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When you pull up to your local filling station, you’re probably aware the blended fuel you’re putting into your vehicle contains ethanol. What you may not realize is the ethanol industry may also have had a hand in putting the fizz into that soda you just purchased.
It’s just how POET works. That’s how Dean Watson sums up the company’s success at marketing CO2, a natural byproduct of ethanol production. Watson is President of POET Grain, which includes not only responsibility for the grain business, but CO2 as well. Finding markets that utilize byproducts of ethanol production to avoid waste is a central focus of what POET does. He says POET seeks out customers, from industrial to food and beverage, to avoid CO2 becoming a waste product.
“CO2 is already a natural byproduct,” adds Allen Weis, CO2 manager for POET. “Why not capture it and make it into a useful product?”
CO2 is used extensively by the food and beverage industry, not only for carbonation but also for cooling and for slowing of bacterial growth in meat. Professional greenhouse growers as well as backyard gardeners utilize CO2, an important component of photosynthesis, to improve plant growth and vigor.
The healthcare industry utilizes CO2 as a medical gas for respiratory therapy and testing pulmonary function. Meanwhile, the pulp and paper industry makes use of carbon dioxide to maintain proper pH levels, improve pulp yield and aid in washing and bleaching.
CO2 has also been used as a safe alternative to traditional chemicals for water and wastewater treatment, lowering costs as well as improving plant safety. Welders and the metal fabrication industry make use of CO2 as well, typically mixing it with the gas argon as a shield against atmospheric contamination of molten metal.
So how is CO2 produced in the ethanol process? During fermentation, yeast consumes simple sugars found in the corn, producing carbon dioxide and ethanol as a result. For each pound of simple sugars consumed, about a half-pound of ethanol and a like amount of carbon dioxide are produced.
“POET is no different from a lot of beer breweries out there that also capture CO2, but use it internally. POET captures it in the same manner, but sells it to customers out in the marketplace,” explains Watson.
Watson estimates the company’s venture into CO2 began back in the late 1990s or early 2000s, before POET Ethanol Products existed.
“At that time, the general thinking by leaders in the ethanol industry was that if we could now capture CO2, we could become even more environmentally friendly,” Watson recalls. “Across the ethanol industry, the focus was more on the idea of being greener than on creating value.”
But the widespread interest in becoming greener meant a lot of ethanol plants started capturing CO2, making a once sparse marketplace very crowded. The supply side was particularly overbuilt in the Midwest. While the market continues to attract a large number of suppliers, there has been some rationalization as the pressure squeezed profitability with the mounting oversupply.
As with most new product lines, POET started out as a small player, at the pilot plant in Scotland, SD, Weis says. The CO2 market existed, but was difficult to enter.
Morving forward, five of POET’s ethanol plants included compression facilities for capturing CO2. As POET’s business grew, CO2 facilities were launched in five more locations.
Watson says POET has worked to deliver a soughtafter product to CO2 customers. “I believe POET is out in front when it comes to quality control and being Global Food Safety Initiative (GFSI) certified, allowing us to bring value to the beverage companies,” says Watson.
Once captured, POET liquefies the CO2 by compressing the gas, making for easier transport. POET’s ability to transport CO2 efficiently is at the heart of its success in the CO2 marketplace. In 2013, POET’s trucking company logged over 7.2 million miles or about 289 times the circumference of the Earth.
“Conventional business thinking would call for us to build really big plants and garner economies of scale,” Watson says. “But transportation is 50 to 60 percent of the cost of CO2 to the customer.”
For that reason, POET uses it’s strategically located plants to minimize freight costs to customers. “CO2 was a terrible market when we got into it. But
we did some things, expanded production locations and expanded into trucking. We looked at less traditional markets and for a creative way to transport the product from point A to B,” Watson sums up. “POET, through innovation and creativity, has taken things others didn’t want and found ways to grow the existing business, while developing new opportunities along the way.
