Carbon Capture Pipelines and Iowa Landowner Rights

Carbon intensity (CI) is a measure or “score” of the rate of GHG emissions per unit of energy consumed in an activity or production process. In the context of climate discussions and low carbon fuel policies, fuels with lower CI scores are favored by receiving greater incentives. Therefore, under low carbon fuel policies, fuels such as corn ethanol stand to benefit by lowering their CI scores. Options to lower the CI score of corn ethanol include adopting certain farming practices, utilizing wind and solar power, maximizing efficiency of ethanol plant operations and adopting technology such as Carbon Capture and Sequestration (CCS).

Carbon dioxide emissions from processing facilities like ethanol plants can be captured before the emissions are released into the atmosphere. This captured carbon dioxide can be transported via pipeline, stored in geological formations and injected thousands of feet underground where it is sequestered under layers of impervious rock. The carbon dioxide then can convert into calcium carbonate (limestone), resulting in a net reduction of atmospheric carbon through plant growth, corn processing and CO₂ storage. However, the carbon dioxide can also be converted into useful chemicals like methanol, plastics or even more ethanol. The conversion and utilization of carbon dioxide can be done on-site at the ethanol plant or transported via pipeline to a centralized location for economic and efficient conversion.

Iowa Corn supports all methods for lowering the carbon footprint and carbon intensity score of fuels and chemicals derived from corn, including CCUS on-site at the corn processing facilities or transfer to a centralized location via pipelines when needed.

The Carbon Sequestration Tax Credit, also known as 45Q based on its section in the tax code, incentivizes carbon capture and sequestration practices. In 2022, the federal government increased the existing 45Q tax credit to $85/metric ton (which is approximately $0.17/gallon of ethanol) for CO₂ that is permanently sequestered underground and $60/metric ton for CO₂ that is used for enhanced oil recovery or other industrial uses. Companies must begin construction of the sequestration project by January 2033, which is a seven-year extension of the tax credit. To be eligible to receive the tax credit, carbon emissions must be measured at capture as well as injection and meet specific sequestration storage requirements.

The Clean Fuel Production Credit is also known as 45Z. In 2022, the federal government created the 45Z tax credit which offers ethanol plants an incentive to reduce their carbon intensity score below 50 kg CO₂ equivalent. For every one carbon intensity point reduction below 50 kg CO₂ equivalent, ethanol plants are given $0.02 per gallon tax credit. For example, reducing a carbon intensity score from 50 to 26 kg CO₂ equivalent would result in a $48 million tax credit for a 100-million-gallon ethanol plant (50-26 x $0.02 x 100 million). The 45Z tax credit is currently authorized for three years (2024 through 2027).

The Iowa Corn Growers Association along with the National Corn Growers Association support the Next Generation Fuels Act, a common-sense solution that Americans – and our country’s corn farmers – need. This bipartisan legislation paves a way to incorporating higher ethanol blends into America’s fuel supply, increasing ethanol demand and ultimately corn grind, while ensuring consumers continue to have affordable fuel and vehicle choices. Increased ethanol demand will bolster farm incomes, helping family-owned farms keep pace with technological developments and remain globally competitive.

The legislation takes a cooperative approach to reducing carbon emissions, while protecting the livelihood of farmers and ensuring consumers continue to have affordable fuel and vehicle choices. This legislation requires octane sources used in the new fuels to result in at least 40% fewer GHG emissions than unblended gasoline, reducing emissions compared to what is currently available. Today’s ethanol is nearly 50% lower in carbon intensity than gasoline and continues to improve, thanks to ongoing environmental footprint reductions on corn farms and at ethanol production plants.

The Next Generation Fuels Act is a commonsense solution to successfully reducing greenhouse gas emissions, improving air quality and ensuring drivers have more affordable low carbon choices.

As defined by the Iowa Utilities Board (IUB): Generally, eminent domain is the government’s power to take private property for public benefit. It comes from the U.S. Constitution, federal laws, state constitutions and state laws. The IUB’s authority to grant the power of eminent domain comes from Iowa Code Chapters 476A, 478, 479 and 479B. Chapter 476A is for electric power generating plants, Chapter 478 for electric transmission lines, Chapter 479 for intrastate natural gas pipelines and Chapter 479B for hazardous liquids pipelines. Telephone and telegraph companies are granted the power of eminent domain by statute, Iowa Code Section 477.4.

Additional information:

• Growth Energy – Achieving Net-Zero Ethanol
• Global CCS Institute – CO₂ Transport Fact Sheet
• EPA – Overview of CCS technology
• CARB – Overview of CCS technology
• CARB – FAQ sheet on CCS Project Eligibility
• Corn LP/Summit Video