Agricultural economic experts released a new study today that found Iowa ethanol production is at a crossroads. Without viable access to carbon capture and sequestration (CCS), Iowa could see 75% of its ethanol production migrate to states that facilitate sequestration.
The study, conducted by Decision Innovation Solutions (DIS), determined that current market and policy dynamics would results in Iowa ethanol production becoming noncompetitive with catastrophic results for Iowa ethanol producers, Iowa farmers and the Iowa economy. The finding included:
DIS concluded: “Margins matter. And the 45Z tax credits are a game changer. Clean fuels such as ethanol which are produced with CO2 capture and sequestration via pipeline are the future for the renewable fuels industry. Iowa’s ethanol industry is at a crossroads – will it be positioned to be the leader in ethanol and other clean fuels or watch that future move over the horizon?”
The Iowa Renewable Fuels Association (IRFA) commissioned DIS to conduct an all-encompassing economic impact study based on a scenario where Iowa ethanol plants are precluded from utilizing CCS technology via pipelines while surrounding states allow such projects to move forward. Phase 2 of the study, which is scheduled to be completed later this month, will determine the negative impact on local corn prices from the projected reduction in the Iowa corn grind.
“Legislation that would effectively shut down CCS pipelines would also shut down Iowa ethanol production,” stated IRFA executive director Monte Shaw.
“The reality that Iowa ethanol producers face is that reasonable access CCS could be the difference between operating and shuttering their operations. We all recognize the important and emotional issues at play here, but IRFA members are calling on Iowans to unite to support a fair and equitable path forward for CCS. The future of Iowa ethanol production and Iowa corn prices depends on it.”