Today the Iowa Renewable Fuels Association (IRFA) released a study finding if Iowa is left out of carbon capture pipeline projects farmers stand to lose over $1 billion in income.
“Ethanol production in the state of Iowa has brought tens of billions of dollars in increased economic activity to the state and has been a significant factor in the rise in net farm cash income for Iowa’s farmers,” concludes the study conducted by Decision Innovation Solutions, an economic research firm focused on agribusiness.
“That economic activity could be lost if Iowa’s ethanol plants are not enabled to be competitive with ethanol plants in other states that have access to carbon capture and sequestration via pipelines or direct injection into deep, underground saline formations.”
This study builds on a study IRFA released last month which concluded if Iowa is left out of carbon capture and sequestration (CCS) pipeline projects the state may lose up to 75% of the its ethanol production. Both studies assume other states move forward and benefit from the 45Z tax credit included in the Inflation Reduction Act.
The new study concludes if Iowa is excluded from CCS pipelines and ethanol production migrates to other states, corn leaving Iowa without added value would jump from 6% to 44% by the end of the decade and profit would drop 85% on average compared to the status quo.
PIPELINE OPPOSITION Three CCS pipeline projects are proposed to cross through Iowa. The projects have fallen under fire over concerns that eminent domain will be used to complete the projects. Several bills were introduced in the Iowa legislature this year concerning the pipelines.
“We are now looking at Iowa being the only state on the map where there is still an active effort to derail these projects,” says IRFA Executive Director Monte Shaw.
Shaw says IRFA is particularly concerned about House File 565, which among other things would require a carbon pipeline project to acquire 90% voluntary easements from impacted landowners before using eminent domain.
The bill also gives local governments across the state new authority to set their own regulations pertaining to the CCS pipelines that companies would have to comply with before a permit could be issued from the Iowa Utilities Board.
“It would set up a number of provisions that would essentially allow as few as two people to veto an entire CCS project in Iowa by establishing physically impossible setbacks.” Shaw says. “It’s not an outright ban but it sets regulatory hurdles that, in our view, would be literally impossible to meet in many cases.”
FIGHTING FOR ETHANOL’S FUTURE With the 45Z credit ethanol producers stand to gain tens of millions of dollars according to IRFA’s first study, depending on a plant’s carbon intensity (CI) score.
Last month's study estimates with CCS a 100-million-gallon ethanol plant with a current CI score in the mid 50s can reduce its score by up to 30 points and earn nearly $50 million a year.
Shaw says the association wants to demonstrate the cost of blocking the CCS projects and rendering ethanol production in Iowa uncompetitive.
Source: agriculture.com
Categories: Iowa, Business