The Inflation Reduction Act (IRA) Mr Biden signed on Tuesday dramatically expands tax credits for industrial projects that capture emissions of carbon dioxide, the main gas blamed for climate change, and store it underground or use it as a base for other products.
Industry hopes to use carbon capture and storage (CCS) technology, aided by a network of carbon transport pipelines across the Midwest, to reach a goal of net-zero emissions by 2050. This technology could help ethanol manufacturers position their product as a green fuel against the backdrop of the electrification of public transport.
Geoff Cooper, president and CEO of the ethanol trade group, the Renewable Fuels Association, said the IRA is “the most significant federal commitment to low-carbon biofuels since the standard was expanded on renewable fuels 15 years ago”.
The IRA allows companies that own and operate CCS equipment to charge up to $85 per tonne, down from $50 previously, for captured carbon that is stored underground, and $60 per tonne, down from $35 previously, for captured carbon that is used in other manufacturing processes or for oil recovery.
One set of projects that could benefit from the expanded funding is a proposed network of pipelines in the Midwest to capture and transport emissions from ethanol plants.
Three companies – Summit Carbon Solutions, a subsidiary of Summit Agricultural Group based in Iowa; Wolf Carbon Solutions, a subsidiary of Wolf Midstream based in Alberta; and Navigator CO2 Ventures, a subsidiary of Texas-based Navigator Energy Services – hope to run more than 5,800 km of pipeline from ethanol plants in six states to underground storage sites.
The projects could capture up to 39 million tons of carbon per year, according to the companies’ websites, making them potentially eligible for more than $3.3 billion in tax credits.
In Reuters statements, the three companies applauded the IRA and its inclusion in the extended appropriations.
The pipelines are different stages of the authorization process in each state. Widespread dissent from landowners along proposed pipeline routes could be an obstacle to ongoing projects.
Ethanol production lends itself well to carbon capture projects because the manufacturing process releases a pure stream of carbon dioxide, said Jessie Stolark, public policy and member relations manager for the Carbon Capture Coalition.
“They were the first to move in many ways,” Stolark said.