Green Plains Inc. GPRE said that its major milestones for the 'Advantage Nebraska' carbon strategy have been met, and the project is on track to begin operations in the second half of 2025. These facilities are projected to be among the first major volumes of low-carbon ethanol from carbon capture and sequestration in the United States, positioning the company to participate in the early days of the 45Z Clean Fuel Production Credit, the specifics of which were recently disclosed.

The recently released 45Z GREET model enables U.S. corn ethanol to reduce its Carbon Intensity (CI) score by about 32 points through carbon capture and sequestration. The model reduces Indirect Land Use Change (ILUC) penalties for corn, resulting in a lower starting CI for U.S. corn ethanol compared to previous GREET models. Imported Used Cooking Oil (UCO) incurs a transportation penalty compared to domestic UCO. Additionally, imported UCO cannot claim the 45Z credit if used to produce on-road fuels like biodiesel or sustainable diesel. Using Renewable Corn Oil (DCO) as a feedstock to manufacture renewable diesel would result in a finished fuel with an estimated 25-point CI advantage over soybean oil.

The carbon capture approach continues to gain traction, and the company is getting closer to being operational across its 287 million-gallon Nebraska footprint. The company believes it is in a unique position to gain from its ability to sequester the biogenic carbon dioxide and reduce the CI of its ethanol by more than half, and it is more certain than ever that its "Advantage Nebraska" plan is the proper course of action with the recently released guidance on 45Z.

GPRE remains on schedule to permanently sequester 800,000 tons of biogenic carbon dioxide annually from its Central City, Wood River and York locations starting in the second half of the year. The compression equipment has been geared to scale to accommodate the potential for increased production and post-combustion carbon capture, with an overall carbon capture capacity of up to 1.2 million tons per year.

Shares of Green Plains have lost 49.6% over the past year compared with its industry’s 17.1% decline.

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GPRE’s Zacks Rank & Key Picks

GPRE currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, Sylvamo Corporation SLVM and ICL Group Ltd ICL. 

Carpenter Technology currently sports a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.1%. The company's shares have soared 207.1% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.

Sylvamo, which currently carries a Zacks Rank #1, beat the consensus estimate in each of the trailing four quarters, with the average surprise being 16.7%. SLVM’s shares have rallied 61.2% over the past year. 

The Zacks Consensus Estimate for ICL Group’s current-year earnings has increased 8.8% in the past 60 days. ICL, carrying a a Zacks Rank #1, beat the consensus estimate in each of the last four quarters, with the average surprise being 18.1%. ICL’s shares have rallied 31.6% over the past year. 

 

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