Gaining ground in the carbon reduction market
Continuing investments by Iowa’s biodiesel and ethanol plants have consistently boosted efficiency and productivity. Now those investments are creating another benefit: gains in markets demanding fuels with lower carbon intensity scores.
That reduction is making Iowa-produced ethanol and biodiesel more competitive in California and other markets along the West Coast, said Monte Shaw, executive director of the Iowa Renewable Fuels Association (IRFA).
“The good news here is that becoming more efficient and competitive is really a dovetailing of where economic motivation matches with environmental motivation,” Shaw said. “Our guys are very proud that they are making a green fuel in a green way.”
California, a significant market for biofuels, uses a program called the Low Carbon Fuel Standard (LCFS) which assigns each fuel a carbon intensity score. The scores are based on an analysis of the entire life cycle of the fuel, taking all aspects of production into account.
Under this program, a fuel generates credits if its carbon intensity level is below the mandated average. Credits can be then sold, often to major refiners.
While there is still a heated debate over greenhouse gas emissions, climate change and whether the phenomenon is man-made, Iowa biofuel producers are simply responding to market forces, Shaw emphasized.
“It doesn’t matter if our guys believe that climate change is man-made or that there should be government policy on it, and it doesn’t matter if our corn and soybean growers agree with climate change,” he said. “Our markets are telling us to take this into consideration.”
Largest biofuel market
Iowa is the largest producer of biofuels and their biggest market is California, Shaw noted. “And if you want to sell in California, you need to care about carbon,” he said.
Oregon and Washington have adopted LCFS standards based on the California model and several other states are considering it. The standards are also important in the international markets, as exports of U.S. ethanol and biodiesel continue to grow.
Western Dubuque Biodiesel in Farley is a good example of the Iowa biofuel industry’s constant push to improve. Since it launched production 12 years ago, the plant has constantly upgraded its operations with improved equipment, software and processes. Those improvements, over the years, have helped the plant to increase production, quality and efficiency.
Now those improvements are helping Western Dubuque compete in markets, both domestic and international, demanding biodiesel with lower carbon scores.
“We are getting better carbon scores, and it really puts us on the radar [of] some of those markets now,” said Tom Brooks, Western Dubuque’s general manager.
Just as important, Brooks said, has been the efficiency gains the northeast Iowa plant has realized from technology investments. The investments have increased the plant’s capacity, and are helping it make a higher quality biodiesel and other products from the soybeans it buys from area farmers.
“We were told that we would get a return on investment in a year and we got it in six months,” Brooks said.
There are several technologies that biofuel plants in Iowa and around the Midwest have invested in to improve their efficiencies and reduce their carbon scores. One, developed by Florida-based Bioleap, uses waste energy from the dried distillers grain (DDGS) dryer system to recover energy.
The system can help an ethanol plant reduce its natural gas requirements by about 20%, said Wayne Mitchell of Bioleap. “Those savings then corelate into a reduction of their carbon intensity score,” he said.
The Bioleap system also recovers water, which can help a biofuel plant reduce its water needs, Mitchell added.
Whatever technology they use, the continual gains in efficiency are just part of the DNA of the Iowa biofuel industry, Shaw said. “This is an industry that has an undisputed record of moving toward efficiency and I don’t see that stopping,” he said.
That, in turn, translates into better carbon intensity scores and more demand from markets concerned about carbon, Shaw said. “The folks in California and other states are starting to realize if they want to reach their aggressive goals, they need more biofuels, not less.”
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