Efficient Producers Up the Ante

Proving greenhouse gas reduction to the U.S. EPA now boils down to four numbers.
By Susanne Retka Schill | February 18, 2015

Four key numbers representing the mass and energy balances of an ethanol plant—bushels of corn, gallons of ethanol, standard cubic feet for natural gas and kilowatt-hours for electricity—plugged into a new U.S. EPA spreadsheet will calculate an ethanol plant’s life-cycle greenhouse gas (GHG) emissions. The threshold to beat is a 20 percent reduction in GHG emissions compared to the baseline gasoline, which is what is needed for a plant to generate renewable identification numbers (RINs) above the volume grandfathered in under the renewable fuel standard.

The EPA’s new petition process—dubbed EP3 for efficient producer petition process—promises to speed up the agency’s review of efficient corn ethanol plants seeking to increase their allowable RINs generation. See the accompanying sidebar for a review of the relevant provisions in the 2007 law establishing the renewable fuel standard regarding grandfathered plants, the petition process established in EPA’s 2010 final rule and the handful of corn ethanol plants approved under the original scheme.

EP3 is a big improvement over the old system, although there are some important challenges to consider in the compliance details, explains Brent Riffel, a California-based consultant.  “With the new way, it’s a very streamlined greenhouse gas calculation in an Excel file,” he explains. The four pieces of information on inputs and output go into the GHG calculation tool, which calculates whether the plant meets the 20 percent GHG reduction threshold. “For the first time producers don’t have to report their coproduct yields, whether making dried distillers grains with solubles or wet, or whether they are extracting corn oil.” There are three GHG calculation tools, he continues, “corresponding to three subcategories—whether you process only corn, only grain sorghum, or both. So far as I know, EPA has only approved corn ethanol pathways, although I just submitted one based on both corn and sorghum.”
The biggest difference, he adds, between the old and new systems is the time it takes. “The producer uploads a ZIP file that contains nine documents and from the time they do that to receiving approval is about four to six weeks,” he says. “Previously, it was four to six months.”

Riffel has become quite familiar with the EPA’s petition process. He worked with three of the plants receiving approval under the old system, including Absolute Energy LLC, in St. Ansgar, Iowa, which was the first. Seven of the nine EP3 applications receiving approvals in December were completed by him. The first class of nine graduating under EP3 include: Cardinal Ethanol LLC, Union City, Indiana; CHS Rochelle, Rochelle, Illinois; Husker Ag LLC, Plainview, Nebraska; Little Sioux Corn Processors LLLP, Marcus, Iowa; NuGen Energy LLC, Marion, South Dakota; Patriot Renewable Fuels LLC, Annawan, Illinois; Red Trail Energy LLC, Richardton, North Dakota; Siouxland Ethanol LLC, Jackson, Nebraska; and Marquis Energy LLC, Hennepin, Illinois.

The GHG calculation tool solved one of the issues with the old system. “Previously there was no easy way to determine what your feedstock emissions were going to be,” Riffel explains. Small changes in ethanol yield directly impact bushels used and that ripples through the feedstock life-cycle analysis, with indirect land use change being the largest single component. In the new GHG tool, the complex modeling done for the 2010 rule has been reduced to a single emission factor for corn upstream GHG emissions of 9.73 kilograms CO2 equivalent per bushel of corn at 15.5 percent moisture. “There’s now a distinct number that producers can look at and determine what their emissions are based on ethanol yields on the corn,” he says. In the new petition process, EPA lays out the documentation required in detail, down to the format to use. A professional engineer is needed to sign off on the required detailed process flow diagram, Riffel says. No other verification is needed for the process data that is submitted, beyond keeping records of utility bills to document natural gas and electricity use.

Daily Data Collection
The issues and challenges surrounding the EP3 system are found in the compliance requirements. Corn ethanol producers are already collecting data on all but one piece of information required for compliance, frequency of data collection is the issue. “The regulation is based on the 365-day rolling average of [a plant’s] data, not monthly data,” Riffel explains. “That has caused quite a lot of consternation because of the physical challenge—feedstock consumed and ethanol produced are done on a monthly basis and those readings are much more accurate than daily readings. The EPA is unwilling to do it on a monthly basis because RINs need to be generated daily and they are very concerned that RINs not be generated for batches of ethanol that don’t qualify.”

“Producers have to come up with methods to collect data daily, measuring their volumes of ethanol produced and bushels of corn at exactly the same time each day and reading utility meters exactly at the same time each day, which they haven’t necessarily done before,” he continues. The data is recorded every day as a line item in the GHG calculation tool and submitted quarterly to the EPA. “The really advanced plants already have systems that are designed to collect this data and they just need to designate a person to validate the data is accurate,” Riffel adds. “Some of the others that might not have the expensive automated technology have to create a protocol and assign personnel.” Some plants are using the more accurate monthly calculations to improve their accuracy going forward. There is an incentive to be sure data is recorded daily. The emission level for the baseline gasoline is to be used on any day with missing data.

The requirement to measure the moisture on every load of incoming corn will not be an issue since nearly all plants probe and measure each incoming load already. Once the bushels and moisture are recorded, the GHG calculation tool automatically adjusts the volume to a standard 15.5 percent moisture.

The missing piece of data is the temperature of ethanol at measurement. “The EPA regulation is based on ethanol volume at 60 degrees Fahrenheit,” Riffel says. “In the initial draft of EP3, the EPA required producers to include the temperature recorded at the time of ethanol volume measurement, which a lot of plants don’t do. They have a temperature-corrected meter, but they don’t take separate temperature measurements.” Riffel was involved in the beta testing of the regulations, and in the end, EPA changed that requirement to allow either the temperature-corrected values meter or to record the volume and temperature.

Producer Experience
Marquis Energy has the distinction of being the only company, to date, to have petitions approved under the original and new processes. Riffel adds Marquis was also the first to work through the EP3 application. “They provided EPA with the tough questions and made them think through some of these issues.” 

Jason Marquis, production manager at Marquis Energy, says the experience in getting the Wisconsin plant approved under the old system was helpful in knowing what was needed at the Illinois plant. “We had to up the ante on the data collected,” he says. Some things needed to be done prior to the application, such as adding meters to be able to separate out the electrical and natural gas use in the administration building from the energy used in the process. “You inherently do close to what is needed,” he adds, “but it wasn’t easily documented or it wasn’t broken down into the components you need or at the frequency you need, be it daily or weekly or monthly, where traditionally it was done only annually or monthly.” He adds they had some of the data issues figured out already as part of getting the distilled spirits permit needed to sell undenatured ethanol and for the sustainability certification required for exporting ethanol.

Marquis says the effort is worth it. “I think there’s more efficient ways for plants to get ideas on how to improve their energy efficiency than going through this EPA process, but anytime you have to take a detailed approach into things you might not otherwise have to look at, it certainly can’t hurt. I think there’s one or two things they want to document on a more frequent basis than we were doing,” he continues. “But honestly, with the different oversight that we have from different regulators, it certainly wasn’t onerous beyond the point where we thought there was value in doing it.” One of the big benefits for Marquis Energy’s two plants is that their production, while still needing to meet air permit limits, is no longer limited to the registered, grandfathered-in volume. “As long as we can show on an ongoing basis that the gallons we’re producing [at each location] meet that threshold that is spelled out on our pathway, then we can produce gallons.”  And as a result, Marquis Energy’s longstanding plans to double the capacity at Hennepin by building a second facility identical to the first have been moving forward. “It should be functional near the close of this year,” he said.

Check out a story about the first pathway petition process, for related reading. 

Author: Susanne Retka Schill
Senior Editor, Ethanol Producer Magazine
701-738-4922
sretkaschill@bbiinternational.com