Alto Ingredients plans to capture and store carbon emissions from its Pekin ethanol plant in a nearby underground "secure geologic reservoir."
The company formally announced the project in a Monday press release. Alto entered into a letter of intent with Vault 44.01 for the project. Vault 44.01, the company currently developing six similar projects around the country, is a subsidiary of private equity firm Grey Rock Investment Partners.
Alto generates more than 600,000 metric tons of carbon dioxide each year as a byproduct of the production of more than 250 million gallons of ethanol.
"[W]e have prioritized our CCS initiative and are encouraged by recent progress on many aspects, including overall system design, community outreach, financing, EPA application preparation, and vendor negotiations," said Alto Ingredients president and CEO Byron McGregor in a prepared statement. Further, we are evaluating new options that would enable us to substantially reduce the capital required to pursue CCS, lower our carbon footprint, and reduce our long-term energy costs."
Alto also stands to make a considerable amount of money on pursuing carbon capture and sequestration. The 45Q tax incentives in the Inflation Reduction Act of 2022 offer $85 a metric ton for sequestered carbon for 12 years. The company stands to make tens of millions of dollars per year if the project comes to fruition.
Carbon capture and sequestration aims to reduce emissions entering the atmosphere and reduce the greenhouse gas effect, but the projects have proven controversial in Central Illinois and throughout the Midwest. A plan from Navigator CO2 to establish a pipeline terminating in Illinois faltered after meeting regulatory resistance in multiple states. Wolf Carbon Solutionswithdrew its construction application last November after Illinois Commerce Commission staff recommended denial last year, but vowed to refile with the ICC in 2024.
Land owners in those cases opposed eminent domain and fear the potential agricultural impacts of a pipeline, while environmentalists raise safety concerns about the projects advancing before federal regulations are updated later this year.
The pourous Mount Simon sandstone formation that lies deep under much of Central Illinois is considered uniquely suited geologically to sequestration projects. That's because a layer of shale above the sandstone can prevent the liquefied carbon dioxide that's injected into the rock from moving upwards into the water table or above ground.
The Tazewell County Board passed a resolution last year backing a moratorium on development of the Wolf Carbon Solutions pipeline, but it's unclear what, if any, ability local governments actually have to regulate carbon capture and sequestration projects with zoning rules. The project must ultimately meet approval from the Environmental Protection Agency. Alto said they plan to use the EPA's "extended" application process that could take anywhere from 18 to 24 months.
Alto describes their Pekin initiative in shareholder documents as a "dedicated short-distance intrastate pipeline" that would limit disruption and risk concerns.
The company is also planning a new natural gas pipeline and steam-powered cogeneration project to reduce plant energy costs.
