Optimism Despite Delayed D3 Pathway Approvals Page 26
From DC: Fly-In Follow-Up
Ethanol Producer Award Winners
Enerkemâ€™s Momentum Page 64
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Ringneck Energy Walter Wendland Little Sioux Corn Processors Steve Roe Commonwealth Agri-Energy Mick Henderson Pinal Energy Keith Kor Aemetis Advanced Fuels Eric McAfee Western Plains Energy Derek Peine Front Range Energy Dan Sanders Jr.
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2019 International Fuel Ethanol Workshop & Expo 3FBIO ACE American Coalition for Ethanol AGI Tramco Agra Industries Apache Stainless Equipment Corporation Archangel, LLC BetaTec Hop Products Bion Companies Buckman Butterworth, Inc. CTE Global, Inc. D3MAX LLC DeLaval, Inc. DSM Bio-based Products & Services DuPont Industrial Biosciences EISENMANN Corporation Ethanol Producer Magazine's Webinar Series Ethanol Producer Magazine's Top News Ethanol Producer Magazine Fagen Inc. Flint HIlls Resources, LLC Fluid Quip Process Technologies, LLC Foundation Analytical Laboratory Growth Energy Hengye, Inc. ICM, Inc. Interra Global Corporation J.C. Ramsdell Enviro Services, Inc. Komline-Sanderson Lallemand Biofuels & Distilled Spirits Leaf-Lesaffre Advanced Fermentations Mason Manufacturing, LLC McC Inc. Mist Chemical & Supply Company Mole Master Service Corporation Nalco Water Natwick Associates Appraisal Services Novozymes Oxidizers, Inc. Phibro Ethanol Performance Group POET LLC Port of Stockton Premium Plant Services, Inc. ProQuip, Inc. Rayeman Elements, Inc. RMS Roller-Grinder, Inc. RPMG, Inc. Seneca Companies Sentrimax Centrifuges, Inc. Solenis LLC Stover Controls Suez Water Technologies & Solutions Sulzer Pumps Solutions, Inc. The Arnold Company Trucent U.S. Water Services Victory Energy Operations, LLC Visionary Fiber Technologies Whitefox Technologies Limited WINBCO Zeochem LLC
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62-63 51 18 48 74 11 40 88 69 41 60 19 44-45 52 34 71 53 50 30 32 38 49 9 21 2 79 15 83 61 68 35 24 59 31 33 81 85 66 17 75 87 55 25 3 39 54 22 84 77 29 5 43 23 58 76 70 7 28 20 13 67 42
JUNE 2019 VOLUME 25
Pathways Await Priority
D3 platform approvals are backlogged, but developers are hopeful By Susanne Retka Schill
10 EDITOR'S NOTE
Largest Issue, Largest Event By Lisa Gibson
VIEW FROM THE HILL
The Facts Behind Gas Price Increases By Geoff Cooper
All for One
73 participants attend ACE’s April fly-in By Lisa Gibson
Market Access Key to Building Demand By Brian Healy
CLEARING THE AIR
Ethanol: Let’s Ride the Wave By Dave VanderGriend
CINDY ZIMMERMAN, ZIMMCOMM
Ethanol Producer Award winners profiled By Lisa Gibson
ETHANOL PRODUCER AWA RDS
‘A Personal Business’
Ethanol Producer Magazine: (USPS No. 023-974) June 2019, Vol. 25, Issue 6. Ethanol Producer Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing oﬃces. POSTMASTER: Send address changes to Ethanol Producer Magazine/ Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.
6 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
Interviews with ethanol execs formerly from large corporations By Matt Thompson
JUNE 2019 VOLUME 25
Running on Refuse
Enerkem is expanding methanol, ethanol from MSW By Matt Thompson BBI INTERNATIONAL
Feedstock Flexibility ON THE COVER Construction on the D3Max technology at Ace Ethanol in Stanely, Wisconsin, is ongoing and expected to be 75 percent complete by midsummer. D3Max produces cellulosic ethanol from corn fiber in wet cake. PHOTO: JIM STEWART, ACE ETHANOL
Opportunities in High-Protein Feed The market is growing as meat consumption increases By Mallorie F. Wilken
8 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
82 CARBON DIOXIDE The Case for a Credit
Ethanol reduces GHGs in its contribution of carbon to merchant market By Steffen Mueller and Sam Rushing
Global technologies are making development progress By Matt Thompson
THE TRANSFORMATIVE EXPERTISE OF FLUID QUIP TECHNOLOGIES
PROJECT OF THE YEAR
Fluid Quip Technologies’ MSC™ installation at Flint Hills Resources in Fairmont, NE is the 2019 Ethanol Producer Project of the Year.
Fluid Quip Technologies installed Maximized Stillage Co-Products (MSCTM) at Flint Hills Resources in Fairmont, NE, transforming their plant to create a new revenue stream. Its success led Ethanol Producer to name it their 2019 Project of the Year. We’re very honored. Fluid Quip Technologies is all about transformations. We recently changed our name, our logo, and our image. Fluid Quip Technologies is still the company that provides biofuel and biochemical industries with innovative technology to provide higher value, product diversification, additional revenue, decreased costs, and greater margins, to stabilize revenue. See how Fluid Quip Technologies can benefit your facility. Visit our website at fluidquiptechnologies.com today.
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fluidquiptechnologies.com I 319-320-7709 I ©2019. All rights reserved. Fluid Quip Technologies, LLC. All trademarks are properties of their respective companies.
Largest Issue, Largest Event While planning this issue of Ethanol Producer Magazine, focused on cellulosic ethanol, a few important questions came up: What’s going on with D3 RIN pathway approvals? How are developers moving forward while they wait for approval? And how is the D3 price decline related to frozen pathway approvals?
It’s a complicated scenario that we delve into in the feature starting on page 26. With no pathway approvals going through in at least the past 18 months, little new production, and no favorable RIN price to incentivize new production, the industry waits for EPA movement. If we had a nickel for every time … Lisa Gibson Freelancer Susanne Retka Schill spoke to some corn fiber-to-ethanol project developers in the Editor U.S., such as D3Max, Edeniq and ICM, who are moving forward with their plans as they wait for email@example.com pathway approvals. The impressive technologies are getting attention and forging ahead, while EPA’s reported D3 RIN generation has been somewhat erratic—suggesting commercial-scale cellulosic ethanol producers have dropped out of production at times, Retka Schill reports. Read the full article to find out what developers are predicting. Next, we take you back to the American Coalition for Ethanol’s Washington, D.C., fly-in that took place in April. I was there and (in case I haven’t talked about it enough) have more coverage to share. It was my first time lobbying and I thoroughly enjoyed it. It’s probably not a full-time gig for me, but I’ll crash a fly-in whenever the opportunity arises. Find it on page 36. EPM is proud to profile the winners of the 2019 Ethanol Producer Awards this month. In our five categories—Workplace of the Year, Collaboration of the Year, Board of the Year, Project of the Year and Good Neighbor Award—we received outstanding nominations and had to resort to a vote count among EPM staff and our editorial board. A few categories had close totals. Turn to page 46 to see who takes each award this year. The Q&A, starting on page 56, gets perspectives from ethanol executives who came to the industry from large corporations like BASF and Cargill. What did they bring along, what did they learn, and how did they transition? They share interesting viewpoints. Finally, we take a look at Enerkem and its municipal solid waste plant in Alberta, Canada, producing methanol and ethanol. The gasification technology is also under development in the Netherlands, to produce methanol (maybe someday ethanol?). Find it on page 64. And on the heels of Enerkem, we take a look at other cellulosic ethanol producers making progress. They’re in the U.S., India, China, Scandinavia, Romania and elsewhere. It’s on page 72. With these six features and two contributions, this June issue of EPM is by far our largest of the year. That’s the case every year, as the June magazine makes a prominent appearance at the International Fuel Ethanol Workshop & Expo. This year’s show is June 10-12 in Indianapolis. Maybe you’re there as you read this. It’s the largest ethanol event in the world. Fitting then, that for it we provide the largest issue of our magazine. Enjoy the show.
FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: 10 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
2019 International Fuel Ethanol Workshop & Expo June 10-12, 2019 Indiana Convention Center Indianapolis, Indiana
From its inception, the mission of this event has remained constant: The FEW delivers timely presentations with a strong focus on commercialscale ethanol productionâ€”from quality control and yield maximization to regulatory compliance and fiscal management. The FEW is the ethanol industryâ€™s premier forum for unveiling new technologies and research findings. The program is primarily focused on optimizing grain ethanol operations while also covering cellulosic and advanced ethanol technologies. 866-746-8385 www.fuelethanolworkshop.com
2019 ACE Conference August 14-16, 2019 Omaha Marriott Downtown Omaha, Nebraska The ACE Conference is a mustattend event for industry leadership. Relaying timely updates on public policy, market development, board of director training, and much more, this event combines the detail of highlevel training courses with all the fun of a family reunion. (605) 334-3381 www.ethanol.org/events/conference
Please check our website for upcoming webinars www.ethanolproducer.com/pages/webinar ETHANOLPRODUCER.COM | 11
VIEW FROM THE HILL
The Facts Behind Gas Price Increases By Geoff Cooper
The kids are out of school, beaches are full and vacations are happening. Summer is here, officially. Doctors
will tell you to apply sunscreen liberally, but there’s an extra step you might need to take to avoid getting burned this summer: looking for the best deal on gas prices. The U.S. Energy Information Administration expects gasoline pump prices to peak in June at $2.83 per gallon, and then slowly drop to $2.66 per gallon in September, the official end of the U.S. driving season. The only thing more predictable than the increase in summer prices at the pump is the finger pointing that comes with it. This year was no exception and ethanol’s critics were quick to claim that the floods that plagued the Midwest in March were behind the rising prices. The culprit, some claimed, was a lack of ethanol stranded by rising water and submerged rail lines that prevented refiners from blending the needed fuel. Sometimes the lies get so deep you need hip waders. The facts are that while the Midwest floods in mid-March did affect ethanol transportation and some individual facilities, ethanol inventories were at record levels. Stocks in most regions, including the Gulf Coast and East Coast, were above year-ago levels. West Coast inventories have been declining since the start of the year, but were nevertheless slightly above the minimum levels experienced in the previous 12 months. At RFA, we knew the issue wasn’t ethanol, so we decided to take a deeper look at what was really behind the increase in gas prices. According to our analysis, the increase in gasoline prices Americans began to feel in April was primarily driven by three factors: a surge in crude oil prices since the start of the year; typical seasonal patterns in gasoline pricing, partially reflecting the changeover to summer specifications; and refinery maintenance and unplanned outages earlier in the spring. Let’s take a deeper look at what we found. First, it has long been recognized that crude oil prices are the primary driver of gasoline prices. Crude oil prices sold off sharply in late 2018 and then rebounded sharply in the first quarter of 2019, and gasoline prices followed. Since
12 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
late December 2018, crude oil futures prices increased by approximately 40 percent, while gasoline (RBOB) futures went up by roughly 50 percent. By comparison, ethanol futures prices have increased only about 5 percent. In fact, ethanol prices were (and remain) at a steep discount to gasoline prices for most of 2018 and 2019, with ethanol futures in April trading at a 60 cent-per-gallon discount to gasoline futures. The discount to competing sources of octane is even more pronounced. Second, gasoline prices have a marked seasonal trend. As explained by the EIA, “Retail gasoline prices tend to be lowest in the winter months (December to February) before increasing in the spring. This trend occurs, in part, because refineries begin producing summer-grade gasoline, which is more expensive to manufacture, in February and March after they have produced enough winter-grade gasoline to last through the winter driving season.” The increase in 2019 was simply accelerated because of the strong rebound in crude oil prices. Third, refinery outages were plaguing the market. According to a blog post by AAA in early April, refinery maintenance work “hit some unexpected bumps in the road, leading to higher pump prices as the nation settles into spring.” According to data from the EIA cited by AAA, total domestic refinery utilization fell to 86.4 percent during the last week in March, while the previous year it was at 93 percent. “The year-over-year difference underscores the impact of unplanned refinery maintenance on markets across the country ... which has led gasoline production to tighten,” according to AAA analysis. As sure as the changing of the seasons and the increases in summer prices at the pump, we’ll always see ethanol’s critics pointing the finger. But this year, we’re hopeful that some facts and a sober analysis can help consumers recognize what’s really driving the prices at the pump, and avoid getting burned. Author: Geoff Cooper President and CEO Renewable Fuels Association 202.289.3835 firstname.lastname@example.org
“We were searching for a way to increase our capacity without having to add a whole new distillation system. The Whitefox’s ICETM system was the answer. Their membrane technology allowed us to increase our dehydration capacity and improve our energy efficiency at the same time.” - Carl Sitzmann, CEO at E Energy Adams
Together, improving American Ethanol.
ICE ICE ICE
Market Access Key to Building Demand By Brian Healy
Changing biofuels policies around the world boosted global ethanol trade to a record high last year—10.7 billion liters or 2.8 billion gallons— and policy trends point toward continued growth as countries look for new ways to reduce overall emissions. Lowering market access barriers so trade acts as a
supply stabilizer is a critical link between the success of many of these policies and increasing global ethanol trade, which has trended higher for the past five years. While more than 65 countries have biofuels policies in place, they vary widely in terms of enforcement and overall renewable content in the fuel supply. Brazil has the highest share of ethanol in its fuel pool in the world at nearly 48 percent, which is expected to expand as RenovaBio, the country’s new national biofuels policy, incentivizes greater use of E100 in flex-fuel vehicles or hydrous ethanol. Japan, the fifth-largest gasoline market today, uses ethyl tert-butyl ether (ETBE) as an oxygenate, which means there is less than 2 percent penetration of renewable content in its fuel supply. Both countries’ policies are enforced by and benefit from trade but leave room for growth in overall renewable content. Another approach to biofuels policy is exemplified by the Philippines, which imported ethanol early in its experience with biofuels to create a guaranteed supply as domestic infrastructure and production capacity was developed. While many countries currently follow this model, others could benefit from it, including India, which has a goal to achieve E20 by 2030. A third tranche of countries with biofuels policies are those that allow for renewable content in fuel specifications but don’t
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have a specific mandate for ethanol use, making blending—or even education about the benefits of blending—inconsistent. For example, Nigeria allows up to 10 percent ethanol content in its fuel specification, and imports nearly all its finished gasoline from countries in the European Union. Chile allows up to 5 percent ethanol in its fuel specification but is not yet blending. Lowering market access barriers to allow for more robust ethanol trade is the critical link for many of these polices. Many tariff schedules do not reflect the true use of ethanol as a standalone fuel or a renewable energy component of gasoline. The tariff schedule in Indonesia, for example, remains high for both undenatured and denatured ethanol at 30 percent compared to 5 percent tariffs on aromatics and duty-free access for gasoline. This higher tariff on renewables than on fossil fuels is a widespread problem globally that penalizes the competitiveness of renewables. Righting these discrepancies in market access is a critical step forward as countries continue to look for ways to reduce overall greenhouse gas emissions and improve air quality and human health. Providing information and examples of policies that work is a key component of the market development work the U.S. Grains Council and its partners in the U.S. ethanol and corn industries are undertaking. Author: Brian Healy Manager of Ethanol Export Market Development U.S. Grains Council 202.789.0789 email@example.com
CLEARING THE AIR
Ethanol: Let’s Ride the Wave By Dave VanderGriend
Now that we are well into the current Congress, it is clear that many new members are riding in on a green wave with a renewed emphasis on climate, carbon and pollution. Committees in the House
of Representatives are fighting for attention as they all want to claim the green ground. Sadly, ethanol opponents seem to see this as an opportunity to make sure ethanol is not part of this discussion. There has been an uptick in unsubstantiated, uninformed published opinion pieces accusing ethanol and agriculture of being the problem, not the solution. It is beyond irony that the money behind many of the so-called environmental groups who are fighting to define what is green or not green is often traced back to the oil industry. Pseudo-environmental groups claiming to save the planet cling to decades-old studies on agriculture and ethanol modeling and refuse to engage in honest debate. In fact, a recent article in a Washington newspaper included a shocking, uninformed statement by a lobbyist for the Environmental Working Group who claimed, “You can’t be for the status quo with ethanol and also be for saving the planet.” He later stated political candidates would be hypocrites by supporting ethanol and claiming to be green. The true hypocrisy is that some environmental groups, and to some extent the U.S. EPA, refuse to recognize emerging science and data that clearly show the growth of the ethanol industry has ushered in a new era of agriculture productivity that has significantly reduced carbon while increasing food supplies. Domestic ethanol has replaced more than 10 percent of our petroleum-derived gasoline and reduced the carbon that is so much of their focus. Energy and carbon inputs are reduced throughout the full life cycle, including petroleum refineries as they use low-carbon ethanol to raise octane rather than energy-intensive aromatics. A sad reality when ethanol opponents rely on fringe groups like the Environmental Working Group is the blinders they wear when looking at carbon and ignoring the big picture of pollution and health. In addition to simply being wrong, the hypocritical position is to oppose biofuels like ethanol and fail to recognize the overall health hazards and pollution that come from oil. Ethanol is already replacing billions of gallons of benzene and other carcinogenic toxic aromatic compounds in gasoline.
16 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
Despite this constant attack from some in the environmental community, the tide may be turning. Whether it is by design or simply laziness, the problem with much of the criticism of ethanol is the failure to do one’s homework and the old saying comes to mind that you are entitled your own opinion, but not to your own facts. And those facts include the findings by the U.S. Department of Energy and the Argonne National Laboratory, which has developed the gold standard of models that gauge ethanol’s greenhouse gas (GHG) emissions. This is a comprehensive life cycle assessment from field to tank and is constantly updated. The result is that corn ethanol is now on par with sugarcane ethanol with a 50 percent reduction in GHG from baseline gasoline. This is supported by numerous private sector studies. The U.S. Department of Agriculture also recently released a study that found corn ethanol was more than 40 percent lower in carbon dioxide than gasoline, and projected future reductions of 70 percent with continued improvements in agriculture and ethanol production. Add to that the dramatic carbon dioxide decrease from vehicles when the ethanol is added to gasoline, and the combination produces carbon reductions that should meet anyone’s definition of green. A new study conducted by North Carolina State University and commissioned by the Urban Air Initiative confirms that splash blending ethanol at higher levels increases efficiency and reduces tailpipe emissions in nonflex fuel vehicles. And finally, Urban Air Initiative has challenged EPA to withdraw a consent decree in response to a lawsuit by the Sierra Club that would effectively force an anti-backsliding study to assess the environmental impacts of the Renewable Fuel Standard. There are certain procedures and protocols to this process, and while we welcome a fair assessment of the true impacts on the environment, we want to make sure EPA is using the best available science and information. So yes, let’s ride this green wave. We have a great story to tell and need to keep telling it. Author: Dave VanderGriend President, Urban Air Initiative CEO, ICM Inc. 316.796.0900 firstname.lastname@example.org
People, Partnerships & Projects
Camag names new lab manager
Royal DSM, Lallemand conclude license agreement
Wilmer Perera has been named the laboratory manager of Camag Scientific Inc. Perera is a natural products chemist dedicated to the development of analytical and preparative methods to identify, quantify and purify complex mixtures of natural bioactive Perera compounds from different natural sources using multiple processes, including high-performance liquid chromatography. Perera received his bachelorâ€™s degree in chemistry and masterâ€™s degree in organic chemistry from the University of Havana, Cuba. He also completed his doctorate in biochemistry at the University of Liege, Belgium. He has published 25 papers in peer-reviewed journals and has performed more than 40 presentations in national and international meetings. Perera will be managing all aspects of the laboratory at Camag Scientific. He will oversee laboratory analyses and projects, as well as trainings and courses at the Wilmington, North Carolina, facility. He will also assist in customer support, particularly in the applications area.
A joint agreement between Royal DSM and Lallemand Inc. grants to Lallemand a nonexclusive, royalty-bearing license to DSMâ€™s lowglycerol yeast technology patents. The license agreement is part of a settlement that was reached following a 2018 U.S. Federal Court jury verdict in Wisconsin. The referenced technology in the agreement is for use in the fermentation of first-generation biofuels. Royal DSM is a global, purpose-led, science-based company active in nutrition, health and sustainable living. DSM delivers solutions for human nutrition, animal nutrition, personal care and aroma, medical devices, green products and applications, and new mobility and connectivity. DSM and its associated companies deliver annual net sales of about 10 billion euros ($11.2 billion) with approximately 23,000 employees. Lallemand is a privately owned company specializing in the research, development, production, marketing and distribution of yeast, bacteria and other microorganisms for use in the food ingredient, human nutrition, animal nutrition, baking, wine, beer, distilled spirits, biofuels, plant care, cosmetic and pharmaceutical industries. Lallemand has approximately 4,000 employees located in more than 40 countries.
Poet’s Broin receives leadership award Jeff Broin, Poet CEO, received the Global Bioeconomy Leadership Award for his vision and leadership in pioneering new technology, at the Advanced Biofuels Leadership Conference in April in Washington, D.C. The award, from Biofuels Digest and Nuu, recognizes individuals who continue to demonstrate “conspicuous leadership in the development and deployment of new technology.” “Biofuels are aiming the trajectory of our economy and global energy away from fossil fuels and toward a 100 percent renewable future,” Broin said. “I’m deeply honored by this award and very proud of the contributions Poet has made over the past 30 years to unlock the potential of biofuels and generate new demand for America’s family farmers. “For more than a century, fossil fuels have polluted our air and clouded our future with no alternative in sight,” he said. “But today we have a readily available, affordable solution that can begin to reverse the devastating effects of climate change. Biofuels are transforming the energy landscape and creating a brighter future, and we now see nearly infinite alternatives to petroleum-based products on the horizon. Poet will continue to lead the way by innovating sustainable technologies and introducing renewable, eco-friendly bioproducts derived from the surface of the earth to protect the health of our families and our planet.”
Broin is the third recipient of the Global Bioeconomy Leadership Award. The two previous recipients were Agriculture Secretary Tom Vilsack and Navy Secretary Ray Mabus. “Jeff Broin exemplifies what the words ‘global leadership’ should mean in the bioeconomy: an ability to envision a bold future, inspire a Broin generation of leaders to work with him to develop that vision into promising technologies and products, and to build a great company to deliver on the promise,” said Jim Lane, editor and publisher of Biofuels Digest and Nuu. “He, and the company he founded, Poet, have catalyzed the development of renewable fuels, advanced feed and a new generation of fuels and materials based on waste residues; they’ve led at every step of the journey in the development of new markets and applications for farmers, new goodpaying jobs for rural areas, and the rebirth of American manufacturing and refining.”
Whitefoxâ€™s ICE starts up at Ace Ethanol Whitefox Technologies Ltd. has completed its fifth successful installation and startup of its Whitefox ICE system. This time, at Ace Ethanol in Stanley, Wisconsin. One-third of all Wisconsin ethanol plants now have a Whitefox ICE system installed. Whitefoxâ€™s membrane solution is a key part of a wider project that will integrate with D3Maxâ€™s technology for taking corn kernel fiber-toethanol, enabling significant energy savings for the integrated facility. Neal Kemmet, president and general manager at Ace Ethanol LLC and Fox River Valley Ethanol LLC said, â€œAfter seeing the benefits of the Whitefox ICE membrane system at Fox River Valley Ethanol in Oshkosh, we were eager to replicate the energy reduction solution at Ace. Whitefox has demonstrated its ability to help our two plants reduce energy consumption and reduce loadings on our columns and mole sieves. We are also running a more stable production at the plant, which is an additional benefit we didnâ€™t anticipate, but is greatly appreciated by our folks in the control room. We are experiencing a positive impact on our energy consumption, plus a reduction in our carbon emissions and cooling.â€?
Gillian Harrison, CEO of Whitefox said, â€œWorking with Neal Kemmet and his team at both Ace Ethanol and Fox River Valley Ethanol has been really rewarding for us at Whitefox. We are excited to be part of a project bringing D3Maxâ€™s technology to the industry. Energy and water efficiency are central to Whitefoxâ€™s purpose and we were pleased to see (the U.S. Department of Agricultureâ€™s) recent report that projects that by 2022, with further improvement, U.S. corn-based biofuels could reduce greenhouse gas emissions by 70 percent compared to gasoline. Ace is showing leadership by investing in new technologies to further improve the sustainability of U.S. biofuels and we are proud to be part of such projects.â€? Wisconsin is home to nine ethanol plants and is the ninth-largest ethanol-producing state in the country. It has the capability to produce 500 million gallons of ethanol per year.
,)620(21(72/'<28 7+(5(:$6$:$<725('8&( (7+$12/23(5$7,21&2676 :28/'<28/,67(1"
*22'1(:6,6217+(+25,=21 And itâ€™s sure to be a game-changer in reducing operating costs for your plant. Stay tuned. You wonâ€™t want to miss it.
rmsroller-grinder.com // contact email@example.com 888-283-9337 // 605-368-9007
ADM announces plan to spin off 3 dry mill ethanol plants Archer Daniels Midland Co. has announced plans to create a new ethanol subsidiary that will include the company’s three dry mill ethanol plants, located in Columbus, Nebraska; Cedar Rapids, Iowa; and Peoria, Illinois. ADM made the announcement as part of its first quarter 2019 earnings release on April 26. During an earnings call, Juan Luciano, chairman and CEO of ADM, said the ethanol subsidiary will report as an independent segment once established. “The establishment of the new subsidiary will facilitate the separation of our three ethanol dry mills as we advance strategic alternatives, which may include, but are not limited to, a potential spinoff of the business to existing ADM shareholders,” he said. “Of course, as with any strategic decision, these changes to our portfolio will be subject to market conditions, acceptable valuations and the approval of our board.” Regarding first-quarter financial performance, ADM reported the company was impacted by severe weather and flooding. “The
first quarter proved more challenging than initially expected,” Luciano said. “Impacts from severe weather in North America were on the high side of our initial estimates, and the ethanol industry environment limited margins and opportunities.” The company reported a $74 million loss for its bioproducts segment, which includes ethanol, down from a $3 million loss during the same period of 2018. Overall, the company reported net earnings attributable to ADM of $233 million, down from $292 million during the first quarter of last year. Diluted earnings per common share were 41 cents, down from 70 cents during the same period of 2018.
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PATHWAYS AWAIT PRIORITY The U.S. EPA hasn't issued a new pathway approval in over a year, but technology providers for corn kernel fiber-to-cellulosic ethanol remain optimistic. By Susanne Retka Schill
Pathway approvals by the U.S. EPA came to a screeching halt in 2018, putting the expansion of corn kernel fiber cellulosic ethanol in limbo. The EPA Part 80 Fuels Program List shows no new registrations for plants approved for D3 renewable identification number (RIN) generation in the past 18 months. And while cellulosic ethanol production is trending upward, tracking EPA’s monthly RIN generation data indicates wide swings in production.
“EPA approval of Part 80 applications for corn fiber-to-cellulosic ethanol processes have apparently come to a halt because the EPA has several higherpriority issues it is working on, like E15, the RFS reset and regulatory changes to modify the RIN compliance system,” says Mark Yancey, chief technology officer for D3Max, which is building its first commercial-scale plant to convert corn kernel fiber in wet cake to cellulosic ethanol. On May 8, EPA issued a guidance document to articulate a proper basis for D3 pathway registration. The guid-
ance specifies EPA has determined analytical methods designed for starch components to be ineffective in calculating accurate cellulosic ethanol yields. The intent of the guidance, EPA says, is to explain its interpretation of regulatory requirements and articulate clear criteria for the type of analysis appropriate for D3 pathway registration. Brian Thome, CEO of Edeniq, says the paused pathway approvals have caused headaches. Before EPA delayed approvals, the company was poised to work with a number of ethanol plants wanting to add cellulase enzymes to
PUT TOGETHER: The first commercial-scale D3Max plant is under construction at Ace Ethanol in Stanley, Wisconsin. The technology uses the corn kernel fiber in wet cake to produce cellulosic ethanol. Completion of projects like this will boost production, affecting the D3 RIN price. PHOTO: JIM STEWART, ACE ETHANOL
26 | Ethanol Producer Magazine | MAY 2018 26 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
ETHANOLPRODUCER.COM | 27 ETHANOLPRODUCER.COM | 27
starch fermentation to convert the corn kernel fiber into cellulosic ethanol. Edeniq licenses its Intellulose technology for an EPA-approved method of measuring the lift, plus helps plants make adjustments to optimize the process. The number of plants approved using the Intellulose pathway remains where it was more than 18 months ago, at six. “There’s been a lot of discussion about test methods,” says Steve Hartig, ICM’s vice president of technology development. In ICM’s Gen 1.5 technology, corn kernel fiber is separated at the front end, pretreated and fermented for cellulosic ethanol production with a special yeast. The 1.5 broth is then introduced into starch fermentation at fill. With the necessary data to apply for a pathway unavailable until the first commercial plant under construction is running, ICM has been laying groundwork with several
agencies to develop its testing protocol. The company has been working with EPA, the California Air Resources Board, the National Renewable Energy Laboratory and the National Institute of Standards and Technology. “We think test methods should be robust, reliable, public and peer reviewed, so that everyone has confidence in them,” Hartig says.
RIN Price Decline
While new EPA registrations have been on hold, the value of D3 RINs has eroded, dropping more than a dollar from the $2.93 peak in September of 2017 to $1.84 in February. With cellulosic ethanol volumes still low, D3 RIN prices are primarily based on the value of the cellulosic waiver credit plus the D6 RIN for conventional biofuel—the D-code applied to corn starch ethanol— both of which are down.
In its document, “Cellulosic Waiver Credit Price Calculation for 2019,” EPA explains that using the criteria and formula specified in the Clean Air Act, the agency calculated the average wholesale gasoline price for the previous 12 months at $1.813 with an inflation adjustment of 1.193 to set the Cellulosic Waiver Credit at $1.77 for 2019. “The biggest reason the cellulosic waiver credit is down to $1.77 versus $1.96 from last year is that the gasoline price average was down about 30 cents,” explains Jordan Godwin, senior journalist with the Oil Price Information Service. Those cellulosic RINs were assessed by OPIS on April 2 at $1.70 for the 2019 compliance year and $1.85 for 2018 compliance. That’s compared with $2.50 for 2018 compliance and $2.58 for 2017 compliance on April 2, 2018. “So the RINs are down even sharper than
D3 RIN PRICES: Monthly RIN generation data reported by the U.S. EPA indicate cellulosic ethanol production has experienced wide swings. SOURCE: U.S. EPA
ETHANOLPRODUCER.COM | 29
RIN TRENDS: U.S. EPA data show D3 RIN prices declining. SOURCE: U.S. EPA
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the CWCs are,” Godwin says. “I’ve been told that the decline in D6 ethanol RINs has played a factor in that. D6 RINs were assessed by OPIS on April 2 at 14.5 cents for 2019 and 12 cents for 2018, compared with 39.5 cents for 2018 and 37.25 cents for 2017 a year ago.” What impact that erosion in D3 RIN value has had on cellulosic ethanol production is difficult to determine. EPA’s reported cellulosic RIN generation each month has been bouncing around, dropping as low as 140,000 gallons in December 2018. January’s RIN data indicates 539,000 gallons generated D3 RINs, which nearly doubled in February’s data to 1.03 million gallons. The swings to higher production levels are attributable to the large, pure-play cellulosic producers—Poet DSM in the U.S. and two Brazilian producers—who are producing inconsistently as they work through firstof-their-kind start-up challenges. The lowest monthly RIN generation totals recorded in the past year, however, suggest the corn kernel fiber folks have also dropped out at times. An estimate based on a 1.5 percent cellulosic lift for those plants using in-situ cellulases, plus Quad County Corn Processors, puts the potential monthly RIN gen-
eration for corn kernel fiber ethanol over 800,000, which was only topped twice in 2018. Thome reports that even with EPA’s hiatus from registering new D3 producers, plants interested in taking advantage of California’s Low Carbon Fuel Standard continue to evaluate Edeniq’s Intellulose technology. “Eastward facing plants would have difficulty in having any reason to measure their corn kernel fiber conversion today because the EPA is not moving, and they don’t ship to California, nor do they have an easy route to California,” he says. “But there are a number of other plants in the Midwest and westward facing where it certainly makes sense to be looking for that extra bump. Some of our customers are getting as much as 75 cents per gallon premium for cellulosic ethanol, and for some customers it correlates to a penny a gallon increase in margin for their entire plant, when you take the numbers and spread that out across all of their gallons.” The California Air Resources Board, he adds, is aligning with EPA in its rules regarding ongoing testing to verify yields, either annually or every 500,000 gallons.
Just how many plants will move toward adding cellulases once EPA resumes evaluating new registrations remains to be seen. The real boost in cellulosic volumes from corn kernel fiber will come when the two plants under construction come online later this year. Yancey reports D3Max construction at Ace Ethanol in Stanley, Wisconsin, is largely on schedule, although the winter weather in Wisconsin was a challenge. “I estimate construction will be about 75 percent complete by the end of June and commissioning should start in October.” In the D3Max technology, the corn kernel fiber in wet cake is diverted to a separate reactor for pretreatment and fermentation and, in the Stanley installment, will go through a dedicated beer column and then membrane distillation. Therefore, the D3Max process is still in line with the May 8 EPA test method guidance document. Yancey is anticipating EPA approval will come quickly. Based on pilot tests, a 7 percent or better yield increase is expected from the corn kernel fiber conversion at a corn ethanol plant. Gen 1.5 is part of a suite of ICM technologies being deployed at Element LLC,
ETHANOLPRODUCER.COM | 31
CELLULOSIC SITE: The 70 MMgy Element, a joint venture between ICM and The Andersons, is expected to have all units operational by the end of the year, including cellulosic ethanol conversion of corn kernel fiber separated at the front end. PHOTO: ICM INC.
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the 70 MMgy ethanol plant under construction in Colwich, Kansas, next to the ICM headquarters. Element is a joint venture between ICM and The Andersons Inc. An Element spokesman says the project is on track, with initial production expected to start this summer and full-scale operation of all systems expected by the end of the year. The company is not disclosing the projected cellulosic ethanol gallons, but does say it expects to achieve a total ethanol yield of 3.1 gallons per bushel of corn. Whether generating D6 or D3 RINs, a yield increase through coprocessing is still valuable. So expansion into corn kernel fiber cellulosic ethanol is poised to continue, despite EPAâ€™s new pathway guidance and tight margins. Author: Susanne Retka Schill Freelance journalist firstname.lastname@example.org
WISCONSIN WINTER: Construction of D3Max at Ace Ethanol has gone smoothly for several months, despite the challenges of building during a Wisconsin winter. PHOTO: JIM STEWART, ACE ETHANOL
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June 10-12, 2019 Indianapolis, IN
ETHANOLPRODUCER.COM | 33
All For ONE The American Coalition for Ethanol’s annual Washington, D.C., ﬂy-in attracts participants from all sectors aﬀected by ethanol to spend an afternoon lobbying for the industry. By Lisa Gibson
GROUP PHOTO: All attendees of the 2019 American Coalition for Ethanol’s Washington, D.C., fly-in pose for a photo. More than 70 people attended a total of more than 120 meetings on the Hill during the event. PHOTO: CINDY ZIMMERMAN, ZIMMCOMM
36 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
ETHANOLPRODUCER.COM | 37
During a meeting with three attendees of the American Coalition for Ethanol’s 2019 Washington, D.C., fly-in, Jaqueline Schmitz, senior policy advisor for Sen. Robert Menendez, D-N.J., said New Jersey voters are against ethanol. They don’t like
the emissions and they don’t want to use it in their boat engines, she said. The three attendees, together constituting team No. 21 of about 25 fly-in teams in Capitol Hill meetings that afternoon, referred her to a greenhouse gas emissions chart they carried along, showing that emissions from ethanol continue to decline, currently hovering at about 40 percent below that of gasoline. And boat engines? The crappie masters tournament uses E10 every year.
38 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
‘So it’s important that we go out and tell our story to keep them up to speed on how this affects such a wide range of the population and not just the constituents that they see right in front of them.’ - DAVE SOVEREIGN
CHAIRMAN OF THE BOARD OF DIRECTORS, GOLDEN GRAIN ENERGY; VICE PRESIDENT OF THE BOARD OF DIRECTORS, ACE
The annual ACE Fly-In & Government Affairs Summit took place April 2 and 3, and education became a prominent theme, attendees said. Many legislators, particularly from states with little agriculture, were unaware of the details of the
Renewable Fuel Standard and had limited knowledge of ethanol. Many thought the RFS will only be around a few more years, didn’t understand renewable identification numbers or were under the impression that E15 has higher emissions than E10.
Conversely, other legislators and their staffs were well-versed on the issues fly-in attendees wanted to discuss and already had letters or petitions in progress to help. This year, the focuses of legislative meetings during the ACE fly-in centered around educating Congress on ethanol, its benefits and the many industries it affects; getting the E15 Reid vapor pressure waiver to the finish line; and communicating the damage caused by unnecessary small refinery exemptions (SREs). “Based on the feedback we received from the more than 70 people taking part in the fly-in, we were successful in illuminating the issues we wanted to illuminate,” said Brian Jennings, CEO of ACE. “I was impressed by the passion and enthusiasm that our participants brought to D.C. and it is always personally rewarding for me to see people from all walks of life come together and push for our priorities in D.C.”
THUNE TALK: Attendees of the American Coalition for Ethanol’s Washington, D.C., fly-in meet with Sen. John Thune, R-S.D., April 2. PHOTO: CINDY ZIMMERMAN, ZIMMCOMM
Inside the Meetings
Scott McPheeters, board member of Kaapa Ethanol, with two locations in Ne-
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braska, and a corn farmer, said he attends the ACE fly-in every year. “The first time I went, I saw the value of what was happen-
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SHIMKUS SHOOT: Fly-in attendees Troy Bredenkamp, left, executive director of Renewable Fuels Nebraska, and Dave Dahlgren, right, of the Nebraska Corn Growers Association, with Rep. John Shimkus, R-IlI., April 2. PHOTO: CINDY ZIMMERMAN, ZIMMCOMM
THE RUNDOWN: ACE CEO Brian Jennings opens the event on the morning of April 2 with a discussion about the policy issues attendees will address in meetings with legislators and their staffs later in the day. PHOTO: CINDY ZIMMERMAN, ZIMMCOMM
ing and how well-organized it was, and I felt really good about accomplishing something,” he said. “We’re frustrated. We wonder what we can do, and it’s a great feeling to go and actually talk to people.”
The meetings with legislators and staffers who have no opinion on ethanol can be the most interesting and constructive, he said. “Those are the ones that are really nice because you can go in and pres-
ent the facts. They’ve been believing what they’ve heard and what they’ve heard is spun by the oil industry.” McPheeters grows only food-grade corn, sold to Frito Lay. But the ethanol
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ACCOUNTABILITY ASK: Bill Wehrum, assistant administrator of the U.S. EPA, took questions about EPA accountability for small refinery exemptions and reallocation of those gallons. PHOTO: CINDY ZIMMERMAN, ZIMMCOMM
industry represents a benefit for all corn farmers, he said. â€œItâ€™s all a big picture. You donâ€™t have to sell corn to an ethanol plant to benefit from the market generated by the ethanol plant.â€?
Finding a common interest in meetings with legislators and staffs sometimes is as simple as breathing. â€œWe want to breathe clean air,â€? McPheeters said. â€œAs a consumer, as a person who lives and breathes on
the planet, thereâ€™s a big benefit.â€? Many attendees agreed that leaning on the climate change impacts of ethanol was a successful tactic in their meetings. It was nice to go on offense instead of playing defense, some said. Dave Sovereign, chairman of the board for Golden Grain Energy in Mason City, Iowa, vice president of the ACE board and president of fuel retailer Cresco Fuels in Cresco, Iowa, said itâ€™s important to tailor the message to the legislator or staffer in the meeting. He was surprised to find out that many donâ€™t even own cars, let alone worry about what fuel theyâ€™re using. â€œSo itâ€™s important that we go out and tell our story to keep them up to speed on how this affects such a wide range of the population and not just the constituents that they see right in front of them.â€? Meetings generally go quickly, as many offices are incredibly busy, with staffers jumping in and out of appointments all day. But Jennings said that doesnâ€™t mean fly-ins lose their effectiveness. â€œAs a former Senate staffer myself, I can say with great confidence our fly-in makes a difference. Yes, it is true that certain times of the year the congressional offices are swamped with
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visits from groups like ours. But it is also true that these fly-in events allow us to put a human face on our priority issues and make connections with staff and members of Congress that pay dividends in the future.” Many attendees get phone calls and emails from legislative staff long after the event, asking about ethanol-related topics, Jennings added. “As the old but true saying goes in D.C., if you’re not at the table, you’re on the menu, so ACE will continue to provide an opportunity for grassroots ethanol supporters to have a seat at the table in D.C.” McPheeters agreed. “One of the best things we can do is fly-ins like this. We’re real people they can look in the eye.” CONGRESSIONAL SUPPORT: Rep. David Loebsack, D-Iowa, poses with Brian Jennings, ACE CEO. Loebsack was a guest speaker at the fly-in April 2. PHOTO: CINDY ZIMMERMAN, ZIMMCOMM
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On the Issues
Perhaps the most critical issue this year was the damage SREs have done to the ethanol industry. In 2016 and 2017, 54 waivers were granted, totaling more than 2.6 billion gallons. A lack of reallocation is oversupplying a tender ethanol market. “We’re always working on something [at fly-ins], but this is really critical,” McPheeters said. “The real and acute economic pain in rural America is caused, in part, by EPA’s abuse of the SRE provision of the RFS and ongoing trade disputes,” Jennings said. “It was evident on the faces of (and in the words of) many of the farmers in attendance that their patience is running incredibly thin and they are concerned about being able to hang on given the onslaught of demand destruction.” McPheeters said his best meeting with a legislator happened at this year’s fly-in with Rep. David Scott, D-Ga. Scott asked how he can help with the SRE damage. He understood the problem, his staff was knowledgeable and he listened to suggestions for solutions, such as a letter to EPA or President Donald Trump outlining the problem and asking for a fix. “That’s the
best meeting I’ve ever had,” McPheeters said. Bill Wehrum, assistant administrator of the U.S. EPA, spoke to participants the morning of April 2, taking questions on the SREs. The address was closed to the press. Those gallons need to be reallocated, Jennings said to attendees following Wehrum’s address. “And I’m telling you something you already know because you told Bill Wehrum that.” SREs likely will need to be addressed through a lawsuit, he added. ACE is involved in a lawsuit in the 10th Circuit to challenge three specific SREs granted to HollyFrontier Corp. and CVR Energy. It has also petitioned EPA to reallocate SREs. “That’s something that we could take up here in D.C., in the D.C. circuit,” Jennings said. “We’re not asking too much of EPA,” he said. “We are not asking too much of elected leaders to make sure the rule of law is followed with respect to the RFS.” This year’s fly-in included several new faces, on the Hill for the first time. Sovereign said attendance, at 73, was the secondhighest in the event’s history. And it’s crucial to get the real faces of the industry into legislators’ offices, he said. “So many times, they read about RINs or ethanol, but they don’t have a human side of it they can relate to. I think that we have that opportunity to put our faces in front of people and, hopefully, by telling our story, they can relate to that the next time they read about it or make a decision on a piece of legislation.”
ORGANIZED INFORMATION: Folders packed with facts and educational materials sit ready to go along with ACE fly-in attendees to meetings with legislators. PHOTO: CINDY ZIMMERMAN, ZIMMCOMM
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ETHANOL PRODUCER AWARDS
ETHANOL PRODUCER AWA RDS
46 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
In their second year, the Ethanol Producer Awards honor worthy people, projects and partnerships. By Lisa Gibson
The ethanol industry is full of noteworthy developments, plants and teams. Ethanol Producer Magazine’s Ethanol Producer Awards recognize just a few of those each year. In the areas of culture, collaboration, projects, leadership and philanthropy, EPM’s editorial staff and editorial board do our best to choose the most deserving nominations out of our pool of candidates. For the second year, we believe we’ve done that. Here are the 2019 Ethanol Producer Award winners. PROJECT OF THE YEAR
Overall Scale, Complexity and Impact Flint Hills Resources Fairmont, Fairmont, Nebraska
Mark Murphy, general manager for ingredients at Flint Hills Resources, says high-protein feed is the next evolution of dried distillers grains. It’s fitting, then, that the company is helping lead the ethanol industry into that space. In 2018, Flint Hills Resources OF Fairmont installed THE YEAR Fluid Quip Process Technologies’ Maximized Stillage Coproduct system, producing NexPro feed. Flint Hills sells NexPro into four continents and is looking to expand into more, Murphy says. “The challenge is we’ve got limited production right now,” he says. “It’s a good problem to have right now.” The project, with a price tag of about $50 million, consisted Flint Hill Resources Fairmont installed Fluid Quip Process Technologies’ Maximized Stillage Coproduct technology last year. of a new protein separation building, two ring driers, silo storage PHOTO: FLINT HILLS RESOURCES modification and a new loading system for rail and trucks. The system started operating in August 2018, within its original time frame products. Using the MSC equipment allows us to continue producgoals and budget, after just over 12 months of construction and ing DDGs, while increasing corn oil production and creating Nexcommissioning time. Pro.” Flint Hills worked with universities and nutritionists, conductIt’s precisely when margins are tight that it’s important to create ing feed trials and researching nutritional needs, Murphy says. “It’s new value from existing operations, Murphy says. “The world debeen 2.5 years in the making. How do we get more knowledgeable mand for protein for the poultry, swine, aqua and pet food markets around what customers value and where the big pockets of demand already exists and will grow in the decades ahead. We see a market are going to be? need, and we plan to fill it.” Opportunities for smaller producers “It’s exciting for the industry. exist, as well, he says. The market is tremendous. “Simply put, we want to extract every valuable product we can Murphy says Flint Hills wants to be a partner for other producfrom each kernel of corn. So we not only optimize our operations ers. to be more efficient, but we try to find ways to create new, valuable Flint Hills is also installing MSC at its Shell Rock, Iowa, plant.
ETHANOLPRODUCER.COM | 47
AWARDS COLLABORATION OF THE YEAR
Technology Advancement through Partnership Homeland Energy Solutions and Lallemand Biofuels & Distilled Spirits
A good collaboration is based on trust, willingness to listen to each other, and drawing on existing expertise, say Tera Stoughtenger, a technical team manager with Lallemand, and Francois Van Zyl, a Lallemand OF THE YEAR director of technical services. Lallemand completed a fermentation project with Homeland Energy Solutions, in Lawler, Iowa, in 2018. The project implemented new propagators to replace the direct pitch proFront, from left: Kevin Howes, Homeland Energy Solutions plant manager; cess at the plant. Lindsay Kuhn, Homeland laboratory manager; Tera Stoughtenger, Homeland implemented a direct pitch process 10 years ago, about Lallemand Biofuels & Distilled Spirits technical team manager; Scott three months after it started up, says Kevin Howes, general manager. Bauer, Homeland maintenance manager; Rebekah Heit, Homeland project “As technology has evolved immensely in 10 years, so has the cost of engineer/manager. the yeast,” he says. Switching back to propagators would bring a savings Back, from left: Wade Rummel, Lallemand technical services manager; of about $3 million with a one-year payback, Howes says. Homeland Francois Van Zyl, Lallemand director of technical services-North America; Jon Van Sickle, Homeland production manager. turned to Lallemand to design the ideal propagator. “We’ve been using PHOTO: LALLEMAND BIOFUELS & DISTILLED SPIRITS them for yeast now for several years. I am on a first-name basis with The system includes conditioning tanks to ensure healthy yeast everyone starting from Angus (Ballard, Lallemand president) all the way down through the organization. Our plant and they have worked close- that multiply cell mass before being introduced to fermentation, Van ly together for many years. Optimization every day, all day with them.” Zyl says. The idea is to promote more aggressive cell mass growth,
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which lowers the risk of infection in fermentation. The benefit, he says, is fermentation time can be long or short. “The relationship between us and Homeland really has paid off in dividends,” Van Zyl says. “The fact that we can relate closely to really see the future. We have worked in the past together and have trust. We’re all trying to accomplish the best performance. But the relationship, we can classify that as a partnership. We are trying to all accomplish the same goal.”
Stoughtenger says, “Both sides had unobstructed and free-flowing communication to all levels of both organizations, which was key in hitting the timeline as well as guaranteeing success of the new propagation project. Homeland’s team project management was top-drawer for this project and made the whole process a pleasure to assist with.” “With the right people on the right side, who come to the table without egos and truly want what’s best, great things happen,” Howes says.
BOARD OF THE YEAR
Exceptional Board Leadership, Planning and Vision Heartland Corn Products, Winthrop, Minnesota
The nomination for Heartland Corn Products reads: “The Heartland board is one of the most strategically focused and unified boards we have met/worked with. Every step they take to enhance their facility is carefully thought out, planned and executed with precision. They are open OF YEAR to all ideas and work through and select those whichTHE positively impact the facility, the employees, the shareholders and the commu- Board members, front row from left: Jeff Franta, Brian Thalmann and Joe nity. They do not hold preconceived notions of what an ethanol Ludowese. Back row from left: Steve Sjostrom, Greg Schwarz and Jon facility should be. They respect each other’s opinions and views and Thoreson. Not pictured: Fred Kienlen and Mike Kuehn.
PHOTO: HEARTLAND CORN PRODUCTS
AWARDS find a pathway forward that takes into account each team memberâ€™s unique skill set and contribution to the facility.â€? Gary Anderson, Heartland CEO, agrees. â€œIt is my experience working with the board. Thatâ€™s who they are.â€? Heartland is owned by its farmers and does not buy outside corn, Anderson says. â€œWe typically donâ€™t get awards,â€? he adds. â€œWe are a closed cooperative. â€œEthanolâ€™s not in our name. We are really a marketing cooperative that happens to grind corn and make it into corn oil, DDGs and ethanol. Our sole mission is to take a bushel of corn from our members and give them as much value as we can.â€? Heartland started producing ethanol in about 1994, as a 10 MMgy plant. Today, the plant produces more than 110 MMgy. â€œWe were one of the first ethanol plants in the state of Minnesota,â€? Anderson says. â€œSo they were visionaries in building a plant in an
industry that didnâ€™t exist at that time. Theyâ€™ve got courage, theyâ€™ve got vision, and continued to reinvest in their business, and changing with the times, and not getting stuck in â€˜this is what weâ€™ve always done.â€™â€? Heartland has two plants on its site, built in 1994 and 2006. â€œWeâ€™ve been modernizing the 1994 plant and positioning it for the future,â€? Anderson says. Four of the eight board members are original board members, and a fifth just retired in March, he says. â€œSo they have been through every single phase of this industry from when it didnâ€™t exist to the early stages of the tax credits, to the two phases of the RFS, to this. So this is a board thatâ€™s extremely knowledgeable and has a tremendous amount of experience and has passion for this industry.â€?
WORKPLACE OF THE YEAR
cus was on preventative and predictive maintenance,â€? says Dusty Turner, chief operating officer for Conestoga Energy, the parent company of Arkalon Ethanol. â€œWe were eight years into operations at that point, and it was clear to me that our biggest issue was unpredicted downtime. And we had worked on morale, identified our culture, had identified our core values, but we still just werenâ€™t quite getting it. We still werenâ€™t really being as consistent as we needed to be in a really competitive market.â€?
Outstanding Employment and Management Practices Arkalon Ethanol, Liberal, Kansas
â€œAbout five years ago, I had run across a company called Marshall Institute and their fo-
WORKPLACE OF THE YEAR
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50 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
AWARDS The Marshall Institute is focused on maintenance excellence, total process reliability (TPR), predictive and preventative maintenance. “Our problem was not necessarily our people or anything like that—our problem was our plant.” Arkalon was great at fixing problems that arose, but wasn’t proactively managing maintenance, he adds. “We were just very reactive. And with that comes overtime, comes callouts, and when your plant’s not running well, it is extremely hard to keep morale and culture where you need it. And I’m completely convinced that fermentation is a pure reflection of morale and culture.” Tailoring the process to the plant brought significant success. “We Conestoga-ized it,” Turner says. “We put it in terms that we could understand. We started with four basic areas, low-hanging fruit with quick wins. Quick wins are what builds confidence in the people and the system.” The result was streamlined operation. Employees know exactly what their jobs will entail each day, Turner says. “Let’s face it, no matter if you’re working in an ethanol plant, nuclear power plant or at home, nobody likes surprises. Everyone wants to come to work, know what their job is, get it done. Everyone wants to do a good job.” The system is in place at all three Conestoga plants: Arkalon, Bonanza BioEnergy in Garden City, Kansas, and Diamond Ethanol in Levelland, Texas. “This program is what runs our business,” Turner says. “The real credit is held at the plant level,” he adds. “We’re only
Daulton Holder works in the lab at Arkalon Ethanol in Liberal, Kansas. PHOTO: ARKALON ETHANOL
as good as our employees. All the credit goes to them, their buy-in and their commitment to the TPR. My job is I work for them. I give them all the tools they need to do their job.”
THE GOOD NEIGHBOR AWARD
Exemplary Community Service and Support Marquis Energy-Wisconsin, Necedah, Wisconsin
This year, Marquis Energy-Wisconsin is offering scholarships to students in the surrounding region. “Marquis wants to see our local youth succeed in achieving their lifelong dreams and this reward will cut down on college expenses and open up doors for students,” says Danielle Anderson, director of public relations and political affairs for Marquis. “The scholarship money is available for nearby students attending universities, community colleges, trade schools and graduate programs.” The plant has also donated about $60,000 to three area high schools to invest in science, technology, engineering and math programs (STEM). The plant participates in local fundraisers, charity events, food drives and more, Anderson says. “Marquis Energy-Wisconsin contributes to several worthy causes in the community, including: food pantries, local schools and STEM promotion, agricultural projects and societies, school athletic booster clubs, the local fair and the local FFA chapter, to name a few.”
From left: Jeff Knutson, Marquis Energy-Wisconsin, presents a check to Necedah High School’s Mark Becker, principal; Tonya Kotlowski, superintendent; and Carl Semrow, technology education teacher. PHOTO: MARQUIS ENERGY
Your plant is unique. Your treatment options should be too. DeLaval Cleaning Solutions released DeLasan CMT TM a patented process treatment for corn mash used for fermentationat at fuel and beverage ethanol plants. DeLasan CMT is a leading technology that is best suited for control of organic acids in your fermentation process. The unigue product formulation, low cost, high concentration of actives, and patent pending application make DeLasan CMT unique among other fermentation treatments. Additional benefits of our DeLasan CMT program can include:
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52 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
Employees of the plant also serve as volunteer firefighters, EMTs, and are involved in local schools and churches, she says. “We’re very proud of our employees. Marquis Energy-Wisconsin values being involved in the local community and having great relationships with our neighbors and farmers that live in the area.” The nomination for the plant sums it up: “Marquis EnergyWisconsin exemplifies all of the qualifications for The Good Neighbor Award! Marquis Energy is a strong supporter of the local schools. Not only the schools in Necedah, but also schools in neighboring communities. They support the community, local organizations, food pantries and other worthy causes. Having lived in Necedah my entire life, I know all too well how important it is to have the kind of support that Marquis Energy provides. They are a very caring and supportive company, they are compassionate and eager to champion the cause in times of need.” Author: Lisa Gibson Editor, Ethanol Producer Magazine 701.738.4920 firstname.lastname@example.org
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‘A Personal BUSINESS’
President and CEO of White Energy PHOTO: WHITE ENERGY
56 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
CEO of Guardian Energy Management PHOTO: BBI INTERNATIONAL
Two ethanol company executives discuss their career changes, lessons theyâ€™ve learned and their impressions of our industry. By Matt Thompson
ETHANOLPRODUCER.COM | 57
Greg Thompson started his career at BASF and is now president and CEO of White Energy. Jeanne McCaherty, CEO of
Guardian Energy Management, came to the ethanol industry from ag-giant Cargill. Both say the industry is a community, working together toward common goals without much competition with each other. “I don’t know of any industry quite like it,” McCaherty says. Ethanol Producer Magazine talked to them both about their experiences, their transitions to the ethanol industry and what they learned along the way. Here’s what they had to say.
EPM: Tell us about your background.
‘I worked in privately backed companies for a number of years and White Energy had that private equitybacked play on it.’ - GREG THOMPSON
PRESIDENT AND CEO, WHITE ENERGY
I was with BASF for the first part of my career. ... And then I worked at Nufarm and ran about a $4 million agricultural group for Nufarm in North America, so running all sales and marketing on their agricultural side for a
number of years. … Then I left Nufarm to start Verdesian Life Sciences. … I was founder and president and chief operating officer. I was there for that period of time and then felt that it was time to do something different. I like agriculture and liked
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58 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
the people in agriculture and I think that’s what kind of drove me to this opportunity. I worked in privately backed companies for a number of years and White Energy had that private equity-backed play on it. They hadn’t had a CEO for about a year and they were really looking for a CEO and somebody to step in and had some really interesting projects and areas of improvement I thought that had value. So I decided to leave and started with White Energy 18 months ago.
McCaherty: When I came to Guardian, I had been doing private equity work for about a year after I left Cargill. The bulk of my career was at Cargill, and the last role I had at Cargill was running a business called Cargill Texturizing Solutions. We provided ingredients to the
food industry that provided texture: corn starch, xanthan gum, pectin, alginates and carrageenans. The business operated with global supply chains, global customers, and I was responsible for the North and South American regions of that business.
ent approach. And for us to work together with those who have a lot of experience, with those who didn’t, and then to bring that diversity to the table to be innovative and to think differently I think, was good.
EPM: What was the transition like for you?
There are things about a small business that are very, very different and things about it that are very much the same. One of the things that is very, very different in the two companies is the level of in-house expertise. In Cargill there was extensive capability inside the company—experts in insurance and lobbyists representing our interests in Washington. I really appreciate and enjoy the size of Guardian because I have been able to come here and learn and become involved in the industry lobby personally, which is critical. The relationships in Guardian with
Thompson: I think in the beginning for me, there was a lot of listening, a lot of learning to start off. I have a highly experienced team that was very effective, so having that around, I think was very good. A lot of it had to do with listening and learning, and then the other part was also bringing a fresh perspective because I hadn’t been in the industry for a long period of time, and then bringing a bit of a differ-
ETHANOLPRODUCER.COM | 59
our vendors and suppliers is much stronger because of our dependence on their expertise. They provided critical support during the build-out of the ethanol industry. One of the other things I really enjoy about a smaller company is the focus on valueadded activities only. We do not spend one minute talking about reorganizations, have few corporate meetings, and limit our energy to items that make a difference to the business. I would call the ethanol industry a very personal business. The owners that I work for every day invested their own personal dollars in this business. They are very passionate about the industry. I really love that personal feel to it.
‘The owners that I work for every day invested their own personal dollars in this business. They are very passionate about the industry. I really love that personal feel to it.’ - JEANNE MCCAHERTY
CEO, GUARDIAN ENERGY MANAGEMENT
One of things that was so striking to me, and that I love so much in this business today is just the decision-making. I have a board of six people that I report to. They are a group of strategic owners who own and operate their own ethanol assets. They’re passionate about the industry and if we have good ideas or good suggestions, they act on it and it’s done. We don’t spend months and months trying to influence a lot of different decision-makers. We can act very, very quickly to make things happen, and that’s been really refreshing. There are reasons big companies have those layers of people, but for me personally, being able to make things happen quickly has been really, really refreshing.
EPM: How was your experience at a large company beneficial to you as you transitioned into ethanol? Thompson:
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So it’s a very entrepreneurial environment. That was certainly one, and then also, you can see firsthand the commitment of the entire team. We have 210 employees. You can really tell the commitment of each and every individual team member, so it’s real transparent and obvious the hard work that everyone does.
There are a number of things that big companies do very well. One is management of risk. They’re very structured and very formal in the way they do that. The ethanol industry has been a little more informal and could benefit from some of the rigor of the larger corporations. A global mindset was something I had to have in my operating business at Cargill. If you look at the ethanol industry and the way it’s evolving, … having that global mindset around what is going to be the fu-
ture of our industry and how global trade is going to evolve is very relevant and important.
EPM: The ethanol industry is a tight-knit group. Everybody wants to help each other succeed. Has that been apparent in your transition? Thompson:
Take all the plants, whether you’ve got a 50 MMgy plant or a 400 MMgy plant like a Marquis, etc. We’re all working toward common goals, because that’s where you truly win. Whether that’s E15 year-round, whether that’s China and tariffs, our ability to export. All of those initiatives are something that we’re all working on together. I don’t get the feeling of a lot of competition because the big ways we win, we’re very aligned around.
Absolutely. The ethanol industry is such a unique industry. It evolved from grassroots. The farmers invested their own personal money and built these plants and you’re left with a very broad group of owners who are independent owner/operators of these assets and the way they’ve been successful is just what you say: by networking and collaborating and sharing their information. You go to the National Ethanol Conference and it is just full of very close vendor suppliers into this industry who are equally passionate about the industry and its success. I don’t know of any industry quite like it.
EPM: Do you have any advice for executives who might also make the transition into ethanol?
I think my advice is, as you contemplate it and if you want more accountability, if you want more responsibility, if you want more of an entrepreneurial environment, that’s certainly something that I would say to anybody that they should certainly consider, whether that’s ethanol or somewhere else. Working for a small- to medium-sized company certainly provides those things for you. And also a way to impact business very quickly and effectively. So that’s more aligned to really what motivates folks. The more entrepreneurial spirit, I think the small- to mediumsized businesses provide that.
One of the things I’ve tried to do at Guardian is to avoid intro-
ducing too many processes. Some of the processes and procedures we used in a large corporation are just too much here. We don’t need it and it just overburdens people with process and paperwork that really doesn’t add value. I have worked very hard to understand the root of problems to be solved and the value that can be created by solving it. Make sure you fit the company you’re in today, and don’t try to impose the large company structure and processes on the current business. Author: Matt Thompson Associate Editor Ethanol Producer Magazine 701.738.4922 email@example.com
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ENERKEM INNOVATION: An employee at Enerkem’s Edmonton, Alberta, plant communicates with coworkers on the radio. The plant produces ethanol and methanol from the city’s municipal solid waste. The technology uses gasification and catalytic conversion. PHOTO: ENERKEM
64 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
REFUSE Enerkem is producing methanol and ethanol at its Edmonton, Alberta, plant, diverting up to 24 percent of the city’s landfill waste. The company has partners for another project in the Netherlands. By Matt Thompson
A Canadian company is furthering ethanol’s environmental benefits, using municipal solid waste (MSW) as a feedstock. Enerkem’s production facility in Edmonton, Alberta, has produced methanol for about four years, but added ethanol to its offerings in 2017. “Our product is in high demand, given that it provides more benefits from an environment standpoint and it also sells at a premium in several markets,” says Michel Chornet, Enerkem’s executive vice president of project execution and plant operations.
“Enerkem’s disruptive technology can help address these pressing environmental issues and fulfill the growing demand for greener products or a ‘cradle-to-cradle’ solution in consumer products,” Chornet says. “It takes waste less than five minutes to produce a synthetic gas, and converts it into advanced low-carbon transportation biofuel—enough to fuel over 400,000 cars on a 5 percent ethanol blend. In turn, biofuels also help reduce greenhouse gas (GHG) emissions by approximately 60 percent when compared to traditional fossil fuel production and landfilling.” Other companies use MSW, but Chornet says, “We believe that in terms of scale-
ETHANOLPRODUCER.COM | 65
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up, in terms of how far we went, we believe that we’re farther or we’re leading the pack.” He adds that Enerkem’s Edmonton plant is the largest MSW-to-ethanol plant, with the capacity to produce 38 million liters (10 million gallons) of methanol and ethanol each year.
The city of Edmonton provides Enerkem the sorted MSW. Chornet says the thermochemical process used by Enerkem in gasification differ from the biochemical processes in corn ethanol production in the temperatures, pressures and residence time achieved. In Enerkem’s process, temperatures and pressures are relatively low. In addition, Chornet says, Enerkem’s feedstock provides additional challenges. Because corn starch is a fairly homogenous feedstock, it lends itself to fermentation. “Waste is a heterogeneous feedstock bringing its own challenges,” he says. “However, waste materials are rich in carbon content, as they are comprised of non-easily compostable biogenic materials as well as non-
practically recyclable fossil-based materials (plastics), the latter being very difficult to decompose using enzymes or microbes.” And it’s that carbon Enerkem’s process is designed to capture, through gasification of the feedstock. “In the gasifier, waste is decomposed to simple molecules, predominantly hydrogen, carbon monoxide, as well as carbon dioxide,” Chornet says. “The conversion reactions require oxygen and steam.” After the syngas is produced, impurities such as chlorides are removed, Chornet says. “We have to clean the gas from contaminates that are typically present in the waste.” The syngas, which Chornet describes as an intermediate, is then converted into methanol, and then ethanol. “Once we have this intermediate, roughly half of the syngas is converted into methanol,” Chornet says. He adds that if methanol is the final product, it’s distilled to become chemical grade. “If ethanol is the desired product, the methanol is further converted into ethanol through a two-step catalytic process,” he says.
‘Waste management is highly likely to be top of mind of many environmental groups, as it indeed is part of the bigger picture of GHG emissions and climate change.’ - MICHEL CHORNET
EXECUTIVE VICE PRESIDENT OF PROJECT EXECUTION AND PLANT OPERATIONS, ENERKEM
EDMONTON ETHANOL: The gasification technology used in Enerkem’s Edmonton, Alberta, plant is being implemented in the Netherlands, as well. PHOTO: ENERKEM
Chornet says producing methanol is a crucial step in the production of ethanol. “We wanted to first produce clean syngas and we produced methanol,” he says. “Methanol is an intermediate to produce ethanol; it’s required.” Methanol is a platform chemical for Enerkem, he adds, as the company has several other projects producing it, mainly in Europe.
More than half of the MSW generated globally every year still ends up in landfills, despite composting and recycling efforts, according to Enerkem. And Enerkem’s role in helping reduce landfill waste and GHG emissions is important, Chornet says. “Waste management is highly likely to be top of mind of many environmental groups, as it indeed is part of the bigger picture of GHG emissions and climate change.” The Netherlands is one country that’s stepping up to manage its waste more efficiently. According to Enerkem, a majority of the Netherlands’ residual waste is burned. Turning that waste to methanol
through Enerkem’s technology will help the country meet its climate goals. Enerkem is part of a consortium working on a plant in Rotterdam in the Netherlands, which will produce methanol. “We’re doing this plant with industrial partners,” Chornet says, naming the Port of Rotterdam, specialty chemicals company Nouryon, industrial gas and service supplier Air Liquide, and Shell. He adds that most of the detailed engineering for the plant is complete, and work will soon begin on financial closing. “We’re looking at beginning the procurement of long lead-time items in 2020, so next year,” he says. And following the success of Edmonton’s plant, and the potential success of the Rotterdam plant, Chornet says Enerkem’s vision is being realized. “I don’t know about closing down landfills because there’s a lot of waste, but it’s been our vision to try to valorize the carbon that is being basically put to sleep in the landfills,” he says. “Also, in Europe, there’s a big movement around circular economy for plastics. Plastics have more difficulties
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IN CONTROL: Plant employees work in the control room at Enerkemâ€™s Edmonton plant. PHOTO: ENERKEM
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to being recycled and with methanol and ethanol, you can get into the plastic recycling also.â€? Chornet says the company currently only produces methanol and ethanol. But in the future, that might change. â€œWe have an research and development group thatâ€™s looking at getting into some higher-value products, but right now, our commercial platforms are either methanol or ethanol,â€? he says. Enerkemâ€™s research and development team last year produced a renewable biodimethel ether, which it says could replace diesel in the transportation sector. It also produced a new biofuel that might help improve octane ratings in conventional gasoline.
Innovation in Edmonton
Part of the reason for the plantâ€™s success, Chornet says, is the collaboration with the city of Edmonton. â€œEdmonton is quite unique because they had a vision and they were advanced quite a bit into their vision,â€? he says. â€œIn other places of the world, the waste is more handled by private companies.â€? The Edmonton plant was built with the help of Alberta Innovates, a government entity focused on assisting in business endeavors. â€œWeâ€™re a provincially funded corporation and our mandate is all about innovation,â€? says Candice Paton, executive director of Alberta Innovatesâ€™ clean technology business line. â€œItâ€™s find-
ing solutions for some of the most pressing challenges that we see in Alberta, all the way from the research side, through to industry.” Alberta Innovates’ relationship with Enerkem began in 2005, Paton says. “They were looking to demonstrate their gasification technology at a commercial scale, and working with the city of Edmonton, Alberta Innovates and the Department of Energy really brought them here to this province to focus on the City of Edmonton and using MSW to convert to more valuable products like methanol and ethanol.” Alberta Innovates provided some funding for Enerkem’s plant, which also helped build the Advanced Energy Research Facility, located at the plant. “That is a co-located, sort of plug-and-play facility where other innovators can come, including Enerkem, and it’s owned by the city of Edmonton, but it’s a place where you can have the availability of … gases and syngases and to demonstrate new technologies,” Paton says. “That’s been a really key part of how the Alberta Innovates support and funding and leadership in that place has brought more of an innovation approach and focus to those facilities.” Diverting landfill waste also is a priority for Alberta Innovates and the city of Edmonton. “For a long time, we’ve had goals and targets around reducing waste to landfills and so that’s really why this is a key investment for Alberta Innovates over the last almost 15 years,” she says. “I think we’re hearing a lot more about the ideas around a circular economy and really understanding how products are moving throughout our supply chain and trying to start to recover value.” “The city of Edmonton has a longterm commitment to environmental responsibility and sustainability,” says Ellen Tian, director of technical services in the Waste Services Branch of Edmonton. “Diverting as much MSW as possible from landfills is one of the goals. Enerkem’s
technology supports this goal by converting MSW to fuel.” She adds that when the plant operates at its design capacity, it helps divert up to 24 percent of the city’s MSW from the landfills. According to Chornet, Enerkem is working with other municipalities in both the U.S. and Canada to build similar plants in other locations.
“I think this is really becoming an emerging area with a lot more enthusiasm to actually mitigate waste and create value,” Paton says. “This commercial-scale plant is quite exciting to have here in Alberta.” Author: Matt Thompson Associate Editor, Ethanol Producer Magazine 701.738.4922 email@example.com
ETHANOLPRODUCER.COM | 69
FLEXIBILITY Beyond Enerkem, a few companies around the world are looking to feedstocks outside of corn to produce cellulosic ethanol. By Matt Thompson
A few well-known ethanol producers are developing cellulosic pathways that use feedstocks other than elements of corn. Enerkem, featured in the article on page 64, is one, focusing mostly in Canada, but a few others are working globally to produce fuels from new feedstocks, or improving on processes for existing ones.
LanzaTech, a U.S.-based carbon capture and recycling company, produces cellulosic ethanol using waste gases from landfills, steel mills and other sources. The company has developed a gas fermentation process and has a commercial installation near Beijing. “If you think about traditional fermentation, you’d use sugars and yeast to make beer or wine,” says Freya Burton, chief sustainability and people officer at LanzaTech. “We don’t use CELLULOSIC IN CHINA: LanzaTech’s cellulosic ethanol plant in China has been operational since May 2018. The company's gas fermentation technology uses waste gases. PHOTO: LANZATECH
72 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
ETHANOLPRODUCER.COM | 73
WASTE NOT: LanzaTechâ€™s commercial plant in China uses waste gas as a feedstock for producing cellulosic ethanol. Waste gases aren't a common feedstock because they're dirty and require cleaning and purifying. PHOTO: LANZATECH
sugars, we use the gas, and we donâ€™t use yeast, we use bacteria, and weâ€™re not making wine, weâ€™re making ethanol that can be blended in the fuel pool or converted into other products, and weâ€™re making other chemicals as well.â€? Burton says waste gas isnâ€™t a common or simple feedstock because itâ€™s dirty, requiring extra costs for cleaning and purifying. LanzaTech has been developing its process for many years, she says.
â€œWe hope that it will become more widespread, but today, there are very few people who are using these gas streams,â€? she says. The companyâ€™s commercial plant in China has been operating since May of 2018. â€œThe ethanolâ€™s been sold into the market in China,â€? Burton says. â€œThey have blending mandates for road transport and, to date, weâ€™ve produced around 6 million gallons of ethanol from the waste gases.â€?
For LanzaTech, China is an important market, Burton says. â€œWe see immense potential from the blending side,â€? she says. â€œLast year, they increased the ethanol mandate to more provinces in China and thereâ€™s a definite focus on using waste and residues or nonfood resources, so cellulosic ethanol and also ethanol from waste carbon gases, for example. And so thereâ€™s a real definite push to get more of this into the market in China.â€?
a second-stage process that converts ethanol into a drop-in jet fuel.â€? She says jet fuel produced with LanzaTechâ€™s process was used on a transatlantic flight last year. â€œWe had enough to do a 5 percent blend last October,â€? she says. â€œAnd it was only a 5 percent blend because we just didnâ€™t have the volume. So, thatâ€™s the next step is getting the volume from the commercial plants, or from any source of sustainable ethanol, and converting that into jet fuel.â€?
Forest to Fuels
LanzaTech is also working with Aemetis in California, which is exploring using the agricultural residue from nut farming to produce cellulosic ethanol through gasification. Burton says the ethanol produced by LanzaTech is used for road vehicle fuel, but there are other uses as well. â€œEthanol can be a building block for lots of other thingsâ€” not just making ethylene, polyethylene and consumer goods, but also, weâ€™ve developed
Based in Finland, St1 is an energy company that operates primarily in the Nordic countries: Finland, Sweden and Norway, says Patrick PitkĂ¤nen, St1â€™s director of biorefining business development. In addition to producing biofuels, the company operates an oil refinery and retail stations in all three countries. â€œWe have both St1 brand stations and licensed Shell operations,â€? PitkĂ¤nen says. In Nordic countries, many energy companies deal in both fossil fuels and biofuels. â€œAt least in the Nordic, all the players, or most of the players, are involved in both,â€? he says. â€œWe have a good understanding about the fact that we have to change business.â€?
St1 began producing ethanol 12 years ago, from food industry waste, PitkĂ¤nen says. The company now has four operating plants in Finland, as well as one in Sweden. The company is now looking to expand into wood feedstocks, with a demonstration plant in Finland. â€œWhen we started from food industry waste and sugars and starch from bakeries and so on, we realized that we donâ€™t have the feedstocks or the volume,â€? he says. As much of the land in Nordic countries is forested, PitkĂ¤nen says the company explored using waste from the sawmills and forest industries as a feedstock for producing ethanol. â€œWe are using sawmill residues and we are certified to operate on soft wood,â€? he says. â€œPine and spruce are the major species in Nordic countries and we are using these. I believe that very few players are on the soft wood.â€? In addition to producing ethanol, St1 is also focused on coproducts, such as lignin. â€œOur efforts are related today to the process itself, but also to the side products,â€? PitkĂ¤nen says. He says St1 also has a pilot plant in Thailand using feedstock from the local food industry.
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VARIABLE FEEDSTOCKS: Praj’s demonstration biorefinery in India is developing its process to produce cellulosic ethanol from a variety of feedstocks, including straw. PHOTO: PRAJ INDUSTRIES LTD.
And Chempolis, as part of a joint venture with Fotum and Numaligarph Revinery Ltd., is constructing a plant in Assam, India, that will produce ethanol from bamboo. Construction on the plant is expected to begin in 2020, and in addition to ethanol,
76 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
the plant will produce furfural, acetic acid and biocoal.
Praj, based in India, has operations around the world. Pramod Chaudhari, ex-
ecutive chairman of Praj, says the technology developed by the 35-year-old company is the basis for many plants across the globe. “If you go to a country like Columbia, you’ll find practically 100 percent of plants are based on our technology,” he says. “In Thailand it is more than 60 percent.” He adds the company’s goal is to help create a circular bioeconomy. One of the ways it hopes to do that is through its cellulosic ethanol technology: Enfinity. Enfinity allows plants to produce cellulosic ethanol from biomass feedstocks, such as rice and wheat straw, bagasse, corn cobs and stover, among others. Following the completion of a successful pilot plant, Praj in 2017 built a second-generation demonstration plant, which Chaudhari says was a logical extension of the company’s firstgeneration ethanol technology. “The 2G biorefinery demo plant is in a field next to a sugar mill, so we get different types of inputs from the sugar mill,” Chaudhari says. “And it is quite flexible to accommodate a variety of feedstocks, whether it be bagasse or rice straw or wheat straw and different batches of palm oil. Most of the feedstocks can be tested there.” Chaudhari says Praj has four contracts for commercial-scale plants in India. He
CELLULOSIC ETHANOL adds that the first plant should be operational by the end of 2020 or early 2021. Chaudhari says the company is hoping to bring its technology to Europe, the U.S. and other parts of the world. That scale-up, from pilot to commercial plants, was possible, in part, thanks to Praj’s Research and Development center, Praj Matrix, which Chaudhari says “is the major backbone of our activities.” Praj is also moving into the renewable gas and renewable chemicals markets. “The biogas business the last so many years has been a part of our wastewater treatment solution, to the ethanol plant,” Chaudhari says. “But now it is getting its own standing, its own recognition as renewable fuel.” Praj is working with Gevo, a U.S.-based company, to produce jet biofuels. “We are trying to adopt their technology to tropical feedstocks like molasses and also agriresidue,” Chaudhari says. Praj hopes to produce isobutanol using juice, syrup and molasses as feedstocks. A few other projects are coming up here and around the world that plan to use crop residues as feedstock. Expected to break ground in 2019, the New Energy Spirit Biomass Refinery near Spiritwood, North Dakota, is projected to use Inbicon
technology to produce 16 MMgy of cellulosic ethanol. It will be the first commercial-scale implementation of the Danish technology in the U.S. The plant will use wheat straw, and possibly corn stover, as its feedstock, and its ethanol will be sold to the California market to take advantage of the state’s Low Carbon Fuel Standard, the plant’s developers say. In addition to ethanol, the plant will also produce fuel pellets from lignin. The project is financed using a Danish loan guarantee through Denmark’s export credit agency, the EKF. In 2018, Clariant celebrated the groundbreaking of its sunliquid plant in Romania. The plant’s feedstock will include wheat and other cereal straw from local farmers. Production at the 16.74 MMgy plant is expected to begin in 2020 and is the first deployment of the sunliquid technology. Also in North Dakota, Red River Biorefinery began construction of its cellulosic plant outside of Grand Forks in August. The plant will use technology from Biotechnika, a European company, to convert its feedstock—sugar beet tailings, and pasta and potato processing waste—into cellulosic ethanol. The technology is in use in Poland.
And recent D3 renewable identification number reports from the U.S. EPA reflect more imported cellulosic ethanol, signaling that two Brazilian plants might be producing more this year. Raizen Energia has been producing from sugarcane bagasse and straw since 2014. The plant uses Iogen technology and is located near a sugarcane mill in Piracicaba, São Paulo. GrandBio’s cellulosic ethanol plant in Alagoas uses sugarcane straw and bagasse. The plant began producing cellulosic ethanol in 2014. Finally, the 13 MMgy Beta Renewables cellulosic ethanol plant in Crescentino, Italy, was purchased last year in a large acquisition of bankrupt parent company Mossi & Ghisolfi by Eni subsidiary Versalis. Versalis is a chemical producer and says it plans to launch plant operations to continue producing ethanol from ag waste. Author: Matt Thompson Associate Editor, Ethanol Producer Magazine 701.738.4922 firstname.lastname@example.org
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As the amount of meat humans consume increases, so does the demand for feed protein products. SOURCE: ICM INC.
HIGH-PROTEIN FEED The market is growing and ethanol can play an important role, providing diversified revenue streams. By Mallorie F. Wilken
78 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
Protein is in high demand worldwide. As the demand increases
alongside a growing middle class, meeting it will require greater availability of feed protein products for the meat animals we consume. Traditionally, one cheap source of protein has been distillers grains used in feeding swine, poultry, and dairy and beef cattle. Research has also shown opportunities in feeding it to fish and other aquatic species. Distillers grainsâ€™ versatility has increased its global demand for feeding meat animals. At the same time protein demand is growing, the ethanol industry is maturing and looking for ways to add multiple revenue streams. Diversification is necessary and crucial for plants to remain profitable in this seasoned market.
Concentrated protein distillers grains will be one of the feed products aiding plants in developing new income streams while continuing to provide feed for animals to fulfill global meat consumption. Because each meat animal species has differing nutritional requirements for optimal performance, formulations incorporate feed commodities in various proportions to meet those requirements. While corn has traditionally been the primary commodity to add energy to a diet for swine, poultry and cattle, soybean meal has often been the supplier of protein because it has a more appropriate amino acid profile to meet dietary needs of swine and poultry than corn does. More recently, distillers grains have been able to replace most of the protein supplement in cattle diets, but this corn protein isnâ€™t as high in lysine content or as balanced in amino acids as soybean meal,
and thus cannot make a similar replacement in swine or poultry diets. High-protein distillers feed products are capable of supplying a larger amount of protein at a lower inclusion level compared to traditional distillers grains. However, it is still corn protein and the ratio of lysine to leucine remains 3:1, compared to 1:1 in soybean meal, which needs to be taken into account. High-protein distillers grains have the potential to replace portions of soybean meal to make the diet more cost effective to the producer while maintaining performance. Further research is being conducted to help us better understand the optimal levels of inclusion of the feed product in each species.
Additional Factors to Consider
It is important to note that, while valuable, protein is not the only component in distillers grains that offers feeding advantages when added to animal diets. Fiber, fat and other intrinsic properties are additional factors. The bran or fiber portion of corn has roughly 20 percent protein content (dry matter basis). This protein is incredibly valuable in cattle diets as the microbial environment in the rumen is able to digest and utilize this fiber for energy and growth, unlike that of swine and poultry. Cattle producers will often note intake and health benefits of diets containing distillers grains compared to those without the product. Cattle will have more consistent consumption rates and, therefore, less digestive issues. The ability to separate the fiber and protein streams has the potential of directing the feed products to more species-specific commodities and increasing revenue for the plant itself. When high-protein distillers grains and corn fiber, mixed with condensed distillers solubles such as ICMâ€™s new feed,
CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s). ETHANOLPRODUCER.COM | 79
Table 1. Results of feeding ethanol feed products to finishing steers Con
Fiber & Syrup
Initial BW, lb
Final BW, lb
Carcass Characteristics HCW, lb
LM area, in2
BW = Body Weight DMI = Dry Matter Intake ADG = Average Daily Gain (Pounds Per Day) HCW = Hot Carcass Weight LM = Longissimus Dorsi Muscle (Measured in square inches – the ribeye section between 12th & 13th rib) Calc YG = Calculated Yield Grade Values within rows with unique superscripts are different (P < 0.10) 1300 = Slight, 400 = Small, 500 = Modest Calculated as 2.5 + (2.5 x 12th rib fat, in) + (0.2 x 2.5(KPH, %)) – (0.32 x REA, in2) + (0.0038 x HCW, lb) 2 a, b, and c denote statistically significance (P-value = 0.05) SOURCE: ICM INC.
Fiber&Syrup (FS), are compared to traditional wet or dry distillers grains plus solubles (WDGS or DDGS) in beef cattle diets, animals observed statistically similar performance (see Table 1). Cattle consuming diets with ethanol feed products at 40 percent inclusion (dry matter basis) had similar to greater performance than those fed cornonly diets. Since the ethanol feed products were fed at levels exceeding the required amount of protein, the cattle were able to utilize the feed as an energy source. This also illustrates that as long as protein requirements 80 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
are met, cattle will “waste” the protein supplied by ethanol feed products as energy, as shown in Table 1 by the equivalent performance of cattle fed high-protein distillers grains (37 percent crude protein) and FS (32 percent crude protein). If cattle are able to perform similarly with enough but less protein in the diet, we should feed FS in the feed yards and utilize the more concentrated, higher protein products in species like swine and poultry where protein is valuable and expensive. Fish is a protein source with increasing demand globally for human consump-
tion. This demand shift is providing opportunities for farming fish. High-protein distillers grains have provided increased performance in tilapia when added to diets at either 15 percent or 25 percent inclusion (dry matter basis), as shown in Table 2. Tilapia fed ICM’s high-protein distillers grains at 15 percent or 20 percent observed significantly increased weight yield (0.28 percent and 0.29 percent respectively) compared to those fed a traditional control diet of 0.26 percent. These results suggest an opportunity to feed more concentrated protein ethanol feed products.
Table 2. Tilapia fed 0, 15, or 20% High Protein Distillers Grains Specific Growth Rate, gm/d
Fillet Yield, % BW
P-value vs Control
SOURCE: ICM INC.
As feed and animal production grow to meet protein demand, new requirements and U.S. Food and Drug Administration guidelines will require technology and innovation to address the need for consistency, providing new opportunities to boost an ethanol plantâ€™s bottom line. Consistency and verification will drive customer loyalty to purchase the feed and the price at which they choose to buy, especially as distillers grains transition from an ethanol byproduct to a feed commodity in the minds of animal producers. The optimal balance for ethanol plants today is met by improving the ethanol production system and increasing revenue through diversified feeds that meet the needs of the local and trade markets. Market conditions are forcing ethanol plants to reevaluate their current production methods toward plant flexibility. Plants must be able to create value in all facets of production, including ethanol, corn oil and feed products. This requires plants to adopt process technologies that separate feed streams and allow the plant to recombine, concentrate, or process each feed to meet demands.
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CAN OF CARBON: Carbon dioxide is used in dry ice production. Ethanol's role in the carbon dioxide supply is often underrated, as are its benefits. PHOTO: CO2 AIR INC.
FOR A CREDIT
Ethanol plants contribute up to 40 percent of merchant carbon dioxide, reducing emissions from fermentation while providing a crucial product. By Steffen Mueller and Sam Rushing
CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
82 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
CREATING CARBON: Pictured is a standard carbon dioxide plant, used to process carbon dioxide for sale to the sectors that use it. PHOTO: ADVANCED CRYOGENICS LTD.
The role of ethanol-based carbon dioxide is often underappreciated, both as an important source for the nationâ€™s carbon dioxide market and for its carbonreduction impact. Fermentation CO2 is
captured, cleaned and condensed at 49 ethanol plants in the U.S., contributing between 30 and 40 percent of the nationâ€™s total CO2 supply. Currently, ethanol CO2 is not given a coproduct credit in greenhouse gas (GHG) modeling. The argument is that although the CO2 is captured, it is not being sequestered and will ultimately be released into the atmosphere. Considering the importance of fermentation CO2 to several industrial and food segments, the life cycle modeling should be transitioning from a waste product to being viewed as a coproduct. And, considering the environmental impact of alternatives, there is an argument to be made that ethanol facilities capturing carbon deserve credit for the difference in emissions between gas cleanup and compression of fermentation CO2 versus alternative CO2 production from dirtier, often fossil, resources.
The importance of the ethanol industryâ€™s fermentation CO2 to the U.S. food supply is significant. Other sources include anhydrous ammonia production at 23 plants, hydrogen sources from 20 refineries, natural geological sources from 19 locations and six miscellaneous sources from other chemical processing facilities. In recent years, the best new CO2 opportunities have almost exclusively been ethanol-based. Food and beverage represent 70 percent of the merchant market for CO2 in most regions. Besides adding carbonation to beverages, the food industry uses CO2 as a refrigerant, accounting for more than 40 percent of CO2 application in many markets. CO2 is also used as a preservative and as a solvent for extraction. Other industrial uses include a wide range of temperature reduction applications, as a shielding gas for welding and a hardening agent in foundries. CO2 is increasingly being used in closed greenhouses to enhance crop growth, being sequestered in the plants themselves. Another interesting application growing in popularity is the application of CO2 in precast and poured concrete, which enhances the calcium carbonate content in the concrete, thus strengthening the material, and secondly,
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CARBON DIOXIDE sequestering the CO2 in the concrete. CO2 is also used in pH reduction of municipal and industrial effluent, often replacing sulfuric acid, resulting in environmentally friendly carbonate and bicarbonate byproducts, rather than harmful sulfates.
As a significant source of high-quality CO2, the ethanol industry plays a critically important role, according to executives in the merchant CO2 industry.
84 | ETHANOL PRODUCER MAGAZINE | JUNE 2019
“In the U.S., the current supply and demand for merchant CO2 is extremely tight,” says Buddy Collin, principal with Reliant Dry Ice Pacific LLC, a manufacturer and supplier of dry ice from liquid CO2. “It would only take a small misstep to cause enormous hardship within the entire industry. For example, if two or three CO2 plants were idled, due to tariffs or other issues beyond the control of the ethanol plant, the end result would lead to much higher prices, and significant shortages of CO2. If four or five ethanol plants were idled, we’d
have major shortages of supply, unaffordable prices, and the inability to supply many industries and customers.” John Lachs, director of product management and process gases for Praxair, one of the largest CO2 producer-suppliers, says if a sheer loss of ethanol sources occurs—perhaps as a result of policy reducing ethanol in gasoline supplies—that abrupt disruption would create major issues. “A reduction of one-third of the supply, assuming demand remained constant, would result in higher prices to customers competing for the reduced supply,” he says. “As this happens, cost to supply the remaining customers would substantially increase as CO2 is moved from greater distances by both rail and truck. This could also increase prices as the additional costs are passed through to the end users. Certain customers would also have the option to switch to alternative technologies as cost increases make CO2 uneconomical.” Few affordable alternatives to ethanol and other well-established source types exist, says Sonny Knotts, operations and production manager for Idaho-headquartered Norco Inc., a distributor of liquid CO2 to a wide range of markets. Alternative sources tend to be much more expensive, he says, giving as an example the four- to five-fold cost increase to recover CO2 from flue gas using monoethanolamidebased solvent recovery. “Fermentation-based CO2 sources are an extremely valuable source type in the industry, and critically important to the supply network,” Knotts says. Disruptions would lead to much higher prices and, “depending upon the regions served, due to closed plants, this would represent unaffordable or fully unavailable CO2 product. The economic damage to the food industry, beverage and industrial sectors would be severe.” Past ethanol downturns resulting in several plants going offline demonstrated what can happen. Scott Vanderburg, CEO of Reliant Holdings Ltd., a producer and supplier of CO2, says closures have sent shock waves through the CO2 industry. “In Arkansas, where huge CO2 demands exist within the poultry processing industry, CO2 buyers have become increasingly tired of shortages precipitated by CO2 plant outages. Their response in the past, and present, is a change in refrigeration technologies.” While not the solution of choice, seeking alternatives often leads to conversion
CARBON DIOXIDE to cryogens such as nitrogen or mechanical refrigeration, he says.
Converting to mechanical refrigeration technologies requires a huge capital investment, and the million-dollar price tag would drive some processors out of business. Liquid nitrogen for cooling and freezing is typically much more expensive than CO2. Trying to replace local sources by trucking or railing CO2 from a distance is also problematic. Not only are supplies tight in most regions, but the transportation cost would be significant—the average cost of delivery in the U.S. has been about $3 per mile. The U.K. and Mexico experienced catastrophic shortages in 2018. In the U.K., supplies became tight, partly as a result of outages in ethanol production. In Mexico, where the primary sources are hydrocarbon-based, the cost and availability of natural gas for anhydrous ammonia production, among other factors, prompted the closing of CO2 plants. In both countries, CO2 was rationed at times, became totally unavailable, or was sold at exceedingly high prices. In the U.K., there were reported fears that food would not be chilled and processed properly. Moreover, important environmental considerations come into play. Alternative refrigeration methods relying on nitrogen or mechanical refrigeration using refrigerants and compressors are more carbon intensive than fermentation CO2. But the treatment of ethanol-based CO2 may be changing. In recent years, the International Sustainability and Carbon Certification organization included a coproduct credit for CO2 capture in the certification of Sweden’s Lantmannen Agroetanol. This is because the European Energy Directive provides for a coproduct credit of “emission savings from CO2 capture and replacement ... limited to emissions avoided through the capture of CO2 of which the carbon originates from biomass and which is used to replace fossil-derived CO2 in production of commercial products and services.” The 14-year-old Landtmannen plant produces 230,000 cubic meters (60 million gallons) of ethanol annually from small grains. In its 2013 annual sustainability report, the Swedish cooperative reported its ethanol
was achieving a 70 percent GHG reduction compared to petrol. The cooperative was anticipating the CO2 plant completion in 2014 would boost that to 90 percent. In its 2015 annual report, the cooperative says it is achieving a 95 percent GHG reduction with its ethanol, producing some 90,000 tons of CO2 annually. The demonstrated importance of merchant gas from ethanol plants to key U.S. industrial sectors serves as a reminder how adjustments to renewable fuel policies, such as the Renewable Fuel Standard—might have
much larger unintended economic consequences currently not being considered by politicians. Co-Author: Steffen Mueller Principal Economist Energy Resources Center, University of Illinois at Chicago, firstname.lastname@example.org Co-Author: Sam Rushing President, Advanced Cryogenics Ltd. 305.852.2597 email@example.com
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The Corn Fiber-to-Cellulosic Ethanol issue. Plus: 2019 Ethanol Producer Awards