Nebraska Projects Impacted by Iowa CO2 Bill

By Scout Nelson

Renewable fuel advocates are calling on Iowa Governor Kim Reynolds to veto House File 639, a bill passed by the Iowa Senate that could severely limit carbon sequestration pipelines across the region. These pipelines are critical for Nebraska’s ethanol industry, which relies on transporting captured carbon dioxide to meet clean energy goals.

The bill changes the definition of a common carrier, increases insurance requirements, and limits pipeline permits to a single 25-year term. Advocates argue the restrictions threaten ongoing and future carbon pipeline projects that would connect ethanol facilities in Nebraska to underground storage sites.

Leaders in the renewable fuel industry expressed concern that even fully voluntary Nebraska projects, such as the Tallgrass Trailblazer pipeline, would be harmed. These projects aim to reduce emissions and support entry into ultra-low carbon fuel markets like sustainable aviation fuel.

One major issue with the bill is the insurance requirements. Operators must cover all potential damages and increases in landowner's insurance premiums. Advocates argue this is unworkable, especially when insurance providers may not offer such broad coverage under current pipeline permits.

Another concern is the 25-year permit limit, with no option for renewal. Industry leaders say this discourages long-term investment. “We’re making a significant investment — we have contracts in place for over $45 million to build the equipment on our site to capture and compress the CO2,” said one official. The lack of renewal options could make such projects financially unsustainable.

Renewable advocates warn that if the bill becomes law, Nebraska could lose its competitive edge in ethanol production. “This fall, Iowa will no longer be the world’s most profitable place to turn corn into ethanol,” one leader said, noting the shift to Nebraska’s more favorable conditions if the pipeline succeeds there.

The governor has yet to announce her decision, while both supporters and opponents continue to urge public action.

Photo Credit:ethanol-support-rocky-ormiston