Ethanol Maker Valero to Join $8 Billion Carbon Pipeline Project
(Bloomberg) -- US fuel refiner Valero Energy Corp. is joining a massive carbon-capture and storage project in the heart of US corn country, lending support to a proposed pipeline plan that faces major hurdles.
The company, one of the country’s largest gasoline producers and its No. 2 corn ethanol maker by market share, has agreed to transport greenhouse-gas pollution from eight of its facilities on Summit Carbon Solutions LLC’s proposed $8 billion pipeline, according to Summit. The agreement comes after Poet LLC, the world’s largest producer of the biofuel, signed onto the project earlier this year.
Summit said the addition of Valero means more than half the US corn ethanol industry will be part of the multi-state pipeline project, encompassing a total of 57 plants across the upper Midwest.
“That reflects how important it is,” said Bruce Rastetter, founder of Summit Agricultural Group, which formed Iowa-based Summit Carbon in 2021. “The opportunity is to add better markets domestically and then ship that value-added product worldwide to countries that are demanding more sustainability.”
Supporters say the pipeline is critical to help the agriculture industry shrink its carbon footprint and profit from new markets for renewable liquid fuels — such as sustainable aviation fuel — at a time when electric cars are threatening the future of corn ethanol.
Both Poet and Valero had been part of a rival project that was abandoned late last year after running up against regulatory hurdles and opposition from some farmers. Summit faces similar obstacles and has said it’s learned from earlier mistakes to communicate better with landowners whose property is along the proposed route of roughly 2,500 miles.
Summit is proposing to build the pipeline through five states — Iowa, Minnesota, Nebraska, South Dakota and North Dakota — and carry 18.5 million metric tons of carbon dioxide a year.
Valero didn’t respond to a request for a comment.
©2024 Bloomberg L.P.
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