Hoeven: Red Trail Energy Second Ethanol Plant in the Nation to Implement Carbon Capture

Hoeven Put in Place Regulatory Framework in ND, 45Q Federal Tax Credit to Enable the Project

WASHINGTON – Senator John Hoeven today issued the following statement after the North Dakota Industrial Commission (NDIC) approved the first Class VI project to store CO2 from Red Trail Energy’s ethanol plant in Richardton. Red Trail is advancing the project utilizing the 45Q tax credit, which provides a critical revenue stream for new CCUS projects. Hoeven worked to pass legislation to reform and expand the 45Q tax credit, and secured final 45Q regulations in January 2021.The tax credit provides up to $50 per ton of CO2 stored, helping make the project financially viable.  

Hoeven also put in place the regulatory framework the approval was made under:

  • regulatory framework for carbon storage that Hoeven worked to implement as governor, when he established the North Dakota COStorage Workgroup and advanced a bill through the legislature to grant this authority to the NDIC.
  • Approval from the Environmental Protection Agency (EPA) that Hoeven secured as U.S. Senator for the state’s permitting program for the permanent storage of COusing Class VI wells, the first such approval in the nation.
    • North Dakota is one of only two states to have this regulatory authority.

“We’ve been laying the groundwork for this achievement for more than a decade, and this is exciting progress as Red Trail Energy is only the second plant in the nation to put carbon capture in place,” said Hoeven. “They’re able to do it because we put the legal and regulatory framework in place for them in North Dakota and secured the 45Q federal tax credit. By capturing and storing the ethanol plant’s emissions, this project will enable Red Trail Energy to sell their product in states with low-carbon fuel standards, helping to grow new market opportunities for the company and farmers in the region.”

Last year, Hoeven joined Red Trail Energy in announcing efforts to drill the carbon storage well being used for this carbon capture, utilization and storage (CCUS) project. The senator also worked as the lead Republican on the Senate Agriculture Appropriations Committee to fund the U.S. Department of Agriculture (USDA) program that provided a $25 million loan for Red Trail to construct its carbon capture, processing and storage facility

Moving forward, Hoeven is prioritizing: 

  • Front end investment in technology development, including bolstering the Department of Energy (DOE)-Energy & Environmental Research Center (EERC) partnership in support of efforts like Project Tundra.
    • Hoeven has secured $43 million in federal funding for Project Tundra to date.
  • Loan guarantees to help project developers secure financing to build the equipment and infrastructure needed to capture and store CO2.
    • Hoeven included funding in Fiscal Year (FY) 2021 appropriations for critical loan guarantee programs at DOE and the Rural Utilities Service (RUS).
    • The senator also helped introduce bipartisan, bicameral legislation to provide flexible, low-interest loans and grants to support construction of CCUS infrastructure, like pipelines to transport CO2.
  • Enhancements for the 45Q and 48A Advanced Coal tax credits to provide important revenue streams to project developers and encourage adoption of CCUS.
    • Hoeven is sponsoring legislation to modernize the 48A tax credit for COcapture retrofit projects and helped introduce a bipartisan bill to provide a direct payment option for the 45Q and 48A CCUS tax incentives.
    • The senator previously worked to get the 45Q tax credit implemented in a way that makes CCUS projects more commercially-viable.