‘Green’ hydrogen holds big potential in bid by Iowa, neighbors for $1 billion in U.S. aid

Source: By Donnelle Eller, Des Moines Register • Posted: Tuesday, May 23, 2023

  • Iowa, Nebraska and Missouri are seeking a $1 billion federal grant to build plants producing “green” hydrogen
  • The hydrogen, a key ingredient in ammonia fertilizers, would be produced with wind and solar energy
  • A $400 million plant proposed near Garner would produce the fertilizer, supplying local farmers
  • A Story County plant would use hydrogen to expand renewable natural gas production

GARNER — A $400 million “green” ammonia plant that three Iowa natives propose building near here could play an important role in helping slash the farm carbon emissions that contribute to climate change.

Greenfield Nitrogen also is key to a multistate effort to land a $1 billion federal grantthat’s expected to create high-paying jobs and spark $4 billion in new business development in the region.

It’s one of two green hydrogen plants planned in Iowa, potentially making them the state’s first.

Greenfield Nitrogen and Verbio, a German-owned renewable natural gas company with a Story County plant, are part of the Iowa-Nebraska-Missouri bid to become a regional hydrogen hub, a highly competitive quest that has state governments, scientists and companies partnering across the country to land a total of $7 billion in investment.

Hydrogen is seen as pivotal to the nation’s transition to clean energy, providing fuel for hard-to-electrify industries, like agriculture, aviation and marine transport. President Joe Biden is pushing the U.S. to reach net-zero emissions by 2050, cutting the greenhouse gases that cause climate change.

More:Why are fossil fuels bad for the environment? Here’s what they are and how they impact our environment.

Karl Theis, who is developing the Greenfield Nitrogen project along with his sister, Linda Thrasher; Reed Kuper; and fellow agricultural investors, said Iowa and other Midwest states are “poised to lead in this new green economy.”

Greenfield Nitrogen will use hydrogen produced with renewable energy to make ammonia ― NH3 ― a nitrogen fertilizer widely used to grow corn and other crops. And Verbio plans to invest $90 million to build a pilot hydrogen plant to expand its renewable natural gas production.

The projects will require large investments in wind, solar or other renewable energy to power them. Verbio puts its investment at $100 million.

“We’re in exactly the right spot for hydrogen to take off,” Theis said, since Iowa combines large-scale renewable energy generation and high demand for ammonia fertilizer.

Nearly 60% of Iowa’s electricity comes from wind, the highest share nationally. And the state is the top corn producer, using about 850,000 tons of nitrogen fertilizer in 2021 to produce 2.5 billion bushels across about 12.5 million acres, the U.S. Department of Agriculture reported.

More:Roots of Peace founder wins World Food Prize for reviving farms in former minefields

Theis envisions projects similar to Greenfield Nitrogen being built across Iowa and other Midwest states, helping fill local farmers’ fertilizer needs, creating jobs and boosting rural economies. He expects hydrogen will attract local investment, much as ethanol did nearly two decades ago as Iowa became the nation’s leading producer of the renewable fuel.

So far, north Iowa farmers and residents have invested nearly $8 million to support the project.

“That’s the real challenging part,” keeping profits in local economies and not siphoned off by multinational corporations, said Michael Reese, the renewable energy director at the University of Minnesota West Central Research and Outreach Center in Morris.

Greenfield Nitrogen expects to create hundreds of construction jobs, though the plant itself will require only 30 full-time positions. Still, the project will create demand for new equipment like electrolyzers, now being manufactured in Fridley, Minnesota, that are critical to hydrogen production, and blades and towers for wind generation units like those made at a plant that is gearing up to reopen in Newton.

“We’d like farmers, rural cooperatives and local businesses to have a role in this development,” Reese said.

Giving farmers a way to cut greenhouse gas emissions

Most ammonia fertilizer is made using natural gas or other fossil fuels, contributing about 2% of the carbon dioxide emissions globally, Reese said. That’s coming from fewer than 300 ammonia plants globally.

“We have a huge greenhouse gas emission issue,” Reese said, and “taking 2% of it out is a big deal.”

Developed countries like the U.S. and developing countries like India have agreed to cut greenhouse gas emissions and limit global warming to 1.5 degrees Celsius. The Biden administration, for example, said May 11 that it would require most fossil fuel power plants to dramatically cut their greenhouse gas pollution over the next two decades.

Theis said green ammonia gives farmers a chance to cut their carbon footprint by 6.6%. “Now farmers don’t have an option” for significantly cutting carbon emissions, said Kuper, who farms near Osage. “This gives farmers an option.”

More:Iowa farmers head to fields with record high production costs, lower corn, soybean prices

And the use of green ammonia fertilizer to grow corn, wheat, barley and other crops ripples through the supply chain, lowering the carbon footprint of the products they go into, like ethanol, hamburger, bread and beer, Reese said.

Greenfield Nitrogen plans to produce ammonia with zero carbon emissions. Using electrolysis, powered by solar or wind energy, the company will separate the hydrogen from oxygen molecules in water, H2O. Then it will use a chemical process to combine the hydrogen with nitrogen from outside air to make ammonia.

The project, providing about 96,000 tons of ammonia annually, will serve about 20% of the farmers within about 60 miles of the plant, said Thrasher, a former fertilizer executive who grew up in Iowa and lives in Minneapolis.

Verbio also will use renewable-energy powered electrolysis to break down water to create green hydrogen that the company will combine with carbon dioxide, captured from the biorefinery’s operations, to produce methane, CH4. It will be blended into the renewable natural gas the company now produces.

It will be the third renewable fuel process at the Nevada plant. Verbio buys 90,000 to 100,000 tons of stover annually — the corn stalks, cobs and other residue that remain in fields after harvest — from area farmers to make renewable natural gas, said Greg Northrup, CEO of Verbio’s North America Holdings Corp.

The stover goes into massive anaerobic digester tanks, where it ferments, creating methane that’s captured and cleaned. It’s then pumped into an Alliant Energy natural gas pipeline, indistinguishable from the fossil fuel that’s used to heat homes and run businesses.

More:Microbe fertilizer companies look to expand on Iowa farms after big 2022. Do their products work?

Later this year, Verbio also plans to begin producing about 65 million gallons of corn ethanol at the plant, originally designed by DuPont to produce a next-generation, low-carbon ethanol using stover. Stillage, a byproduct from making ethanol ― typically dried and fed to cattle and other livestock ― will go into the digesters to produce more renewable natural gas, Northrup said. “We’ll start small and hopefully develop a full project down the road,” he said.

Is carbon dioxide reuse an alternative to pipelines?

Using the carbon dioxide captured from ethanol and renewable natural gas production closes the emissions loop at the plant, Northrup said, turning what’s considered a “CO2 waste into an asset, which is globally unprecedented at an industrial scale.”

That presents an alternative to sequestering it, said Reese, the University of Minnesota expert. It’s a controversial issue in Iowa, where three companies propose to capture and sequester carbon dioxide emissions from ethanol, cement and other energy-intensive industries. They’re running into opposition from landowners, who are fighting the extensive pipelines needed to transport the liquefied gas to underground sequestration sites.

One of the carbon-capture pipeline companies, Navigator CO2, said Thursday it had reached an agreement with Infinium, a California alternative fuel company, to provide 600,000 tons of carbon dioxide to make low-carbon fuel using green hydrogen. The location of the future plant that would use the carbon was not identified. Navigator anticipates sequestering 15 million metric tons of captured carbon annually.

Reese said he’d like to see the same tax credits that have been offered to sequester carbon dioxide — now some of the richest climate-related incentives — also provided for finding ways to use it, even though it would cause some emissions.

“We may have missed the boat a little bit on CO2,” he said. “It’s a problem, like fertilizer is, but it can also be part of the solution.”

More:Pipelines operated by oil companies for decades without permits, but Iowa law limits penalties

“There are many uses for CO2,” Reese said, noting that making sustainable aviation fuel is one large opportunity as well as producing renewable natural gas. That’s why it’s “so hard to see that large of an investment going to sink carbon someplace where we won’t be able to use it,” he said.

States, corporations race for billions in federal funding

The U.S. Department of Energy plans to provide $7 billion to support up to 10 hydrogen hubs across the country, thanks to the 2021 Bipartisan Infrastructure Act. The federal agency says it’s received applications from nearly 80 groups, made up of state governments, researchers and corporations, requesting nine times the money available.

Additionally, the 2022 Inflation Reduction Act will provide $270 billion in tax credits to support clean energy production.

Another big project in the Iowa-Nebraska-Missouri regional hub bid is Monolith, a Hallam, Nebraska, company that produces carbon-free hydrogen and carbon black, a substance with numerous industrial uses, via a pyrolysis process that employs renewable and conventional natural gas. The company last year landed $300 million from large investors and a $1 billion U.S. Department of Energy loan guarantee in 2021 to expand.

Northrup said federal support is critical for the Verbio project to move forward.

“We want to be part of producing the next generation of fuel,” Northrup said. “But it’s a significant financial investment. We need to make sure that we’re pursuing this in a way that makes good sense.”

Theis said Greenfield Nitrogen will be able to produce three times the ammonia initially planned if it’s part of a hydrogen hub. The clean energy production tax credits are critical to enabling green ammonia to compete with ammonia made from natural gas and other fossil fuels, he said.

Even though the percentage is declining, about 30% of U.S. nitrogen fertilizer is imported, said Theis, who like Kuper also farms near Osage. Iowa has three large fertilizer manufacturers: Iowa Fertilizer Co. near Wever, CF Industries near Sioux City, and Koch Fertilizer near Fort Dodge.

In Garner, Greenfield Nitrogen will be next door to a CF Industries distribution hub. Pipelines and other infrastructure left behind by another energy company are available to move the green ammonia to the farmers who need it, Theis said.

But breaking into an industry that’s become more concentrated is difficult, the developers said. Usually farmers aren’t able to own a piece of nitrogen production without buying shares in publicly traded companies like CF Industries, Thrasher said.

“We’re in the breadbasket of America, but farmers don’t produce their own fertilizer,” Kuper said. “But we can.”

Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at deller@registermedia.com or 515-284-8457.