Dakota Spirit AgEnergy was certified to sell ethanol into California’s low carbon fuel standard market
Dakota Spirit AgEnergy (DSA) was recently certified to sell ethanol into the low carbon fuel standard (LCFS) market in California. DSA is a part of Midwest AgEnergy, a Great River Energy subsidiary.
The value of selling into the LCFS market is realized through higher return on ethanol values, about 5 to 10 cents more per gallon depending on carbon score of ethanol produced and the value of carbon in the California market.
“This will have a significant impact on our business and is why we worked very hard in the past couple of years to achieve this pathway,” said Adam Dunlop, director of regulatory and technical services for Midwest AgEnergy Group.
California, through the LCFS, is working to reduce carbon emissions in liquid transportation fuels to 1990 levels by the year 2020.
The carbon intensity of a fuel is based on a full life cycle evaluation of the fuel’s pathway. For ethanol, it includes looking at the factors required to make and transport ethanol to the end user. This includes agricultural practices associated with raising corn and hauling it to the ethanol plant, the biorefining process of converting corn to ethanol, transporting ethanol to the California market, blending it with gasoline and the emissions from burning fuel in consumer vehicles.
“A lot of math was involved in making comparisons between the carbon intensity of ethanol produced by DSA and gasoline,” Dunlop said.
DSA, like any other ethanol biorefinery, has a unique pathway and carbon intensity score. For DSA, a major component was the co-location with Spiritwood Station and the efficient use of steam from the combined heat and power plant to power the ethanol process.
DSA also has higher efficiencies in distillation and drying as compared to other plants and its yield is slightly higher than other ethanol plants. This, along with less chemical use and lower other energy inputs, gives DSA a lower carbon intensity than “typical” ethanol plants and California gasoline.
DSA sold its first ethanol into California in August. It is anticipated that half or more of ethanol produced at DSA could be sold into California, where it will be blended and sold as 10 percent ethanol.