Buis: Carbon Capture Ag's Big Moment

DES MOINES, Iowa (DTN) -- The head of the American Carbon Alliance (ACA) told an audience at the National Carbon Capture conference in Des Moines, Iowa, last week that farmers and ethanol producers need to fight for carbon capture, which he said is a big economic opportunity for rural America.

Tom Buis, chief executive officer of the ACA, said farmers and ethanol producers cannot allow critics to define them as ethanol critics did during the food-versus-fuel debate in the early days of the ethanol boom.

"I don't need to tell anybody how controversial it (carbon pipelines) is," Buis, who came out of retirement to head the ACA.

"You've got a few very vocal critics that are really good at scaring people. They're really good at promoting misinformation. And so, friends of mine, a lot of the people that started Growth Energy, started calling and they said, 'Tom, I don't know if you understand what's going on out here related to the farm economy. But we have the greatest opportunity we've ever had since the advent of ethanol and the critics are defining it as ugly, ala the food-versus-fuel days.'"

At the end of October, Navigator CO2 Ventures canceled plans to build a $3.5 billion carbon pipeline, creating what Buis said are "headwinds" in the face of ethanol producers and farmers trying to take advantage of a new tax credit.

Navigator released a statement Oct. 20, 2023, saying the company pulled the plug on a planned 1,350-mile pipeline connecting to Midwest ethanol plants because of the "unpredictable nature of the regulator and government processes involved, particularly in South Dakota and Iowa."

The Navigator project would have connected as many as 30 ethanol plants in South Dakota, Minnesota, Nebraska, Illinois and Iowa to a pipeline that would run to carbon sink locations in Illinois.

Last year the National Carbon Capture conference was interrupted by protesters opposing carbon pipeline projects. See that story here: https://www.dtnpf.com/…. This year organizers held a private event.

As was the case with the advent of the ethanol industry as a result of the Renewable Fuel Standard in 2005, Buis said, carbon capture along with the growth of a sustainable aviation fuel industry is the next big wave for agriculture.

"If you look at what this will do for farm income," he said. "It (capturing carbon) lowers the carbon index of ethanol and it's been very controversial from the very early days of the low-carbon-fuel standard in California, where the modeling charged ethanol with all kinds of stuff that it probably should have never been charged with."

TAX CREDIT OPPORTUNITY

Summit Carbon Solutions is in the middle of its permit hearings in Iowa on a similar carbon pipeline project. It 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.

A third of the corn kernel used to produce ethanol is carbon, Buis said, which means ethanol producers have an opportunity to capture that carbon and claim a new tax credit created by the Inflation Reduction Act.

Mitchell Hora, an Iowa farmer and founder and CEO of Continuum Ag, a company helping farmers calculate their carbon footprints, said during a panel discussion in Des Moines that farmers need to understand the opportunity.

Although the IRS has yet to issue guidance and rules for the Clean Fuel Production Credit, or section 45Z, which provides a new tax credit for fuels relative to how low their carbon intensity score is, Hora said he's working to convince farmers to complete analyses of their farms.

The value of the credit is 2 cents per gallon for each carbon intensity point under 50. Ethanol producers and others can qualify for fuel produced between 2025 and 2027.

"Again, thinking specifically about transportation biofuels, that grain side of the equation is a huge component of the carbon intensity score of these fuels, again a big contributor to the problem today but is a core part of the solution," Hora said.

Agriculture accounts for about 11% of the global carbon footprint, he said.

Hora's farm is about two hours southeast of Des Moines near Washington, Iowa, where he said he has fields turning out negative carbon footprints based on several conservation practices he has implemented.

Hora said farming practices, including no-till, cover crops and other tools, can be "stacked" with pipeline initiatives or other projects when calculating carbon intensity scores. That can result in lower scores, he said.

PIPELINES DEBATE

Critics portray carbon pipelines as dangerous, Buis said, although they are the safest way to transport CO2.

"Well, I don't know how you would transport carbon from an ethanol plant," he said.

"It would take all the trucks in the world to be able to haul that stuff because you have to sequester the carbon and have to have a geological formation."

Buis, the former CEO of Growth Energy and president of the National Farmers Union, said the Summit project will send carbon from states that have nowhere to store it to places such as Illinois and North Dakota.

"It means economic opportunity," he said.

"It means profitability for farmers. It means a new demand. It means profitability for the ethanol companies. And one of the reasons that I've always been an advocate for rural America is the rural communities. You can't sustain a rural town and community if you don't have the infrastructure people need and want to live there."

Buis said the growth of the ethanol industry brought economic development to small towns like never before.

Because the ethanol industry has stopped growing, he said, rural America needs to fight for carbon capture.

"If you don't believe me, drive to a location," Buis said.

"Here in Iowa. there's 40-some ethanol plants. Drive to the location where that ethanol plant is and you see a vibrant economy. Drive to those rural communities that don't have one and they're struggling. You see a lot of empty stores. From my perspective, this is all about getting on board."

Buis encouraged farmers and ethanol producers to make their case with government leaders and the media.

"All of the future belongs to lowering that carbon index, which we want to compete as an industry, and there's no shortage of connections between the ethanol industry and farmers," he said.

"Number 1, they buy the corn. Corn is the biggest crop in the United States and I've always followed the belief that the rising tide lifts all boats and a sinking ship brings them all down in their wake. And that happened with the ethanol industry when it created a whole new domestic demand for corn. That spinoff transferred to every commodity in agriculture and it became the most profitable period since the early 2000s. It became the most profitable period in American agriculture. But today we're starting to see headwinds."

Read more on DTN:

"Payments Could Encourage Low Carbon Crops," https://www.dtnpf.com/…

"Navigator Cancels Carbon Pipeline Plans," https://www.dtnpf.com/…

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

Follow him on X, formerly known as Twitter, @DTNeeley.

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