The second part of a study looking at potential impacts if Iowa prevents carbon capture and sequestration (CCS) projects was released this week by Decision Innovation Solutions (DIS) and the Iowa Renewable Fuels Association (IRFA), finding that farm income could drop by more than $1 billion annually.
DIS concluded: “Ethanol production in the state of Iowa has brought tens of billions of dollars in increased economic activity to the state and has been a significant factor in the rise in net farm cash income for Iowa’s farmers. That economic activity could be lost if Iowa’s ethanol plants are not enabled to be competitive with ethanol plants in other states that have access to carbon capture and sequestration via pipelines or direct injection into deep, underground saline formations.”
Iowa Renewable Fuels Association (IRFA) commissioned DIS to conduct an all-encompassing economic impact study based on a scenario where Iowa ethanol plants are excluded from using CCS while pipelines in the surrounding states go forward. The first phase of the study found that current market and policy dynamics would result in Iowa ethanol production becoming noncompetitive. As production migrates out of state by the end of the decade, Iowa ethanol production could contract by 75% with Iowa farmers losing local markets for over 1 billion bushels of corn annually.
“Ethanol production has done more to increase farm income than anything else over the last twenty years,” stated IRFA executive director Monte Shaw. “If Iowa legislators adopt laws that prevent ethanol production from remaining competitive in the state, they are also imposing an 85 percent pay cut on farmers who produce corn. This would be as unwise for the state as it would be unwelcome for our farmers. IRFA continues to ask all Iowans to unite behind a fair and equitable path forward for CCS projects in this state.”
Shaw held a virtual press conference Monday to announce the study results with David Miller, Chief Economist of Decision Innovation Solutions, and Iowa corn grower Tim Recker.
Iowa RFA study phase two results (24:36)