Going Low To Send It High
As some ethanol producers are developing strategies to reduce their CI scores and access new markets or opportunities, life cycle analysis is a good — often necessary — way for producers to understand which plant upgrades will be the most beneficial and what credits they qualify for in different markets.
Life Cycle Associates works to help fuel producers and material suppliers understand their GHG impacts and comply with regulations. Stefan Unnasch, managing director and founder of LCA, says the company helps clients access credits, assess new markets, and identify effective strategies to reduce their carbon emissions.
As Unnasch puts it: “Helping [clients] develop strategies to value their emissions reductions.” He explains further that it’s often a matter of evaluating all available options, like an alternative use for distillers grains. “Well, it depends on how you’re monetizing your corn ethanol, and then once they have a certain strategy, then we make sure they can get it verified.”
Understanding market opportunities in ethanol production
Part of LCA’s analysis includes helping producers understand the opportunities available to them in different markets. The company’s chief economist, Brian Healy, uses his past experience in global market development for the corn and ethanol industry to advise producers on commercial opportunities provided by various policies.
For example, if a plant is interested in sending ethanol to California under the state’s Low Carbon Fuel Standard, or adding a new technology, a life cycle analysis can help plant management know if they have an advantage under the LCFS and how a new technology would impact their carbon intensity.
Sending ethanol to California
“We will help them collect their data so they can submit [an LCFS] pathway. Ethanol plants all have EPA pathways, right?” Unnasch says. “If they need [an LCFS] pathway, then they must have data that complies with CARB requirements, and this can become complicated if they have co-located facilities.
For example, they might have J-grade ethanol processing, which isn’t used for fuel grade but might have coproduction with different feedstocks, maybe it’s waste starch, etcetera. We make sure that all their ducks are in a row for an LCFS application.”
Applying for international low carbon fuel programs
Sending ethanol to California is only one of many potential market opportunities for producers in places that may have low carbon fuel programs in place. Unnasch lists several international markets as well, including Canada, Colombia, Brazil, Europe and, potentially, Japan.
Applications in these places are all vastly different, with various greenhouse gas accounting frameworks. As Unnasch puts it, “it’s like filing your taxes in Minnesota versus Switzerland.” It’s esentially the same thing, but with a different rule book and different factors to consider.
“For example, if you’re shipping to Europe under the RED (Renewable Energy Directive), they require that you have your feedstock certified, and we work with farmers to make sure that we have sufficient farming data,” he says. “And those calculation methods are different than what’s required for the LCFS.”
Deciding on key markets
The range of policies ethanol producers can monetize is wide, ranging from the Renewable Fuel Standard, California’s Low Carbon Fuel Standard, the European Union’s Renewable Energy Directive, and the International Civil Aviation Organization’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Some of these policies are exclusive, for example, a producer that exports to the European Union is not able to take advantage of RINs from the RFS.
It does not make sense for producers to get certified in every potential market because the time and cost of certification is usually prohibitive relative to revenue, Unnasch explains. Often producers pick a couple of markets, get verified and export there when the markets are favorable.
LCA also executes technoeconomic analyses to help producers figure out which markets are the best option for their fuel, as well as what investments in their plant’s efficiency will give them access to more markets or credits.
Exporting ethanol to Canada
One favorable market for U.S. ethanol producers has been north of the border. “We’ve been exporting ethanol to Canada at 330 million gallons for the last decade, ever since their clean fuel regulation went into place in 2009,” Healy says.
“What we’ve seen in the last year and a half is the near doubling of our exports to that market, more than 600 million gallons in response to increased blend rates in Ontario and the national clean fuel standard, and [that’s because their] GHG reduction threshold is attainable.”
The inflow of U.S. ethanol—some of which comes from Canadian-owned plants in the U.S.—has played a role in some Canadian producers shipping their ethanol to the EU, taking advantage of their free-trade agreement and duty-free access to that market, explains Healy.
Verifying ethanol producer data
The process of gathering a producer’s data and getting it verified is necessary to comply with regulations and customer demands, explains Unnasch. He says it can be challenging to locate all of the necessary data and organize it in a way that meets the expectations of a regulatory body.
“For example, if you’re carving out your J-grade ethanol, you need to think about how much energy went to that extra distillation,” Unnasch says. “And plants don’t have energy meters but rather steam meters, [which] measure the mass of steam, not energy. And so, the energy is the change in enthalpy between the steam going into the process and the return steam, and that all needs to be worked out to the verifier’s satisfaction.”
Diverse applications of life cycle assessments
Life cycle assessments are good for more than helping producers put together data for applications. LCA also helps associations, such as CORSIA, evaluate the GHG emissions of a new process or find answers to investors’ questions about a project by, for example, looking at different uses for naphtha in emissions reduction.
“There are lots of interesting ways to try to reduce greenhouse gas emissions, [and some] require more than just the prescribed calculation methods [offered by] the low carbon fuel programs,” Unnasch says.
Other technical pursuits LCA has explored include studying scenarios on the impact of a low carbon fuel standard in different regions of the U.S., examining the supply and demand of credits in various pathways, and evaluating areas of potential competition between LCFS programs.
Strategies for reducing CI in ethanol production
Unnasch says there are several key areas of ethanol production that offer the potential for carbon intensity (CI) reduction. Natural gas usage is one obvious category, and Unnasch recommends moving toward, for example, heat battery technology as a potential solution. “The IRA is saying, ‘we’ll give you money if you don’t burn that natural gas, but now you’ve got to find another way to do it,’” Unnasch says. Other big opportunities for CI reduction that Unnasch has identified include regenerative agriculture and renewable electricity.
Understanding GREET Model for ethanol production
Although the specific version of the GREET model that producers will be able to use for calculating CI for sustainable aviation fuel is uncertain, the Argonne GREET model is used for determining carbon intensity in the Clean Fuel Production Credit under the 45Z section of the Inflation Reduction Act. “We spend thousands of hours [studying] the GREET model and you know, [really understanding] the carbon intensity of a typical corn ethanol plant,” he says. “And we can tell you where every single number comes from and its provenance, whether it’s reasonable, and how it affects the ethanol producer.”
This article was originally published in Ethanol Producer Magazine.
Author: Katie Schroeder