Ag Policy Blog

One of the two major carbon pipeline projects in the Midwest has withdrawn its permit application in Illinois and put its $3.5 billion project on hold.

The move becomes a complication for dozens of ethanol plants that had signed with Navigator intending to capture their carbon dioxide and lower the carbon footprint of their ethanol in the process.

Navigator CO2 Ventures had already lost a construction permit application in South Dakota in early September and had asked the Iowa Utilities Board to suspend work on its permit application in that state as well. The Illinois Commerce Commission had been preparing to hold hearings next week on Navigator's permit application, which was crucial because Navigator had intended to sink its carbon dioxide into an Illinois bedrock formation.

In a statement Tuesday, the carbon pipeline company stated, "Navigator will be taking time to reassess the route and application."

Navigator had planned to run a 1,350-mile route of pipelines to as many as 30 ethanol plants in South Dakota, Nebraska, Minnesota, Iowa and Illinois – with most of its contracted ethanol plants in Iowa. Those ethanol plants would ship their carbon dioxide waste through Navigator's pipeline and sink it in Illinois, which would dramatically lower the carbon footprint for those ethanol plants.

Carbon pipelines have said they have gotten a majority landowners to sign contracts for easements, but the companies want eminent domain for the holdouts. Opponents have rallied landowner and community opposition to pipelines and counties in states along the routes have passed their own restrictions and setback ordinances. Critics praised the Navigator announcement on Tuesday.

"The carbon pipeline dominos are falling," Jess Mazour, an Iowa Sierra Club conservation coordinator, said in a statement quoted in the Des Moines Register. "We hope Navigator sees the writing on the wall that they will face opposition in every corner of every state. We do not want their carbon pipeline or any carbon pipelines."

Jane Kleeb of the Nebraska-based Bold Alliance told Associated Press, "When you organize the families most at-risk of eminent domain, you can stop a pipeline," Kleeb said."This is a core lesson we have learned over the years, as pipeline corporations try to bully hard-working Americans into giving up their land for corporate greed."

Navigator is one of a pair of major pipeline proposals going through the regulatory steps in different states. Summit Carbon Solutions is in the middle of its permit hearings in Iowa, which started in late August but the hearings are expected to stretch into November. Summit also has seen its permit applications rejected in both North Dakota and South Dakota, but is reapplying for permits in both states. Summit's plan is to sink its carbon dioxide in North Dakota.

Reflecting the potential blow to ethanol plants, the Iowa Renewable Fuels Association said in a study released earlier this year that the state's ethanol plants could lose more than $10 billion a year if they do not have a way to sequester carbon and receive new federal tax credits as a result. The Inflation Reduction Act, passed last year, includes the Clean Fuels Production Credit, or 45Z, that could generate an average of 48 cents a gallon in tax credits for ethanol plants. Then there is the value of selling lower-carbon ethanol into markets such as California or other states with low-carbon fuel standards as well.

Ethanol plants also need to lower their carbon footprints as airline companies focus more aggressively on creating Sustainable Aviation Fuels (SAF) which also have standards for lowering emissions to qualify for federal tax breaks.

This article contained information from the Des Moines Register, Associated Press and Iowa Capital Dispatch.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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