Two Fuels, One Place

Apr 17, 2023 | BIOFerm in the News

From Ethanol Producer Magazine:

A growing number of U.S. ethanol producers have found a way—and a reason—to produce biogas, often upgraded to renewable natural gas, at the same complex or in close proximity.

The relationship between ethanol production and biogas can be hard to define. While both fall under the umbrella of renewable energy production, a connection between the two biobased outputs has never been a no-brainer for U.S. ethanol producers. Other than RIN-generation and the possibility of onsite power, there are few other obvious reasons why the two should coexist (if at all), but several plants have found financial success or operational synergy by making both ethanol and biogas. The existing plants that are running anaerobic digesters in parallel to ethanol and coproduct production have invested in the necessary storage, processing and upgrading biogas-to-RNG infrastructure for reasons particular to their respective facility. The range of reasons is wide, including: access to waste feedstock needed for anaerobic digestion (from dairy manure to corn stover);  regional demand for biogas or its upgraded version, renewable natural gas (RNG); local or national policy and tax incentives; and, as most ethanol producers are coming to understand, a desire to achieve a lower overall carbon intensity (CI) score.

A one-size-fits-all approach to biogas and ethanol doesn’t exist, but as several successful facilities running ethanol and biogas/RNG operations in conjunction have shown, there seems to be benefits to producing the two biofuels together.

Big Returns from Big Biogas Policy
In 2014, California-based Calgren Renewable Fuels powered up a biogas production operation to provide power to its 55 MMgy ethanol plant. Lyle Schlyer, president of Calgren, tells Ethanol Producer Magazine, that today biogas from its onsite digester is exclusively used in the plant’s renewable fuel production processes. The plant initially started producing biogas from an 1,800-cow dairy operation that was only a mile away. Today, more than 20 local dairies are involved in Calgren’s expansive biogas operation.

In addition to ethanol, Calgren produces biodiesel, corn oil and provides a site for carbon dioxide liquefaction. The entity is no stranger to integrating tech into an overall operation based in ethanol production. According to Schlyer, the biogas produced onsite is also made from biodiesel wastewater and other substrates.

Calgren starts with raw biogas before upgrading the product to serve the RNG market in California. According to the U.S. Environmental Protection Agency, to upgrade biogas to RNG, the methane content must be increased by removing water vapor, hydrogen sulfide, other impurities and most importantly, carbon dioxide. After that happens, it can be injected and transported via natural gas pipeline, serving as a direct substitute for natural gas.

Biogas produced at Calgren is cleaned up to pipeline standards, injected into a common carrier pipeline system and transported to CNG refueling stations in California. A portion of that RNG is used for process energy on the ethanol and biodiesel side.

Schlyer and his team recognized early on that the lifecycle carbon intensity value of renewable fuels was important. “Our presence in California, and our desire to maximize benefits under its LCFS, probably helped in that regard,” he says. “Perhaps that has made us more willing than most to consider technologies such as biogas and CCUS that can dramatically reduce CI values.”

When Schlyer looks at the current market for biogas and upgraded RNG, he calls it “developing.”

“We think the CI value of biogas and regional considerations will be big factors in driving future demand,” he says. “For example, the market for extremely low CI value biogas from swine and dairy manure digesters for use in refueling California CNG vehicles is strong. But that may change in the future.”

Right now, one of the driving incentives for Calgren to produce biogas correlates to methane reduction. The majority of the Pixley-based biogas is produced by capturing methane that would have otherwise been released into the atmosphere at surrounding dairy farms. That biogas, cleaned up to natural gas standards and injected into a natural gas pipeline system for transportation and use at CNG refueling stations, is given a CI value well below zero. Calgren gets credit for the methane emissions that are avoided. “That may change in the future since California is considering eliminating the ability to credit CI values with avoided methane,” Schlyer says. “That may necessitate a change in how we use our biogas.”

Since firing up the first digester in 2014, Schlyer and his team have learned a lot about biogas production and everything that comes with it. The issues and required actions linked to the federal Renewable Fuel Standard and California’s Low Carbon Fuel Standard far overshadow the physical issues of operating a biogas site, he says.

To other producers considering the addition of biogas production in parallel to ethanol, Schlyer says there are many cross-linked opportunities from the operations side and for CI reduction scores. All producers, he says, should remember this: “Biogas and other decarbonization technologies are driven solely by policy incentives,” he says. “Since policies change over time, it is important for producers to think ahead and maintain flexibility. That is exceedingly important.”

Another California RNG producer, also making ethanol, exemplifies a renewables producer that is benefiting, operating and planning based on favorable policies. Aemetis Inc., which describes itself as a leading producer of below-zero-carbon intensity dairy RNG and developer of carbon-zero renewable jet/diesel biorefineries that use carbon sequestration, has a multi-year plan for RNG and biofuels.

In February, the NASDAQ listed (AMTX) company, announced a five-year plan (filed with the SEC). The plan includes the expansion of RNG production, sustainable aviation fuel, renewable diesel, carbon sequestration and other low- or below-zero carbon products. The reason for the ambitious plan? Eric McAfee, chairman and CEO of Aemetis, offered an answer.

“With the passage of the Inflation Reduction Act, Congress provided a clear incentive to support meaningful reduction of air and carbon pollution, which we expect to achieve in this Five-Year Plan,” he said. The plan, according to McAfee, would grow the company’s revenue to $2 billion in 2027.

Recent milestones helped Aemetis see a reality in the future plan. In just the past year, the company completed 40 miles of biogas pipeline, finished construction of a biogas-to-RNG upgrading facility, completed construction of a gas pipeline interconnect unit, brought four additional dairy digesters closer to service and made progress in the permitting process required to start-up a renewable jet/diesel facility.

According to Aemetis, the Inflation Reduction Act provides for the transfer of tax credits from incentives connected to the production of product, as well as investment tax credits and other credits. In total, those tax credits will improve the company’s net income by a projected $341 million in 2027.

The Beginning of More Biogas and RNG?
Not all biogas or RNG projects are scaled to connect ethanol sites to natural gas pipelines, multiple dairy manure production operations or other large-scale projects.

Lincolnway Energy LLC, a 90 MMgy dry mill corn ethanol plant in Nevada, Iowa, has been producing ethanol and distillers grains since May 2006. The company’s goal is to reach 100 MMgy, and based on its recent award from the U.S. Department of Energy, to expand into biogas production and usage.

Through the DOE’s Bioenergy Technologies Office, Lincolnway was recently awarded more than $450,000 to explore a biogas process that would utilize stillage and other feedstocks to reduce the carbon intensity of its ethanol. The project was selected as part of a funding opportunity created to meet the DOE’s goal of achieving a 70 percent reduction in greenhouse gas emissions by 2030. In total, 17 different projects were awarded for a total of $118 million in funding.

The projects were selected based on four areas: pre-pilot scale-up of integrated biorefineries; pilot scale-up of integrated biorefineries; demonstration scale-up of integrated biorefineries; and, Gen-1 corn ethanol emission reduction.

The Lincolnway project will evaluate the feasibility of deploying biogas tech using various forms of stillage and/or corn stover in a site-specific design that would link the biogas produced at the site to the ethanol production process. The DOE hopes what’s learned can be applied across the entire industry. “With two corn ethanol plants involved, the analysis will leverage actual plant data, designs, samples and operating procedures to create an industry-ready, biogas platform,” DOE said of the Lincolnway project.

Already running in Nevada, Iowa, the Verbio biorefinery is making major strides with its RNG operation. Verbio could be well on its way to offering a blueprint to other producers looking to connect biogas and ethanol production. This year, Verbio noted a successful year-plus of operating an RNG production facility that upgrades corn-stover-based biogas into RNG. That RNG is sold to a commercial customer.

Two corn stover storage facilities were built at the plant in Nevada to hold a combined 100,000-plus stover bales for use in its anaerobic digestion process. The cellulosic feedstock is purchased from local corn farmers. Although the success of Verbio in prooving out its corn stover-to-RNG process in Iowa to date is a notable accomplishment, what’s coming this summer will be even more closely watched by the ethanol sector. Verbio’s full vision is to begin operating as a corn-based ethanol plant that produces RNG from corn stover/stillage, and it plans to begin working towards that this summer.

“Marking the one-year anniversary of our RNG production in Iowa is an important milestone for our company,” says Greg Faith, Verbio Nevada plant president and general manager. “We are taking big steps towards reaching full production capacity at our Nevada plant.”

It’s not just ethanol producers working to expand the link between ethanol and biogas. More solutions providers are now committing to the industry. In early 2023, BIOFerm, a Madison, Wisconsin-based gas upgrading and anaerobic digestion system provider, announced it was entering the ethanol industry. BIOFerm is now an official member of the Renewable Fuels Association.

Scott Orsini, vice president of sales at the company, said BIOFerm is excited to join the RFA and to “partner on opportunities to turn existing ethanol plant waste streams into additional green energy.”

RFA President and CEO Geoff Cooper said the addition of BIOFerm will provide technology solutions and expertise that can help ethanol producers achieve greater efficiency, enhance competitiveness and achieve a smaller carbon footprint.

BIOFerm has been in the anaerobic digester and RNG space for more than 15 years and provides services to other industries that include distilleries, landfills, wastewater recovery plants, food processors and agricultural operations.

Some new RNG players trying to exist in the ethanol production space are thinking a bit bigger than the rest. In Calgary, Alberta, Green Impact Partners is on its way to creating North America’s largest carbon negative RNG and ethanol project. Using low-grade wheat to produce renewable natural gas and ethanol, the Future Energy Park site is being built—from the start—with the idea of combining RNG production with that of ethanol.

Once complete, the plant is expected to produce more than 3.5 million MMBtu per year of RNG; almost 80 MMgy of ethanol; nearly 260,000 tons of distillers grains; and once fully operational, the plant could capture roughly 440,000 tons of CO2 for the creation of carbon credits.

“A first-of-its-kind, Future Energy Park is an exciting opportunity for us to link the circular economy and decarbonize agriculture and our energy future,” says Jessie Douglas, CEO of Green Impact Partners. “The facility will be fully integrated, co-producing two forms of renewable fuels using advanced technology, including capture from the production process to go beyond the goal of net-zero CO2 emissions.”

The company is advancing multiple projects across North America. In February, Green Impact Partners signed a strategic partnership deal with Amber Infrastructure out of London in a deal representing $545 million in total investment for a 50 percent project-level equity interest stake in each of Green Impact Partners projects.

In Iowa, the company will be operating a multi-dairy RNG production facility that generates 350,000 MMBtu in annual RNG production. In Colorado, the Calgary-based team expects gas production to begin at its GreenGas Colorado RNG project this year. Although the facility will start producing roughly 180,000 MMBtu of RNG for the first year, it will eventually grow to more than 360,000 MMBtu in run-rate production.

There might not be a one-size fits all approach to implementing biogas or upgraded RNG into the operational footprint or fiscal plans of every ethanol plant across North America. But, as the connected ethanol and RNG projects spanning a geographical range from California to Iowa to Canada show, for those that do want to produce ethanol and a biogas-based product in parallel, the benefits and options to do so exist.

Author: Luke Geiver
Contact: [email protected]