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Iowa's largest fertilizer plant signs carbon transportation and storage agreement

Highlights

Over 1 million mt/year of CO2 will be stored

Agreement utilizes Heartland Greenway pipeline

A Midwestern carbon management company has forged an agreement with Iowa's largest fertilizer plant to transport and store 1.13 million mt/year of carbon using a carbon capture pipeline system, the companies said Nov. 29.

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The Iowa Fertilizer Company, owned by the global nitrogen products maker OCI, signed the agreement with Navigator CO2 Ventures to manage carbon captured from IFCo's plant process gas and post-combustion stages. About 500,000 mt of carbon will captured and stored through process gas, and the remaining 630,000 mt will be captured through post-combustion capture equipment, the companies said in a joint statement.

Navigator CO2 Ventures will transport the carbon through the Heartland Greenway pipeline system, a proposed 1,300-mile network that will transport carbon from industrial and biofuel producers in Illinois, Minnesota, South Dakota, Nebraska and Iowa for underground sequestration at a site in Illinois.

The network is commercially anchored by Valero and has nearly 20 receipt points, Navigator spokesperson Andy Bates later told S&P Global Platts in an email.

Once fully expanded, the Heartland Greenway will have capacity to transport and store 15 million mt/year of captured CO2, according to the Navigator spokesperson said. The pipeline project was initially announced in October and is expected begin construction after its permit is approved in 2023. Phased-in operations are expected to begin in late 2024 and early 2025.

Once built, the pipeline will be capable of capturing and storing "materially all of the CO2 emissions" from the Iowa fertilizer plant, subject to regulatory changes within the 45Q program, a federal program that awards money to carbon capture and storage projects.

The agreement "allows for an effective and quick solution to reduce our CO2 footprint and offer low carbon products to our customers across the value chain from our world-scale facility in Iowa," said OCI CEO Ahmed El-Hoshy in the statement. "We are monitoring the on-going discussions in Congress around enhancements to the 45Q program to support the project economics and potentially open the opportunity to widen the scope of this project to capture more CO2."

Section 45Q of the federal tax code currently provides carbon credits valued at $50/mt for projects that permanently store carbon geologically, and $35/mt for projects that use captured carbon for enhanced oil recovery. Provisions within the Biden Administration's Build Back Better Act would increase these amounts to $85/mt for permanent geologic storage and $60/mt for enhanced oil recovery.

Navigator's Bates said that the Heartland Greenway pipeline is intended for long-term storage and sequestration, thus making it eligible for carbon credits valued at $85/mt under the Build Back Better Act.