US-headed renewable natural gas (RNG) and renewable fuels company Aemetis, Inc has announced that its new subsidiary Aemetis Carbon Capture Inc has "opened negotiations" for the annual supply of 1.6 million tonnes of carbon dioxide (CO2) for Carbon Capture and Sequestration (CCS) to be located at or near the two Aemetis renewable fuels plant sites in Central California near Modesto. It is anticipated that the capacity of each injection well site will be approximately one million tonnes per year.
Recently, the Aemetis Carbon Capture, Inc. subsidiary was established to build carbon sequestration projects to generate Low Carbon Fuels Standard (LCFS) and IRS 45Q credits by injecting captured carbon dioxide (CO2) into wells which are monitored for emissions to ensure the long-term sequestration of carbon underground.
California’s Central Valley is well established as a major region for large-scale natural gas production and CO2 injection projects due to the subsurface geologic formation that retains gases.
Carbon Storage as a Service
When related to transportation fuels produced for sale in the California market, CO2 sequestered underground is estimated to generate revenue of approximately US$200 per tonne under the California Low Carbon Fuel Standard (LCFS). The IRS 45Q tax credit value for sequestered CO2 is approximately US$50 per tonne.
The combined US$250 per metric tonne of revenues from the capture and storage of CO2 is expected to increase significantly due to pending Congressional legislation to support CCS.
The existing California LCFS and IRS 45Q carbon capture and sequestration programs could potentially generate approximately US$500 million per year of revenues from injecting a combined two million metric tonnes of CO2 per year at these two plant sites. The Aemetis Carbon Capture projects are expected to benefit producers of traditional and renewable fuels that supply California by offsetting carbon emissions with carbon sequestration, said Eric McAfee, Chairman, and CEO of Aemetis.
Ethanol plants economic CCS sites
A Stanford University Center for Carbon Storage study issued in October 2020 cited ethanol plants in Central California as the most economic site for CCS in California, comparing 61 carbon emission facilities in the state.
The other emission sources in the study that produce transportation fuels, primarily oil refineries, are the primary potential suppliers of CO2 to the Aemetis carbon storage injection wells and monitoring facilities.
The planned 52 dairies in the Aemetis Biogas project are expected to produce approximately 50 000 tonnes of CO2 each year. The renewable jet/diesel plant under development is expected to produce more than 200 000 metric tonnes per year of CO2.
The remaining 1.6 million metric tonnes of annual CO2 injection capacity are expected to be filled by compressed CO2 delivered via truck or rail to the two Aemetis CCS sites from renewable diesel plants and refineries that supply fuels to the California market.
The Aemetis Carbon Zero project, the Aemetis Biogas renewable natural gas (RNG) project, and energy efficiency upgrades to the Aemetis Keyes plant include US$57 million of grant funding and other support from the US Department of Agriculture (USDA), the US Forest Service, the California Energy Commission (CEC), the California Department of Food and Agriculture (CDFA), California Alternative Energy and Advanced Transportation Financing Authority (CAEFTA), and Pacific Gas & Electrical Co’s (PG&E) energy efficiency program.