Alto Ingredients is moving ahead with an agreement to pursue development of carbon capture and sequestration at its Pekin ethanol plant.
The company on Wednesday announced it will work with Vault 44.01 to build out a plan to transport, inject, and store deep underground the carbon dioxide captured from its Pekin operation.
“While we await EPA submission and approval, address financing and source equipment, the TSA (CO2 Transportation and Sequestration Agreement) marks a significant milestone on our path toward a more prosperous future," said Alto Ingredients president and CEO Brian McGregor in a statement. "This project represents our commitment to building a sustainable future for our environment, our farmers and our entire community.”
The porous Mount Simon sandstone formation that lies beneath much of Central Illinois is considered optimal for the permanent storage of liquified carbon dioxide. 45Q tax credits incentivize carbon capture and sequestration as a method to combat climate change by mitigating the greenhouse gas effect. The Inflation Reduction Act of 2022 increased the value of the 45Q tax credit to $85 per metric ton.
Alto Ingredients is banking on the tax credits to prove highly profitable for them. The Pekin plant alone produces some 600,000 metric tons of carbon dioxide annually as a byproduct of the 250 million gallons of specialty alcohols and renewable fuels it produces each year via corn fermentation.
The company has said the carbon dioxide will be transported by a "dedicated relatively short-distance intrastate pipeline, which greatly limits disruption and risk concerns." It's not clear what route that pipeline may follow or what area could be designated for sequestration.
It may prove easier to move through the Alto project through the regulatory process than the expansive multistate pipelines that can lose momentum if they meet significant headwinds in even one state along the route to Illinois.
Carbon capture and sequestration is controversial, earning opposition from those like environmentalists, who are skeptical of the safety and merits of it; as well as farmers who oppose the eminent domain process that can be utilized to obtain land rights for their construction and worry about the potential long-term impacts on agricultural productivity.
Carbon capture pipeline development is currently on pause in Illinois through July 2026, or until the federal government updates its guidelines, whichever comes first.
ADM's carbon sequestration operation in Decatur is currently facing new questions after leaks were discovered. McGregor told investors on a Wednesday earnings call that he hasn't heard anything from the EPA about changes to the moratorium timeline after that news broke, but he says the CCS process has evolved since ADM's operation first came online.
"There's been significant changes in the way that the work is done, the quality of the casings, the depth, the strength and the like," McGregor said. "So I don't know that it would be particularly applicable to...whether it's ours or anyone else's going into the ground today. That said, time will tell."
