As ethanol producers seek new ways to monetize emissions, Lapis Carbon Solutions is targeting smaller emitters with CO2 utilization solutions that avoid regulatory delays.
With at least three known carbon capture and storage (CCS) projects underway or in development, Lapis Carbon Solutions is expanding into CO2 utilization as ethanol producers explore their options to turn waste into worth.
Finding ways to monetize the greenhouse gas has been gaining momentum lately, fueled in part by the 45Q tax credit. The credit incentivizes the capture and either storage or utilization of qualified CO2 from industrial and power plants by providing a per-metric ton credit for captured CO2. The tax credit’s modified structure offers a credit value of $85 per metric ton for CO2 captured from industry and power.
Dallas-based Lapis has been working with companies in the Gulf Coast region to shrink their emissions footprints by sequestering CO2. But as it moved into the Midwest, a major agricultural region known for its production of corn, soybean and wheat—all of which are feedstock for ethanol production—interest in CO2 utilization is emerging.
“You’ve got a lot of traditional sequestration opportunities that we’re pursuing with big ethanol plants where the volumes are 400,000 to 500,000 tons of CO2 per year, which is the economic threshold for a lot of these projects to work,” Lapis Carbon Solutions CEO Reg Manhas told Hart Energy. “But you’ve got a lot of smaller players where the volumes may be less than 200,000 tons per year. … So now these ethanol producers are thinking about, well, my goodness, we’ve got this CO2, maybe there are other ways to monetize that CO2.”
CO2 is a heat-trapping gas known to warm the Earth’s climate when emitted into the atmosphere. While the oil industry has used the gas to boost oil production in EOR, CO2 is also commonly used in the fertilizer industry as a feedstock to create ammonia and urea.
However, new application pathways are emerging as the world seeks to lower emissions amid rising energy demand. These include utilizing CO2 in the production of synthetic fuels such as efuels, which combine hydrogen with CO2, chemicals and building aggregates, according to the International Energy Agency.
“You’ve got food and beverage. You’ve got animal processing. You’ve got a lot of different utilizations for CO2,” Manhas said. “A lot of ethanol plants and other CO2 emitters are beginning to find other uses for that CO2, including sequestration, e-methanol, et cetera.
Lapis will act as a middleman of sorts for ethanol producers, bringing its capital, capture and CO2 liquefication expertise with less regulatory risk.
“We’ll work with end users to market that CO2. It allows us to actually find opportunities where others may not be looking in terms of these smaller volumes at a reasonable rate of return,” Manhas said. Providing utilization services also diversifies Lapis’ business, Manhas said.
“Right now with sequestration, everyone’s drilling these wells and you’re waiting for Class VI approvals, which are taking a long time. If we move into utilization space, we don’t have to drill Class VI wells. We don’t need EPA approvals. We can be quicker to market to monetize the business. … We’ve heard really positive feedback from investors that this is a nice diversification of our business as well.”
Lapis’ backers include private equity firm Cresta Fund Management, which recently made another investment into the carbon capture, utilization and storage (CCUS) company through the Cresta Sustainable Fund II. The capital is expected to advance Lapis’ anchor projects and expand its project opportunities, including CO utilization.
“This investment reflects our belief in Lapis’ ability to lead the way in carbon capture, sequestration and utilization,” Chris Rozzell, managing partner for Cresta, said in a news release. “Private equity has a critical role to play in enabling decarbonization at scale, and we are proud to support Lapis as they build the infrastructure necessary for a lower-carbon future.”
The move into CO2 utilization is occurring as Lapis continues work on its CCS projects.
Project Libra: In St. Charles Parish, Louisiana, Lapis said it is developing a 14,000-acre storage site in an industrial corridor with joint venture partner Exxon Mobil. Targeting a final investment decision and first injection in 2027 to 2028, Project Libra aims to capture and store up to 4 million tonnes per annum.
A Class VI permit application was submitted to the Louisiana Department of Natural Resources (LDNR) in November, and a letter of administrative completeness was received within weeks, he said. “The current plan at this point is to drill a strat well on that project towards the end of 2025.”
Lapis has said it believes the site, located about 20 miles from New Orleans, has the capacity to hold 80 million tonnes of CO2 and could become a regional decarbonization hub.
Project Blue: In Arkansas, Lapis’ flagship Project Blue aims to capture more than 400,000 tonnes per year of CO2 for sequestration beneath LSB Industries’ chemical manufacturing facility in El Dorado. Manhas said Lapis completed a strat well and is reviewing data.
“The plan is to submit all that data back to the EPA [Environmental Protection Agency] this fall, and we currently continue to be on track to begin COD, commercial operations, by the end of 2026,” he said before turning to community engagement. Some projects in the CCS sector have been halted or slowed by community opposition. Navigator CO2 Ventures, Summit Carbon Solutions and BP are among the companies that have faced challenges.
“We’ve worked very hard to build really strong relationships at the community level now for the past two plus years. And we feel that’s really paid off in terms of strong community understanding and support for the project,” Manhas said. “We continue to also have great relations and great support from political regulatory stakeholders in Little Rock as well as the Arkansas Congressional Delegation in Washington. So, we’re very, very happy about that project, and it continues on schedule.”
Weyerhaeuser: Spanning about 187,000 acres across parts of Arkansas, Louisiana and Mississippi, the partnership with timber company Weyerhaeuser is also progressing. The two companies entered a two-year carbon sequestration exploration pact in 2024, scouting sites for possible CCS developments.
“We’ve been involved in a lot of conversations with two different kinds of groups of emitters in that area, both brownfield and greenfield biogenic CO2 emitters, so that’s mainly pulp and paper,” Manhas said. “And we’ve been working with various capture technology firms around their engagement with pulp and paper and how we can be the sequestration partner for those projects. There’s a lot of active conversations happening in that regard.”
There is also potential for CCS projects in the natural gas power generation space, though Manhas sees that as more long-term in terms of time to market, but material in terms of volumes.
“We are also proceeding with a project in the Midwest with respect to ethanol, and we actually just completed the drilling of a strat well in the Midwest in that regard,” Manhas said. “That well also came through with very, very positive results. The plan is to take those results and incorporate those into a Class VI application, which we will be submitting to Region 5 [EPA].”
As the CCUS sector evolves in the U.S., Manhas sees continued growth ahead.
“We’ve got some degree of regulatory certainty and 45Q is here to stay, at least in terms of this Congress and whatnot,” he said. “I think it’s a strong signal to the marketplace that this is the place for investment number one, and from an emitter standpoint, this is the industry that will have that financial support in the long term.”
Article published by Hart Energy on August 6, 2025
https://www.hartenergy.com/exclusives/cresta-backed-lapis-rides-45q-momentum-broaden-ccus-projects-213746