Getting Creative with Carbon

Federal regulations already place caps on a wide range of industrial emissions so it seems inevitable that carbon dioxide will soon be one of them. If the U.S. adopts a carbon cap-and-trade program, many ethanol producers will be faced with a choice—adopt new production technologies or absorb the expense of purchasing carbon credits. Those choosing to adapt will not only avoid incurring another expense, but may be able to realize an additional revenue stream as well.
By Erin Voegele | June 03, 2009
The United States is one of the few westernized nations that has yet to place a cap on industrial carbon emissions. Over the past several years, federal lawmakers have introduced countless legislative measures that seek to regulate carbon dioxide. As of early 2009, none of the initiatives have been able to garner the political support necessary to move forward. This political climate, however, is quickly changing. Under the new administration, it seems imminently possible that carbon legislation will gain the traction needed to become law.

According to the White House Web site, President Barack Obama's administration supports measures that would take immediate action to reduce the carbon pollution that threatens the nation's climate. Although the U.S. has long placed emissions limits on many pollutants, including sulfur dioxide and nitrogen dioxide, no such policy has been enacted to stem carbon emissions. The administration clearly states that it will work to close this carbon pollution loophole.

While it is impossible to forecast exactly what kind of policy will be put in place to close this loophole, many have theorized the possibility of a carbon tax or the development of a cap-and-trade program. A discussion draft of legislation that would establish a carbon cap-and-trade program, known as the American Clean Energy and Security Act of 2009, was recently released by lawmakers in the U.S. House of Representatives.

In a committee hearing regarding that legislation, U.S. EPA Administrator Lisa Jackson provided testimony comparing pending carbon legislation to the Acid Rain Trading Program that was signed into law in 1990. She asked committee members to recall claims that the law would cause "death for businesses across the country." In reality, that legislation, according to Jackson, resulted in $120 billion in annual health and welfare benefits at an annual cost of only $3 billion. Furthermore, she says the economy grew by 64 percent while acid rain pollution was reduced by more than half.

"Now, the ‘no we can't' crowd will spin out doomsday scenarios about runaway costs," she says. "But EPA's available economic modeling indicates that the investment Americans would make to implement the cap-and-trade program of the American Clean Energy and Security Act would be modest compared to the benefits that science and plain common sense tell us a comprehensive energy and climate policy will deliver."

While ethanol as a finished product is a clean, low-carbon fuel, the production process leaves room for improvement. This is because ethanol production generally consumes a large amount of energy, which tends to be supplied primarily by natural gas and other fossil fuels. The burning of fossil fuels generates large quantities of carbon dioxide. Under a federal carbon tax policy, ethanol producers would likely be taxed on these emissions. Under a carbon cap-and-trade program, they would be forced to purchase carbon credits to offset their production processes.

Either way, most ethanol producers would find it extraordinarily difficult to absorb the additional expense of a carbon regulation. However, a cap-and-trade program could provide opportunity as well. Producers who employ low-carbon technologies will be in a position to generate and sell carbon credits, which could create a whole new stream of revenue.

There are two basic ways in which ethanol producers can work to reduce their carbon footprints. The first is by implementing technologies that employ carbon neutral fuel to power the production process. The second is by finding creative ways to capture and utilize the carbon dioxide created during the ethanol production process.

Becoming Carbon Neutral
Many technologies will soon be widely available that will allow ethanol producers to replace fossil fuel with carbon neutral renewable sources of power, including the use of landfill gas, anaerobic digestion and gasification. ICM Inc. is working to develop one such technology.

The company has developed an "air-blown" gasification technology that can be used to produce carbon neutral fuel from renewable resources. According to Bert Bennett, a principal scientist at ICM, the company's gasification technology involves directly heating fuel in the presence of limited oxygen. The process creates combustible gases that can be used as an alternative to natural gas and burned directly in a boiler to create steam for process heat and electrical power generation. With some equipment modifications and loss in efficiency, the gas can also be cleaned for use as a direct replacement in existing natural gas fired dryers and package boilers.

Bennett says ICM's gasifier technology is very close to being ready for commercial deployment. The system is currently being tested at the Harvey County Landfill in Kansas.
ICM's technology is designed to utilize organic feedstocks, such as agricultural wastes and wood chips. According to Bennett, the system will also be able to utilize a processed municipal solid waste, known as refuse derived fuel. The refuse derived fuel could include components such as paper products, cardboard and green yard wastes.

"We started on this path to look at ways that we could cut our demand for natural gas and go to a biomass-based fuel," Bennett says. "The reason we chose gasification is it is very flexible...and with the right technology capable of handling a broad range of fuel types and moisture content." The unit can also coproduce a high-carbon biochar fertilizer, which when used under the right conditions can potentially allow for carbon negative operations.

Greg Krissek, ICM's government affairs director, says that the gasification technology can potentially lower the cost of energy at an ethanol plant while also reducing the facilty's carbon footprint. "Obviously ... there is a very strong interest in the public and private sectors of how to reduce your carbon footprint, and that is usually reducing your fossil fuel use," he says. "This type of energy conservation system fits nicely into that approach."

Krissek also notes that a facility implementing this type of technology wouldn't necessarily have to wait for a federal cap-and-trade program to be established to benefit through the sale of carbon credits. Those producers could generate revenue now through the sale of carbon credits in a voluntary trading market, such as Chicago Climate Exchange.

In addition, federal funding may be available to assist producers in implementing this type of technology at existing facilities. In May, Obama issued a presidential directive to Agriculture Secretary Tom Vilsack to expedite and increase production of and investment in biofuel production by making renewable energy financing opportunities from the Food, Conservation and Energy Act of 2008 available within 30 days. A portion of that funding is meant to encourage biorefineries to discontinue fossil fuel use in plant operations by either installing new biomass energy systems or producing new energy from renewable biomass. "There is more than $1.1 billion of opportunity here, created by the Congress to assist in building biorefineries and helping existing refiners convert from fossil fuel power to renewable power," Vilsack says.

Using Carbon Creatively
In addition to moving to a carbon neutral source of energy, ethanol producers may be able to generate carbon credits by finding innovative ways to capture and utilize the carbon that they produce. While many of these technologies are in the early stage of development, some may provide the additional benefit of producing another revenue stream through the sale of coproducts produced. This means that ethanol producers who choose to employ alternative technologies would not only add to their bottom line through the sale of carbon credits, but may be able to benefit through the sale of coproducts that are generated from their carbon waste stream.

Sequestration
Carbon sequestration may be the most well-known carbon capture technology. While it does not produce any useful coproducts, the technology may have important implications in the capture and storage of large quantities of carbon dioxide.

Archer Daniels Midland Co., the Midwest Geological Sequestration Consortium and the Illinois State Geological Survey are working together on a project that seeks to capture and store the carbon dioxide produced at ADM's ethanol plant in Decatur, Ill.

According to an ADM spokeswoman, the project will help determine whether it is viable to store carbon emissions from manufacturing operations far below the earth's surface. "It may also determine whether geologic sequestration can further improve the environmental footprint of alternative fuels such as ethanol by capturing and storing carbon emissions associated with their production," she says.

The project involves drilling an injection well that is approximately 7,200 feet deep. Beginning in early 2010, a total of 1 million metric tons of carbon dioxide produced by the ethanol plant will be captured, compressed and injected into the Mount Simon Sandstone, a large underground saline water-bearing rock formation.

According to Sallie Greenberg, the sequestration communication coordinator for the MGSC, several factors contributed to the decision to partner with ADM to complete the project. "ADM had a readily available source of carbon dioxide in suitable quantities for demonstration purposes," Greenberg says. "The carbon dioxide comes away from the fermenting process at 99.9 percent pure, which was beneficial for research purposes and avoided separation costs associated with capturing carbon dioxide. In the case of the Illinois Basin - Decatur Project, we have the excellent juxtaposition of a high purity source, available land, and suitable geology deep below the plant."

Dry Ice
The purity of carbon dioxide emissions produced at ethanol plants is also cited by Pain Enterprises Inc. as a primary reason the company recently constructed a liquid carbon dioxide and dry ice production facility adjacent to Global Ethanol's plant in Riga, Mich. According to Pain Enterprises President Jack Pain Jr., ethanol plants are a good candidate for this type of technology because they produce cleaner emissions than many other industrial processes.

The facility built by Pain Enterprises can produce up to 300 tons of liquid carbon dioxide, which is used to carbonate beverages, or 200 tons of dry ice per day. The facility, which began operations in March, currently captures and utilizes 75 percent to 80 percent of Global Ethanol's carbon dioxide emissions.

Algae
Green Plains Renewable Energy Inc. and BioProcessAlgae LLC are working to develop a pilot algae plant production facility that will be located adjacent to Green Plains' ethanol plant in Shenandoah, Iowa. Water, heat and carbon dioxide will be recycled from the ethanol manufacturing process and used to produce algae.

A series of self-contained, modular photobioreactor units are being installed at the ethanol plant, and, in mid-May, were expected to be operational by midyear. According to Scott Poor, Green Plains' corporate council, it's expected that the algae used in the system will be able to capture approximately 60 percent of the carbon dioxide that is fed into the system. While Green Plains expects to explore using the algae produced at the pilot plant as a source of animal feed, others are researching the use of algae as a feedstock for biodiesel and cellulosic ethanol production.

Chemicals
Mantra Venture Group Ltd. is working to develop a technology that can convert carbon dioxide into high value chemicals. The process, called electro-reduction of carbon dioxide (ERC), works by combining electricity with water, carbon dioxide and an electrolyte, which produces a useful industrial organic chemical called formic acid.

Formic acid could be used as a replacement for hydrochloric acid in the steel pickling process. This may also have applications in fuel cell technology. In addition, the process can be adapted to produce ammonium formate, a potential additive that could be used with diesel to reduce nitrous oxide emissions.

There may be opportunities to use the technology to produce other products such as hydrogen or methanol as well. "These chemical processes, with a few little changes here and there, we can create different products," says Larry Kristof, Mantra's CEO. "With a few changes in the way we set up the system or some of the chemicals we add, we can definitely change the dynamics of it and create different products." Kristof says there may even be potential in the future for a cellulosic ethanol plant to employ this kind of technology to use its own waste carbon stream to produce acids that would be used in the fuel production process.

Kristof notes that there are many ways to deal with carbon, but that his company's solution offers a great way to help industries reduce their carbon footprint in a way that is profitable. "We've got a serious carbon dioxide problem," he says. "We think there are no silver bullets - there is silver buckshot, and we're just a part of that. I would love to see all these things come into play - all these different technologies. There are some pretty neat solutions out there. We just have to put them into play."

Erin Voegele is an Ethanol Producer Magazine associate editor. Reach her at evoegele@bbiinternational.com or (701) 373-8040.