BlackRock-Backed Navigator Scraps US Corn Belt CO2 Pipe Plan

(Bloomberg) -- A BlackRock Inc.-backed plan to build a pipeline that would capture carbon emissions from the US corn ethanol industry was scrapped in the face of regulatory obstacles and opposition from landowners.

Navigator CO2’s proposal to build more than 1,300 miles (2,092 kilometers) of pipeline across five Midwest states — known as the Heartland Greenway project — had been backed by investors including BlackRock, top ethanol maker Poet LLC and fuel producer Valero Energy Corp. The cancellation raises questions about the viability of similar projects supported by large agriculture and fuel companies. 

“Given the unpredictable nature of the regulatory and government processes involved, particularly in South Dakota and Iowa, the company has decided to cancel its pipeline project,” Omaha, Nebraska-based Navigator CO2 said in a statement.

Summit Carbon Solutions, which seeks to build an even bigger carbon dioxide pipeline, was denied a permit by North Dakota in August and is asking officials to reconsider the decision. Summit Carbon, a unit of Summit Agriculture Group, said it aims to gain from Navigator’s departure. 

“We are welcoming their plants into our pipeline,” Summit Agriculture Chief Executive Officer Bruce Rastetter said in an interview.

While Navigator hasn’t had any conversations with Summit, the plants that had contracts with the Heartland Greenway project will be free to explore other options, said Elizabeth Burns-Thompson, a Navigator spokeswoman. 

Projects to capture emissions from ethanol plants are seen as crucial for the industry to benefit from potentially lucrative tax credits in President Joe Biden’s landmark climate bill. The incentives are aimed at shifting to a lower-polluting energy economy in an effort to fight climate change. 

(Updates with rival’s comments in third paragraph)

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