© Reuters. FILE PHOTO: Eco Energy storage and switch services photographed in Philadelphia, Pennsylvania, U.S. on February 4, 2017. REUTERS/Tom Mihalek/File Photo
By Leah Douglas and Laura Sanicola
WASHINGTON (Reuters) – The U.S. drive to develop sustainable aviation gas (SAF) utilizing ethanol might be slowed due to rising opposition to proposed pipelines that may curb greenhouse gasoline emissions from ethanol vegetation by capturing carbon dioxide and carrying it away to different states for storage.
trade gamers say the developments elevate questions on future progress for U.S. producers of the biofuel, together with POET, Valero and others, who’ve been banking on proposed carbon seize and storage (CCS) pipeline tasks throughout the heartland.
These are wanted to decrease ethanol’s local weather affect sufficient for the gas to qualify as a feedstock for SAF underneath the U.S. Inflation Reduction Act (IRA).
President Joe Biden’s administration has dedicated to producing 3 billion gallons of SAF yearly by 2030 and 35 billion gallons by 2050. The objective is to decarbonize the airline trade whereas additionally supporting the ethanol sector and the corn farmers that provide it.
The proposed pipeline tasks would siphon tens of millions of tons of CO2 off Midwest ethanol processing vegetation and transfer the gasoline to different states for underground injection. Some residents alongside the pipeline routes fear the pipelines might spring lethal leaks or that their land might be seized to construct the tasks.
Last month, Omaha-based Navigator CO2 Ventures canceled its proposed pipeline. Two others underway from Iowa-based Summit Carbon Solutions and Denver-based Wolf Carbon Solutions face allowing setbacks and public resistance.
“Without carbon capture and storage, conventional ethanol does not have a pathway into SAF under today’s policies,” mentioned Homer Bhullar, vp at biofuel producer Valero Energy (NYSE:), which was an investor in Navigator, mentioned on the corporate’s Oct. 26 quarterly earnings name.
Valero declined an interview request.
U.S. corn growers and the politically highly effective ethanol trade hope airline gas manufacturing will enhance gross sales as ethanol’s conventional market as a gasoline additive shrivels attributable to rising electrical automobile use and elevated gas effectivity.
Biden sought to kickstart SAF manufacturing with a $1.25 per gallon manufacturing tax credit score within the IRA. To be eligible for the credit score, SAF producers should exhibit their gas is 50% decrease in emissions than standard jet gas.
Currently, utilizing ethanol to make SAF solely cuts its emissions by 15%, in response to the U.S. Department of Energy (DOE) web site.
“MARK MY WORDS”
Under a Biden administration blueprint shared this yr, some 10% of the 2030 SAF goal is projected to come back from ethanol. Biden’s public statements have been extra optimistic in regards to the function of ethanol within the SAF program.
“Mark my words: the next 20 years, farmers are going to be providing 95% of all the sustainable airline fuel,” he mentioned in July at a Maine rally.
Vegetable oils, municipal waste, agricultural residues and different supplies are additionally being developed as feedstocks for SAF, mentioned a DOE spokesperson. But ethanol have to be a key ingredient if the SAF program is to hit its targets, mentioned Barry Glickman, a vp at Honeywell (NASDAQ:), an investor in some U.S. biofuel vegetation.
“If we cannot use U.S. ethanol, then there will be a shortage of SAF,” he mentioned.
The DOE spokesperson confirmed that ethanol producers should minimize emissions of they need a long-term function in SAF manufacturing. Producers say carbon seize and storage is the best instrument for doing that. Biofuels commerce group Growth Energy says the approach can slash emissions from ethanol manufacturing by 50% or extra.
Still, ethanol producers want carbon pipelines as a result of many ethanol vegetation are usually not close to geologically applicable underground storage websites.
Navigator canceled its CCS pipeline mission, which might have captured carbon at 18 POET ethanol vegetation, after North Dakota regulators rejected its allow software and landowners alongside its route in different states opposed it.
South Dakota and North Dakota have rejected Summit’s allow purposes this yr and the agency has delayed its mission’s operational date to 2026 from 2024.
Wolf’s mission additionally faces opposition in Illinois, the placement of its storage web site.
Failure of those tasks could be an enormous detriment to the trade’s local weather targets, mentioned Nikita Pavlenko, fuels group lead on the International Council on Clean Transportation.
“It would take the most effective tool in their arsenal to reduce their emissions off the table,” Pavlenko mentioned.
Other choices for lowering ethanol’s carbon depth embody utilizing renewable vitality at ethanol vegetation, or climate-friendly farming practices for corn.
The ethanol trade is pushing federal regulators to evaluate SAF emissions utilizing a unique local weather mannequin that assigns a decrease carbon affect from rising corn. The Biden administration is predicted to reply to that request by yr finish.