Today the Iowa Renewable Fuels Association released a study concluding up to 75% of Iowa’s ethanol production is at stake if the state is locked out of carbon capture and sequestration pipeline projects.
“Legislation that would effectively shut down CCS pipelines would also shut down Iowa ethanol production,” says Monte Shaw, executive director of the Iowa Renewable Fuels Association (IRFA).
“The reality that Iowa ethanol producers face is that reasonable access [to] CCS could be the difference between operating and shuttering their operations. We all recognize the important and emotional issues at play here, but IRFA members are calling on Iowans to unite to support a fair and equitable path forward for CCS. The future of Iowa ethanol production and Iowa corn prices depends on it.”
Three carbon capture and sequestration (CCS) pipeline projects are proposed to cross through the state. The projects have fallen under fire over concerns that eminent domain will be used to complete the projects.
Several bills have been introduced in the Iowa legislature this session that would limit or even remove the CCS pipeline companies’ ability to use eminent domain.
The study, conducted by Decision Innovation Solutions, an economic research firm focused on agribusiness, found if CCS pipelines are locked out of Iowa while other states move forward, Iowa ethanol plants will struggle to compete as plants in other states reap the financial benefits of the 45Z clean fuels production tax credits created by the Inflation Reduction Act.
“Margins matter,” the study says. “And the 45Z tax credits are a game changer. Clean fuels such as ethanol which are produced with CO2 capture and sequestration via pipeline are the future for the renewable fuels industry.
“Iowa’s ethanol industry is at a crossroads – will it be positioned to be the leader in ethanol and other clean fuels or watch that future move over the horizon?”
With the 45Z credit ethanol producers stand to gain tens of millions of dollars according to the study, depending on a plant’s carbon intensity (CI) score.
The study estimates with CCS a 100-million-gallon ethanol plant with a current CI score in the mid-50s can reduce its score by up to 30 points and earn nearly $50 million a year.
The study also estimates that if Iowa were left out of CCS pipeline projects, Iowa farmers would lose local markets for over one billion bushels of corn annually and Iowa would realize an eventual decline in revenues from ethanol plants of more than $10 billion a year.
Shaw says the organization wants to draw awareness to the “severe” economic consequences at stake around the debate over CCS pipelines.
“People can still come to opposite decisions,” he says. “That is their right. But we want it to be an informed decision, not just one that assumes you can oppose CCS on one hand and that there isn’t some economic impact on the other.”
