US ethanol industry eyes CCS to boost long-term demand
May 31, 2022
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US ethanol industry is eyeing carbon capture and sequestration projects to boost long-term demand. Producers are exploring lower carbon intensities in markets with low carbon fuel standards and sustainable aviation fuel. The voluntary carbon credit market for tech-based capture could attract interest. Listen to the podcast for insights on evolving CCS interest in US ethanol.
US ethanol industry exploring carbon capture for emissions reduction and new revenue streams
Consideration of lower carbon intensities in markets and future industries like sustainable aviation fuel from ethanol
Deep dives
Importance of Carbon Capture and Sequestration for U.S. Ethanol Producers
U.S. ethanol producers are increasingly focusing on carbon capture and sequestration to reduce emissions and explore new revenue streams. The podcast discusses how ethanol plants capture pure CO2 for various applications and are now considering sequestration. Several pipeline projects aim to connect these plants for efficient carbon capture, potentially reducing carbon intensity and generating higher value in markets like California's Low Carbon Fuel Standard.
Financial Incentives and Market Dynamics in Carbon Credits
The podcast highlights the financial aspects of carbon capture projects, including the growth of tech-based carbon capture credits and the dynamics of voluntary carbon markets. It explores fluctuating credit prices and the potential for economies of scale to drive down costs over time. Notable investments in carbon capture projects, such as in Switzerland and Canada, indicate a growing interest and commitment to reducing carbon emissions.
Challenges and Opportunities in Sustainable Aviation Fuel Production
The discussion extends to the long-term strategy of ethanol producers in transitioning to sustainable aviation fuel production. It underscores the importance of lowering carbon intensity to access credit markets like the Renewable Fuel Standard and to qualify for incentives like the 45Q tax credit. Furthermore, the conversation delves into the complexities of obtaining certifications for different carbon intensity models, emphasizing the need for standardization amid market fatigue and administrative burdens in certification processes.
As the US ethanol industry pursues carbon capture and sequestration projects, producers are looking at the effects of lower carbon intensities in markets with low carbon fuel standards and in future industries like sustainable aviation fuel produced from ethanol. The voluntary carbon credit market for technology-based carbon capture could also attract interest given high prices but hurdles could keep ethanol producers focused on regulated markets.
S&P Global Commodity Insights' Americas biofuels manager Josh Pedrick talks through the evolving CCS interest in US ethanol with low-carbon lead Arsalan Syed and biofuel analytics manager Corey Lavinsky.
This Future Energy podcast was produced by Felix Fernandez in London.
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