From Boom to Bust: Failed Ethanol Plant Hands the Crown to RNG as the Future of Fuel

Germany: Verbio North America Corp., a subsidiary of Verbio Vereinigte BioEnergie AG in Germany, has breathed new life into a cellulosic Ethanol plant in Iowa that was previously shut down by DuPont in 2017. Despite the $225 million investment made by DuPont, the process of converting corn stover to renewable energy seemed like a failure. However, Verbio saw an opportunity to convert corn stover to renewable natural gas (RNG) instead of cellulosic Ethanol. According to Holly Schnur, Director of Marketing and Communications for Verbio North America, the company was never attracted to the cellulosic Ethanol sector due to unfavourable economic conditions. Instead, the plan was always to introduce Germany's RNG technology. As a part of an Iowa Smart Ag event in central Iowa.

Verbio, a renewable natural gas (RNG) producer, stands out from its competitors by using corn stover - approximately 100,000 tons of it - instead of dairy manure or landfill waste to create RNG. This unique approach makes Verbio the largest industrial RNG plant in North America. According to Schnur, Verbio's chief competitors are currently limited to smaller scale operations consisting of dairies and landfills. While Verbio's Nevada operations are based on a German blueprint, the company has already established three similar RNG facilities and a couple of Biodiesel plants in Germany. As the first of its kind in North America, Verbio's RNG production is well-established in Germany, allowing the company to bring unmatched expertise to the table.

Verbio expands its presence in the renewable energy market with the acquisition of South Bend Ethanol in Indiana and a planned $230 million upgrade to produce 2.8 billion cubic feet of RNG and 85 million gallons of Ethanol per year. Despite competition, Verbio is taking advantage of state and federal incentives to drive production growth for RNG or biomethane. Verbio has already begun processing RNG from stover in central Iowa and has built two stover buildings capable of storing over 100,000 bales. This year, the company has secured contracts with farmers for at least 26,000 acres to collect stover from their fields.

Verbio, a sustainable energy company, has implemented an innovative approach to reducing carbon and erosion in cornfields. Instead of completely cleaning the fields of residue, Verbio takes only one-third to half of the stalk residue, leaving substantial benefits in place. The company has 16 methane-digester tanks that are fed with bacteria from local cattle manure, and they use a process that involves feeding chopped and slurry-processed stover into the tanks. The bacteria then produce methane gas through their natural breakdown process. Verbio has a proprietary refining process that cleans the RNG (renewable natural gas) to Alliant's specifications, and because there is a natural-gas line running near the facility, the company does not have to store the gas it generates. This process helps to generate sustainable energy for the community while also reducing carbon emissions and promoting environmental sustainability.

Verbio's natural gas has an impressive power equivalency of 80 megawatts, enough to power over 13,000 homes. Additionally, Verbio is recommissioning their Ethanol plant to become a 60-million-gallon corn Ethanol facility, set to begin processing around harvest time. With farmers providing the corn, Verbio anticipates production in the third quarter. Unlike typical Ethanol plants that produce dried distiller's grain for livestock feed, Verbio will opt to feed the grain to a second set of digesters. This innovative approach will generate more RNG and produce a liquid fertilizer by-product that Verbio plans to market. The strategy will be utilized in both the Iowa and Indiana plants.

Verbio, a company that specializes in methane digestion, has found another by-product from their process - humus that resembles the mulch sold at gardening stores. To help farmers in the area, especially those who provide stover, Verbio is offering this humus as a soil conditioner. The company is even trucking and spreading the humus for a fee of $22 per ton, or producers can pick it up directly from the plant for $7 per ton if they have trailers. According to Verbio, the humus has the same N, P, and K values as the corn stover from which it is derived; however, it is in a more usable form. By redistributing the humus back onto fields, crop nutrition is renewed and does not leave the soil. The company aims to educate farmers about the benefits of using humus as a soil conditioner and is not seeking to profit from this valuable resource.

According to the RNG coalition, the number of operational RNG facilities in the US has reached 281, with an additional 180 facilities currently under construction and 296 more in the planning stages. This could potentially result in over 750 RNG facilities by the end of the decade, surpassing the national count of approximately 200 Ethanol plants. While most RNG facilities currently capture methane from municipal waste landfills, there is a growing trend towards dairy and swine operations. Additionally, industry players such as BP, Shell, Chevron, and Enbridge are acquiring smaller companies and announcing their own RNG initiatives, leading to increased competition and consolidation. The recent Inflation Reduction Act (IRA) has expanded federal incentives for renewable natural gas, including the 30% Energy Investment Tax Credit, which contributed to Verbio's decision to purchase an Indiana RNG plant, potentially increasing its return on investment by over 10%.

Verbio, a Germany-based bioenergy producer, can potentially benefit from Renewable Natural Gas (RNG) production. RNG qualifies as an advanced biofuel under the Renewable Fuels Standard, making it eligible for both D-3 and D-5 Renewable Identification Number (RIN) credits. In addition, RNG has one of the lowest carbon-intensity (CI) scores of any fuel. In fact, RNG has an average score below -100 and can go as low as -600, compared to renewable diesel's LCFS score of around 35. This means that if Verbio produces RNG, it can be used to make Ethanol production more efficient and lower the CI score for the Ethanol produced at their facility. Furthermore, if RNG is used for power generation, it can qualify for the Production Tax Credit. The current average value of California LCFS credits stands at slightly below $83 per metric ton of Carbon Dioxide equivalent displaced.

Schnur confirmed that their company meets the standards required to enter the California market, despite the carbon intensity score being a somewhat variable metric. Meanwhile, after DuPont's shutdown of the Nevada facility, concerns were raised about Verbio taking over. The Iowa Renewable Fuels Association's executive director, Monte Shaw, explained that there is now an ongoing education process regarding Renewable Natural Gas (RNG). While municipal-waste facilities and dairies have been utilizing RNG, crop residue has not been used by anyone else in its production. Shaw also shared his experience of a speech given by one of Verbio's German leaders, who expressed interest in investing capital for multiple projects in the U.S., making it a venture worth keeping an eye on.