By Todd Neeley
October 24, 2023

ADM's Luciano: CO2 Pipeline Continues

Archer Daniels Midland CEO Luciano Says Company Staying Course on Carbon Pipeline

LINCOLN, Neb. (DTN) -- Just days after Navigator CO2 Ventures canceled its $3.5 billion carbon pipeline project, Archer Daniels Midland CEO Juan Ricardo Luciano said during a quarterly earnings call Tuesday that his company is continuing with its carbon pipeline plans.

In June 2023, Wolf Carbon Solutions filed an application with the Illinois Commerce Commission to seek approval to build a 260-mile pipeline to send carbon dioxide from two ADM plants in Clinton and Cedar Rapids, Iowa, to a sequestration location below ADM's plant in Decatur, Illinois.

In an Oct. 20 statement about the decision, Navigator said it was canceling its project because of the "unpredictable nature of the regulator and government processes involved, particularly in South Dakota and Iowa."

That project faced stiff opposition from residents of those states.

In addition, Summit Carbon Solutions delayed its carbon pipeline project until 2026.

Luciano said the situation Navigator faces is one of the perils of launching a new industry.

"Of course, with any industry that is breaking ground, the pioneers suffer sometimes with the regulatory environment and having to adjust," he said. "So, we're working closely with the authorities across the different states and in terms of trying to align the regulatory framework to the needs of decarbonization of the desires of the Department of Energy and Department of Agriculture.

"We have seen the news that you do, and you can take two tacks: that we may suffer a similar fate or that we will have less competition. We don't have any bad news to report other than we continue forward."

Luciano said ADM is not at all second-guessing whether to continue with its plans.

"This is a very important initiative for ADM," he said. "And it's something that, as you know, we started less than 10 years ago. So, it's something that we have a lot of experience in, and we're leveraging that experience on our ability to inject carbon into the lower surfaces in our facility applicator."

Luciano said ADM remains on track to complete the pipeline project in Illinois and Iowa.

"We found that the government was planning to create far more injection wells over the next few years," he said.

"We've already submitted permits for that. Those permits have been accepted. So, they are complete. They are in the process of being studied and analyzed, and we are reviewing also with our partners, right-of-way acquisitions and all those types of agreements."

Navigator planned to run a 1,350-mile route of carbon pipelines to as many as 30 ethanol plants in South Dakota, Nebraska, Minnesota, Iowa and Illinois.

Navigator lost a construction permit application in South Dakota in early September and asked the Iowa Utilities Board to suspend work on its permit application in that state as well. The Illinois Commerce Commission also had been preparing to hold hearings on Navigator's permit application. The company had intended to sink its CO2 into an Illinois bedrock formation.

ADM announced its third-quarter financial results this week, showing net earnings of $821 million, down from $1.03 billion one year ago.

The company reports "much lower" crushing results than one year ago, although global soy crush margins remained solid.

ADM said in a news release the ag services and oilseeds portion of the business continues to show growth.

"Ag Services and Oilseeds delivered another solid quarter, leveraging the strength of our Brazilian export capabilities, extending regenerative agriculture partnerships and commissioning our Spiritwood (North Dakota) production facility to serve the growing demand for renewable green diesel," the company said.

"Carbohydrate Solutions drove strong results through excellent execution in favorable ethanol, starches and sweeteners margin environments."