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How would a Midwestern Clean Fuel Policy impact the ethanol
industry?
Brendan Jordan
Vice President, Great Plains Institute
American Coalition for Ethanol
8/15/19
2019 vs 2010 – changing perceptions about LCFS/Clean Fuel Policy
Clean Fuel Policy/LCFS Background• Require average carbon intensity reductions for all transportation fuels
• Higher carbon fuels pay
• Lower carbon fuels receive payment
• More and more jurisdictions – CA, OR, WA, Canada, Brazil
• VS RFS:
• “Technology-neutral” policy
• Portfolio approach (ethanol, biodiesel, RNG, EVs, etc)
• Carbon intensity reductions (not just volumes)
• Incentives for innovation by all fuel producers
• All facilities have a unique “score”.
CA
Lo
w C
arb
on
Fu
els
Source: UC Davis Institute of Transportation Studies. “Status Review of
California’s Low Carbon Fuel Standard, 2011-2018. September 2018.
Midwestern Clean Fuel Stakeholder Process• Participation: ethanol, biodiesel, ag. commodity, NGO, state government, auto, EV, electric utility,
RNG
• Modeling:
• Compliance – what fuels benefit from the program
• Economic impact
• Case studies – how do individual use cases fare?
• Stakeholder engagement
• Policy considerations for a Midwestern approach
• Working on a final whitepaper for ~October 2019
• NOT recommendations on specific state or federal legislation
Midwestern Clean Fuels Vision• Portfolio approach – bigger coalition for clean fuels.
• Build on existing policies and goals
• Increase biofuel blending, along with increasing use of other clean
fuels.
• Technology-neutral approach to economic and environmental
benefit.
• Fuels evaluated with a FAIR GHG LCA framework (updated,
science-based, consistent).
• Achieve other benefits – economic benefit, energy security, water
quality, public health, soil health.
• Argonne GREET model• Updated ILUC reflecting current science• Electricity accounting (indirect accounting, utility-specific)• Updated emissions factors for farming practices at state/regional level• Compensate farming practices with GHG benefit• Investments in soil health and water quality
Group will make high level recommendations for the Midwest – policy is up to states
Unique MW approach in AT LEAST these areas
20% Carbon Intensity Standard
Minnesota
8
20% Carbon Intensity Target by 2030 Contribution to Compliance
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Cre
dit
s -
De
fici
ts
Net Credits-Deficits, Annual
Cumulative Bank
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Cre
dit
s G
en
era
ted
Ethanol, E10
EtOH, Mid-Level
EtOH, High-Level
Biodiesel
Renewable Diesel
Electricity, LDV
Electricity, HDV
NatGas (Fossil+RNG)Deficits
• Average biofuel blends increase, average carbon intensity decreases• Other strategies to increase blending are
complementary• Carbon intensity reductions achieved with Midwestern
fuels (not imports)• Lower cost and more benefits in Midwest than in other
states.
Preliminary modelling outcomes
Introduction to Economic Modeling:IMPLAN Model Direct impacts, which are impacts in the primary
industries where spending by the trucking and
construction are focused, such as engineering, truck
manufacturing, and non-residential construction.
Indirect impacts, which are impacts in the industries
that supply or interact with the primary industries, for example when building of new electric charging
stations requires the purchase of construction-related
building materials.
Induced impacts, which represent increased spending
by workers who earn money due to the proposed
projects, such as when construction workers use their wages at local restaurants.
The total impact is the sum of the multiple rounds of secondary indirect and induced impacts that remain in
the region (as opposed to “leaking out” to other
regions). IMPLAN then uses this total impact to
calculate subsequent impacts such as total jobs created
10
Iowa
CORN, LP 70.34
Elite Octane 69.86
Golden Grain Energy 75.65
Golden Grain Energy – Trestle 100% DDGS 59.60
Green Plains Shenandoah 74.87
Homeland Energy Solutions 73.11
Louis dreyfus Commodities Grand Junction 78.10
LSCP, LLLP 74.45
Plymouth Energy 79.71
POET BIOREFINING ASHTON OTTER CREEK 71.66
POET Biorefining Gowrie 73.71
POET BIOREFINING COON RAPIDS TALL CORN 71.64
Poet Biorefining Corning 70.50
Poet Biorefining Emmetsburg 74.44
Poet Biorefining Hanlontown 72.36
Poet Biorefining Jewell 70.38
Siouxland Energy Cooperative (Kernel Fiber) 42.17
Siouxland Energy Cooperative 70.04
Southwest Iowa Renewable Energy 79.79
The Andersons Denison Ethanol 71.82
Valero Renewable Fuels Albert City 78.62
Valero Renewable Fuels Fort Dodge 78.14
Minnesota
Absolute Energy 76.69
BUSHMILLS ETHANOL 74.76
Granite Falls Energy 74.30
Guardian Energy 75.43
Heartland Corn Products 80.24
Heron Lake BioEnergy 77.33
Highwater Ethanol 75.15
POET BIOREFINING BINGHAM LAKE ETHANOL 2000 76.50
POET BIOREFINING GLENVILLE AGRA RESOURCES 73.69
Iowa and Minnesota Ethanol Producers with Approved CARB Pathways
Source: Great Plains Institute
39.0
29.2
36.7
27.5
72.775.8
56.951.6
0
10
20
30
40
50
60
70
80
90
100
CA LCFSBiodiesel
IA
CA LCFSBiodiesel
MN
ICFMidwestBiodiesel
ICFMidwest
Low CarbonBiodiesel
CA LCFSEthanol
IA
CA LCFSEthanol
MN
ICFMidwestEthanol
ICFMidwest
Low CarbonEthanol
gC
O2e /
MJ
CA LCFS vs ICF Midwest
Average Carbon Intensity(not volume weighted)
Source: Great Plains Institute
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Gasoline & Substitutes 92.25 91.91 91.21 90.52 89.13 87.74 85.66 83.57 81.49 78.71
Diesel & Substitutes 89.73 89.39 88.71 88.04 86.69 85.34 83.31 81.28 79.26 76.56
Midwestern Fuel Standard
ICF Modeled Carbon Intensity Standard
0
20
40
60
80
100
120
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
g / M
J
Carbon Intensity(with EER for EVs)
Clean Fuel Standard Gasoline Ethanol Low Carbon Ethanol Electric
2021 2025 2030
Standard 92.3 89.1 78.7
Gasoline 95.3 95.3 95.3
Ethanol 56.9 56.9 56.9
Low Carbon Ethanol 56.9 55.3 53.4
Electric 39.1 31.7 22.4
g/MJ
g/MJ
Source: Great Plains Institute
CARB vs Argonne – Credit Revenue
ILUC Assumption 2021 2025 2030
CARB $0.05 $0.12 - $0.15 $0.00
Midwest Fuel Policy $0.10 $0.25 - $0.31 $0.12 - $0.17
Dollars per Gallon
Dollars per Bushel
Ethanol Refiner: Per Gallon
Po
ten
tia
l fo
r fa
rmin
g
pra
cti
ce
s t
o l
ow
er
CI
Source: Argonne
National Laboratory
Texas Interconnection
Petro-chem/NG Refining
Electricity
Ethanol
Cement
EOR Sink
Most efficient regional infrastructure to prioritize maximum capture potential
Draft National Scenario
Source: Great Plains
Institute
Ne
ga
tiv
e C
arb
on
Co
rn
Eth
an
ol?
Source: American Coalition for Ethanol
