Low carbon biofuels producer Harvestone Low Carbon Partners (HLCP)announced that it has closed a $205 million tax equity financing with Bank of America to support its North Dakota-based biofuel carbon capture and storage project, marking the first financing of its kind since the passage of the Inflation Reduction Act (IRA).

Passed by the U.S. in 2022, the Inflation Reduction Act (IRA) allocated nearly $370 billion through a series of tax credits, loans, grants and subsidies to areas including renewable energy and industrial decarbonization solutions. Among the tools enabled by the IRA aimed at accelerating the deployment of decarbonization solutions were updates to the “45Q” tax credit, including significantly increasing the credit value to $85 per ton of carbon emissions captured and stored from industrial facilities, extensions to the timeline to claim the credit, and the ability to transfer the credit to outside investors.

Based in North Dakota, Harvestone operates three corn-based, dry-mill ethanol facilities, producing nearly 220 million gallons of ethanol per year. The company’s Blue Flint 73 million gallon per year biorefinery, Blue Flint, near Underwood, North Dakota is one of the first in the U.S. to capture its CO2 emissions, commencing carbon capture and sequestration (CCS) operations in October 2023. The project’s CCS infrastructure captures biogenic carbon dioxide emissions released during the production process, compresses it to a liquid, and injects it into a deep underground geologic formation injection well.

The facility has captured more than 125,000 metric tons of CO2 to date, and anticipates capturing more than 200,000 tons per year.

Jeff Zueger, CEO of HLCP, said:

“Blue Flint’s carbon capture and sequestration project has helped the facility dramatically reduce emissions, produce ethanol with a significantly lower carbon intensity score, and strengthen the ethanol and agricultural markets for North Dakota.”

Under the new transaction, Bank of America has committed $205 million, with the bank participating in the 45Q tax credits, generated in connection with the facilities CCS infrastructure. When available, BofA will also be able to purchase clean fuel tax credits generated by the biorefinery facility.

Karen Fang, Global Head of Sustainable Finance at Bank of America, said:

“We have built a strong track record of innovative financing transactions for decarbonization technologies including carbon capture and sequestration. We are engaging with all of our clients including partners like Harvestone and providing them a full suite of financial solutions tailored to meet their needs as they take steps to transition to a more sustainable future.”