Carbon Opportunities for Ethanol Plants

By Jesse McCurry | December 09, 2009
Despite the backlog of front-burner issues facing President Barack Obama and Congress, many analysts believe carbon legislation is a matter not of "if" but "when."

"Certainly the health, appropriations and energy billsand just the sheer lack of timemake it a cloudy proposition though," said Sara Hessenflow Harper, a partner with Washington-area environmental consulting group The Clark Group LLC.

According to Hessenflow Harper, a real breakthrough occurred when many members of the agriculture industry came to the table to engage. This was an important step because, as Hessenflow Harper says, "If you are not at the table, you are on the menu." Many major farm groups eventually came to oppose carbon legislation outright, but their willingness to participate at least found some offset provisions for agriculture.

"The ethanol industry needs to help shape whatever comes out of a climate bill," Hessenflow Harper said. "There are plenty of folks who want to attribute the destruction of the rain forest to ethanol and claim that it is even more carbon intensive than gasoline. A new market is going to be created nonetheless, and whether ethanol is treated fairly in that system is critical. The industry needs to not only oppose bad stuff,' but also come up with better alternatives."

Kennedy and Coe LLC partners to help plants comply with increased regulationsand identify some new revenue opportunities in the process. "Between renewable identification numbers, tax filings, the U.S. EPA and now carbon credits, it is our obligation to help position plants to mitigate risk and perhaps find added revenue opportunity," said Donna Funk, member in charge of the firm's biofuels practice. "We'll bring in additional resources as necessary that we trust."

Currently there are no federal compliance rules or methodology regarding carbon. Garth Boyd, senior vice president for agricultural services at Camco, a private international climate change and sustainable development company, offers ethanol plants a number of services related to carbon. "Today the market is voluntary," he said. "Companies interested in corporate sustainability are buying carbon credits to either decrease or offset their carbon footprint. They find that it is good for their green image or for shareholder approval."

Camco offers an alternative to the Chicago Climate Exchange. "We are not a trade platform or a registry," Boyd said. "We create and sell carbon and provide general consulting to help companies understand what risk they have in a mandated carbon environment. We also invest in projects that have potential to create carbon credits."

Boyd said Camco's international experience and understanding of rigorous international protocols such as the Kyoto Protocol will put his company ahead of the curve once similar mandates come to the United States.

"Big companies all around the world (many of which are big polluters) need to synch up with those that have credits to offer," he said.

Jesse McCurry works in business development for Kennedy and Coe LLC, a leading accounting and consulting firm focused on renewable energy. Reach him at jmccurry@kcoe.com or (316) 691-3758.