Studies highlight the untapped value of crop residue byproducts of ethanol production
September 21, 2017
SAN DIEGO — Two new studies show that generating energy from ethanol industry byproducts can fuel a billion-dollar business opportunity for the farm economy.
Reports from the studies are available at trestleenergy.com/economic-analysis.
Iowa-based Regional Strategic, Ltd. examined the economic impact of collecting, processing and delivering corn stover byproducts of ethanol — the stalks, leaves and stems of corn plants — for use in generating electricity. The stover is compressed into biomass pellets that can be burned like coal in existing power plants, reducing CO2 emissions and increasing renewable energy supplies. This is similar to the use of wood pellets in European power plants.
The studies reveal that with modest infrastructure investments, building even a single pellet facility can deliver large quantifiable economic benefits across farm economies. Developing a broader industry around corn stover represents a multi-billion dollar opportunity.
For farmers, harvesting stover means reaping more value from their crops. For electric utilities, burning biomass pellets provides low-cost emissions reductions and renewable energy from existing facilities without the intermittency challenges of wind and solar. For ethanol-producing states, expanding bioenergy capacity delivers significant economic benefits, including an increase in jobs, economic output and state GDP.
The studies, commissioned by Larksen LLC, Trestle Energy's affiliate for biomass supply, focus on Nebraska and Iowa, two leaders in U.S. ethanol production, with an eye toward how building out a new biomass industry would impact the economies of these states. Nebraska's ethanol industry produces roughly 8.32 million tons of harvestable corn stover annually, and Iowa's industry produces around 15.6 million tons. Utilizing this stover to reduce carbon emissions elsewhere in the economy reduces the overall carbon footprint of ethanol — increasing the value of that ethanol in jurisdictions with Low Carbon Fuel Standards or Clean Fuel Standards (LCFS/CFS). This increased value helps farmers earn extra profits from their stover and fuels a new economic engine for agricultural states.
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The economic impacts show that building a corn stover industry to complement ethanol production in Iowa could deliver over $1 billion in additional labor income and contribute $2 billion to Iowa's GDP by 2030. In neighboring Nebraska, the analysis shows the potential to generate $840 million in labor income and $1.5 billion in GDP over the same period. This can be achieved using mature technologies. What is required is modest infrastructure investments to enable coal-fired power plants to blend biomass into their fuel mix. Agricultural states can start reaping the benefits today by enabling infrastructure investments that open the door for this billion-dollar business opportunity. ❖