Expert Study Finds Carbon Sequestration Vital to Future Profitability of Iowa Corn Production

Contact: Jared Palmer 515-322-0435

JOHNSTON, IA- Decision Innovation Solutions (DIS) today released phase two of its deep dive into the ramifications if Iowa prevents carbon capture and sequestration (CCS) projects from moving forward, finding that farm income could drop by more than $1 billion annually.

The study found corn leaving Iowa without added value would jump from 6% to 44% by the end of the decade. Regions of the state will experience up to a 75 cent per bushel reduction in local corn basis prices, and the typical ethanol plant premium of 16 cents per bushel would disappear.


As a result:

  • Lower basis would cause the profit on corn production to plummet on average by 85% compared to the status quo.
  • Farm income would drop $43,000 for a typical 1000-acre farm split 50/50 between corn and soybeans.
  • Statewide net farm cash income would decline by $1.1 billion per year.


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.”

Read the full study here. Note: phase two results are included in the executive summary and chapter 4 of the full report.


The Iowa Renewable Fuels Association represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production with 42 ethanol refineries capable of producing 4.5 billion gallons annually – including 34 million gallons of annual cellulosic ethanol production capacity – and 11 biodiesel facilities with the capacity to produce 410 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: