2022 Ethanol Producer Magazine

Page 1

OCTOBER 2022

TAKING STALK IN QUALITY PAGE 32

PLUS

Corn Fiber Ethanol Measuring up PAGE 12

Upping California Carbon Reduction Targets PAGE 20

The Challenge of Supply Chain Constraints PAGE 26

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Upcoming Events

Advertiser Index EDITORIAL

2022 National Carbon Capture Conference & Expo

2023 Int'l Fuel Ethanol Workshop & Expo

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BASF Enzymes LLC

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Check-All Valve Mfg. Co.

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CTE Global, Inc.

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D3MAX, LLC

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Produced by Carbon Capture Magazine and BBI International, the National Carbon Capture Conference & Expo is a two-day event designed specifically for companies and organizations advancing technologies and policy that support the removal of carbon dioxide (CO2) from all sources, including fossil fuel-based power plants, ethanol production plants and industrial processes, as well as directly from the atmosphere. The program will focus on research, data, trends and information on all aspects of CCUS with the goal to help companies build knowledge, connect with others, and better understand the market and carbon utilization.

Enertech Solutions, Inc.

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EnviroLogix, Inc.

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Fluid Quip Mechanical

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Fluid Quip Technologies, LLC

30

Foundation Analytical Laboratory

2

Growth Energy

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ICM, Inc.

40

IFF, Inc.

37

PUBLISHING & SALES

Indeck Power Equipment Co.

29

2023 International Biomass Conference & Expo

Lallemand Biofuels & Distilled Spirits

39

CEO Joe Bryan | jbryan@bbiinternational.com

Midland Scientific Inc.

15

Mole Master Services Corporation

16

Natwick Associates Appraisal Services

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Phibro Ethanol

3

November 8-9, 2022

February 28 - March 2, 2023 Cobb Galleria Centre, Atlanta, GA (866) 746-8385 | BiomassConference.com

Now in its 16th year, the International Biomass Conference & Expo is expected to bring together more than 800 attendees, 140 exhibitors and 65 speakers from more than 21 countries. It is the largest gathering of biomass professionals and academics in the world. The conference provides relevant content and unparalleled networking opportunities in a dynamic business-to-business environment. In addition to abundant networking opportunities, the largest biomass conference in the world is renowned for its outstanding programming—powered by Biomass Magazine—that maintains a strong focus on commercial-scale biomass production, new technology, and near-term research and development.

President & Editor Tom Bryan | tbryan@bbiinternational.com Online News Editor Erin Voegele | evoegele@bbiinternational.com Staff Writer Katie Schroeder katie.schroeder@bbiinternational.com

DESIGN Vice President of Production & Design Jaci Satterlund | jsatterlund@bbiinternational.com Graphic Designer Raquel Boushee | rboushee@bbiinternational.com

SGS North America, Inc. Agricultural Services 31, 35 Trucent

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Victory Energy Operations, LLC

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Zenviro Tech US Inc.

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CHI Health Center, Omaha, Nebraska (866) 746-8385 | BiodieselSummit.com The Biodiesel & Renewable Diesel Summit is a forum designed for biodiesel and renewable diesel producers to learn about cuttingedge process technologies, new techniques and equipment to optimize existing production, and efficiencies to save money while increasing throughput and fuel quality. Produced by Biodiesel Magazine, this world-class event features premium content from technology providers, equipment vendors, consultants, engineers and producers to advance discussion and foster an environment of collaboration and networking through engaging presentations, fruitful discussion and compelling exhibitions with one purpose, to further the biomass-based diesel sector beyond its current limitations.

4 | ETHANOL PRODUCER MAGAZINE | OCTOBER 2022

Circulation Manager Jessica Tiller | jtiller@bbiinternational.com

EDITORIAL BOARD Ringneck Energy Walter Wendland Little Sioux Corn Processors Steve Roe Commonwealth Agri-Energy Mick Henderson Aemetis Advanced Fuels Eric McAfee Western Plains Energy Derek Peine Front Range Energy Dan Sanders Jr.

CHI Health Center, Omaha, Nebraska (866) 746-8385 | FuelEthanolWorkshop.com

June 12-14, 2023

Account Manager Bob Brown | bbrown@bbiinternational.com

Marketing & Social Media Coordinator Dayna Bastian | dbastian@bbiinternational.com

June 12-14, 2023

2023 Biodiesel & Renewable Diesel Summit

Senior Account Manager/Bioenergy Team Leader Chip Shereck | cshereck@bbiinternational.com

Marketing & Advertising Manager Marla DeFoe | mdefoe@bbiinternational.com

2023 Int'l Fuel Ethanol Workshop & Expo

From its inception, the mission of this event has remained constant: The FEW delivers timely presentations with a strong focus on commercial-scale ethanol production—from quality control and yield maximization to regulatory compliance and fiscal management. The FEW is the ethanol industry’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.

Vice President of Operations/Marketing & Sales John Nelson | jnelson@bbiinternational.com

Customer Service Please call 1-866-746-8385 or email us at service@bbiinternational.com. Subscriptions Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and handling charge for anyone outside the United States. To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or service@bbiinternational.com. Advertising Ethanol Producer Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to editor@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

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Contents

12

PHOTO: STOCK

26

PHOTO: STOCK

20

PHOTO: STOCK

32

PHOTO: STOCK

OCTOBER 2022 VOLUME 28 ISSUE 10

DEPARTMENTS 4

AD INDEX/EVENTS CALENDAR

6

EDITOR'S NOTE Securing a Future for Ethanol

FEATURES 12 FIBER

Measuring Up Corn Fiber Ethanol

Ethanol made from corn fiber has a low carbon intensity and the potential to generate D3 RINs.

By Katie Schroeder

8

VIEW FROM THE HILL The Biggest Biofuels Policy Deal Since 2007 By Geoff Cooper

9

By Katie Schroeder

20

GLOBAL SCENE US Ethanol Exports on Track for One of the Best Years on Record BUSINESS BRIEFS

42

MARKETPLACE

Innovations for the Individual Producer

Global biotechnology company IFF is a yeast and enzyme provider. By Katie Schroeder

POLICY

Within Clear Sight

The California Air Resources Board is working on its latest scoping plan. By Katie Schroeder

By Mackenzie Boubin

10

SPOTLIGHT 40 IFF

26

PROCUREMENT Staying Stocked

Supply chain constraints are improving, but ethanol producers still face challenges. By Luke Geiver

32

TESTING

Elevating Quality Control

Ensuring what’s arriving at the gate is fit for today’s production needs is just one facet of ethanol plant labs. By Luke Geiver

ON THE COVER Though ethanol plant lab technology, standards and strategies have changed, the quality issues they test for—such as toxins in corn—have not. PHOTO: STOCK

Ethanol Producer Magazine: (USPS No. 023-974) October 2022, Vol. 28, Issue 10. 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.

ETHANOLPRODUCER.COM | 5


Editor's Note

Securing a Future for Ethanol Passage of the Inflation Reduction Act was a landmark event for the ethanol industry. Signed into law on August 16, the bill addresses immediate issues within the biofuels industry—such as reinstating and extending tax credits and appropriation of $500 million in funds for the development of biofuel infrastructure—as well as helping solidify a foundation for newer fuels and decarbonization efforts, including sustainable aviation fuel (SAF) and carbon capture utilization and sequestration. In this issue, Ethanol Producer Magazine explores developments in the policy realm, supply chain challenges as well as the evolution of ethanol plant lab practices. The regulatory landscape surrounding corn fiber ethanol is complex. In “Measuring Up Corn Fiber Ethanol,” page 12, we explore the markets available to corn fiber ethanol, the role of measurement and the monetary value of this product. Mark Yancey, chief technology officer with D3MAX, sees corn fiber as a great opportunity for producers. “I think the ethanol industry really needs to take a look at corn fiber, whether it’s in-situ or separate processing like D3MAX, because it’s extremely profitable,” Yancey says, adding that he believes these cellulosic gallons will be in high demand for SAF in the future. In August, CARB approved a rule that requires all new cars in California to be zero-emission vehicles by 2035. In the meantime, the state is moving toward the approval of E15 and potentially intensifying its Low Carbon Fuel Standard goals. In “Within Clear Sight,” page 20, Ethanol Producer Magazine chats with policy experts about what these developments could mean for the industry. Brian Jennings, CEO of the American Coalition for Ethanol, emphasizes ethanol’s role in a low-carbon future, saying that “ethanol has a dramatically important role to play in light-duty vehicles.” Another feature not to miss is “Staying Stocked,” page 26, which examines ongoing supply chain issues and means of navigating them, with insight from stakeholders in many different aspects of the ethanol industry, including a plant manager, agriculture economists, an equipment specialist and a benchmarking expert. Finally, check out “Elevating Quality Control,” page 32, for a deep dive into a vital component of any ethanol plant’s system—the lab. Don Cannon of Green Plains Inc. explains that labs are doing much more than just “testing to aid production,” and have moved toward guaranteeing the quality of an ethanol plant’s inputs and outputs. One of the quality concerns producers may have during harvest season are the presence of mycotoxins in corn, which is addressed in the story. We hope you enjoy exploring the above topics, and we look forward to reporting on progress and impacts of the historic Inflation Reduction Act as it is rolled out.

KATIE SCHROEDER ETHANOL PRODUCER MAGAZINE'S STAFF WRITER

FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US:

6 | ETHANOL PRODUCER MAGAZINE | OCTOBER 2022

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Collaborative partnerships. Sustainable solutions. Our shared goal is clear. Working together, we’re developing solutions that lead the way toward renewable, earth-friendly biofuels and a healthier world.

Let’s talk solutions.

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View from the Hill

The Biggest Biofuels Policy Deal Since 2007

Geoff Cooper

President and CEO Renewable Fuels Association 202-289-3835

gcooper@ethanolrfa.org

It’s been a long time since Congress passed legislation focused on stimulating significant growth and investment in low-carbon renewable fuels like ethanol. How long? Well, to be exact, it’s been 15 years. In December 2007, Congress passed, and former President George W. Bush signed into law, the Energy Independence and Security Act, which extended and greatly expanded the Renewable Fuel Standard. EISA’s passage was a remarkable achievement for the ethanol industry, and the U.S. biofuels sector would go on to roughly triple in size within in the years following enactment of the legislation. But when it comes to federal biofuels policy, we’ve had a long dry spell ever since 2007. That all changed on August 16, when President Joe Biden signed the Inflation Reduction Act into law. In fact, I believe the IRA marks the most significant federal commitment to low-carbon biofuels since the RFS was expanded a decade and a half ago. Through a comprehensive suite of tax credits and grant programs, the new legislation establishes a clear path forward for innovation, investment and growth in the renewable fuels sector. We were thrilled to see many of RFA’s top legislative priorities included in this package. For starters, the IRA appropriates $500 million to USDA to provide competitive grants for infrastructure improvements for blending, storing, supplying, or distributing higher biofuel blends like E15 and E85. This provision will offer crucial financial assistance to retailers and marketers who wish to sell lower-cost, lower-carbon fuel blends to their customers. The bill also extends existing tax credits for cellulosic biofuels, biodiesel and renewable diesel through 2024, then transforms those credits into a single Clean Fuel Production Credit. The CFPC is a technology-neutral tax incentive for the domestic production of clean fuels, including ethanol, which reduces carbon emissions by at least 50% compared to gasoline. The level of the incentive depends on the lifecycle carbon emissions of the fuel, topping out at $1 per gallon for fuels with a net-zero carbon emissions footprint. In addition, the IRA creates the first-ever tax credit for sustainable aviation fuels (SAF). Ethanol-tojet fuel and other SAFs that achieve a 50% GHG reduction compared to petroleum jet fuel are eligible for a $1.25-per-gallon tax credit, which expands to $1.75-per-gallon for SAFs that have net-zero carbon emissions. The legislation also extends and modifies the tax credit for carbon dioxide sequestration, popularly referred to as 45Q or the CCUS credit. In addition to extending the deadline for eligibility to 2032, the bill lowers the minimum carbon capture amount required for eligibility and increases the credit value for geological sequestration to $85 per metric ton. We were also pleased by the inclusion of more than $20 billion for agricultural conservation investments and technical assistance. These investments are intended to improve soil carbon, reduce nitrogen losses, and decrease or sequester farm-level greenhouse gas emissions—all of which would have a beneficial impact on the carbon footprint of corn ethanol. Finally, we believe it is notable that the bill’s electric vehicle incentives includes important energy security safeguards. Specifically, the bill incorporates made-in-America measures to ensure that growth in EVs doesn’t lead to an unhealthy dependence on foreign minerals and offshore manufacturing. When taken together, the IRA’s biofuels and agriculture provisions will create long-term investment certainty and stimulate remarkable technology innovation. Ultimately, it is our belief that these measures will help RFA’s member companies achieve their goal of producing ethanol with net zero carbon emissions well before midcentury. This is a big deal … the biggest since 2007!

8 | ETHANOL PRODUCER MAGAZINE | OCTOBER 2022


Global Scene

US Ethanol Exports on Track for One of the Best Years on Record

Mackenzie Boubin Director of Global Ethanol Export Development U.S. Grains Council

mboubin@grains.org

With two months remaining in marketing year 2021-'22, the U.S. has exported nearly 1.3 billion gallons of ethanol, up over 20% year-over-year as COVID-19 restrictions continue to lift, and drivers return to the road. Total exports are up in nearly every top-10 market, apart from India and Peru, according to the USDA Foreign Agriculture Service database. The U.S. Grains Council continuously conducts programs, hosts missions and facilitates conversations with stakeholders in these markets, leading to significant gains in Canada, the EU, U.K. and Japan, and continuing to move U.S. ethanol exports forward. Canada has remained a top market for U.S. ethanol through the past decade. The country is currently blending an average of 7% ethanol nationwide, and so far this marketing year has imported nearly 372 million gallons, up over 80 million gallons from the previous marketing year. Most recently, the Canadian government released its Canadian Clean Fuel Standard, a regulation that anticipates reaching an average ethanol blend of 15% nationwide by 2030, in response to demands for lower-carbon fuels and bolstered by progressive provincial mandates. Momentum will continue into both the near- and long-term future as CFS implementation begins in January 2023. Another bright spot is exports to the EU and the U.K., which are up more than 60% and 600% year over year, respectively. These two markets represent a shift within the European energy framework as ethanol continues to be a driving factor in decarbonizing the transportation sector. In September 2021, the U.K. began its transition from a 5% ethanol blend to a 10% ethanol blend to reduce annual carbon emissions by nearly 800,000 metric tons. Already averaging an 8% national ethanol blend rate, the U.K.’s move toward E10 could easily call for 100 million gallons of additional demand for U.S. ethanol. Japan has been one of the most notable success stories for U.S. ethanol this marketing year. The country did not start importing U.S. ethanol until 2018, but since then, Japan has blended ethanol in the form of ETBE, equal to a 1.7 % ethanol blend nationwide. This blend rate lands Japan as a top-10 market for U.S. ethanol. Based on USGC data, exports to Japan have reached 11 million gallons per month, totaling nearly 90 million gallons in marketing year 2021- '22. Other countries to watch are South Korea, India and Indonesia. South Korea has gradually increased imports of industrial grade U.S. ethanol, moving to the third largest market this marketing year. The country currently has no biofuel policy, but presents the opportunity to become a significant fuel grade market in the near future. The USGC remains committed to maintaining a robust industrial market that services biobased chemicals and promotes ethanol as a feedstock solution for acetate and acrylate end uses.

ETHANOLPRODUCER.COM | 9


BUSINESS BRIEFS PEOPLE, PARTNERSHIPS & PROJECTS

Inflation Reduction Act passes

Next Generation Fuels Act introduced in Senate

President Joe Biden on Aug. 16 signed the Inflation Reduction Act. He called the legislation the “biggest step forward in climate—ever” and stressed that the expansive legislative package will allow the U.S. to boldly take additional steps towards meeting its climate goals. The IRA, in part, establishes new tax credits to support the production of sustainable aviation fuel (SAF), clean transportation fuels and clean hydrogen. It also extends and modifies the Section 45Q tax credit for carbon capture and storage (CCS). In addition, the IRA extends several existing tax credits that benefit transportation biofuels, including the $1 per gallon blenders tax credit for biodiesel and renewable diesel, which is extended through the end of 2024. The IRA also appropriates $500 million to support the development of biofuel infrastructure. An additional $245 million is appropriated for projects related to the production, blending or storage of SAF.

On July 26, an important piece of legislation met a milestone with its introduction in the Senate. Sen. Chuck Grassley, along with original cosponsors Sens. Amy Klobuchar, D-Minnesota; Joni Ernst, RIowa; and Tammy Duckworth, D-Illinois; introduced the Next Generation Fuels Act. The bill establishes a high-octane, low-carbon fuel standard that would lower pump prices, reduce greenhouse gas emissions, enable greater engine efficiency, and encourage competition. In addition, the legislation addresses regulatory impediments that have slowed the commercialization of these fuels and the vehicles that consume them. A similar bill was introduced in the House last year by Rep. Cheri Bustos, DIllinois, and now has 26 cosponsors. The Renewable Fuels Association first began advocating for the creation of a national high-octane, low carbon fuel standard in late 2018. As additional lawmakers evaluate this approach, RFA will look for opportunities to advance the bill.

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ACE elects board of directors at annual business meeting

POET acquires Savannah transload facility, expands global network

The American Coalition for Ethanol announced the re-election of several board members and the election of two new members to the organization’s board of directors during its annual business meeting prior to ACE’s 35th annual conference in Omaha, Nebraska. Re-elected to the board of directors for three-year terms: • Redfield Energy LLC – Troy Knecht • KAAPA Ethanol LLC – Scott McPheeters • Absolute Energy LLC – Rick Schwarck • Golden Grain Energy LLC – Dave Sovereign • East River Electric Power Cooperative – Chris Studer Randy Gard, representing Bosselman Enterprises Corp., owner of the Nebraskabased Pump & Pantry convenience store chain, was elected as a new member to the board of directors for a three-year term. Wayne Garrett, general manager with Chief Ethanol Fuels Inc., was newly elected to represent the company on the board of directors for a three-year term. He fills the seat of Duane Kristensen, who retired from Chief Ethanol in 2021.

POET announced that it has signed a purchase agreement with Savannah Marine Terminal to acquire its rail-to-container transload facility in Savannah, Georgia. The acquisition will include all equipment and real estate to operate the grain transload facility. The Port of Savannah, one of the highest volume container ports in the U.S., has geographic synergy with several of POET’s key global markets for its animal feed products, including Dakota Gold dried distillers grains and its corn fermented protein product, NexPRO. The facility will also strengthen POET’s shipping process, ensuring even greater traceability and transparency for its customers. POET is currently the 36th-largest container shipper, exporting to more than 20 countries around the world.

CONGRESS: It’s time to permanently eliminate seasonal restrictions on E15. Take Action at GrowthEnergy.org/RVPfix



Fiber

MEASURING UP CORN FIBER ETHANOL Ethanol made from corn fiber has a low carbon intensity and the potential to generate D3 RINs, but navigating the regulatory landscape to capture its fullest value can be complex. By Katie Schroeder

Producing corn fiber ethanol alongside standard, D6 RINgenerating corn starch ethanol gives producers an opportunity to produce more gallons at a lower carbon intensity (CI) score.

The current production volume of D3 corn fiber ethanol produced in the U.S. is relatively small. In June 2022, there were 576,022 D3 RINs generated by cellulosic ethanol producers—and less than half that volume in July. Corn fiber ethanol fits into the RFS under pathway K, which allows ethanol produced from cellulosic content to earn D3 RINs, so long as it meets certain qualifications. There are two principal ways to produce corn fiber ethanol. One method is to produce it in-situ, meaning that an enzyme or other technology is introduced to break down the corn fiber, producing cellulosic ethanol simultaneous to corn starch ethanol, at same plant. Another way of producing corn fiber ethanol is through extraction of the fiber upstream, manufacturing cellulosic ethanol separately on-site. Measurement of fiber and starch content is one key part of determining qualification for D3 RINs under the EPA’s guidelines for in-situ production facilities. Kristi Plack is the chief science officer at Bion, the parent company of Soliton, which uses propri-

etary analytics, or tests, to give producers the defensible, third-party production data they need to run their plant optimally. She says Soliton can also provide information necessary for in-situ corn fiber ethanol facilities to potentially qualify for D3 RINs. Other processes for corn fiber ethanol production utilize a separate system and do not require the same testing procedure to acquire D3 RINs. This method of production is to colocate a system with a primary ethanol plant. The plant will feed the fiber into the system, allowing for measurement of the cellulosic ethanol at the end due to the separate process streams. Ace Ethanol LLC, a 58 MMgy corn ethanol plant in Stanley, Wisconsin, is currently operating such a technology—and successfully generating D3 RINs. Mark Yancey, chief technology officer for D3MAX, the technology developer behind the Ace corn fiber ethanol plant, says the system’s separate production streams make it unique to other alternatives. “From the day we formed the company in 2015, it was our plan to have a process through which we would create the cellulosic ethanol separate from the starch ethanol, and that the two would never cross paths until we measured the amount of cellulosic ethanol produced,” he says. All biofuel producers must fill out an application to qualify for RINs under the

RFS. Yancey explains that the terminology can be confusing, as people commonly refer to a Part 80 application as “pathway approval,” when in reality, the pathway already exists. “But what they really need is a Part 80 application approval,” he says. “So, if you build a D3MAX plant or you implement an in-situ process, if you want to participate in the RFS program, you have to fill out a Part 80 application. And a Part 80 application tells EPA how the process works, and how you measure or calculate the amount of ethanol or other fuel produced. That application is then reviewed and either approved or denied, or they ask for more information.” Although both in-situ and separate process stream methods can qualify for D3 RINs, many in-situ processors have not pursued, or stopped pursuing, D3 RIN registration, and have instead focused on sending their low-CI, cellulosic-infused D6 gallons to the California market. “The industry knows what the EPA needs to approve Part 80 applications, which allow [plants] to generate D3 RINs, but nobody has done that, and it’s been almost three years now [since the agency issued guidance on its treatment of in-situ processes],” Yancey says. “The other thing is that California, CARB and the Low Carbon Fuel Standard do allow in-situ processes to

MEASUREMENT MECHANICS: Along with third-party labs, developers of in-situ corn fiber ethanol processes have invested heavily in methods of precisely and accurately measuring how much cellulosic ethanol is being produced from the fiber fraction of corn. PHOTO: EDINIQ

ETHANOLPRODUCER.COM | 13


Fiber generate LCFS grants if they ship the ethanol—that cellulosic ethanol—to California.”

Measurement Regulations

Plack explains that the EPA’s regulations specify the qualifications that testing methods must meet in order to be used for calculating RINS; the two different types of testing are VCSB and non-VCSB methods. “VCSB, which is Voluntary Consensus Standard Body, is a method that’s been evaluated by a scientific organization that has its own internal method validation criteria,” Plack explains. “So, that would be like an ASTM, AOAC, AOCS, and those methods are then available for any laboratory in the world to use. If it’s not VCSB, it’s more of a proprietary-type assay and based on a … scientific peer-review process of the method utilized; meaning other scientists review the method, the application of the method and validate the method in the same manner, yet maintaining the confidentiality of the method.”

14 | ETHANOL PRODUCER MAGAZINE | OCTOBER 2022

Plack says that producers must have starch and cellulosic content values at the beginning and end of the ethanol conversion process. “They need those results … to enter into the calculator—that is specified in the RFS—so they can get their D3 RIN value; that’s why they need the test results, so that they have analytical values to show how much starch and cellulosic content they’re converting,” says TaNeal Boer, technical science director with Soliton. The in-situ producers must test every 500,000 gallons of cellulosic ethanol produced, or annually, if they are not producing that volume of corn fiber ethanol. This is necessary due to the fact that the precise amount of fiber versus starch varies depending on the crop. “Corn may be misunderstood; corn is not just corn,” Plac,k says. “And when you’re looking at it from this type of process, every growing year has different things. So, Mother Nature, this year might be super hot and dry, and last year was colder and

wet, so that changes how the corn develops, which changes the composition of that corn.” While producers can go through tests to qualify for D3 RINs, there is no longer a clearly laid out pathway for corn fiber ethanol in-situ production through the EPA. “The industry knows that the EPA is not approving


PARALLEL PRODUCTION: The D3MAX process, shown here under construction (left) and in operation (right), separates corn fiber and starch before converting each component into ethanol, and doesn’t require recertification or measurement of cellulose and starch. PHOTO: D3MAX

registrations currently,” Boer says. “In the interim, the industry has shifted focus to LCFS while the EPA is in a holding pattern. The facilities are doing the work to complete the Soliton analytical testing for a LCFS registration or an EPA registration. The Soliton testing regimen utilizes the same process, whether

the facility is looking to submit a registration to CARB for their approval or prepare an application for EPA.” Cellulosic content and starch are not the only testing information needed by CARB or the EPA to gain credits. There are also engineering reviews that look into the plant’s oper-

ation inputs and outputs, which are necessary to qualify for low-carbon fuel credits. “I think the important thing is that the measurement piece gives you the data, but the engineering piece helps show that the operation matches the data that’s coming from that third-party laboratory,” Boer says. “Because they all need

ETHANOLPRODUCER.COM | 15


Fiber to go hand in hand, you can’t have data saying 'X' when a plant is doing 'Y.'”

CARB and D3 Markets

California is a leading market for low-carbon fuels like corn fiber ethanol due to the state’s LCFS and carbon reduction goals. Fuel with a lower CI makes more money in California, whether or not it has a D3 RIN attached to it, Yancey explains. “CARB requires applicants to prove the carbon intensity of their fuel. Then, that carbon intensity determines the value of that fuel,” he says. “It’s a [totally] different approach to EPA’s approach of assigning RINs, and the RINs having measured values.” In order to get credit from the LCFS, producers must provide three months—90 days—worth of data to verify their carbon intensity score. CARB has been proactive in approving non-VCSB tests to allow producers to sell into the California market, according to Plack. Producers utilizing separate process techniques, such as Ace Ethanol, are able to make money both in the California market and through D3 RINs. As of July 21, a D3 RIN was worth $2.74 per gallon. Yancey explains that a producer utilizing D3MAX will usually sell the D3 RINs to the highest bidder, and then buy a much cheaper D6 RIN, yielding a net gain of around $1.25 per gallon. After accounting for the sale price of ethanol in California and credit from the LCFS, the producer makes almost $4 per gallon.

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Corn fiber ethanol provides producers with an opportunity to use cellulase or other technology, which may assist in the process of extracting more corn oil to gain more profit, Boer explains. “If they’re converting more fiber and extracting more oil, they could be decreasing their gas usage, which is decreasing their carbon footprint and also their cost,” she says. “Now, they’re producing and selling more ethanol gallons and corn oil; it’s a multifaceted benefit from the technology addition, whatever that is, to the process for those facilities.” The D3MAX process has a separate distillation column for the corn fiber ethanol, and measures it using a mass flow meter that is accurate within 99 %, which the EPA uses to assign D3 RINs. The process doesn’t require recertification or measurement of cellulose and starch. There are pros and cons to each process, Yancey explains. “The pros of D3MAX are, number one, that very high projected profit,” he says. “Highly profitable, quick payback. That being said, the con is that a large part of that is from RIN income and California LCFS credits. Those values go up and down, and are subject to political input and influence.” D3MAX is also able to increase oil recovery from around 0.7 to 0.8 pounds per bushel to around 1.3 to 1.4 pounds per bushel. While an in-situ process produces 1 to 3 MMgy of cellulosic ethanol per 100 MMgy, the D3MAX process is able to produce about 8 MMgy in the same size plant. However, the higher yields of D3MAX come with a higher price tag, Yancey says. D3MAX costs around $25 million, while an in-situ process costs significantly less, while still increasing ethanol yields. If a producer wants to incorporate a corn fiber ethanol process


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into their operations in an in-situ way, Plack recommends selecting an analytical testing provider that has experience in ethanol production, and has its testing approved by LCFS programs such as CARB, which has approved multiple different measurement options. She also suggests that producers discuss technology options with their enzyme vendor and other technology providers. Although implementing corn fiber ethanol production is a complex investment, it has the potential to be an effective and beneficial addition to an ethanol plant’s portfolio. “I think the ethanol industry really needs to take a look at corn fiber, whether it’s in-situ or separate processing like D3MAX, because it’s extremely profitable, and cellulosic gallons are going to become very, very in demand for making sustainable aviation fuel,” Yancey adds. “Ace has been approached several times [by potential buyers of] their cellulosic ethanol for various uses that match that low-carbon fuel. It’s one way for the ethanol industry to make cellulosic ethanol with a low CI right now, not in five or ten years—available today.” Author: Katie Schroeder Contact: katie.schroeder@bbiinternational.com

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Policy

WITHIN CLEAR The California Air Resources Board is working on its latest scoping plan, which could potentially intensify Low Carbon Fuel Standard targets and boost ethanol use in state—especially if E15 gets approved. By Katie Schroeder

California’s Low Carbon Fuel Standard has been a pivotal piece of regulation for the ethanol industry for many years, helping to make the state a top-shelf market for ethanol.

In 2022, the California Air Resources Board was due for a scoping plan, which is done every five years. In doing so, CARB is exploring the option of increasing carbon reduction goals for the LCFS. The proposed goals, as of early August, were an increase from 20% carbon intensity (CI) reduction by 2030 to a 25 or 30% CI

20 | ETHANOL PRODUCER MAGAZINE | OCTOBER 2022

reduction in the same timeframe. “The current California Low Carbon Fuel Standard calls for a 20% carbon intensity reduction in transportation fuel by 2030, but today, the fuels being sold in the California marketplace are exceeding the carbon intensity reductions that are established in the law,” says Brian Jennings, CEO of the American Coalition for Ethanol. Jennings explains what these changes to the LCFS goals could mean for the ethanol industry. “We’re pretty confident that, if they do this, it could be very positive for ethanol,” he says. “It could mean greater demand for ethanol in the nation’s most important fuel market.”

While more aggressive CI targets could lead to more ethanol demand in California, Jennings has some concerns about the “idiosyncrasies” of CaliforJennings nia’s management of the LCFS in recent years. He explains that CARB has recently favored electric vehicles (EVs) over lowcarbon liquid transportation fuels, and recently announced that it will phase in a total ban on the sale of gasoline-powered cars by 2035. However, a University of


SIGHT

California Institute of Transportation study funded by the California legislature found that it was impractical to get all internal combustion engines off the road by even 2045, and instead advised that the government replace fossil fuels with biobased fuels alongside EVs.

Scoping Plan Background

Understanding why CARB performs half-a-decade scoping plans puts potential changes to the LCFS in regulatory context. “Really, the scoping plan that CARB develops in five-year intervals is the master plan for greenhouse gas reduction and other related programming

in California,” says Graham Noyes, managing attorney at Noyes Law Corp. and executive director of the Low Carbon Fuels Coalition. Noyes’ law firm specializes in fuel and carbon law, and he works primarily on California transportation, fuel, environmental attribute and clean fuel standard programs, as well as the Renewable Fuel Standard. He explains that the need for the scoping plan came from California’s 2006 Global Warming Solutions Act, or AB 32, which requires CARB to release a report every five years on the state’s efforts in reducing GHGs, and explicitly focus on how effectively these ef-

forts are working to reduce California’s GHG emissions to 1990 levels. The goal of AB 32— to get to 1990 GHG levels by 2020—was met more than three years ahead of schedule. The next tier is Noyes to get to 40% below 1990 emissions levels by 2030— set by SB 32—followed by achieving energy carbon neutrality by 2045, set by an executive order by former Gov. Jerry Brown. To meet the net zero goal, Noyes explains that the state has determined that it needs to eliminate the use of fossil ETHANOLPRODUCER.COM | 21


Policy fuels over the next two decades. Noyes says this year’s scoping plan is the first that needs to consider progress on two related goals: carbon neutrality and emissions. “Whether it’s the advanced clean cars program, the zero EVs program, or all the building electrification programs that we have—efficiency programs—there are literally hundreds of programs, and these all get built into the scoping plan,” Noyes says. “And so, in regard to biofuels, from the biofuels perspective, what was most significant was CARB identifying again that the LCFS is really the most important program in the fuels sector, and one of the most important programs in the transportation sector.”

Sustainable Aviation Fuel in California

Alcohol-to-jet has been a major talking point in the ethanol industry, and California could be a key market for sustainable aviation fuel (SAF) in the future. A recent letter from Gov. Gavin Newsom to CARB

requested setting a 20% clean fuels target for the aviation sector. “We are eagerly pursuing any new market, and the aviation fuel market has emerged as one where I think ethanol as a feedstock fuel could play a very important role in supplying … SAF, absolutely,” Jennings says. Although SAF provides a great opportunity for ethanol producers, Jennings is cautious of narratives that relegate almost all future ethanol use to the “hard-to-electrify” space, and place too much emphasis on electrification as the chief solution to climate change. “I think that’s nonsense, I think ethanol has a dramatically important role to play in light-duty vehicles—where ethanol only comprises a little over 10% of the market today—and we should be pushing 20, 30% of that market, minimum,” he says. “We have a lot of growth potential in the light-duty vehicle market, and I don’t intend to ever cede that entirely to EVs” California’s goals run parallel to those

of several airlines, which have committed to pursuing a certain percentage of SAF— from an array of raw materials—by various set dates. Cellulosic ethanol, including corn fiber ethanol, has value as a potential feedstock for the production of SAF. Companies like Gevo, SAFFiRE Renewables and LanzaJet have projects underway to pursue SAF production at commercial scale. “Obviously, alcohol-to-jet is a huge new opportunity, and with the blenders tax credit that’s in the Inflation Reduction Act, it will really accelerate SAF commercialization,” Noyes says. “California has a bill going, which we’re working on, that would further accelerate [SAF use].”

E15 Opportunities and EV Challenges

California is one of the largest and most important markets for E85 in the U.S., but E15 isn’t legal in the state. Jennings explains that though E85’s presence is great in terms of its ethanol volume and price


at the pump, it has limited consumer reach because most people don’t own flex-fuel vehicles (FFVs). But E15 can be used in over 90% of the light-duty vehicles on the road today, and after years of rigorous testing, Jennings believes its approval in the Golden State is no longer a matter of if, but when. Ethanol was an important component in enabling California to meet its GHG reduction goals ahead of schedule, Jennings explains. “Ethanol delivers incredible carbon reduction compared to gasoline,” he says, “so we hope CARB will decide to set a more ambitious carbon intensity target.” With the potential for an increase in the stringency of the LCFS, now would be the ideal time for E15 to make an entrance. “This is going to give everybody in the marketplace a chance to do more ethanol blending with E15, and I think we’ll see probably the most rapid E15 mobilization that we’ve seen in any state,” Noyes says. Over the past few years, E15 has been undergoing California’s rigorous multime-

FROM THE TOP: Both California Gov. Gavin Newsom and his predecessor, Gov. Jerry Brown, have taken actions that have promoted the state's move toward carbon neutrality. PHOTO: STOCK

dia process, which includes various tests to determine if it will be allowed in the state. In late July, CARB stated that it is planning to complete the process in 2024. Noyes says that in July, E15 passed air quality criteria pollutant testing with “flying colors.” “CARB, through this long-term testing process that’s been going on for several years and has involved a lot of industry in-

vestments, has become convinced that E15 is essentially better than E10 or … the gasoline standard for California, but there is still a process to go through,” Noyes says. E15 has the potential to give obligated parties, such as fuel refineries and importers, a way to meet California’s GHG requirements and give producers more credits per gallon of blended E15 fuel. Noyes explains

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Policy

Final Thoughts

QUESTIONING THE EV CHARGE: Ethanol proponents are leery of policy trends that relegate ethanol use to the “hard-to-electrify” space and place too much emphasis on electrification as the chief solution to climate change. PHOTO: STOCK

that if an obligated party blended an ultralow carbon intensity ethanol enabled with carbon capture and sequestration technology, they may be able to meet their entire LCFS obligation, on a gallon-for-gallon basis, with E15 alone. “That’s a big slice of the pie … and essentially, that’s going to allow the obligated parties to get a 50% boost in their blending, so I think E15 will very rapidly become the standard fuel in California,” Noyes says. With California planning to eliminate

the use of fossil fuels by 2045, restarting the manufacture of FFVs could be a key step to leveraging the future of E85 in the state. However, Noyes says that efforts to get policy support have struggled to gain traction. He and his team hope to show how E85 can be used to achieve California’s goal of net zero emissions, through blending E85 with renewable naphtha, a byproduct of renewable diesel production that is becoming more widely available.

“While California does have a very aggressive ZEV (zero-emission vehicle) program in the light-duty sector, and is working to electrify the medium- and heavy-duty sectors, the state is realistic and performs technology assessments, seeing that in the long-term, low-carbon fuels are essential to decarbonization,” Noyes says. Noyes believes that the misconceptions about ethanol’s place in a low-carbon future is not only limited to California, but must be debunked in the national arena as well. “We don’t think it’s sufficiently clear in the national conversation that biofuels are an essential part of the solution—that ethanol is an essential part of the solution—and the work everyone’s doing to further decarbonize ethanol and improve is just going to make it more so.” Author: Katie Schroeder Contact: katie.schroeder@bbiinternational.com

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presents 2022 Faces of Ethanol

JENNIFER HEADMAN

Fermentation Manager POET Sioux Falls, SD

Jennifer Headman is a fermentation manager with POET research. She and her team screen all the new technology inputs in the lab and collaborate with plant managers to design trials for the POET’s bioprocessing facilities.

“I would say there’s really no typical day [working] at POET,” says Jennifer. She and her team work in the lab, screening new technologies such as yeast, enzymes and other chemicals, before they are implemented in POET’s bioprocessing facilities for trials. Headman also collaborates with plant managers to design upcoming trials, helping to fix any operational opportunities and advises on how to achieve the best possible outcome. She believes that both the communication and technical analysis elements of her job are very important. “Obviously, the technical work has to happen. You have to do all the testing and all the analysis of the data, but nothing is really going to happen on the larger scale unless you can effectively communicate with people that are helping to run the plant. You have to answer questions for the people that are running plant trials or are running different technologies that we’ve suggested,” Headman says. Service and Exploration Beyond her professional life, Headman enjoys traveling and being involved in Alpha Phi Omega, a national co-ed service fraternity and leadership development organization. She is in her last term as the Regional Chair of the North and South Carolina part of Alpha Phi Omega and loves helping college students develop leadership skills, plan service projects and organize fun events. Headman’s travels include visits to Brazil, Argentina and Europe. Although she hasn’t been able to travel much lately, she is hoping to start up again soon. She loves to have an opportunity to experience the local culture and unique environment of each location. Industry Experiences Originally from the Philadelphia area, Headman first came to the Midwest when she attended graduate school at the University of Wisconsin Madison. There she studied microbiology and specifically enjoyed Tom Jeffries’ research on the utilization of corn stover and other plant matter as an ethanol feedstock. This is what started her interest in the industry. After working with California-based company Edeniq during start up and working with their cellulosic process for 16 months, Headman worked with Verdezyne and Novozymes before coming to work with POET four years ago. Her years in the ethanol industry have given Headman a greater appreciation of rural America and developed her understanding of the importance of different roles within the workplace. “I might be a really strong scientist but this doesn’t matter if I can’t work with the engineers and other people to make sure that an input is implemented as accurately as possible and that we think of all the potential downfalls ahead of time,” she says. Throughout her time with POET, Headman has found BASF to be a great supplier of enzyme technologies. “BASF just consistently brings really high-quality products to us for testing and it’s really good to work with them, both their sales team and their technical team are always willing to help us if we have questions,” Headman says.


STAYING STOCKED

Supply chain constraints are improving, but ethanol producers are still dealing with the higher costs and tighter availability of almost all production inputs, parts and equipment. By Luke Geiver

The U.S. supply chain can be described in two ways. There is the

complicated explanation for the state of supply in 2022 that requires a deep dive into shipping container availability, fuel prices, post-pandemic hangover, Ukraine and a handful of other intricate factors. There is also a simpler way of looking at the U.S. supply chain. As CoBank, one of the largest private providers of credit to the U.S. rural economy, recently said in a quarterly report created for the rural industries it serves, “Supply chains are still a mess.” 26 | ETHANOL PRODUCER MAGAZINE | OCTOBER 2022

Ethanol Producer Magazine spoke with entities from across the greater ethanol industry to shed light on these lingering supply chain restrictions to see what’s being done about it and when normalcy might return.

The Benchmarking Expert

Connie Lindstrom, senior biofuels analyst for Christianson Benchmarking LLC, offers insight to the supply chain challenges of 2022—down to the penny. Ethanol producers are rethinking inventory levels to en-

sure they aren’t short on a critical ingredient or necessary part, she says. That new focus on inventory is increasing operational costs per gallon. Lindstrom sees the increase in her benchmarking work that shows plant supplies, repairs and maintenance costs are all running about a cent higher per gallon for the first half of 2022 compared to the previous year. Multiply a penny by 50 or 100 million—gallons, that is—and you’ll see why plants are concerned about a cent difference, she notes. Chemicals and ingredients (minus denaturant) are also running


Procurement

ality of the industry, she says. “The former a good management team can fix; the latter, a good management team can reach out to others in the industry to problem solve and find workarounds.” Lindstrom sees plants looking for ways to gain flexibility in the supply chain, including through the addition of onsite storage, power generation and even transportation partnerships. Some larger plants have been able to leverage things like pooled parts and supply inventories, while smaller organizations have sometimes found partners to help mitigate the higher costs of maintaining larger inventories. Overall, the situation has made new partnerships important for long-term stability, she says. “This has really been a year for ingenuity to shine. Success in managing cost and supply chain challenges relies upon creative thinkers: listen to everyone from the bottom up within your organization for ideas and suggestions, and don’t forget to leverage relationships, not just vendors, but staff from other facilities and even other businesses in your local area.” According to Lindstrom, the health of the ethanol industry, despite the current supply chain challenges, is in a good place. “We have so many experienced leaders right now,” she says. “Profitability continues [to be] steadily favorable, and plant boards and management executives have been around long enough to see several downturns and up-cycles. So they know it's a great time to invest in technologies that will help them high, roughly 1.5 cents more than the previ- future-proof their profits (into things that will reduce carbon scores, improve efficienous year. “Fortunately, two things are helping cy and diversify product mix).” mitigate the impact of this: generally good continued profit margins, and the ongoing Ethanol Plant Manager Mick Henderson, general manager at process efficiency improvements throughKentucky’s Commonwealth Agri-Energy out the industry.” Clients throughout the industry have LLC, says his team has experienced supply come to rely on the insight and bench- chain issues like most other sectors of the marking work that Lindstrom and her team economy. There have been plenty of nuiprovide. Many use the data to understand sance issues to work around and some have whether a particular rising cost is specific to been very impactful. The worst issue for Commonwealth their location or facility, or if it’s simply a re-

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Procurement

has been sourcing spare parts, according to Henderson. There have been long delays combined with higher prices for the parts. Most ingredients have also taken longer to get and cost more, he adds. “Freight is more expensive all around,” he says, “but we are entirely reliant on truck inputs with virtually no rail issues, so we have that going for us.” Like Lindstrom, Henderson believes relationships matter more than ever in times like these regarding the supply chain. “We are not on an island. Talk to other ethanol plants and see what their solutions may have entailed. You can get back tenfold what you give,” he says. As everyone in the industry is having the same problem, Henderson believes there is an end in sight. The suppliers of parts or ingredients are working to hire and retain more workforce, he points out. “Parts inventories will improve soon. In-

gredients also. Being forced to look for alternatives to all of the above has helped us in the short term. We will be better in the long-term, too.”

Equipment Specialist

Michael Cohen, vice president of the equipment acquisition group for Illinoisbased Aaron Equipment Co., helps the ethanol industry become more cost-efficient by purchasing their excess equipment or helping them auction off inventory. Cohen and his team have seen and felt the effects of the supply chain upheaval on their business and their ethanol clients. “For many of our customers, long lead times with OEMs have made it impractical to buy new equipment,” Cohen says. “This has led customers to turn to us to help solve their equipment needs. In some cases, we have also sold equipment back to an OEM.”

The Aaron team has had to deal with higher fuel costs, making it more expensive to transport equipment from a customer’s location to an Aaron warehouse, a situation that has made Cohen and his team explore different alternatives. Cohen says his team can help ethanol clients in multiple ways right now. For a CFO or accounting team, Aaron can help with appraisals as well as inventory, so that there is a clear understanding of what equipment is where, and what the value of that equipment is. “On occasion, we have created internal websites to allow plant managers to see excess equipment within the company and have it transferred to a location that needs equipment,” he explains. “We can also help raise cash by purchasing excess equipment or conducting an auction.” For a plant manager or operations

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team, Aaron can help them find the equipment they need to replace or purchase. Most plants have a “boneyard” of old equipment or discarded parts. “We can help clean up the boneyard by purchasing equipment or linking the plant to a reputable scrap company. This frees up space as well as generates cash.”

Agriculture Economists

Through its work helping rural customers access credit, CoBank has its research finger on the pulse of ag and biofuel production. The team recently provided a detailed summary of the supply chain as it exists in Q2 and Q3 of this year. Warehouse capacity is hard to come by and inventory is expensive. Transportation costs have slipped since Q1. Container shipping has become cheaper, but conditions for agricultural transport are mixed, the CoBank team reports. Rail, truck, barge and vessel

Although finding equipment can be difficult in the presence of supply chain issues, Michael Cohen and his team help producers transfer excess equipment from one location to another that in need. PHOTO: STOCK

costs remain stubbornly high and capacity limited. “The remainder of 2022 will be far from ordinary, and particularly hard to forecast,” says Dan Kowalski, vice president, knowledge exchange at CoBank. “The Fed’s job will become harder and its influence greater. But the U.S. economy and rural sectors

in particular are best positioned to navigate what comes next.” The CoBank team believes the supply chain and logistics matrix in the U.S. has improved and is getting better. The team credits the change to two developments. First, there have been fewer exports issues from China related to the COVID-19 lockdown there.


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Transportation costs, including rail, truck, barge and vessel, remain stubbornly high with limited capacity. PHOTO: STOCK

Second, there has been slightly lower transportation price inflation. The picture isn’t all clear or positive, however. CoBank notes that grain car availability and prices were at multiyear lows and highs, respectively, in Q2 and hadn’t improved until July of this year. Grain export vessel rates are also reaching multi-year highs and, despite efforts to improve agriculture’s access to vessels returning to Asia from California, the share of vessels leaving port empty was still roughly 70% in Q1, CoBank reports. “Supply chains,” the team notes, “are still a mess.” Kenneth Zuckerberg, CoBank’s lead analyst for grains, farm supply and biofuels, works closely with several seasoned relationship managers who bank the ethanol industry and benefit from being able to share knowledge and triangulate ideas about the future of the industry. Zuckerberg considers a supply chain to encompass the network of companies, resources, activities and technology involved in both the production and sale or distribu-

tion of a given product. With ethanol, he focuses on the cost and availability of corn, the cost of fertilizer, and among others, grain transportation to an ethanol plant. He also follows natural gas prices and market prices for fuel ethanol and ethanol coproducts. Following Russia’s invasion into Ukraine that caused an initial spike in corn prices, Zuckerberg and his team noticed a trend among ethanol producers. “What we observed was that the most technology efficient ethanol producers were able to make profits during the past six months despite the volatility of inputs, partly driven by a firming in fuel ethanol prices along with rising gas prices,” he says. Looking forward to the remainder of 2022 and into ’23, Zuckerberg is keenly focused on energy costs and the outlook for corn production. Both factors will impact the balance of a volatile supply chain and the profitability of ethanol production, he says. David Oppedahl, senior economist at


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the Federal Reserve Bank of Chicago for more than two decades, agrees with the sentiment of the CoBank team. Oppedahl believes that there are still supply chain issues in many corners of the economy, even if it wasn’t as stressed as a year ago. Labor is one of the main factors driving the issues, he says. “When you talk to a railroad company, they are holding back partly or even primarily because of labor issues,” he says. Part of Oppedahl’s research work is directly talking with companies from the Fed Bank of Chicago’s region, many of which deal with clients in the heart of ethanol production territory. For corn producers, it is an unusual time, he says. Outputs are priced well, but inputs are not. Most of the farmers in his region appear to be set for a profitable year, however. For ethanol producers watching the supply chain and the price of corn, Oppedahl says to expect more of the same with corn prices, despite the return of Ukraine to the market. “Hopefully, there will be some release in high corn prices when Ukraine stocks get exported, even though there are some questions about the quality of those stocks. It will take a long time to get those supplies to the market,” he adds, “I doubt it will be back to normal in the near term.” &<

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Author: Luke Geiver Contact: editor@bbiinternational.com

ETHANOLPRODUCER.COM | 31


Elevating

Quality Control

When lab personnel aren’t ushering in new innovations, testing ethanol fermentations and producing real-time production data for their colleagues, they’re making sure what’s arriving at the gate is fit for today’s production needs. By Luke Geiver

32 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2022


Testing

In a world creating, consuming and craving more and more data, ethanol plant labs are right at home. Equipped with a steady supply of

both powerful new tech and the time-tested standby instruments that have been getting the job done for years, today’s lab managers are expected to do both react to what’s occurring in the moment and predict what’s coming next. Ethanol Producer Magazine spoke with industry veterans and lab experts about the role of the modern lab and how managers navigate perennial issues (like mycotoxins in incoming corn) while their teams also work to stay ahead of the everyday that keeps plants running optimally (like testing for quality across the entire supply chain).

Innovation In the Lab Setting

Don Cannon has proven his ability as an innovator in the analytical chemistry space by achieving success in the private sector, through his work standing up public labs, and now as the research and development director for the cutting-edge team at Green Plains Inc. Cannon is currently helping usher in a new era inside a jointly run, collaborative space in Omaha, Nebraska, connecting the expertise and needs of Green Plains with the industry knowhow and technology or testing insight of its subsidiary, Fluid Quip Technologies. All of that happens at one site. Keith Jakel, director of sales and marketing for FQT, believes like Cannon does. “There is a great story of innovation with what we are doing in Omaha,” he says. “We have such a large base of knowledge between the two companies. Chances are we have an expert in the field for any question that arises.” The Omaha Center for Innovation lab provides a glimpse at what a centralized, all-capable lab can look like, Cannon says. The team there uses the most modern equipment possible while running strategic tests in conjunction with other tests that are now a requirement. With Green Plains focusing on the production of sustainable, biobased ingredients for feed, fuel and the massive bioproducts industries, more testing is required than ever before. “I think the increase from the food market that the feed products are going into has created a fundamental shift in how we run the lab,” Cannon says. “We are looking at putting quality management systems in place now. Throughout the production process, but also in the lab.” Jakel says the standards on some feed ingredients are very high. The end user is also looking for a sound testing protocol all the way through. “We need to demonstrate for them how the products test all the way through the supply chain,” he explains.

Similar to most lab professionals across the biobased products and biofuels industry, Cannon is embracing and adapting to the new necessities required of his profession. Modern labs across the renewable energy or biobased sectors are changing, he says. New tests, new tech and new ways of thinking about the true function of the lab itself are the new norm. Although most labs might appear to function as they always have, the modern lab has changed. Production is not the only area a lab needs to focus on, especially those at facilities producing multiple product streams to various markets. Quality control and assurance is now critical, as is the ability to validate claims from outside parties (through on-site testing) about bolt-on tech or upgrades. “Labs aren’t just testing to aid production anymore,” Cannon says. “The best labs and facilities are now implementing quality control and quality assurance experts for inputs and outputs.” To maintain the rigorous testing protocol required of more products in multiple markets, Jakel and Cannon say they have had to ensure their testing is consistent. “Something as simple as the way you prepare samples in a lab is huge. That consistency across the board is the key to the higher margins in every department. That is what we looked at with this lab,” he says. Jakel also says the role of testing today isn’t just about what is going out, but also about how well new or existing plant set-ups are running. “Our technologies rely on sampling and lab processing to ensure that they are operating at peak efficiency.” On most days, the team samples every two hours to make sure they are adjusting to anomalies. “Doing testing allows us to make adjustments on the fly,” Jakel explains. Through his work in the ethanol industry and other sectors, Cannon says he has learned that a lab shouldn’t only focus on testing. He is a proponent of running tests only if they have meaning. He works with his team in the lab and any plant he is affiliated with to ensure the data gleaned from each test is meaningful. Cannon values the consistency of testing protocols over the number of tests ran, he says. He also tries to remind others that sometimes the results are less important than the direction of a trend in testing. Sometimes a lab-scale test will not mimic the same numerical correlations that larger systems yield. But, he explains, what direction is a test moving? If the numbers move in the desired direction, he is less likely to discount the effectiveness of the larger system. “There are things that I have been very excited about in the lab,” he says. “Then, you go to reproduce it at scale and it doesn’t always work. That is why a good lab has the ability to understand why tech can’t scale based on lab tests.” Modern labs also serve a purpose unrelated to current ETHANOLPRODUCER.COM | 33


Testing operations, Jakel and Cannon both agree. “The ability to give operations meaningful data is the number one priority of an industrial lab,” Cannon says. Sometimes that means providing data—or evidence—that an outside vendor’s claims on new bolt-on tech or upgrades ring true. “Every plant runs so unique now,” Jakel says, “that you have to be able to create these baselines for your own operation.” FQT has developed several lab simulations for its technology to be able to show what its tech can do with certain stillage. The simulations help to show how much corn oil uplift a plant might get from a FQT technology adoption. “It is important that a plant can look at an investment before they ever spend a dime,” Jakel says. “Information gained from tests allows us to make good decisions.”

Dealing with Today

While ethanol plant lab technology, standards and strategy have changed, the corn quality issues they test for have not. For example, mycotoxins, a family of toxins produced by mold that grow on almost all vegetation and grain, are a recurrent concern. These toxins are harmful to the humans and animals that consume the feed products made from these crops, which is why they need to be monitored at ethanol plants producing distillers grains, says Lauren Kellen, lab manager for CHS Inc. “Certain conditions such as extreme drought, extreme humidity and excess rain can cause a sudden surge of toxin levels in the crops,” Kellen says. “The drought that much of the Prairie lands have seen this summer will likely result in elevated aflatoxin values come harvest.”

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Several surveys indicate the current state of mycotoxins every year. The surveys collect information during the fall, before releasing updates starting in February. DSM’s July release of its own mycotoxin survey showed that of the 48 corn DDGS samples tested, surveillance suggested that mycotoxin occurrence was somewhat increased compared to 2020, with the greatest shifts in Zearalenone (6% above normal). Only samples sent in were tested. Samples showing clinical signs of toxin impact were not included in the survey testing. DSM has been running the survey since 2014 and analyzed thousands of agricultural samples from around the world. Dealing with toxins in corn isn’t new to Kellen, but the issue does showcase the importance of a well-run lab. Kellen says being vigilant about mycotoxins is simply part of ethanol production. “We’ve all seen rises and ebbs in mycotoxin levels,” she says. Through past experience, Kellen’s team has developed a successful monitoring process for mycotoxins. “We have plans in place to quickly address high levels if brought into the plant. We feel confident in our instrumentation, and our validation methods.” This year, the majority of the crop space in the Midwest has experienced record droughts in addition to extreme heat. Certain mycotoxins thrive in these conditions, and many plants purchasing from these areas will likely have to deal with the toxins until next year. To stay on top of the issue, Kellen’s team tests incoming and outgoing products to constantly monitor mycotoxin values. The combination of in-house testing methods as well as third-party verification allows them to monitor the toxin load coming in or going out. During harvest, they increase testing. Although the USDA and the Food and Drug Administration have laid out limits for each toxin depending on the market a product is going into (swine, cattle, etc.), Kellen’s team has created their own limits in the lab they use to flag any product getting close to USDA or FDA thresholds. This year specifically, Kellen says lab managers should be prepared for increased testing and associated costs, and be thinking about a proactive approach rather than a reactive approach. “Testing the samples can be time-consuming,” she says, “so it’s good to plan ahead with lab personnel to know that you will have manpower to get the job done.” Kellen believes it is important to understand that “while we cannot change climate conditions for the crops in our areas, we can do a good job monitoring and turning away highly flagged products. This cannot be done without the support of a highly [capable] lab team to be able to efficiently test and monitor the data associated with toxins,” she says. “Having a highly educated team makes the monitoring process smooth.” &

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Spotlight BY KATIE SCHROEDER

Innovations for the Individual Producer Global biotechnology company IFF is a yeast and enzyme provider that offers ethanol producers customized recommendations based on their plant’s needs. Yeast is the lynchpin of the ethanol production process. IFF is an industry leader in biosciences, helping ethanol producers meet the challenges of creating a secure, renewable energy pipeline with innovative enzyme, yeast and antimicrobial solutions for starchbased fuel ethanol. Larry Anthony, research and development technical manager with IFF, says the company has been providing yeast to the ethanol industry for the past 10 years. He explains that IFF’s XCELIS Ethanol Solutions platform features yeasts and enzymes that they will recommend and tailor to each plant’s situation. “What we do is listen to our customers,” Anthony says. “We find out what each plant needs in terms of its process, and from there we can recommend the right yeast.” Their products include both single yeast strains and blended strains that will match each facility’s needs. Anthony states that IFF’s process of developing new yeast solutions stems from its diverse collection of yeast strains, each with their own desirable qualities such as fermentation speed and robustness, which are allowed to combine via mating followed by selection of high-performing strains. The selected strains will be put through an intense screening regimen that exposes the yeast to stress conditions it will encounter in ethanol plants, such as high lactic acid stress, high acetic acid stress and high temperatures, identifying the winners. These high-performing strains are then used as a platform to genetically engineer products for high yield and other performance traits. “We take all these strains—and we develop hundreds, thousands of strains—and put them through a reiterative screening process,” Anthony says. “You identify the top 10 percent of the best, put those back in the screen, and you keep winnowing it down until you’re able to identify the handful that are the most promising. But again, it’s all from listening to the customer, because the screen conditions are set up around what the customers are facing in the field.” The future role of yeasts in the ethanol industry will be closely tied to growth areas as plants start prioritizing high value coproducts and reducing their carbon footprint. However, Anthony thinks there is still potential to maximize the traditional goals, such

PHOTO: IFF

as yield, fermentation rate and robustness. “But now that plants are starting to embrace new technologies like high value feeds, new product development opportunities are continuously emerging,” Anthony says. Along with its strong core competency in yeast engineering, IFF’s XCELIS AI computer modeling system enables the company to better predict and steer outcomes at scale. “There aren’t very many biotechnology projects where you’re working with fermentations at the scale of the ethanol industry,” he adds. “So, from our perspective, it’s very exciting to work on projects that are large-scale commercial projects where you can actually see and make an impact at a customer’s plant.”

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).

36 | ETHANOL PRODUCER MAGAZINE | OCTOBER 2022


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