Ethanol Blog

LINCOLN, Neb. (DTN) -- Omaha-based Green Plains Inc. announced on Thursday it has acquired all the necessary rights of way toward completing a carbon-capture project connecting all of its Nebraska ethanol plants that have a corn-ethanol production capacity of about 287 million gallons.

The project remains on track for operation in the second half of 2025, according to a news release from the company.

"These facilities are expected to be among the first significant volumes of low-carbon ethanol from carbon capture and sequestration in the U.S. and positions the company to participate in the early days of the 45Z Clean Fuel Production Credit, the details of which were recently revealed," Green Plains said on Thursday.

Todd Becker, president and CEO of Green Plains, said his company is "very pleased" with progress made on the project called "Tallgrass."

Green Plains announced in January 2023 a joint venture called Blue Blade Energy to develop and commercialize a sustainable aviation fuel technology that uses ethanol as a feedstock. It is a joint venture with United Airlines and Tallgrass for which Green Plains plans to provide SAF to fly more than 50,000 flights annually on United flights between Chicago and Denver.

"Tallgrass has secured all the rights of way for the laterals to connect our Nebraska plants, and all Class VI sequestration well permits have been issued, allowing us to stay firmly on schedule," Becker said.

"Construction of the compression infrastructure is planned to begin in February, with the delivery of the compression equipment anticipated for the second quarter. With Tallgrass commencing construction of the laterals in 2024, we remain on schedule to permanently sequester 800,000 tons of biogenic carbon dioxide each year from our Central City, Wood River and York, Nebraska, locations beginning in the second half of the year. The compression equipment is designed to scale to accommodate the potential for increased production and post-combustion carbon capture, with overall carbon capture capacity up to 1.2 million tons per year."

The recently released 45Z GREET (Greenhouse gases, Regulated Emissions, and Energy use in Technologies) model allows U.S. corn ethanol to reduce its carbon-intensity score by approximately 32 points with carbon capture and sequestration, according to Green Plains.

Green Plains said according to a preliminary analysis of the model indirect land use change penalties for corn were further reduced, resulting in a lower starting CI for U.S. corn ethanol relative to prior GREET models.

The company said a transportation penalty is assessed on imported used cooking oil "relative to domestic UCO, and imported UCO is prohibited from claiming the 45Z credit if used to make on-road fuels such as biodiesel or renewable diesel."

Green Plains said using renewable corn oil as a feedstock to produce renewable diesel would result in an approximately 25-point CI advantage for the finished fuel relative to using soybean oil as the feedstock.

"Our carbon-capture strategy continues to gain momentum and we are now even closer to being operational across our 287-million-gallon Nebraska footprint," Becker said.

"We also believe the value of this is not reflected in our current share price as this project has the ability to create significant earnings and value creation opportunities for our shareholders by producing some of the lowest carbon-intensity fuel in the world. With the recently released guidance on 45Z, we are more confident than ever that our 'Advantage Nebraska' strategy is the right course of action and believe we are uniquely situated to benefit from our ability to sequester the biogenic carbon dioxide and reduce the CI of our ethanol by more than half."

Becker said that based on the most recent GREET model the company's Central City facility, for example, has a base CI score of 51 and with carbon capture in place it would be at 19 as a new starting point.

"In addition, our low-CI corn oil should now be further advantaged relative to other feedstocks," Becker said.

"We have positioned ourselves to participate not only in this upside from the federal tax credits but also state low-carbon fuel markets or private carbon credit markets, as well as being a leading supplier of low-carbon feedstocks for use in alcohol to jet SAF as that market develops in the future."

Read more on DTN:

"New USDA Climate-Smart Ag Rule Helps Clarify Path to 45Z Tax Credit for Biofuel Producers," https://www.dtnpf.com/…

"Biden Admin Releases 45Z Tax Guidance," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on social platform X @DTNeeley

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