Nebraska is an agricultural powerhouse, generating $31.6 billion in agricultural cash receipts in 2022. Now, the state is ready to further its push into the biobased value chain with an eye on growing demand from sustainability compliance markets.
Here are four things that give Nebraska growth potential as a biomanufacturer.
1. Corn
Nebraska’s biobased ambitions centre heavily around their prize crop. Corn for grain production in 2023 from the state was around 1.73 billion bushels, making it the third biggest US producer in that year.
Proponents for developing the biobased industry in the state celebrate the crop’s chemical versatility. One of the major biobased products made from corn sugars today is Poly Lactic Acid (PLA), a thermoplastic monomer that can be turned into plastic film, bottles, and shrink wrap material.
Corn can also be turned into ethylene, a chemical building block for producing plastics like polyethylene (PE), polyvinyl chloride (PVC), polyethylene terephthalate (PET), and polystyrene (PS). Aside from plastics, one of the chemicals manufactured from corn globally is biofuels.
The state already got a glimpse of how valuable its crop could become in a world of increased renewable fuels mandates and other carbon compliance laws when DG Fuels recently announced a $5 billion production facility in Douglas County to produce sustainable aviation fuels from corn stovers – the stalks and leaves of corn.
The new SAF plant promises millions of dollars a year in additional farm revenue to the state by using local corn feedstock. It is said to be among the largest single investments into the state in its history while its use of lower-value agricultural byproducts as feedstock will minimise the amount of produce and land diverted away from the human food market, addressing one concern about the inflationary impact of harvesting crops for industry.
The state’s agricultural prowess combined with its openness to biobased investment means it should be among the first in line to benefit from any further renewable fuel laws for the aviation industry. DG’s decision to set up in Nebraska came just four months after Nebraska’s Governor Jim Pillen signed into law a tax credit for SAF producers under Biden’s Inflation Reduction Act.
The policy environment has also been favourable for SAF demand the last several years, with Biden’s SAF Grand Challenge aiming to scale domestic production to at least 3 billion by 2030.
Away from the big two biobased products – biofuels and bioplastics – the state is also keen to welcome processing capacity for higher-value, lower-volume products aimed at more niche markets. Startups and research scientists have spent years exploring a whole range of novel applications for the crop including as a feedstock for removable and reusable carbon-neutral walls, biocomposite elastomers, hydrogels, and as a filler in biocomposites.
The market opportunities afforded by the bioeconomy only expanded for agricultural states like Nebraska after Biden’s Executive Order on Advancing Biotechnology and Biomanufacturing Innovation in 2022 – what many in the state regarded as being the most significant directive for the agricultural sector since Bush’s 2005 law that mandated oil companies use US-made corn ethanol in gasoline. The directive specifically aimed to bolster US capacity in high value biobased goods, such as alternative proteins, pharmaceutical biotech, and sustainable farming inputs.
2. Political support
“The biobased economy is gigantic for the future. It’s our Silicon Valley,” said Jim Pillen, Nebraska’s governor in November 2023.
Political support is key to Nebraska’s push to become a biobased producer state. Governor Pillen has vocally advocated market opportunities in sustainability for sometime, fostered by a growing raft of climate-related regulations. By leveraging this new demand, Pillen has said, the bioeconomy affords opportunities to boost rural economic revitalisation and the job market.
Pillen was behind Nebraska’s Bioeconomy Initiative, led by Julie Bushell, which aims to spotlight the state as an up-and-coming producer of low carbon industrial feedstock.
Sherry Vinton, Director of the Nebraska Department of Agriculture (NDA), has similarly advocated the wealth of opportunity for the state in fuels but also value-added products like plastic and amino acids made from corn or unused soybeans.
With this political momentum, the regulatory work required to enter sustainable compliance markets is more likely to get underway. Nebraska intends to establish its own standard for measuring the carbon intensity of biobased products and communicating this to customers.
3. An eye on sustainable compliance markets
Nebraskans are aware of the commercial reasons now in place for shifting to more sustainable forms of agriculture and associated biobased processing.
Many bioeconomy backers want their state to become a leading supplier not just for renewable goods but ones with demonstrably lower carbon footprints, allowing customers to meet environmental regulations and climate-related disclosure laws.
Biofuels are recommended by the IPCC as one tool in the pathway towards global net emissions reductions. However, their carbon emissions depend heavily on how the crops that go into them are cultivated. Moreover, intensive farming practices needed to increase crop feedstock volumes can heavily damage ecosystems and biodiversity. Minimising the environmental impacts of the supply chain relies on reviewing the way the feedstock is farmed.
The state has been pushing for federal support in moving towards more sustainable production. In the summer of 2024, Governor Pillen stood next to a bean field on a fifth-generation farm in Nebraska to announce that the state had won a US Environmental Protection Agency competitive award for a $307 million Climate Pollution Reduction Grant, funded by Biden’s Investing in America Agenda. Nebraska’s winning proposal was named ONE RED, an acronym for Opportunity for Nebraska: Reducing Emissions and Decarbonization.
The fund aimed at cutting greenhouse gas emissions, including in agriculture meaning part of the $307 million should now go on increasing Nebraska’s adoption of precision agriculture techniques for reducing waste, as well as to encourage energy efficiency, solar deployment and irrigation wall electrification.
Smaller farms in Nebraska hope the grant will level the playing field with larger outfits in terms of their access to newer tech that makes it easier to maintain high levels of material and energy efficiency around the business. The state also hopes this will open up billions of dollars of additional revenue for family farms.
Nebraska already had pockets of principled farmers adopting sustainable farming practices designed to enhance soil quality and protect biodiversity. Yet it is only sweeping policy schemes of the kind mounted over the last several years in the US that an industry can change in a short period of time, giving producers the certainty that investing in carbon and waste-reduction practices on the farm will not hit revenue.
4. Existing bioprocessing capacity and know-how
The state has a solid base in bio-processing capacity and biobased R&D to begin with, mainly in bioplastics and biofuels but also some in biobased specialty chemicals.
Nebraska is already the second biggest US state producer of corn-based ethanol, mainly for the renewable vehicle fuels market. It has two dozen ethanol plants with one study estimating the industry as a whole was responsible for just over $4.4 billion of economic activity.
Corn ethanol has uses beyond fuel. Viridis Chemical in the city of Columbus is a classic example of a Nebraskan chemical firm piggybacking off the state’s agricultural production, using locally sourced corn ethanol to produce chemicals used in paint, adhesives, pharmaceuticals and cosmetics.
Then there are the bioplastics. Producer Citroniq recently announced the close of a $12 million Series A investment and soon plans to set up its first plant in Nebraska, where it will source local ethanol to turn into bioplastics.
One of the most prominent corporate names in Nebraska’s bioeconomy is Cargill. The private company is one of the world’s biggest food producers and traders but is now rapidly diversifying into the biobased chemicals and materials space.
The company has a campus at Blair which, on top of Cargill’s biorefinery, also houses Germany-based Evonik and Danish-owned Novonesis, marking out the densest bioeconomy cluster in the state.
Evonik selected the site back in 2017 and operates a commercial plant for producing omega-3 fatty acids. The site is a good example of a specialty and high-value bioeconomy sector: made from marine algae, the supplement made at the campus is sold into the salmon aquaculture industry and pet food industry.
Novonesis set up capacity in Blair, Nebraska around 12 years ago. The facility is trussed to the state’s biofuel economy, producing enzymes used to create corn ethanol fuel. In 2021, the company released plans to invest into an additional production site at Blair for alternative proteins.
Biobased R&D also finds a home at the Industrial Agricultural Products Centre at the University of Nebraska-Lincoln, which is researching renewable chemicals that can replace petroleum-based substances in industry.
