Green Plains Enters into Agreement to Sell Ord, Nebraska Ethanol Plant

Green Plains Inc. announced recently that its subsidiary, Green Plains Ord LLC, has entered into an asset purchase agreement with GreenAmerica Biofuels Ord LLC to sell its 65 million gallon ethanol plant located in Ord, Neb. for $64 million, plus working capital.

“The sale of our Ord, Nebraska plant is another step in our overall “fully funded” strategy to rapidly construct and implement our Ultra-High Protein production technology across our biorefining platform,” said Todd Becker, president and chief executive officer. “We believe this sale enables us to create additional value for our shareholders by efficiently deploying capital to support our transformation through technological advancements in proteins, sustainable corn oils and clean sugars acquired in the recently announced Fluid Quip Technologies transaction.”

Green Plains Ord LLC has also entered into an asset purchase agreement with Green Plains Partners LP and its affiliates (Partnership) to acquire the storage and transportation assets and the assignment of railcar leases associated with the Ord ethanol plant for $27 million, which will be utilized to pay down the Partnership’s debt. In addition, the storage and throughput services agreement will be amended to adjust the minimum volume commitment to 217.7 million gallons per quarter and to extend the maturity date by one year to June 30, 2029.

“We believe the value achieved from the sale of the Ord facility begins to demonstrate that we remain undervalued relative to the potential of our portfolio. As we execute on our total transformation strategy, adding additional innovative, sustainable and clean products produced at our biorefineries through the application of these technologies, we believe our value will continue to increase,” concluded Becker.

Green Plains will record a pre-tax gain of approximately $37 million related to the transaction. Both transactions are anticipated to close within the next 45 days. The purchase agreements are subject to customary closing conditions and contain ordinary and customary representations, warranties and indemnification obligations.

Ocean Park acted as the exclusive financial advisor to Green Plains and Sidley Austin LLP served as legal advisor to GreenAmerica Biofuels Ord LLC in connection with the transaction.

U.S. wind energy production tax credit extended through 2021

The timing and magnitude of wind turbine installations in the United States are often driven by tax incentives. The U.S. production tax credit (PTC), a per-kilowatthour (kWh) credit for electricity generated by eligible renewable sources, was first enacted in 1992 and has been extended and modified in the years since. At the end of December 2020, Congress extended the PTC at 60% of the full credit amount, or $0.018 per kWh ($18 per megawatthour), for another year through December 31, 2021. In 2020, the credit was 60% of the full credit amount. Under the new PTC legislation, qualifying wind projects must begin construction by December 31, 2021.

Based on previous PTC legislation, wind projects that started construction in 2016 qualify for 100% of the full credit amount. After 2016, the percentage decreases by 20% per year from 2017 through 2019; facilities starting construction in 2019 qualify for 40% of the full credit amount.

Wind projects can receive the tax credit based on either the year the project begins operation or the year in which 5% of the total capital cost for the project has been spent and construction has begun. This 5% down method, known as safe harboring, allows wind developers to receive the PTC at a given year’s level, provided they complete construction no more than four calendar years after the calendar year that construction began.

To help address construction delays related to COVID-19, the Internal Revenue Service (IRS) issued guidance in May 2020 allowing projects that began construction in 2016 or 2017 an additional year for construction, giving them five years to come online instead of four.

U.S. wind capacity totaled 112 gigawatts (GW) as of November 2020, the latest data available in the U.S. Energy Information Administration’s (EIA) Electric Power Monthly. According to plans announced by project developers and grid operators and compiled in EIA’s Preliminary Monthly Electric Generator Inventory, another 10 GW was expected to be added in December, bringing the annual 2020 total to 21 GW. December’s planned additions will be confirmed as operational in EIA’s survey results released in late February.

If all planned additions are confirmed, 2020 will be a record year for wind installations, far surpassing the previous record of 13.2 GW added in 2012. The record level of annual capacity additions in 2020 was driven by developers scheduling project completion in time to qualify for the full-valued PTC from 2016. Wind capacity additions tend to be relatively high in years when the PTC is set to expire, such as in 2012 and 2020.

In 2021, project developers expect 12.2 GW of wind capacity to come online, of which they expect 7.2 GW (59%) to come online in December. December has historically been the month with the most wind capacity additions.

Source: EIA

New Research Shows That Corn Ethanol Emits 46% Less Greenhouse Gases Than Gasoline

Research from Environmental Health & Engineering, Inc. (EH&E) shows that greenhouse gas (GHG) emissions for ethanol, a biofuel made from corn, are 46% lower than gasoline. Conventional wisdom based on a prior analysis done by EPA had pegged the difference to only 20%. EH&E's topical review of the latest science shows that this renewable biofuel is less carbon intensive and more climate-favorable than previously thought. "This research provides an up-to-date accounting of corn starch ethanol's GHG profile in comparison to that of gasoline refined from crude oil," says EH&E Chief Science Officer David MacIntosh. "The results of this research are timely for the scientific, public health, legislative, and business communities seeking to establish a net zero carbon economy while addressing related technological, political and economic challenges."

The research delivers a transparent, state-of-the-science assessment on life cycle analyses of corn starch ethanol in the U.S. EH&E researchers reached their conclusions after critically reviewing earlier life cycle analysis modeling and data, and consulting with more than two dozen experts from government, academia, and nonprofits. Their findings uncovered significant reductions in carbon intensity made possible by advances in farming technology, soil conservation practices, and production of animal feed as a by-product of making ethanol.

EH&E's assessment also shows that carbon emissions from converting prior land uses to corn farming make up only 3.9% of the biofuel's total GHG emissions--a much smaller amount than generally recognized. This finding stems directly from the latest models and data that consider both the economic value and productivity of land to estimate release of carbon when land is put into corn production. The research's findings suggest that substitution of conventional gas with corn ethanol could deliver a net carbon sink over a much shorter period than previously estimated.

Today, corn ethanol accounts for about 10% of liquid fuel sold at gasoline stations in the U.S. and has the potential to account for a greater share of liquid fuel for transportation. The findings provide much-needed data for decisions and policies on the future role of biofuels to address climate change as well as opportunities for continued reduction of carbon emissions across the life cycle of corn ethanol.

DuPont Launches New High Performance Yeasts for U.S. Ethanol Market

DuPont Nutrition & Biosciences today announced the launch of the SYNERXIA® Gemstone Collection, the next advancement in high-performance yeasts. The new collection from the XCELIS® platform includes SYNERXIA® SAPPHIRE and SYNERXIA® RUBY – two innovative, high-yield yeasts designed for the unique needs of ethanol producers.

This marks the first time that DuPont has co-launched two high-yield yeasts. SYNERXIA® SAPPHIRE brings the most powerful combination of yield, robustness and enzyme expression in a yeast. It offers enhanced ethanol yield increase paired with revolutionary thermotolerance and infection robustness in fermentation and has been genetically engineered to withstand harsh stressors, while still finishing fermentation with ultra-low DP1.

SYNERXIA® SAPPHIRE has been engineered to provide a strong ethanol yield increase compared to conventional yeast and powers through fermentation finishing clean when ethanol producers encounter hot fermentations or severe infections. The product also expresses enough glucoamylase to displace up to 80 percent of the glucoamylase injected to fermentation. The yeast’s strong expression of the powerful glucoamylase offers reduced residual starch for many producers.

SYNERXIA® RUBY is the highest yielding yeast available today from the XCELIS® platform, delivering exceptional performance to producers via a patented PKL pathway and additional targeted genetic modifications. It produces less acetic acid compared to SYNERXIA® THRIVE GX and enables up to 65 percent glucoamylase reduction.

“The SYNERXIA® Gemstone Collection will give ethanol producers flexibility in responding to their individual plant needs while ensuring high ethanol yield and minimal waste,” said Hans Foerster, global marketing director, DuPont Biorefineries. “These new yeasts represent a new standard in high-yield yeasts on the market for ethanol producers and is just the latest in DuPont’s innovative approach to ethanol solutions through the XCELIS® platform.”

Iowa ethanol production fell 12 percent in 2020

Compared to 2019, Iowa ethanol production fell 500 million gallons, or 12 percent, in 2020 as a result of dramatic demand destruction resulting from the COVID-19 pandemic, trade disputes around the globe, and illegal exemptions granted from the Renewable Fuel Standard (RFS). Producing only 3.7 billion gallons, 2020 was the second year in a row that Iowa ethanol production dropped following 2018’s record of 4.35 billion gallons.

Iowa Renewable Fuels Association Executive Director Monte Shaw called on state and federal leaders to take action to grow demand in 2021.

“While a pandemic is unpredictable and trade disputes are difficult to resolve, there are steps that our leaders can take today to begin to heal the demand destruction done to Iowa’s ethanol producers,” Shaw said. “President Biden can instruct his EPA to properly enforce the RFS as Congress intended. Congress has the opportunity to ensure that any legislation they consider to reduce emissions is technology-neutral and provides biofuels — the only tool in our toolbox ready to reduce carbon emissions on a grand scale today — a level playing field.

“We also believe that Midwestern states should not cede the fuel policy debate to the East and West coasts. We are seeing aggressive attempts on both coasts to ignore science and push low carbon biofuels out of the picture in favor of electric vehicle mandates. Here in Iowa, we will work with Governor Kim Reynolds and the legislature to continue to create growth opportunities for biofuels use.”

Source: Iowa Renewable Fuels Association