Crushing Ethanol’s CO2 footprint: Summit Carbon launches 10MT Carbon Capture & Storage monster; Green Plains is in

Sometimes, as the song says, you gotta bury your troubles, and when your trouble is the cost of carbon dioxide emission, and you’re in the ethanol business, you were stymied until a few minutes ago, when news crossed the wires that Summit Carbon Solutions is building the largest carbon capture and storage project in the world, 10 million tons of it.  For you, ethanol producer.

That’s 2 million cars off the road, as carbon equivalencies go. And it’s built by ethanol folk — Summit Carbon Solutions is a unit of Summit Agricultural Group, headed by one of the industry’s highest profile investors, Bruce Rastetter.

The pipeline and storage

Although the route of the CO2 pipeline and location of the storage formations is not yet disclosed, here’s a potential route connecting the three Green Plains refineries to the Bismarck area salt caverns.

The project that will create the infrastructure to transport CO2 from Iowa to North Dakota for deposit into geologic storage. The exact location in North Dakota has not been disclosed — we’re betting on the salt caves near Bismarck, North Dakota. 

Summit Carbon Solutions is proceeding with initial engineering, design and permitting associated with the project, which will permanently store carbon dioxide in underground saline geologic formations. 

“This is a giant leap forward for the biofuels industry,” said Rastetter. “Carbon capture and storage is a future-focused solution that allows the biorefiners to lower their already attractive carbon footprint by up to 50 percent.”

The scope

Let’s put this in context. A 100 million gallon per year ethanol biorefinery produces around 650,000 tons of CO2 per year, more or less. So, you could store 15 years of CO2 — all of it — for a large biorefinery in one CC&S project of this size. The negative cost of CO2 is right around $200 per ton in California — putting the value of the CO2 offtakes here at $2 billion in today’s dollars. And Lux Research is out with a report this morning projecting that the CO2 Utilization industry will generate $550B in sales by 2040.

Green Plains is in

Already this morning Green Plains has committed three of its biorefineries to the project, with a long-term carbon offtake agreement. Green Plains CEO Todd Becker predicts that his company will achieve “a minimum of 15 cents per gallon margin uplift as well as potential for carbon credits, 45Q tax incentives and direct returns on our investment in the pipeline and SCS,” based on current California LCFS prices.”

Green Plains will initially connect the biorefineries at Fairmont and Fergus Falls (Minnesota) and Superior (Iowa). They have the option to expand to additional locations as the pipeline network grows. Green Plains will make an initial investment in Summit Carbon Solutions to help fund the development of the project, and expects the pipeline to begin operation in late 2024. The three biorefineries have a combined ethanol capacity of 234 million gallons.

More to come

Summit Carbon Solutions has partnered with a select group of leading biorefiners located in Iowa, Minnesota, South Dakota, and North Dakota to execute the first phase of the project, which will put them on the path of ultimately delivering a net-zero-carbon fuel.

 In addition to biorefiners, Summit Carbon Solutions will partner with other industries throughout the Midwest that have carbon reduction goals to help them capture and store their carbon emissions.

Another step in Green Plains’ journey

“The partnership with Summit Carbon Solutions aligns with our ongoing transformation to lead the way in sustainable biorefining,” said Todd Becker, president and chief executive officer of Green Plains. “The future is low carbon, and while we have already made enormous strides in improving the efficiencies and sustainability of our processes through Project 24 and Fluid Quip’s extensive IP suite, taking advantage of the advancements in carbon sequestration is the next logical step of our evolution.” 

The Summit backstory

Most recently, Rastettner has been active in the high-visibility business of building corn ethanol capacity in Brazil. His Summit Agricultural Group is a diversified agribusiness operator and investment manager, deploying capital across the agricultural supply chain with a particular focus at the intersection of agriculture and renewable energy

“Summit Carbon Solutions is a truly transformational project,” said Summit Ag Investors President Justin Kirchhoff. “This opportunity helps satisfy the urgent global need to decarbonize and meets the ever-growing demand for low carbon fuels by collaborating with leading biorefineries to capture and store carbon on a scale not yet achieved anywhere in the world.”

“Simply put, this will be the most impactful development for the biofuels industry and Midwestern agriculture in decades,” Rastetter added. More on Summit Ag here.

The Bottom Line

There’s been talk about whacking more CO2 out of corn ethanol for some time — talk that never seemed to turn into an actual project. The scope of this is reasonably staggering — ahem, a project for grown-ups.  It’s something like 480 miles from Superior Iowa to Bismarck if you follow the MN-15, MN 4 right of away to the I-194 corridor, where you pass Fergus Falls en route to Bismarck. It’s not unambitious, the pipeline part of this. 

Think of it, though, a CO2 pipeline. “Sequester” today could lead to “carbon capture and use” in the not distant future as Summit finds more distribution for its captured carbon.

Which is a way of saying, all you power to X types looking to turn CO2 plus water into fuels using renewable power, let me commend North Dakota to your attention. They produce about a quarter of the state’s power from wind. Nice industry for North Dakota, more sustainable than the Bakken shale play. Entrepreneurs, rev your engines.