zero emission” cars. Measured on a full lifecycle, there are always emissions and always costs. A socially inclusive transition to carbon neutrality should empower all citizens and all countries, not just those who can afford new technologies and infrastructure.
But there was more encouraging news in July, when the European Parliament’s ITRE Committee voted decisively in favor of increasing the ambition for GHG emissions reduction in transport and allowing Member States to continue using crop-based biofuels in their transport energy mix. The ITRE position largely maintains the framework for crop-based biofuels as proposed by the European Commission, with a crop cap set at each Member State’s 2020 final consumption of energy in transport, allowing +1% flexibility with a maximum of 7%. ITRE members signalled that sustainably produced crop-based biofuels, such as renewable EU ethanol, do play an important role in transport decarbonization—today and tomorrow.
DavidDirectorCarpinteroGeneral ePURE, the European Renewable Ethanol carpintero@epure.orgAssociation
It’s Time for Europe to Do Better on Biofuels Global Scene
As part of its review of what constitutes “CO2 neutral fuels,” which the agreement allows in 2026, the Commission should take into account the proven and immediate GHG-reduction performance of EU renewable ethanol, and recent studies that show plug-in hybrid vehicles running on high-ethanol blends have lower GHG emissions than battery electric vehicles on a full-lifecycle basis.
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"I'm proud to call Omaha home and eager to continue building our team in the Midwest, which is the heart of our project footprint," said Matt Vining, CEO of Nav igator. "Tyler will be an invaluable asset to accelerating our vision for becoming a pre eminent carbon handling platform, having technical expertise across multiple aspects of CCUS and success in growth initiatives and corporate investment strategy.”
PEOPLE, PARTNERSHIPS & PROJECTS
Navigator CO2 Ventures LLC is relo cating its corporate headquarters to Oma ha, Nebraska, and adding Tyler Durham as chief development officer and senior vice president. Durham brings over 16 years of experience in the energy sector and cor porate venture capital, most recently with Schlumberger New Energy's CCS division.
Blank named CEO of Summit Carbon Solutions Summit Carbon Solutions has named Lee Blank its chief ex ecutive officer. Blank will assume day-to-day leadership of the com pany, which has part nered with 32 ethanol plants across the Midwest to develop in frastructure to capture and permanently sequester over 10 million tons per year of carbon dioxide beginning in 2024. Blank has more than 30 years of lead ership experience with various companies spanning the agricultural supply chain. Most recently, he was CEO of Advance Trading Inc., an advisory and risk manage ment firm. “We are excited to welcome Lee as CEO of Summit Carbon Solutions as we continue to build momentum towards ex ecuting a transformational project for the agriculture and biofuels industries,” said Bruce Rastetter, CEO of Summit Agricul tural Group, parent company of Summit Carbon Solutions. “Lee’s background as an accomplished leader and entrepreneur, his experience in project delivery, and his ability to develop relationships and to en gage with these stakeholders make him a perfect fit.”
Blank
Tallgrass has entered into an agree ment with ADM that would pave the way for Tallgrass to capture carbon dioxide from the ethanol producer’s corn-process ing complex in Columbus, Nebraska, and transport it to eastern Wyoming for per manent underground storage. Tallgrass is developing a project to convert its Trailblazer natural gas pipeline to CO2 transportation service and establish an approximately 400-mile CO2 pipeline— running through Wyoming, Colorado and Nebraska—which will be capable of trans porting more than 10 million tons of CO2 per year.“ADM is meeting growing customer demand, advancing our strategy and living up to our purpose by continuing to lead in the decarbonization of our industry,” said Chris Cuddy, president of ADM’s Carbohydrate Solutions business. “Earlier this year, we announced an agreement that would allow us to sequester carbon from two of our biggest processing facilities in the U.S., and now we’re looking forward to working with Tallgrass to continue our work towards meeting our decarbonization goals.”
Tallgrass, ADM partner on CCS project in Nebraska
14 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022 BUSINESS BRIEFS
Navigator announces new memberexecutiveheadquarters,team
Navigator is continuing to develop its proposed Heartland Greenway pipeline, which will capture CO2 from more than 30 receipt points, including biofuel producers and other industrial customers in Illinois, Iowa, Minnesota, Nebraska and South Da kota.
The government of Rio Grande Do Sul, Brazil’s southernmost state, has an nounced an agreement with Brazilian biodiesel producer BSBios for the devel opment of a grain ethanol plant that will process corn, wheat, triticale, rice and sor ghum.BSBios will invest over (U.S.) $100 million in the project, according to the an nouncement. The facility will be developed in two phases. The plant will initially have a capacity of 111 MMly (30 MMgy), with operations expected to begin in 2024. The second phase of development will boost capacity to 220 MMly (60 MMgy). Phase two of the project is expected to be opera tional in 2027.
The plant will be able to produce both anhydrous ethanol, which is used as a gaso line additive, and hydrous ethanol, which is used as an unblended fuel.
The project is expected to create about 140 direct jobs and 1,000 indirect jobs. New grain ethanol plant under development in southern Brazil
Aemetis Inc. has announced the purchase of 24 acres—known as “Parcel B”—on its leased Riverbank (California) Industrial Complex site, to develop a carbon capture and sequestration (CCS) injection well. The company plans to construct a characterization well to ob tain required data and final injection well design information that will be used for the EPA Class VI CO2 injection well per mit application for the sequestration of approximately 1 million metric tons per year of “TheCO2.Riverbank Parcel B land pur chase secures the key site for 1 million annual tons of planned CO2 injection to reduce the carbon intensity of Aemetis biofuels and sequester CO2 from other California industrial and agricultural sources,” said Eric McAfee, chairman and CEO of Aemetis. “We have completed engineering and filed permits to drill a characterization well on the site as the next step in our CCS project, helping to close the gap on essential climate miti gation actions that can be accomplished today.” Aemetis acquires site for CCS injection well
Policy, Messaging Vigilance Skor’s keynote speech followed a special message from SAFFiRE Renewables and Southwest Airlines, which have partnered to develop sustainable aviation fuel (SAF) from cellulosic ethanol, with the low-carbon alcohol biointermediate being developed first and the jet fuel second. While touch ing on the importance of SAF and other near-term opportunities for ethanol, Skor’s speech focused primarily on the now. She discussed Growth Energy’s involvement in policy victories for the biofuels industry in Washington and emphasized the impor tance of communicating the industry’s role in both decarbonization and fuel cost reduc tion in the midst of high gas prices.
The 38th annual Interna tional Fuel Ethanol Workshop & Expo welcomed producers, suppliers, innovators and policy experts to Minneapolis, Minne sota, in mid-June for three days of presentations, networking and speeches.
PHOTO: BBI/SARAH M PHOTOGRAPHY
By Katie Schroeder
At the 2022 International Fuel Ethanol Workshop & Expo, producers, industry stakeholders and vendors gathered to connect and learn. The FEW’s general session included speakers representing Growth Energy, Green Plains Inc., Summit Agricultural Group and more.
Skor highlighted how the Biden admin istration’s emergency waiver allowing E15 to be sold this summer, while temporary, has drawn attention to ethanol’s affordability. In the wake of the publicity and high gas prices, nine states have petitioned the EPA to make E15 available year-round, and Iowa went a step further and passed a 2022 Bio fuels Access Bill, which guarantees state wide access to E15 by 2026.
RHYTHMS REINVENTION:OF FEW GENERAL HIGHLIGHTSSESSION
ETHANOLPRODUCER.COM | 17
Skor made it clear that Growth Energy wants to ensure that E15 is not just a fleet ing solution during the crisis in Ukraine, but a long-term U.S. component of climate change mitigation. “To build our momen tum, we need to remind policymakers that we are more than just an affordable alter native to Russian oil,” she said. “Savings at the pump got us this summer of E15, but it is our role in a low-carbon future that will open markets in 2023 and beyond.”
The FEW’s general ses sion, the show’s big-stage event, featured an impressive lineup of industry leaders in cluding Emily Skor, CEO of Growth En ergy; Todd Becker, CEO of Green Plains Inc.; and Bruce Rastetter, CEO of Sum mit Agricultural Group, parent company of the planned Summit Carbon Solutions CO2 pipeline. Together, this trio of bigname executives—with Skor headlining and Becker and Rastetter speaking back-to-back after the FEW’s policy roundtable (see page 19)—relayed an array of topics ranging from the industry’s current policy and mar ket priorities to carbon intensity reduction, coproducts evolution and the future of bio refining.
Event
PERCEPTION AT THE PUMP: Headlining the 2022 FEW, Growth Energy CEO Emily Skor highlighted the industry's top policy priorities, emphasizing the importance of communicating ethanol's role in both decarbonization and fuel cost reduction.
Skor touched on current industry de velopments such as CO2 sequestration and utilization and rising interest in SAF pro duction, saying biofuels are a here-and-now solution for difficult-to-electrify industries like aviation. In addition to early-stage SAF projects like SAFFiRE, U.S. ethanol pro ducers ADM and Marquis Energy have committed to producing 20 percent of the current administration’s goal for sustainable aviation fuels. Skor emphasized how etha nol plants use $30 billion worth of corn to produce a variety of renewable prod ucts including distillers’ corn oil, renewable chemicals and animal feed alongside etha nol, while constantly pushing the carbon intensity down through efficiency, science and investments.“Withtoday’s technology, this industry can reach net zero and even negative car bon emissions,” Skor said. “Every plant is calibrating and optimizing, whether that’s tapping into pipelines, test wells for se questration or seeking renewable energy sources like solar or biomass to power their biorefinery. Our commitment to continu ous progress is even opening a new world of opportunity for climate friendly agricul ture.”
Growth Energy aggressively confronted those claims, and Skor highlighted the im portance of educating policymakers and the public on the facts, backed by data from the U.S. Department of Agriculture and favor able scrutiny from the nation’s top model ers, including the Department of Energy’s Argonne National Lab. “Oil disciples and EV evangelists have loyal followers,” she said. “But where ideology confronts reality, that is where biofuels emerge as the clear solution for clean and affordable liquid fuel available right now for today’s vehicles.”
Event
PHOTO: BBI/SARAH M PHOTOGRAPHY
Reinventing Ethanol Green Plains CEO Todd Becker dis cussed the importance of remolding etha nol plants into “modern day biorefineries” by looking for ways to invest and adapt, cre ating higher value products.
Along with the media attention on E15, Skor said there was misinformation circulating (including controversial claims within an early-2022 paper released by Uni versity of Wisconsin-Madison researcher Tyler Lark) that question biofuels’ lifecy cle environmental and air quality benefits.
“We saw with our campaign a sharp increase in awareness and consideration at the pump, especially among a new genera tion of motorists who are motivated by the promise of cleaner, healthier air, and will change their fuel consumption to support this value,” Skor said. “All they need is a nudge and unrestricted access to better fuel options.”
“Historically, the industry has [been] relegated, based on the technology that we had, to produce low-value ingredients that we sell at a low price,” Becker said. “Why should we accept that? We never believed we should accept that. And today, if you’re
STRATEGIC ADAPTATION: Green Plains CEO Todd Becker told FEW attendees that dry mill ethanol plants need to become more like corn wet mills by investing in new technologies to diversify their product portfolios.
She mentioned the EPA recently final ized renewable volume obligation (RVO) numbers through 2022 and discussed poli cies that Growth Energy is prioritizing on Capitol Hill. These policies include clean fuel and carbon capture tax credits as well as infrastructure investments ensuring avail ability of higher ethanol blends in the U.S. market.“We helped insert these items into the White House’s original Build Back Better legislation, and while the bill has stalled in Congress, it remains a key starting point for all subsequent negotiations,” Skor said. “No matter what happens in the next several months, energy will remain firmly at the top of the congressional agenda, and Growth Energy remains committed to ensuring that biofuels are recognized as a cost-effective solution that can deliver an immediate im pact.”Skor also mentioned the advances Growth Energy seeks to make for ethanol on the world stage, explaining how ethanol can play a key role in climate and energy issues. The organization wants to see in creased awareness of ethanol’s benefits at home and abroad, she explained, outlining a pilot campaign the organization launched to encourage climate-conscious consumers to consider what fuel they use at the pump.
PHOTO: BBI /SARAH M PHOTOGRAPHY
The panel also discussed low carbon fuel markets, carbon intensity, carbon capture and the possibility of an eventual federal low carbon fuel standard. Bredenkamp emphasized the importance of choosing an accurate model used to assign CI scores, and Jennings said lowering carbon intensity is impor tant since it will be the “primary means” of increasing demand for ethanol in the future.
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"Brian mentioned technology neutral, that is a phrase we use constantly when we’re talking about a clean fuel standard being done, because it cannot tip that scale toward one tech nology over the other,” Bredenkamp said. "We just want an even playingThefield.”three panelists also discussed the "bright future” etha nol has in the sustainable aviation industry and the importance of carbon intensity. Bliley said that Growth Energy members have committed to 20 percent of the Biden Administration’s goal for aviation fuels.
Roundtable Panelists Tackle RVOs, SREs, SAF and More
An FEW general session mainstay, the Association Round table featured representatives of each of the industry’s pri mary trade associations. This year’s returning panel of policy experts included Brian Jennings of the American Coalition for Ethanol; Chris Bliley of Growth Energy; and Troy Bredenkamp of the Renewable Fuels Association. The roundtable regulars, led by panel moderator and FEW program director Tim Portz, discussed gas prices, ethanol misinformation, renewable vol ume obligations and the potential for a federal low carbon fuel standard.Atopic of focus was the EPA’s largely favorable actions taken in early June, when the agency released current renew able volume obligation (RVO) numbers and proposed additional measures. Jennings said the agency’s denial of 69 small refin ery exemptions, or SREs, was particularly noteworthy. “I think this begins to get the RFS back on track, but goodness gra cious we have to be vigilant,” he said. “Mismanagement has been the rule not the exception.”
Oversupplying the market is something producers need to be wary of as they start experimenting with new products, Becker explained. He advised industry members to avoid “making something for the sake of making something” and to be thoughtful in the investments they make. He touched on that subject in the context of niche product opportunities like bio-glycol, a component of antifreeze.With1.5 billion internal combustion engines on the road today, and less than 20 million electric vehicles, Becker doesn’t think the demand for low-carbon fuels is going away. “I believe we can redefine our selves and together redefine this industry,” he said. “The opportunity we have in front of us to reinvent our industry to supply low-carbon, renewable, plant-based biofu els and ingredients to the world is here.”
SAF GAINING LIFT: Southwest Airlines Sr. Director, Fuel Supply Chain Management Michael AuBuchon spoke to FEW attendees about the airline's recent investment in SAFFiRE Renewables' sustainable aviation fuel venture. M
Becker emphasized the importance of adapting to the moment and investing in new technologies to diversify product port folios. He encouraged the audience to re member that they need to attract new talent to run those new technologies, and he re minded them that it takes time and effort to break into new markets for novel products.
20 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022 producing low-carbon, plant-based fuel … [which] I still believe is deeply misun derstood, we have a chance to—unlike any other time in our industry’s history—rede fine our stories.”
Another major investment Green Plains has pursued is high-protein feed and technology. Green Plains has put millions into backing Fluid Quip Technology’s devel opment of Maximized Stillage Co-Products (MSC) platform, which gives producers the ability to not only make ultra-high protein feed (50%-60%) but also increase corn oil production, Becker explained. Green Plains has been breaking into the aquaculture mar ket, announcing partnerships to sell its “60 percent corn-fermented protein product” as an ingredient to Riverence, the largest trout producer in North and South America, as well as Japanese company Hayashikane, one of the oldest aquaculture companies in the world.“Remember, we are not just selling pro tein, we’re selling a product with 25 percent yeast, with the availability to tailor solutions specifically to the end user needs, that’s how we’re thinking about it at Green Plains for this product,” Becker said.
One of the most talked about develop ments of the past year has been the active effort to develop interstate pipelines for ethanol plant carbon capture and seques tration. Summit Agricultural Group CEO
Ultimately, Becker said, dry mill etha nol plants need to become more like di versified corn wet mills. Expanding the number of low-carbon products produced in dry mill operations is key to the reinvent ing the ethanol industry, he explained. Al though wet mills have the ability to produce an even wider range of products and ingre dients, their products generally have higher carbon intensities than dry mill products.
Project, AlignmentIndustry
PHOTO: BBI /SARAH
“We’re very different from what a wet mill does in that we can make similar and supe rior products more efficiently with a lower carbon footprint than those types of as sets,” he Cleansaid.sugar is one of the new products Green Plains is investing in, and Becker be lieves that production of dextrose and glu cose is a great opportunity for the ethanol industry, providing decarbonization oppor tunities and a new stream of revenue. “I believe our clean sugar technology, for us at least, is our single best solution that exists to reduce our carbon emissions out of our plants,” he said, explaining that clean sugar production doesn’t require fermentation and therefore is a low-energy process.
PHOTOGRAPHY Event PEDESTAL OF PRIZES: The Award of Excellence, left, and the High Octane Award, right, are presented each year during the FEW general session. See winners on page 21. PHOTO: BBI /SARAH M PHOTOGRAPHY
STEPPING UP: Thrermal Kinetics Vice President of Business Development and Marketing Marcos Filgueiras (top left) welcomes 2022 FEW attendees; SAFFiRE Renewables CEO Mark Yancey (top right) shares details about the startup company's SAF production venture with Southwest Airlines; and Award of Excellence recipient John Christianson (bottom left) and High Octane Award winner Randy Doyal (bottom right) address the audiance upon accepting their accolades.
PHOTOS: BBI /SARAH M PHOTOGRAPHY
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“I truly believe there’s a renaissance that’s coming for our industry and our compa nies,” he told his colleagues at the FEW.
“We stand ready to provide the feedstock for the bio-revolution that is coming, and for the bio-revolution that is here.”
Looking Forward The 2022 FEW, from the general ses sion and opening seminars on the basics of ethanol production and carbon capture to the event’s three dozen technical break out sessions and Innovation Stage talks on the expo floor, ultimately gave attendees the opportunity to learn and explore what ethanol production’s reinvention looks like.
Author: Katie Schroeder Contact: katie.schroeder@bbiinternational.com
Rastetter added, “In this instance of lowering carbon scores, we can win the battles of the future because we’re aligned with sustainability, like all of us have always believed we’ve been, but also taking it to the next level to compete very directly with electric vehicles.”
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Bruce Rastetter, closing out the 2022 FEW general session, described the importance of carbon capture to the industry. He out lined the improved efficiency in agriculture throughout the years and talked about how the ethanol industry has benefited agricul ture by providing a local market for farmers’ crops.“As I think back on my career, and part of that career being in ethanol, and build ing a plant in Iowa Falls, Iowa—in 2004, in the early stages of ethanol—I can’t help but remember a farmer that was in his mid70s at the time who said in 50-some years of farming that was only his second year of profitability without government subsi dies,” Rastetter said. “It was because sud denly, instead of an export market, he had a domestic market for his corn nearby to, not be loaded on a shuttle train and shipped overseas to the vacancies of those markets, but add value [right here], as biofuels has done.”As ethanol has grown as an industry, it has become the consumer of 45 percent of the U.S. corn crop, Rastetter explained.
Summit Carbon Solutions’ CCS pipeline is heading toward construction by gaining right-of-way throughout a five-state foot print. To date, the project has signed volun tary easements with more than 2,000 land owners representing over 600 miles across the system. When complete, the pipeline will serve 32 ethanol producers across North Dakota, Minnesota, Iowa, Nebraska and South Dakota. Rastetter talked about Summit’s ongoing efforts to gain easements from property owners, and how the com pany is honoring the heritage of agriculture in its negotiations with farmers. They plan to inject CO2 into the ground starting in the summer of 2024, halving the carbon inten sity scores of the ethanol plants on the CCS pipeline.“In today’s world, that’s not a simple process, but if you pay fair value and you treat people right, you can have good out comes. And so, we are,” Rastetter said.
Event
STEADY PROGRESS: Speaking to FEW attendees about Summit Carbon Solutions' ongoing efforts to gain easements from property owners for a planned CO2 pipeline, Summit Agricultural Group CEO Bruce Rastetter said the project has signed voluntary easements with more than 2,000 landowners representing over 600 miles across the system.PHOTO:BBI/SARAH PHOTOGRAPHY
Although the year ahead has unknowns, the policy wins and exciting new technologies introduced in 2022 are a step forward for ethanol.Becker perhaps said it best when he expressed his hopes for ethanol’s future.
Rastetter also talked about his excite ment for changing the politics of biofuels as oil and gas company Continental Resources is an investor in Summit Carbon Solutions’ pipeline. “As I’ve mentioned, Continen tal Resources, founded and led by Harold Hamm, who has significant experience in the Bakken on directional drilling, believes that it is really important for the combus tion engine that oil and gas work with biofu els, so we all have a future,” he said.
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Cyber security for ethanol producers is increasingly im portant. Threats like ransomware and leakware can result in operational disrup tion, loss of data and theft of proprietary information. Recovering from a cyber breach can be as time- and labor-intensive as repairing physical damage to a facility af ter an industrial accident or storm.
DEFENSESDIGITAL
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The ethanol industry’s potential sus ceptibility to cybercrime is partially due to the use of outdated technology and an em phasis on uptime, explains Joe Henderson, IT director for Direct Technologies. Out dated technology is a perfect recipe for a cyber criminal. “We’ve got an industry that, you know, runs 24/7, runs on outdated hardware and doesn’t update themselves,” he says.Brandon Bohle, endpoint security team lead for Interstates, explains that avoiding cyber security problems helps increase up time and decrease the potential for unex pected downtime. “We realize that uptime is critical for these organizations, they’ve got to make that product and get it out to con
Business
Cyber security has become crucial across all industries, ethanol production being no exception. Experts in the space offer advice on how to improve security, back up data, remediate risk and avoid becoming a victim of cyber crime.
“If a hurricane hits your plant, it might be down for several days to clean up and get everything back together, and you might lose some things,” says Eric Newell, CEO of Stoneridge Software. “A ransomware at tack is kind of similar to that in that you’re down for several days, it could impact some of your internal systems, it could impact some of the controls that you have on your manufacturing equipment. So, it could end up really shutting you down for a consider able period of time.”
By Katie Schroeder
A key step to begin the process of im proving cyber security is assessing a plant’s strengths and weaknesses. Every ethanol plant has its own unique set of vulner abilities, which need to be remediated to improve security. Henderson suggests that producers start improving their cyber secu rity with a vulnerability audit scan. “One, it’s a great way to find out your inventory,” Henderson says. “Sometimes systems get so large that you don’t even know what’s on the network, right, or the plant might not even know what’s on the network, or they thought they were going to retire some thing, and it never got retired.”
ETHANOLPRODUCER.COM | 27 sumers in order for them to make money,” Bohle says. “We want to ensure high up time and availability at these facilities, and by avoiding different cyber security issues, that’s how we’re really helping them keep up in processing.”
Ransomware is a major financial risk and can be very disruptive to a producer’s operation. This happens when a cyber crim inal gains access to a network and holds files and information, not allowing the owners to have access unless they give them large sums of money. Bohle explains that ransomware is currently one of the biggest threats in the cyber world. Although there is no “silver bullet” for stopping cyber attacks, Bohle explains that Interstates takes a lay ered approach, looking at the many differ ent aspects which go into an ethanol plant’s cyber security.
Newell agrees, suggesting an assess ment followed by a penetration test, where
Assessing Vulnerabilities
Remediation Solutions
Business
Doug Davidson, director and depart ment head of external-facing IT services with GBQ Partners, suggests starting with a Critical Security Framework assessment from the National Institute of Science and Technology to identify valuable assets, ways to protect them, as well as how to “detect, respond and recover” if those assets are at tacked. “The second step would be to do a risk assessment to understand what assets you have—whether IT or OT assets—and how they’re exposed. And then, based on how likely an attack might impact those sys tems, let’s put a plan together to remediate or close this hole,” Davidson says. Uneducated end users are the produc er’s greatest vulnerability since they may fall prey to a phishing email and grant a cyber criminal access, according to Henderson. While uneducated end users can be a major vulnerability, they can also be a your “big gest defense.” Other vulnerabilities include outdated or end-of-life operating systems, such as XP or Windows 7; default usernames, de fault passwords and weak passwords; active usernames for employ ees who no longer work there; and internet ac cess for devices which are on the operation technology (OT) network.
One of the ways producers can protect their data and avoid unanticipated down time is by having backups. Bohle explains that backups are the best way to avoid fall ing prey to ransomware and being forced to pay possibly millions of dollars to get your data back. “If we have a good backup pro cedure and one of our systems gets com promised with ransomware, rather than contemplating paying the ransom, we can just use our backups and restore our sys tems,” he says. “It’s usually cheaper and it’s a lot quicker, but you’ve … got to [bear] that upfront cost.” Newell recommends having a mini mum of two backups, one in the cloud and one physical backup. For cloud storage he recommends OneDrive and Azure. “And then if you’re on premise (i.e., your IT infrastructure is hosted on site) the most common solution that we recommend is called Veeam, that’s a really strong backup software that will organize your backups for you and give you options to backup digital, cloud, all that kind of stuff, so that’s kind of the best in the industry on that,” Newell says.
28 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022 a hired professional attempts to hack your system. “That can expose a lot of wrinkles, or it could tell you that you’re generally pret ty safe and as long as you don’t give away the passwords and phones, you’ll probably be okay,” he says. “But that’s the best thing to do; we do a fair number of them.”
Determining the importance of the in formation is key to understanding how fre quently information needs to be backed up and how much money to invest in backups, Bohle explains. “This would give us an un derstanding of how frequently we need to do backups on our systems, or do we need to do live backups,” he says. “Generally, the shorter amount of time [between backups] … the more expensive a system is. So, you kind of [need] that balance between the two.”
Davidson Bohle
Henderson recommends three dif ferent cheap and simple methods which can help turn end users into the first line of defense instead of a vulnerability. First, educate end users on what a phishing email is and how to recognize it. Second, teach them how to have strong passwords and implement a strong password policy. Final ly, both Henderson and Newell suggest that producers invest in multi-factored identifi cation, so that a hacker would not be able to access accounts or systems if they steal a user’s password.
Educating End Users
There are multiple different education options to assist with these steps. Hender son recommends asking a Direct Technolo gies representative or another “cyber secu rity guru” to come in and give a 45-minute presentation to educate employees on safe usage. Newell recommends using train
One of the biggest problem spots in cyber security, aside from end-user missteps, is having the operation technology network accessible via the business network. Bohle explains that separating the business or of fice network at the operation technology network allows for less damage to the orga HendersonNewell
The average plant worker will be encour aged to speak up if they notice the system is not working normally. For employees who work at a security officer level, Interstates goes over response options, limiting expo sure once compromised and responding to ransomware. Other decisionmakers, such as plant managers, executives and board members, may receive education on the im portance of early implementation of cyber security, Bohle says. “It is an upfront cost that really doesn’t have a direct ROI, but in the long run—by preventing some of these downtimes or reducing the time that a sys tem is down in these events—they can get up and be producing again in a quicker fash ion,” he explains.
Network Separation and Protecting Critical Assets
Business
30 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022 ing from cyber secu rity company KnowBe4. Davidson agrees with that recommendation and describes how GBQ utilizes their training.
“We use the tool to raise awareness about what bad things might hap pen, and to raise awareness about what we expect an employee to do in that environ ment, and then kind of in a learning mode, we self-phish the organization,” he says.
“Self-phishing” is conducted by send ing out phishing messages to every member of the company’s inbox. If employees re port the email to IT, they will get a message congratulating them on responding correct ly, Davidson explains. However, if they click on the link, they will get a message telling them that clicking was not the right response and giv ing them information on what to look for in the future to recognize a phishingBohleemail.explains that Interstates tailors its end user training to the team member’s role within the organization.
Insurance Investment Investing in cyber security insurance is an important safety measure that could end up saving you money in the long run. Newell compares purchasing cyber security insurance to purchasing insurance for tor nados or thunderstorms, it helps you cover some of the cost for damages. “There’s cy ber security insurance that you can buy with ransomware protection, and that will help offset some of the costs you have if you are hit,” he says.
“We want to limit what sort of traffic can go to different areas,” he says. “This is where we like to do segmentation. If there’s an office environment, we like to separate that from the controls or the production environment.”Henderson agrees, “A lot of plants that we’ve seen get compromised, it always starts with a business office network and then from that business office network they’re able to gain access to their OT network,” he says. “So, having that business office net work segregated or separated through, for instance, a firewall is pretty critical along with any other networks that hit the world wide web. With those segregated off, which could still leave a back door or some type of loophole, it’s going to take longer for those cyber criminals to find and maybe mitigate or shut down before it is exposed.”
Henderson explains that though cy ber security insurance may cost somewhere from $8,000 to $20,000, the price pales in comparison to ransomware costs, which can be millions of dollars. While backups are helpful, Henderson reminds produc ers that they’re not necessarily a guarantee for a quick comeback. “Backups will save you probably 95 times out of a hundred,” he says. “Chances are, if you’re down for three days … [backups] will take care of your data. But if for some reason we need to strip that network and rebuild it, you’re down for a week, and how much does that cost you?”
Identifying “mission critical assets” is vital, Bohle explains. Mission critical as sets include any communication paths or systems which will shut down the whole process if they fail or become non-respon sive. “We might look at having redundant systems that are running concurrently, we could have redundant power supplies for some of the systems or we could even have redundant switches in place. If something goes down, it could shut you down, so we need to figure out how we create redundan cy there,” Bohle says.
Author: Katie Schroeder
ETHANOLPRODUCER.COM | 31 nization as a whole if one area gets hacked.
Contact: katie.schroeder@bbiinternational.com
Jim Pirolli, chief commercial officer of Summit Carbon Solutions, was there with Boshart to help add to the discussion—specifically about the plant’s future. Pirolli has been busy since joining the Summit Carbon Solutions team. The affiliate of Summit Agricultural Group is working towards building a multi-state, multi-ethanol plant pipeline system that could help ethanol producers realize a future enhanced by carbon capture.
ADDING UP CCSSTREAMSREVENUE 32 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022
Ethanol Producer Magazine spoke with Boshart and Pirolli moments after they completed their tour, discovering how it went, what questions the general public had about fermentation or carbon, and why. More specifically, why has CCS taken the ethanol sector by storm, and why do producers in and out of ethanol country put such great value on CCS? Their answers were largely about two things: the big picture for ethanol’s future and the immediate financial impact CCS could have on a biorefinery’s bottom line.
On a mid-July afternoon, a group of reporters, community leaders and other townspeople gathered near Goldfield, Iowa, on the grounds of Corn LP, a 72 MMgy corn ethanol plant in the heart of ethanol country. The team at Corn LP had the plant clean and ready for the day’s media tour scheduled to start at 3 p.m. Chris Boshart, general manager of the plant, was prepped and ready to talk to the invited group about the facility, touching on the plant's history and what its future might look like. Boshart wasn’t alone.
Carbon
By Luke Geiver
The dual financial motive behind ethanol’s move into CCS helps explain how and why producers intend to monetize their vital new role in the carbon sequestration movement.
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In most cases, a gallon of ethanol sold into California with a lower-thanaverage CI score will fetch a range of 20 cents to 40 cents more per gallon through the state’s LCFS. So, alone, CCS-associat ed ethanol with an improved CI score gen erates more income per gallon out West. But that’s only half the story.
In addition to the per-gallon pay bump offered via the California market, the U.S. Internal Revenue Service offers a tax credit on renewable energy linked to carbon capture. The credit is known as 45Q. Like the CI score-to-monetary gain part of carbon capture, the 45Q seems simple but is more complex than most think.To understand how an ethanol plant earns additional revenue through carbon capture and the LCFS, consider this hy pothetical combined with the use of the credit price calculator provided by the California Air Resources Board. The calculator takes into account the current price of an LCFS credit, the CI score of the given energy source and the energy economy ratio value relative to the fuel the lower carbon biofuel is displacing. Currently, CARB assumes that the EER
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WALKING THROUGH QUESTIONS: A group of reporters and community leaders (inside facility, right) tour Corn LP in mid-July to learn about the operations and future of the 72 MMgy corn ethanol plant near Goldfield, Iowa. The facility is among 32 Midwest ethanol plants signed on to participate in the planned Summit Carbon Solutions CO2 pipeline. Chris Boshart (seated left), general manager of Corn LP, and Jim Pirolli (seated right), chief commercial officer of Summit Carbon Solutions, field media questions, most pertaining to carbon capture and sequestration.
PHOTOS: SCS value of ethanol is 1; electricity used to power an electric vehicle earns an EER of 3.4, in comparison. The price of an LCFS credit fluctuates based on the volume of credits generated each quarter. With the rise of EVs and the acceptance of renewable diesel in the LCFS program, the volume of credits available in the program continues to rise. With a greater supply of credits available to trade or acquire by third parties, the price has decreased some. The most an ethanol-generated credit can be valued at is $200 per credit, but current values are about half that amount. While the CI score of a fuel or energy source can also vary, the average CI of ethanol used in the LCFS market is roughly 58. There are numerous factors that can change a CI score, including feedstock, energy use and, now, participation in CCS. The CARB calculator shows how much monetary bump a gallon of ethanol will receive with a particular CI score at a particular credit price. So, at a CI score of 58, a credit price at $100 and the standard EER value of 1, a gal
Carbon Factoring In CCS
Several factors affect the financial vi ability or economic potential of an etha nol plant capturing carbon produced dur ing the ethanol production process. On a basic level, the advantages of carbon capture are simple and well understood throughout the ethanol industry. Captur ing carbon lowers the carbon intensity score of any ethanol produced at a plant that participates in reducing its carbon footprint through capture and sequestra tion techniques. That CI score (the lower the better) increases the monetary value of ethanol in low-carbon markets, particu larly California, that incentivize liquid fuels and other sources of energy that are pro duced with lower carbon than traditional gasoline or diesel. Oregon has a similar in centive for low-carbon biofuel, and other states are following suit, but the California Low Carbon Fuel Standard is currently the main game in town.
Take Ac tion at GrowthEnergy.org/RVPfix lon of ethanol would receive an additional 27 cents per gallon. For perspective, the average price of ethanol in 2021 was roughly 86 cents per gallon. An ethanol facility selling 10 mil lion gallons of ethanol outside of California would gross roughly $8.6 million. But an etha nol facility selling those same 10 million gal lons into the LCFS system would earn $11.2 million, a difference of $2.6 million.
It’s time ConrestricseaseliminatepermanentotlyonaltionsE15.ONGRESS:
The addition of CCS can potentially re duce the CI score of ethanol by half. So, if that ethanol plant selling 10 million gallons into California was also capturing and seques tering its carbon, it would earn (assuming the same credit price and EER value used above) roughly $13.6 million, a difference of $5 mil lion had it not engaged in CCS or sold its fuel into the LCFS market. If the credit price used in this hypothetical calculation was maxed at the $200 threshold, those 10 million gallons produced with CCS and sold into the LCFS market would earn $18.7 million.
ETHANOLPRODUCER.COM | 35
Bryen Alperin, director of renewable en ergy and sustainable technologies at Foss & Co., is an expert in the tax credit space. Alperin and his team have a long track-record of navi gating and capturing the value of tax credits for entities that either earn the credits or have an appetite for using them. A tax credit reduc es a company’s tax liability dollar-for-dollar. But according to Alperin, not every tax credit generator has a desire to use the credit or the account value to do so. Foss & Co. helps com panies find a way to benefit from the credit, or helps them work with another company that can. Alperin and his team are particularly skilled at connecting large corporations with companies that can generate 45Q credits. Foss will link tax equity investors to projects that generate certain tax credits that are valuable for various reasons to the TEI group. In the case of 45Q, the credit helps satisfy the desire of large entities needing or wanting to offset their own carbon footprint. Some corpora tions, like Microsoft, Alperin explains, are big into acquiring offset credits to meet their own requirements. By partaking in the 45Q credits, corporations or investors can get the value of a carbon offset while also potentially receiving the monetary value associated with 45Q which is valued by the metric ton of carbon.
CARB is currently engaging in talks with industry about the amount of credits it has in the California market, the stipulations allowed for setting CI scores of energy sources and other factors that could positively impact the credit prices through the program.
While the gains for corn ethanol gallons sold into California with or without CCS can be done by just about anybody who can navi gate an Excel spreadsheet (that is what CARB provides to do the calculations), figuring out the value of 45Q tax credits is much more complicated.
“What we saw with the 45Q was that our investors had a lot of interest but there weren’t a whole lot of projects getting com pleted,” Alperin says. In many cases, Alperin helps 45Q tax credit generators link with TEI’s
Through
“You don’t want to be left out on this,” he says of the CCS project. People need to know the benefits that these projects will bring, he also explains, referring directly to why his team held the media tour in mid-July this year with Pirolli. CCS is something to be proud of, he believes, and it shows that the ethanol indus try is a major player in the push to lower the world’s carbon footprint.
•
• Depreciation
Boshart says there are multiple reasons why the Goldfield ethanol plant was the first to sign up on the Summit Carbon Solutions pipe line plan. “This is an important project for us,” he says, noting that during the depths of the Covid pandemic, the plant was shut down and his team was looking at layoffs. The difficulties of Covid impacting the market and the role carbon has on the future of many industries made Boshart and his team do a reality check on what they needed to do.
The idea of subsurface work and carbon injection may sound risky, Cartilage adds, but with Battelle and their expertise in the space, the risk gets downsized so that projects can get done and thrive.
• 45Q
• Reduced
Carbon The Simple Math Through
The Big Picture
•
There are others in the ethanol space that would agree, nearly a majority. Between the Summit project and others, ethanol produc ers are announcing their intent to join a CCS pipeline or implement on-site CCS. Boshart and his team were in the camp that thought about doing it on their own, but opted to have a third-party involved instead. Just as Alperin explains, the Goldfield plant and the others in volved with Summit, didn’t have the appetite CCS, Plants Receive: $0.20 - $0.40 extra per ethanol gallon sold into California tax credits for every metric ton of Carbon 2022 value equals $37.85/mt Carbon Intensity scores (which in turn increase the monetary value of ethanol gallons sold into California) CCS, Tax Equity Investors Receive: 45Q tax credits that can be used for corporate tax strategy and carbon offsets partial proceeds of the premium fuel sales linked to California values from equipment owned to capture carbon at an ethanol site
Jon Cartildge, commercial sales director for Battelle, says Battelle’s Carbon Services are set up to find and evaluate the feasibility of carbon storage and onsite sequestration of any given site while projecting operational and capital expenses for the project. But they don’t stop there. Battelle can stay engaged with a project for the long haul. His team can manage construction, obtain permits, monitor compli ance during injection and post injection. “We can play the long game,” he says. All ethanol plants have high-purity car bon, making them great options for CCS. Most produce well over 100,000 metric tons per year, according to Cartildge. Because the economics of constructing CCS projects don’t alter based on volume of carbon produced, plants with greater volumes of carbon are bet ter off, he says.
Ethanol
In some cases, those investors are willing to de ploy their own capital to get a project going so they can get the 45Q credits in return for their tax strategy.“Ithink about it from the corps perspec tive. They can wire money into the IRS for taxes, and they have no control on how it gets used. But by investing in these projects they are still paying into the social good, and they have control over the types of projects that they are able to promote with those dollars,” Alperin says, adding that, “they have an opportunity to earn a return on their investments.”
36 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022
In 2022, the value of the 45Q credit for CCS is roughly $37 per metric ton. The mini mum volume of metric tons that a carbon pro ducer has to emit annually in order to qualify for the credit is 100,000 mt. At the minimum, the 45Q credits would be worth $3.7 million to any entity that can use them. By projects that investors want to back, Alperin means CCS. And to help Foss meet the needs of its large clients looking to gain access to 45Q credits passed from a project or ethanol producer to their own tax strategy playbook, Alperin and team have linked up with the longest running CCS expert in the country: Battelle. Foss and the CCS expert group of 40-plus engineers and industry CCS veterans, have partnered to help assess, plan and build-out CCS projects at ethanol facilities (in addition to steel or cement plants).
Either way, Foss is already helping ethanol plants access capital and partners interested in their 45Q credits, all with the help of a national leader in CCS.
“If a plant operator doesn’t want anything to do with the CCS project, we can manage and pay for the CCS and essentially buy their CO2,” Aplerin says, adding that, “if they want to be a little more hands on, there are struc tures where they can put up some of the de velopment capital.”
in an agreement that gets project investment capital to the 45Q project users (in this case, an ethanol plant installing CCS infrastructure and equipment) in return for the tax credits, equip ment depreciation and preferred cash returns from project proceeds to the TEI’s. In the past few years, Alperin has seen a major uptick in interest regarding the 45Q.
captured:
At a recent presentation on 45Q during the Carbon Capture & Storage Summit—a colocated event at the International Fuel Ethanol Workshop & Expo, the largest gathering of ethanol producers in the world—the presenta tion space was standing room only. It's not just ethanol producers interested in how to navi gate the 45Q. Investors and corporations are voicing their interest as well. “We were sitting down with one of our investors recently and they were encouraging us to get involved ear lier on to bring more projects to market faster.”
• Potential
Pirolli points out that these projects help ethanol decarbonize the transportation sector and position the industry and its agricultural al lies well for the future.
There is no volume commitment for members of the Summit pipeline.
“As we strive to retain value in our local communities, it is imperative to understand that each component of the corn kernel has value, including the CO2. With the value proposition embodied within a partnership with Navigator, we come much closer to realizing that full en vironmental and monetary value,” adding that “this is the right decision not only for the en vironment, but also for our shareholders, corn suppliers and underlying communities.”
“CO2 is one of the last remaining things that does not have added value,” she says. “I think this showcases the necessary steps for ethanol to fully Burns-Thompsondiversify.”hopes that someday people will think about Navigator’s work, or others like it, as more than a pipeline. She views the systems as carbon management plat forms, noting that the opportunity for utilizing carbon in new materials isn’t far off. Those types of projects that rely on car bon as a building block don’t come to scale un less there is a backbone for supply. “This helps ethanol producers future proof their facility.”
Out of the blue, your tanks fail.
Their valuable contents are at risk. But if your site planning included J.C. Ramsdell secondary containment systems, you’re protected from the unthinkable. Your contents are safe— the environment is safe. Ramsdell has been protecting them both since 1988. to deploy the capital to do the project. But, in return for their 45Q credits and a share of the proceeds from selling ethanol into the LCFS market at a premium, they are getting an en tire CCS system built and operated by Summit.
ETHANOLPRODUCER.COM | 37 877-658-5571 • JCRAMSDELL.COM
Author: Luke Geiver Contact: editor@bbiinterantional.com
Navigator CO2 Ventures LLC is also play ing a major role in helping the ethanol industry supplant its future in the carbon discussion. The company is working to build a multi-state pipeline system to capture, utilize and/or store carbon.When Big River Resources LLC an nounced that it was signing up three of its Io wa-based ethanol plants for Navigator’s Heart land Greenway Project pipeline in May, David Zimmerman, CEO of Big River, explained the company’s position.
Navigator was on pace with its initial scheduling for the project, but another major ethanol player announced it was joining into the Heartland project recently. POET is pre pared to connect several plants as well. Eliza
A Snapshot of LCFS Ethanol Credits 2021: • Ethanol generated 3.8 million credits • Corn ethanol gallons supplied to the LCFS system reached 1.2 billion • Fiber-based ethanol gallons supplied to the LCFS system reached 140.5 million • Average credit price range: $175 to $200 2022: • Current average credit price range: $80 to $125 Source: California Air Resources Board Data Dashboard
beth Burns-Thompson, vice president of gov ernment and public affairs, says that although the scheduling and other economic impact studies had to be tweaked with the addition of POET, the announcement simply shows how important CCS is to the industry.
Navigate
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ETHANOLPRODUCER.COM | 39 | 87 7. 45 6. 858 8
EthylPharmaceutical-GradeAlcohol
Navigating Facility Changes to Produce Higher-Grade Alcohol By Jessica Buckley The claims and statements made in this belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer or its All questions pertaining to this article should be directed to the author(s).
PHOTO: AEMETIS
Fuel and Industrial-Grade Ethyl Alcohol Ethyl alcohol can be found in a wide range of products. It is important to un derstand the various alcohol grades to dis tinguish adjustments to the process and the compliance considerations. Fuel-grade alcohol is denatured with natural gasoline and is often considered the lowest grade due to high impurity levels, which are often disregarded since they’re easily combusted in engines. Industrial grade alcohol typically has most of the impurities removed and is required to meet United States Pharmaco poeia (USP) standards. Industrial-grade al cohol can be 190 or 200-proof and is spe cifically denatured. For example, SDA 40B, a variety of industrial-grade alcohol, is spe cifically denatured with tert-Butyl alcohol. Approximately 60% of U.S. industrial de mand goes to solvent applications in toilet ries and cosmetics, detergents and house hold cleaners, coatings and inks, processing solvents, or as a chemical intermediate.
Diversification
Magazine
advertisers.
It’s no secret that 2020 was an especially difficult year for the biofuel industry. Between less people traveling and market conditions, many plants were forced to slow or tem porarily halt production due to reduced demand. Some facilities were able to divert product for alternative uses, particularly as an ingredient in hand sanitizer as the result of FDA’s temporary policy changes. Given the current political climate and push for more electric vehicles, some facilities are beginning to explore alternative markets on a more permanent basis. Facilities that were originally designed and operated as fuel-grade ethanol manufacturing plants are diversifying to produce higher-grade al cohol. However, there are permitting and compliance hurdles that may be encoun tered when changing the intended final use of manufactured products. With the global industrial alcohol market expected to grow to over $241 billion by 2027, it is logical for facilities to diversify to secure a more sus tainable future.
Drink the Best and Sell Rest!the
Further reducing impurity levels can qualify the ethyl alcohol as “Pharmaceutical Grade,” which has applications as a topical disinfectant (i.e. hand sanitizer). Pharma-
article
40 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022
CONTRIBUTION:
Markets grade alcohol can also be used for blood fractionation/plasma, chemical interme diates, tableting, powders and antibiotics. Additional recordkeeping and testing will be required at this level and will also re quire registration with FDA. The primary impurities of concern and acceptance cri teria is represented as follows: methanol (200 mL/L), acetaldehyde and acetals (10 mL/L), benzene (2 mL/L), sum of all other impurities (300 mL/L).
Further, short and long-term business plans may need to be assessed to determine which TTB permit is required. If only pro ducing fuel-grade alcohol, the facility re quires an Alcohol Fuel Plant (AFP) permit. For higher grade alcohols, there are several DSP permits for which the facility may re quire authorization. A DSP Beverage facil ity may be authorized to produce, bottle, rectify, process or store beverage spirits, (i.e. vodka, whiskey, gin, etc.). A DSP Industrial facility may be established to manufacture articles, or produce, bottle or package, de nature or warehouse spirits for industrial use (not beverage use); Distilled Spirits Vin egar Plants fall into this category. A DSP Industrial/Beverage facility may conduct beverage (non-industrial) and industrial op erations from the same premises. Finally, an Experimental DSP may be established for specific and limited periods of time solely for experimentation to develop industrial spirits or sources of materials or processes used to produce spirits. In addition, there are other registration considerations for beverage-grade alcohol. There are certain applications that wholesalers must file to export alcohol, particularly to export it without payment of tax. Importers and wholesalers must follow similar procedures. With all the nuances listed here it is easy to be overwhelmed. Environmental consultants and marketers can provide a valuable resource for information and as sist with streamlining the approval process. With some minor changes to the process and some additional paperwork, it may be feasible to “drink the best and sell the rest!”
Production of beverage alcohol requires a specific DSP permit through the Alcohol and Tobacco Tax and Trade Bureau (TTB) and requires a separate FSMA plan. The state permitting authority may also require additional authorizations and may affect tax on products.
Considerations
Permitting and Compliance
Food-Grade Alcohol Food grade is distinguished from the other grades since it must be safe for hu man consumption. It has a higher purity level due to lack of additives, adds a heavy metal specification limit, and is convention ally 200-proof. It requires specific FDA reg istrations and a specific hazard assessment and Food Safety Plan through FDA’s Food Safety Modernization Act (FSMA). Foodgrade alcohol has a wide variety of markets, including hemp and cannabis extraction, flavor extracts (vanilla, citrus, root, etc.), craft vinegar, as well as personal hygiene products and nontoxic fuel for RV and boat stoves.
Author: Jessica Buckley, Project Manager RTP Environmental Associates buckley@rtpenv.com516-333-4526Inc.
Beverage-Grade Alcohol Beverage grade alcohol is considered “pure alcohol” or Grain Neutral Spirits (GNS), and is the highest grade of purity, typically 192-proof. Since taste and smell profile is considered, it must pass a strin gent organoleptic assessment, which can of ten pose challenges for fuel-grade facilities.
ETHANOLPRODUCER.COM | 41
Additionally, as stated previously, the facility may need FSMA registrations and certifications as well as follow new and/or updated compliance programs. A full reg istration process is required for industrialgrade and higher-grade alcohols. Since the temporary waiver granted by FDA in 2020 expired as of December 31, 2021, manu facturers that plan to continue producing alcohol for hand sanitizer can do so pro vided they comply with the FDA’s Current Good Manufacturing Practices (CGMP) and other applicable requirements. Fur ther, food-grade and beverage-grade alco hol plants will require registration as a food facility, which requires additional handling considerations such as security, sanitation, additional FSMA assessments and verifica tion activities, product testing, premarket submissions and labeling requirements.
Although some diversification of final alcohol products will require minimal modi fications to the manufacturing process, they will likely affect various environmental permits and compliance programs. For ex ample, the facility may need to upgrade the distillation process, or may require add-on technology. Depending on the facility, the plant may require a separate line, separate loading and separate storage tanks. Not only will this likely affect the facility air per mit, but it could also require an update to the aboveground storage tank (AST) per mit, Tier II filings, risk management plans and water permits. Examples of scenarios requiring a modification to the facility air permit include a change in the method of operations or the incorporation of alterna tive operating scenarios, new storage tanks, additional steam required to support pro duction, new or modified loading rack, or even additional LDAR components. Some of these changes may even change the per mit from a minor source/Title V to a major source/PSD permit or major source NE SHAP, which would require a new permit authorization. These changes would likely result in adjusted or new recordkeeping and reporting requirements, stack testing, etc. Additionally, depending on the state, air dispersion modeling and additional en vironmental impact assessments may be required. Producing higher grades of alcohol will likely affect RINs and other Low Carbon Fuel Standard (LCFS) programs since the facility could not credit 100% fuel produc tion. This may require calculating steam/ energy and feedstock usage separately for each process line. Also, if there’s additional storage, the facility must assess if the tank farm can handle the new tanks for second ary containment, and an update to the In dustrial Storm Water Pollution Prevention Plan is likely required. Construction Storm Water authorization could also be required depending on facility activities.
42 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022 Get MessageYourOut Now Quickly Reach 40,000+ Industry Contacts Easily Track Your Performance Digital Press Package By Ethanol Producer Magazine Interested? Contact us at 866-746-8385 FUEL ETHANOL Ethanol Producer Magazine's Marketplace 800-279-4757 | 701-793-2360 CallOver50YearsofExperienceusforafree,no-obligationconsultationtoday. www.natwickappraisal.com natwick@integra.net The Specialist in Biofuels Plant Appraisals • Valuation for nancing • Establishing an asking price • Partial interest valuation CLEANSBUTTERWORTHBETTER www .butter wo rt h.com inf o@butter wor th.com &EXPOSURMAXIMUMGAINECONTACTINFO Live + OnDemand www.EthanolProducer.com/pages/webinar Contact us today for more service@bbiinternational.cominformationor866-746-8385 WEBINAR SERIES EthanolProducer.com
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