Greenfield Pivots Towards Fuels Of The Future, But Where To Invest?
Greenfield Global, the largest ethanol producer in Canada, and one of the largest in North America, plans to make significant investments to support the global shift to low carbon fuels, including plans to pivot towards fuels of the future — whether by process or type — such as renewable natural gas (RNG), renewable diesel, sustainable aviation fuel (SAF), and green hydrogen and derivative e-fuels such as marine fuel methanol.
The question Greenfield is presently asking at its Toronto headquarters, is where to locate these large-scale capital investments to make these fuels, with simple and massive incentives in the 2022 Inflation Reduction Act (IRA) presently titling the scale towards locations in the U.S. The company presently operates at 18 locations around the world.
To learn more about Greenfield’s plans for future clean fuel production, as well as where the plants to produce these fuels may be located, the Bulletin interviewed Malcolm West, the company’s EVP and CFO, and VP of industry and government affairs Andrea Kent.
Key drivers for clean fuels
“Worldwide, not just the U.S., governments are strategically creating attractive policies and programs to compete in the growing market for clean fuels, including significant support going to help de-risk early-stage low carbon fuels projects,” says Kent.
The key drivers for these policies and programs today, according to Kent, are: the need for carbon reduction to combat climate change; rising security of supply concerns, with global geopolitics again rearing its ugly head; and concerns about the reliability of fuel supplies, whether for geopolitical or weather-related reasons.
West, who has been with Greenfield since 1991, says the original drivers for government policies and programs to promote biofuel production and consumption — such as mandated ethanol blending requirements for gasoline in Canada and the U.S. — were introduced to counter local air pollution, and to promote rural economic development, including in the agricultural sector, both of which remain pertinent today.
Corn-based versus cellulosic ethanol
Greenfield has no plans to produce second generation cellulosic ethanol, after a failed attempt to develop a commercially viable production process over 10 years ago — efforts by several U.S. biofuel companies were similarly abandoned — but ethanol remains very much a part of the company’s future. Greenfield is planning projects to expand production capacity of corn-based ethanol, while improving efficiencies and processes to produce low carbon intensity ethanol, according to West.
“If you go back 15 years, cellulosic ethanol was considered to be the Holy Grail of biofuels,” says West. “But despite millions and millions of dollars being spent, including on R&D for advanced enzymes and processing methods for conversion of cellulosic biomass to ethanol, practical considerations and economic realities got in its way.”
The three core challenges cellulosic ethanol has largely failed to overcome, according to West, are: high capital intensity, with the capital cost of a cellulosic ethanol plant eight to ten times greater than a corn ethanol plant; supply chain issues, including difficulty securing cellulosic biomass 24/7, the high cost of sourcing it, and impurities in the biomass; and lastly the carbon score of cellulosic ethanol not being materially better than corn-based ethanol.
“Today, commercial production of cellulosic ethanol is limited to some Brazilian production,” says West. The core advantage Brazil has over countries in North America for producing cellulosic ethanol is bagasse from sugar cane is a readily available source of waste biomass for cane refineries, whereas in North America, only the corn kernel is harvested, with the rest of the plant, known as stover, left in the field.
But Greenfield remains committed to lowering the carbon intensity of its corn-based ethanol production, despite already producing some of the lowest carbon intensity ethanol in North America. The company is currently working to decarbonize and expand ethanol production capacity at its Varennes, Quebec facility, with the goal of making it net-zero emissions in the longer term.
“Ethanol will play an increasingly important role as a widely available and affordable low carbon fuel additive for gasoline as policies such as Canada’s Clean Fuels Regulations kick in and ramp up,” says West.
Fuels of the future
“Our dedicated team of scientists and research engineers are focused on developing the next generation of low-carbon renewable fuels,” says West. “We believe that better biomass to energy solutions exist [than cellulosic ethanol], including using organic waste biomass for RNG, and using other biomass waste streams for the production of sustainable aviation fuels (SAF). We presently have R&D programs ongoing on a number of fronts and in various locations.”
Renewable natural gas
And this research is already bearing fruit, with Greenfield’s engineering and technology team at its Chatham, Ontario research facility having developed advanced anaerobic digestion technologies that accelerate the conversion of organic waste into RNG, including a patented bio-hydrogen reactor that potentially increases the energy yield from organic waste processing.
“We recently completed a major expansion of the RNG facility at Varennes, increasing annual processing capacity from 40,000 to 120,000 metric tonnes of organic waste per year, with most of this waste collected curbside from a population base of about 450,000,” says West. “We are considering whether to establish another RNG facility of similar scale adjacent to our Chatham ethanol plant.”
Clean diesel and SAF
At the same time, in collaboration with the University of Alberta Faculty of Engineering, and with federal funding, Greenfield is working on two advanced fuels pathways: the conversion of biomass to biocrude for processing into SAF and renewable diesel; and conversion of ethanol to clean jet fuel.
“Although there are many steps along the way, the timing to commercialize ethanol to clean jet fuel is likely quicker than SAF from biomass, maybe six to eight years, partly because we don’t have to create a supply chain infrastructure to produce biocrude from biomass” says West.
In the interim, Greenfield is jumping onto the synthetic fuels bandwagon, taking advantage of the biogenic carbon dioxide produced at its Varennes ethanol plant to expand the types of fuels it produces, according to West.
“By 2026, we plan to have a large-scale electrolyzer operating at our Varennes distillery producing green hydrogen, using renewable power from Quebec’s vast hydroelectricity capacity,” says West. “Hydrogen from this facility, along with biogenic carbon dioxide from existing ethanol operations, will be fed to a methanol synthesis facility to produce near-zero carbon methanol for marine fuels and other green chemistry applications. And in the not-too-distant future, we may also produce electronic kerosene [i.e. SAF] from the same ingredients at this facility.”
Where to invest?
Despite plans to boost clean fuels production in Canada in the shorter term, Greenfield is seriously considering committing future investment dollars to projects in the U.S. to take advantage of IRA-related investment and production credits thereafter. “Investment goes where you get the highest return,” says West, with the company’s ethanol plant in Minnesota strategically located to provide clean fuels to both the U.S. and Canadian market, amongst others.
The IRA is offering more than US$200 billion in energy-related subsidies over the next decade to boost renewable fuel production in the U.S., whereas the Canadian government is presently offering some support for clean hydrogen production, but is not quite matching support programs for the construction of low-carbon fuels facilities in Canada, according to West.
“The projects we are presently undertaking, and ones we are contemplating, are extremely expensive,” he says, mentioning a $500 million price tag for Greenfield’s low carbon fuels expansion projects in Quebec.
“Greenfield understands that the Canadian government is looking at options to protect Canada’s competitiveness, especially relative to the U.S., with plans to provide additional support for clean fuels production in the upcoming federal budget,” says Kent. “But the federal government has to get it right both in terms of simplicity of the support programs and the generosity of them.”
“This will be incredibly crucial to ensure that Canada does not become a net importer of renewable fuels as the country’s demand for low carbon fuel increases under federal regulations like the Clean Fuels Regulations and carbon pricing.”
- New Energy