Bank of America will be providing funding for an ethanol plant in Underwood, North Dakota which is using carbon capture to prevent its emissions from entering the atmosphere and generating 45Q tax credits.
The Blue Flint Ethanol plant is owned by Harvestone Low Carbon Partners (HLCP) with $205 million in tax equity funding being provided by Bank of America. The plant has been capturing its CO2 since late 2023, with 125,000 metric tons of CO2 already captured and sequestered. The targeted annual capacity for the plant will be to sequester 200,000 metric tons of CO2.
HLCP CEO, Jeff Zueger said: “Blue Flint’s carbon capture and sequestration project has helped the facility dramatically reduce emissions, produce ethanol with a significantly lower carbon intensity score, and strengthen the ethanol and agricultural markets for North Dakota.
Relevant: Harvestone CCS Project Marks New CO2 Injection Milestone
As the sole controller of the entire value chain, HLCP was in a prime position to design a tax equity financing arrangement that allowed Bank of America to benefit from the 45Q federal tax credits. Additionally, Bank of America could opt to purchase 45Z clean fuel tax credits produced by the biorefinery facility when they became available.
“We have built a strong track record of innovative financing transactions for decarbonization technologies including carbon capture and sequestration. We are engaging with all of our clients including partners like Harvestone and providing them a full suite of financial solutions tailored to meet their needs as they take steps to transition to a more sustainable future,” said Karen Fang, Global Head of Sustainable Finance at Bank of America.
The tax credits associated with the Blue Flint assets are generated through the use of carbon capture and sequestration (CCS) technology. This system captures biogenic carbon dioxide emissions produced during the manufacturing process. Once captured, the CO2 is compressed into a liquid state and securely and permanently stored in a deep underground geological formation using a Class VI injection well.
The biorefinery is the first project to capture its carbon emissions after the passing of the Inflation Reduction Act back in 2022, showcasing the difficulty the industry and financial backers face when developing projects for ethanol carbon capture.
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