Biofuel producers are taking up carbon capture and storage technology faster than any other industry in the United States as demand grows for cleaner fuels for shipping and aviation.

Four out of every ten carbon capture and storage projects announced since 2018 in the United States are for ethanol production facilities, according to Cipher’s Cleantech Tracker.

Many U.S. ethanol producers are betting on carbon capture technologies to reduce carbon dioxide emissions from making corn-based biofuels. Ethanol’s characteristics — smaller plants and denser streams of CO2 emissions — make carbon capture easier and cheaper compared with other industries, according to a recent Congressional Budget Office (CBO) study.

The ethanol industry has already set a precedent for using carbon capture and storage, said Shailesh Sahay, an attorney with the law firm Baker Botts who specializes in the biofuels industry. As an example, Sahay pointed to the multinational food processing company ADM, which has been capturing and storing carbon dioxide in Illinois for a decade.

This precedent could offer a glimpse into efforts to capture carbon from larger — and more expensive — technologies, including direct air capture (DAC), which scientists say is essential to help stave off the worst impacts of a warming planet.

“If we can’t even capture and store the cheap CO2, how are we going to capture and store more expensive sources of industrial CO2, not to mention much more expensive CO2 from DAC?” Sahay said.

Biofuels, which can be directly dropped into engines as replacements for petroleum, are mainly made from corn and soybeans, and to a lesser extent from different types of plant and animal waste. Ethanol is the most widely produced biofuel, made from grinding, harvesting and fermenting corn.

The U.S. has been the world’s largest producer and consumer of biofuels since 2005, when Congress enacted a national renewable fuel standard mandating more blending of biofuels — mostly corn ethanol — into the nation’s gasoline supply.

President Joe Biden’s signature climate law, the 2022 Inflation Reduction Act, could drive increased ethanol production. Ethanol producers may receive tax credits for clean fuel production, making ethanol-based sustainable aviation fuel and for capturing carbon emissions to store or use.

Cipher’s cleantech tracker shows at least 41 ethanol production facilities have announced plans since 2018 to install carbon capture technology at plants across the Midwest, Colorado and California but are yet to start construction. That’s out of about 102 announced carbon capture projects overall in the past six years, including 19 hydrogen production projects.

To date, only two ethanol producers in the country, Red Trail Energy in North Dakota and ADM’s Illinois Industrial, are capturing and storing CO2 on site. Two facilities in Kansas are also capturing carbon but instead of storing the gas they send it out for use in nearby oil recovery operations, which the CBO notes is one way producers of ethanol, natural gas and fertilizers are making the economics of carbon capture work. To be sure, critics question the climate benefits of the practice.

(Our tracker doesn’t show data for all facilities built before 2018 because the primary focus of the underlying dataset is projects announced since 2018.)

Carbon capture spending at ethanol facilities makes up just 3.5% of the $50.2 billion invested in this technology across all industries since 2018 according to Cipher’s analysis.

Because it’s easier and cheaper to capture carbon from making ethanol than in other contexts, a large gap persists between the high project number and low overall investment share.

Fermenting fuel from corn yields a largely pure stream of CO2 that can easily be captured. The CO2 released from other processes, like burning fossil fuels or taken from the air, must be cleaned because it’s mingled with other polluting gases. Those plants are also larger, requiring larger and more expensive capture equipment.

Capturing carbon costs about $15 to $35 per metric ton when making ethanol, processing natural gas and making ammonia for fertilizer, compared to an estimated $50 to $120 per metric ton for power generation and steel, iron and cement making, according to the CBO study.

To help keep costs down, a majority of Midwest ethanol facilities, including Sioux Corn Processors in South Dakota and Granite Falls Energy in Minnesota, are planning to send captured CO2 to a single storage site in North Dakota via a dedicated pipeline developed by Iowa-based Summit Carbon Solutions, said Sahay.

“Collecting the CO2 and sequestering at a single site distributes the cost of sequestration among all the plants, making the endeavor much more affordable,” Sahay said.

Building a pipeline can be expensive and run into local opposition, as recent developments indicate. The company Navigator CO2 canceled its planned CO2 pipeline in the Midwest in October due to permitting issues in South Dakota and Iowa. Summit Carbon is facing similar issues in these states.

But the ease of capture coupled with the ability to share transport and storage is “definitely pivotal” for ethanol producers, said Paola Perez Pena, principal research analyst for clean energy technology with S&P Global Commodity Insights.

Although biofuels are increasingly seen as a cleaner alternative in sectors like trucking and aviation where electrification is costly and complex, they have come under growing scrutiny over their environmental impacts.

Critics worry about the extent to which corn-based ethanol diverts the crop from food supplies to fuel. Others express safety concerns, especially since a CO2 carry pipeline in Mississippi exploded in 2020. And last year, a National Academy of Sciences study cast doubt on previously conventional wisdom that ethanol was a cleaner option than gasoline.

Notwithstanding that scrutiny, ethanol producers may benefit from federal tax credits for clean fuel and sustainable aviation fuel if their fuel’s carbon intensity (how much CO2 is emitted in the process of making ethanol from corn) is low enough. The government is expected to soon release a model that helps decide if corn-based ethanol qualifies.

If not, ethanol may remain confined to current uses. “CCS will play a key role to reduce the carbon intensity of ethanol producers, which increases their opportunities to play a bigger role in clean fuel production,” said Perez Pena.