Reid Thompson, a fourth-generation farmer in central Illinois, is in the middle of planting season. Weather permitting, he tends to the fields in the morning, walks home for lunch with his wife and newborn, and then returns to his tractor until sundown. He’ll harvest his corn in early fall, sell it to a nearby ethanol plant, and eventually it will make its way to a car’s gas tank. That’s the routine, at least for now.
Nearly all U.S. gasoline contains ethanol to reduce emissions, and nearly all of that ethanol is made from corn starch. But, electric and hybrid vehicles offer even further emissions reductions. This poses a threat to corn demand that could be devastating for a state such as Illinois, the second-largest corn producer in the country.
The resulting decline in the value of Midwestern farmland and corn prices will hurt farmers and have ripple effects across rural communities, predict University of Nebraska at Lincoln agricultural economists Jeffrey Stokes and Jim Jansen. Rural businesses that cater to the agriculture sector could go under, property taxes that fund local schools will likely plummet and farmers could be forced to default on debts to community lenders, the economists forecast. This would come after farmers have been hit by a series of misfortunes over the last five years: the pandemic, trade wars, inflation and excess supply.
Corn could be the key to solving another clean energy dilemma, though. Unlike cars and trucks, planes are difficult to electrify, and some fuel companies believe the answer to cleaning up aviation lies in America’s heartland.
“(Corn is) the cheapest, most sustainable, most scalable feedstock (raw material),” said Patrick Gruber, CEO of Gevo, one of the companies with plans to turn corn ethanol into aviation fuel.
Thompson and other corn farmers are eager to seize this opportunity in sustainable aviation fuel, another term for jet fuel made without fossil fuels.
“As I sit here and look at the next so many years of my farming career, as maybe my father starts to retire and maybe one of my kids wants to farm, I wonder what’s going to keep us here longer. And to me, that’s sustainable aviation fuel and the ethanol demand,” said Thompson, a father of three. “I mean, there’s got to be a home for our corn because that’s what we grow.”
But, before corn ethanol-to-jet fuel can be a viable alternative to conventional jet fuel, the emissions associated with corn ethanol production must come down. This will require farmers to change their practices on the field and ethanol plants to implement controversial technologies like carbon sequestration.
The rise of electric vehicles
Since 2005, the federal government has required transportation fuels to be blended with increasing amounts of renewable fuels such as corn ethanol to reduce air pollution, greenhouse gas emissions and dependence on foreign oil. The mandate transformed rural economies across the Midwest. Between 2008 and 2016, corn prices rose by 30%, and 26% more land was converted to cropland than would have been otherwise, according to a 2022 study published by the National Academy of Sciences.
Ethanol plants quickly sprang up around corn fields, due largely to investments from farmers eager for the new market to succeed.
“It’s just another avenue of capturing some of that value of my product,” said Thompson, whose parents and grandparents were early shareholders in One Earth Energy, an ethanol plant 15 miles east of his primary farm that he sells to today.
The six states that grow the most corn — all in the Midwest — also account for 70% of the nation’s fuel ethanol production, and it’s a huge market. More than 98% of U.S. gasoline contains ethanol, and 94% of domestic ethanol is made from corn starch. The rest of the ethanol is mostly derived from wood and field residues, including stalks, stems and leaves.
According to a 2021 U.S. Department of Energy analysis, corn ethanol offers 40% tailpipe emissions reductions compared with gasoline. But, the National Academy of Science study suggests carbon emissions from using land to grow corn may negate, or even reverse, tailpipe emissions reductions. When land use changes are factored in, corn ethanol may be more than 24% more carbon intensive than gasoline, according to the 2022 study.
Electric vehicles, on the other hand, have no tailpipe emissions. So, in pursuit of the national mission to achieve net zero by 2050, the federal government has shifted its efforts from cleaning gasoline-powered cars to promoting battery-powered cars with emissions mandates and tax credits. Electric and hybrid cars accounted for over 16% of new light-duty vehicle sales last year, more than a 3% increase from 2022.
In March, the EPA finalized “the strongest-ever” pollution standards for passenger cars, light-duty trucks and medium-duty vehicles. The rule was designed to accelerate the adoption of hybrid and electric vehicles.
The EPA’s decision will also “decimate the ethanol industry and corn demand,” the Illinois Corn Growers Association said in a statement shortly after the standards were announced.
Today, roughly 30% of Illinois corn production and 40% of all U.S. corn production is used to make ethanol.
While corn farmers are cognizant of the threat battery-powered vehicles pose to their family businesses, they’re quick to mention the volatility and infrastructure challenges the emergent industry faces. Ford and GM recently scaled back production of electric vehicles and Tesla had mass layoffs.
“I look at the whole EV (electric vehicle) segment as a segment that gets blown around with the winds of change. It may be popular now, but who knows what the future may be harboring,” said Jared Gregg, a seventh-generation farmer from east central Illinois. “EVs have infrastructure challenges that they’ve got to be able to clear to make this a functional reality.”
Regardless of how much electric and hybrid vehicles decrease demand for ethanol in the auto sector, Gregg is looking to opportunities in aviation like Thompson.
“I can’t control how technology comes forward in the future. What I can do is step up to the plate and meet the challenges that are laid before us here and now and adapt like all farmers always have over time,” said Gregg.
The ‘Grand Challenge’
Non-military flights within and departing from the U.S. account for 11% of the nation’s transportation-related emissions. But, aircraft are more difficult to electrify than motor vehicles because of how heavy today’s batteries are. All of the passenger and cargo space in a twin jet airliner would have to be replaced with batteries for it to take off, and even then, the plane could only fly for under an hour, according to the University of Michigan’s aerospace engineering department.
Corn and other biomasses such as animal fat, forestry residue, municipal waste and sugar cane offer an alternative to the dirty crude oil in conventional jet fuel. After additional processing, corn ethanol can be blended with, or entirely replace, petroleum-based kerosene in existing jet engines.
The Biden administration established a “Grand Challenge” to produce 3 billion gallons of sustainable aviation fuel — defined as jet fuel with 50% less emissions than conventional jet fuel — annually by 2030. The ultimate goal is to make enough of this fuel to meet all national demand — estimated to be 35 billion gallons — by 2050.
Airlines are on board. United and Delta have both signed advance purchase agreements with numerous aspiring sustainable aviation fuel producers. Currently, however, sustainable fuel only accounts for 0.1% of the jet fuel used by major U.S. airlines, according to the latest federal government data.
The challenge is that creating sustainable aviation fuel costs three to five times more than conventional jet fuel and securing biomasses at scale is challenging. Most of the 24.5 million gallons produced last year were created with discarded cooking oil and animal fat, which are available in limited quantities.
“When you think of the scale of something like this — of the amount of feedstock that’s required — it’s billions of pounds of raw materials,” said Gruber, CEO of Gevo. “Just fundamentally a lot of stuff.”
The 90 million acres of homegrown corn could be a solution to the supply shortage. But, the financial feasibility of the additional processing required to create aviation fuel from corn hinges on access to government incentives, including generous new Inflation Reduction Act tax credits.
Corn ethanol-to-jet fuel doesn’t meet the 50% emissions reduction benchmark for sustainable aviation fuel under most environmental impact models. Significant emissions come from clearing land for corn fields, applying fertilizer to the field and biorefining to isolate the corn starch used to make ethanol.
Climate-smart agriculture practices such as planting cover crops, practicing no-till and using less fertilizer can reduce emissions associated with corn production. But, there isn’t a uniform methodology to determine how much yet.
In late April, long-awaited criteria for an aviation fuel tax credit for 2023 and 2024 were announced.
While it’s too late for most fuel producers to make plans to cash in on this credit, the guidance signals that the Biden administration is keen to foster the corn ethanol-to-jet fuel market with future incentives, including a tax credit for 2025 to 2027.
However, environmental interest groups caution that there must be a peer-reviewed methodology to measure the precise impact of climate-smart practices on emissions before the federal government can write any longer term policy.
“We have to hand out rewards based on the measurable ability to have an impact on reducing climate pollution into the environment,” said Mark Brownstein, senior vice president of energy transition at the Environmental Defense Fund.
On the farm
Gevo has been working with farmers to monitor how climate-smart agriculture practices affect emissions and distill the impact into a carbon intensity score, a number that reflects how much carbon is emitted per bushel of corn produced.
“Agriculture has undergone a revolution. It’s not what it was,” Gruber said. “We now have the ability to measure stuff we could never measure before, track things like we’ve never tracked before.”
Gevo is using a $30 million federal grant to reward farmers for lowering their scores. Eventually, the company anticipates the money will flow naturally as less carbon-intensive corn becomes more valuable in the aviation fuel marketplace. Tax incentives will help spur this.
“We have to do a better job for the planet, but we also have to be financially stable,” said Shawn Feikema, a third-generation farmer in the southwestern corner of Minnesota and an early participant in Gevo’s tracking program. “Sustainability doesn’t work in any sense of the word unless it’s financially sustainable.”
He appreciates the program and believes a marketplace based on corn’s carbon intensity will encourage more farmers to adopt climate-smart practices. Illinois farmers Thompson and Gregg, who aren’t being paid for carbon reductions but are experimenting with climate-smart practices, agree.
“As a producer, you’ll evolve to participate in it if you want to stay viable,” Gregg said.
Climate-smart agriculture practices also increase yield over time, so farmers can be more productive on less land. Converting forests and grasslands into agricultural production is a significant source of farming emissions and threatens native ecosystems.
Planting cover crops, reducing tillage and minimizing fertilizer application are also solutions to other environmental challenges like water pollution from fertilizer run-off that contributes to the dead zone in the Gulf of Mexico.
“Everything that a farmer does to produce a crop of lower carbon intensity is good for the soil and good for the plants,” said Chandler Mazour, who leads Gevo’s tracking program.
At the plant
Just changing how corn is grown won’t lower the carbon intensity of ethanol enough. Changes will also have to be made at the ethanol plant.
One key way ethanol producers are looking to drive down emissions at their plants is carbon sequestration: capturing carbon dioxide and storing it underground.
However, the nascent process is controversial. Securing carbon underground is energy intensive and many environmental groups warn sequestration may encourage the continued use of fossil fuels over renewable fuel sources.
Carbon sequestration has a particular appeal for the ethanol industry, though — especially those in Illinois. The carbon dioxide released during ethanol production is nearly pure, and porous sandstone formations filled with salty water deep under central Illinois are optimal storage sites.
One Earth Energy, an ethanol plant in Gibson City, seeks to build a 6-mile pipeline from its plant to an injection site in a neighboring county. The pipeline would significantly lower emissions from One Earth Energy’s plant and open the door for it to get a corner on the burgeoning aviation fuel industry, an opportunity the plant is uniquely positioned to seize, said Steve Kelly, the company’s CEO.
“With Chicago O’Hare, Midway and Rockford — a major freight airport — we’ve got huge opportunities within 120 miles of this plant right now,” he said.
Illinois is also one of the first states with its own per-gallon tax incentive for airline carriers using aviation fuel that reaches the same 50% emissions reduction benchmark as the federal credit.
The benefits would trickle down to Illinois family farmers such as Thompson and Gregg.
However, One Earth Energy’s pipeline and others have faced significant local backlash, primarily due to unknown health impacts of the relatively new technology and eminent domain concerns.
Last fall, after fierce community opposition and difficulty securing permits, Navigator CO2 Ventures withdrew its application to build a 1,350-mile pipeline across five states to capture carbon dioxide from over 30 Midwest ethanol plants and store it in Illinois.
Kelly says One Earth Energy’s project is different. Its pipeline would only be a few miles, within state borders, avoid local aquifers and all landowners along the pipeline route signed voluntary agreements so eminent domain wouldn’t be used.
The pipeline would also bring Illinois an estimated $367.2 million in economic impact from 2025 to 2030, according to a recent analysis by Sandy Dall’Erba, an environmental economist at the University of Illinois at Urbana-Champaign.
Powering plants with renewable energy, such as wind and solar, will offer some emission reductions, but
U.S. Agriculture Secretary Tom Vilsack said in an interview with Reuters last fall that the ethanol industry will need carbon capture and sequestration for corn ethanol-to-jet fuel to reach the 50% emissions reductions benchmark.
“(If the pipeline isn’t approved) we’re kinda stuck in just producing what we’re producing today and selling into that market, and then we’ve kind of lost control of our destiny here,” Kelly said.
In the future
Freedom Pines Fuels, the world’s first-ever ethanol-to-jet aviation fuel plant, opened in Soperton, Georgia, in January. The facility, which is owned and operated by the Illinois-based sustainable fuels company LanzaJet, has pledged to produce nine million gallons of aviation fuel this year, a modest start compared to the 35 billion that the White House has set out to produce by 2050.
LanzaJet’s CEO Jimmy Samartzis hopes the federal government updates policy and provides more emission reductions incentives to ensure domestic corn ethanol qualifies for sustainable aviation fuel production.
For now, the company is only using domestic corn-based ethanol for testing and will begin commercial production at the Georgia-based plant with sugarcane ethanol from Brazil, which has a lower carbon intensity score than corn ethanol across emissions models.
LanzaJet hopes to use a variety of low-carbon domestic ethanol in the future and entered a partnership to create a 120-million-gallon-per-year corn ethanol to aviation fuel plant with Illinois-based ethanol producer Marquis Energy in 2022. Both companies are still assessing the project’s feasibility as the government determines its long-term standards for sustainable aviation fuel.
LanzaJet is also exploring new ways to create ethanol from corn.
“We are doubling down on the U.S. ethanol industry,” Samartzis declared.
The company has partnered with Southwest Airlines to explore whether ethanol can be made more sustainably from corn stalks, leaves and cobs left over after harvest. The collaboration is in the early stages but he believes this could be another opportunity for American corn farmers. And, if it is, farmers are eager.
“Agriculture is the best kept secret on all of these environmental mitigation issues, and we’re where we’ve always been: right underneath your nose,” said Gregg, the seventh-generation farmer in east central Illinois. “If they put the infrastructure and the rules in place and all the pieces line up, there’s no doubt in my mind that the American farmer can meet this challenge, goal and demand.”
