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Apr 16, 2023

Is green methanol an alternative to CO2 pipelines?

Several Iowa farmers are optimistic CapCO2 could ‘solve the pipeline issue’ Mar.

Several Iowa farmers are optimistic CapCO2 could ‘solve the pipeline issue’

Mar. 26, 2023 5:00 am

Some renewable fuels advocates say carbon dioxide pipelines are the only way to save Iowa's ethanol industry, but Jeff Reints doesn't buy it.

Especially not since he learned about CapCO2, a company marketing a system to capture CO2 from ethanol plants, combine it with hydrogen and turn it into green methanol — a highly sought renewable fuel.

"It's just so much more of a logical, better-for-the-environment, not-destroying-Iowa-farmland concept," said Reints, a Shell Rock farmer, real estate developer and pipeline opponent.

Real Carbon Tech, a Polish firm that developed the technology being used by CapCO2 in the United States, built the system in shipping containers that can be set up outside ethanol plants. As an ethanol plant emits CO2, the gas is captured, compressed and processed with hydrogen.

The end product is methanol, a fuel being used in some industries to replace diesel.

Danish shipping giant Maersk announced in November it needs 6 million tons of green methanol a year to reach its 2030 greenhouse gas emissions target and even more by 2040 to get to net zero emissions.

CapCO2 would ship the methanol out by rail — the same way ethanol already is transported from the plants, CapCO2 CEO Jeff Bonar told The Gazette.

"You’ve got this very pure, large amount of CO2 coming from an ethanol plant," Bonar said. "For certain kinds of products, like methanol, that pure CO2 is perfect."

Bonar drove through Iowa and Illinois earlier this month to meet with ethanol plant owners, farmers and other stakeholders to promote his product as an alternative to CO2 pipelines — contentious in Iowa because two of the projects want to use eminent domain to gain access to privately held land to build the underground pipelines.

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The Iowa House on Wednesday passed a bill that would require pipeline companies to secure 90 percent of the land through voluntary leases on land before eminent domain could be used to gain access to the rest.

House File 565 now goes to the Iowa Senate, where its fate is uncertain.

Many farmers don't want to be forced to provide easements to the pipeline companies — even though they’ll be paid for allowing access — and worry about lower yields and disrupted water drainage tiles where the pipelines are built.

Some farmers also don't like hearing the Iowa Renewable Fuels Association say pipelines are the only way to preserve Iowa's ethanol industry.

Reints, who sells the bulk of his corn to POET Bioprocessing in Shell Rock, criticized a recent study the association commissioned saying 75 percent of Iowa's ethanol plants would go out of business without pipeline approval.

"The whole study was bought and paid for by them. What do you think the outcome is going to be?" he said. "It's really embarrassing the stance that (Association Executive Director) Monte Shaw and others in the renewables industry are taking on this. It's quite obvious their pockets are being lined."

Shaw said the whole ethanol industry will benefit financially if plants can lower their greenhouse gas emissions enough to qualify for new tax credits authorized by the Inflation Reduction Act.

"So why is everyone working to do CCS?," he said about the carbon capture and storage offered by pipelines. "Because it is a proven technology, with reasonable capital costs and can be implemented in time to earn the 45Z tax credits. In short, plants are pursuing CCS because it makes financial sense."

Pipeline companies and ethanol plants could make up to $1 per gallon in federal tax credits for producing transportation fuel with lower greenhouse gas emissions. With a lower carbon intensity score — based on capturing CO2 — ethanol plants could sell their fuel in states and countries with low-carbon fuel standards.

Summit Carbon Solutions, Navigator CO2 Ventures and Wolf Carbon Solutions — the three companies proposing pipelines in Iowa — would transport the compressed gas to Illinois and North Dakota, where it would be sequestered in rock formations underground.

But Bonar and Iowa supporters of CapCO2 say if there's a market for methanol, why wouldn't Iowa want to use the waste CO2 from ethanol plants to make something of value?

"You can capture the CO2 from ethanol plants right on site so you get the tax credits from that, but you also get the fuel source that is sought after," said Josh Manske, an Algona farmer who sits on the boards of the Iowa Farmers Union and the National Farmers Union. "I don't want to say it can solve the pipeline issue, but it kind of can."

Companies around the world are trying to turn waste into methanol — especially with customers like Maersk waiting for the product.

CIMC Enric is one of six companies that signed a deal to supply the global shipping giant with methanol. The agreement calls for CIMC, a Chinese firm, to perform a demonstration project to turn 50,000 tons of biomass into green methanol, CIMC reported last year.

"The production capacity of the second phase of the project depends on the development, and the annual output of green methanol is expected to increase to 200,000 tons," the company said.

CapCO2 is planning to pilot its technology at a Midwest ethanol plant this summer.

Bonar only has one shipping container now — an ethanol plant would need from five to 10 containers to capture all its CO2 — but he hopes the pilot project will prove the concept works.

"From a chemical and engineering point of view, it's quite clear it will work just fine," Bonar said. "It's more of it's brand-new and you’ve got to get people comfortable with the idea of it."

The National Corn to Ethanol Research Center at Southern Illinois University Edwardsville is helping CapCO2 with some tests to determine how to best pipe CO2 from the ethanol plants and to determine whether there are any other chemicals in the CO2 that would need to be removed, Bonar said.

Using a "capture-as-a-service" model, CapCO2 would rent space at an ethanol plant to install the shipping containers, take care of all operations and liability, and pay the ethanol plant a percentage of methanol sales. They would share the 45Z tax credits, Bonar said.

Steve Guyer, energy policy manager of the Iowa Environmental Council, said the idea is an option.

"With the Inflation Reduction Act providing tax incentives for both CO2 capture and storage, as well as hydrogen production, methanol production utilizing CO2 from ethanol is definitely a potentially viable alternative to CO2 pipelines," he said.

CapCO2 is a small player and has only been in business since 2022, which Shaw, of the Renewable Fuels Association, thinks should make Iowans skeptical about investing too much hope in the technology being able to convert large volumes of CO2 into methanol.

Manske and Reints said they’d like CapCO2 to have more proven results, but all carbon capture technology — including that used for underground sequestration — is relatively new.

"Once that thing is up and running, I will be there," Manske said of the CapCO2 pilot test.

Iowans seeking alternatives to pipelines say ethanol plants should be able to consider other carbon capture options, even if they’ve signed letters of intent to provide their CO2 to pipeline firms.

ADM and Wolf Carbon Solutions announced in January 2022 they have signed a letter of intent to build a 350-mile pipeline to transport liquefied CO2 from ethanol and cogeneration facilities in Cedar Rapids and Clinton to ADM's already-operational sequestration site in Decatur, Ill.

Last June, POET, which owns 12 Iowa ethanol plants, said it would allow Navigator to capture and store 5 million tons of CO2 from POET facilities starting in 2025.

Those letters of intent aren't public information, so it's not clear what kind of deals ethanol plants struck with pipeline companies. The Gazette asked POET whether its letter of intent would prohibit the company from working with CapCO2 or other alternative carbon capture providers.

"POET is not involved with CapCO2," spokeswoman Erin Swift said in an email. "We continue to explore all available options to achieve our goal of carbon net neutrality by 2050."

Navigator didn't answer the question about whether ethanol plants, like those owned by POET, have the freedom under their letter of intent to explore carbon capture technologies not connected to the pipeline.

"Navigator and our shippers do anticipate growth in the opportunity associated with further processing and utilization of CO2," the company said in a Friday statement to The Gazette.

"However, many of those technological proposals are still very much in the development phase. Additionally, in terms of scaling up and optimizing those further processing technologies will take aggregation of CO2 supplies and efficient transportation of that product to a central facility — meaning the industry will very much still need pipeline infrastructure."

The Gazette asked Wolf whether the letter of intent signed with ADM would allow the ADM to work with alternative carbon capture providers.

"The CO2 at the Clinton and Cedar Rapids facilities is spoken for with the Mount Simon Hub," the name the company has given its proposed pipeline in Iowa, Wolf responded in an email.

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