Innovation at Work: Breaking ground on next-generation agricultural markets

A scientist stands in front of machinery used to pyrolize biomass into biochar. The scientists gestures toward the machine as if explaining how it works.

Tannon Daugaard, an engineer at the Bioeconomy Institute, with the pilot-scale pyrolyzer at the Biorenewables Center. Pyrolysis turns biomass from grasses and crop residue into usable products such as biochar and bio-oil. Photo by Christopher Gannon/Iowa State University News Service.

By Fred Love, News Service

AMES, Iowa – Iowa soil is good at growing crops. In fact, it’s probably the best agricultural soil in the world. And, while Iowa’s farmland has proven itself to be a powerhouse for producing cash crops like corn and soybeans, Iowa State University scientists are dreaming up innovative ways to grow new value, new markets and new revenue streams from Iowa soils.

These potential revenue streams include a spectrum of ideas. Some, such as producing ethanol from biomass taken from crop residue, build on tried-and-true technologies and approaches. Other ideas under development at Iowa State call for visionary new approaches to the landscape.

In all cases, Iowa is well positioned to lead the way in these new arenas due to its world-class soil, but the markets and basic science required to capitalize on those opportunities remain works in progress.

That’s why scientists across the ISU campus have committed to laying the scientific foundation on which these innovative new markets can be built. The research has the potential to unleash new opportunities across the state, especially in Iowa’s rural communities. They could also protect the environment and safeguard Iowa’s natural resources for generations to come.

Carbon markets

Iowa possesses many advantages that could position the state as a world leader in emerging carbon markets, which offer financial incentives in exchange for taking greenhouse gases like carbon out of the atmosphere for extended periods of time. Cropland is a prime candidate for storing carbon, and emerging carbon markets could provide a reliable revenue stream for Iowa farmers, but there’s no guarantee that future will come to pass, said Alejandro Plastina, an associate professor of economics who studies carbon markets. Policies guiding these new markets are still materializing, and big question marks still dominate the discussion, Plastina said.

Storing carbon keeps it from circulating in the atmosphere where it can contribute to global warming. Many private companies, and some governmental entities, have launched initiatives that pay for the sequestration of carbon as a means of reducing their overall carbon footprint. For instance, Microsoft has announced that it intends to be carbon negative by 2030, and the tech giant lists carbon sequestration as one practice to help it attain its goal.

But this patchwork approach to carbon sequestration means there’s little structure to the system, Plastina said. Interested farmers must weigh all kinds of factors before they sign a carbon contract, he said. There are so many variables that farmers need to be careful not to sign up for a deal that doesn’t make sense for their operations in the long term.

“Each company is following their own recipe on how to generate these carbon credits,” he said. “There’s no standardized set of rules to determine what can be considered a good-quality carbon credit or a bad-quality credit.”

ISU scientists are injecting some clarity into the discussion by forming a nearly 300-page report that explores the topic of carbon credits from numerous angles. The report, which began as a response to a directive from Iowa Gov. Kim Reynolds, summarizes the state of the science surrounding carbon credits and identifies current knowledge gaps. The report notes that Iowa is positioned to take advantage of emerging carbon markets, but only if credible and standardized measurements and practices emerge to govern the markets.

“We think there is a scenario where this is a positive development for Iowa, but that would require much more standardization of practices,” Plastina said.

Agricultural soils possess great potential for carbon storage, said Lisa Schulte Moore, a professor of natural resource ecology and management. Crops take up carbon dioxide as part of photosynthesis, and photosynthesis is one of the best and most cost-effective ways of scaling up carbon sequestration. The more plants on the landscape to carry out photosynthesis, the more carbon gets pulled out of the atmosphere.  

“The good news is that when we talk about taking carbon dioxide out of the atmosphere, agriculture is going to be a part of that. And that’s what Iowa does well,” Schulte Moore said.

Practices such as no-till farming, cover crops and planting prairie grass among row crops store carbon in the soil that might otherwise be released into the atmosphere. Those practices also offer numerous environmental benefits, such as limiting nutrient runoff and providing wildlife habitat. But they require farmers to commit time and money to implement, and managing them correctly comes with a substantial learning curve, said Schulte Moore. Those factors may make some farmers hesitant to adopt the practices.

But a reliable carbon market could provide a financial incentive that would offset those costs, creating a classic win-win scenario for farmers. In addition to protecting the environment and generating new revenue, implementing the practices strengthens soil health and sets the stage for better production in the long term.

“Soil health is good for the farm and good for the business, but can be hard to pay for in the short term. Carbon markets can offer additional money that helps farmers do things that’s in their interests long term,” Schulte Moore said.

Pyrolysis

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Iowans have gotten used to converting corn into ethanol and biodiesel, but Iowa State University researchers like Robert Brown see that as just the beginning. Biochar and bio-oil, two products that can be made from biomass harvested from prairie grass and other sources, have numerous applications with the potential to create new revenue for Iowa farmers, said Brown, Iowa State Anson Marston Distinguished Professor in Engineering, the Gary and Donna Hoover Chair in Mechanical Engineering and the director of Iowa State’s Bioeconomy Institute.

Heating biomass through a process called pyrolysis produces biochar, or charcoal (watch the video above to learn more about pryolysis). Treating soils with biochar holds nutrients and moisture in place, improving soil health and preventing leaching. It also improves the soil’s carbon storage potential. However, pyrolysis technology is not yet able to produce biochar at a large enough scale to make it economically feasible for most farmers to treat their fields with biochar, Brown said. Biochar currently sells for as much as $1,000 per ton, but farmers would need that price to drop to around $100 per ton before the practice could be adopted widely, creating a profitable market.

But what if pyrolysis could create other valuable products from biomass harvested from grasses, wood and crop residues? Condensing aerosolized droplets from the smoke given off during pyrolysis yields a thick liquid substance Brown and his colleagues refer to as bio-oil. Brown and others in the ISU Bioeconomy Institute are experimenting with various uses for bio-oil, including as liquid fuel and as an additive in road surfaces. The results have been encouraging so far.

Iowa State has two pyrolyzers, a lab-scale unit installed on campus in the Biorenewables Research Laboratory and a larger pilot-scale unit at the BioCentury Research Farm outside Ames – that produce biochar and bio-oil. And researchers at the Bioeconomy Institute patented a fractionation process that cools the pyrolysis vapors at precise temperatures, condensing the bio-oil as fractions with specific chemical and physical properties, which increases the versatility and range of uses the oil can serve.

Pyrolysis technology has already taken root in Iowa, and markets for the products that result from the process are growing. Advanced Renewable Technology International, (ARTi) is a company founded in 2013 and headquartered in Prairie City, Iowa. The company specializes in biochar production and sales and also develops, designs and manufactures modular pyrolysis systems for the production of biochar from waste biomass. Bernardo del Campo, the company’s CEO, worked with Robert Brown while earning a Ph.D. in mechanical engineering with a co-major in biorenewable resources and technology at Iowa State, and that education provided the springboard for the company’s launch.

ARTi sources the biomass residues from Iowa farmers and converts it into biochar. The company is working toward a future in which the technology becomes standard practice. Lissette Cordova, one of ARTi´s economics analysts, describes it as a perfect “circular economy.” Farmers sell crop residues and other sources of biomass to ARTi or similar firms, then buy biochar to treat their fields. The biochar boosts yields and provides ecosystem services that strengthen the farm’s bottom line.

The potential for the biochar market in the United States is vast, said ARTi Project Manager Melany Estrella said. Biochar can serve farmers with fields measured in hundreds of acres, but it can also benefit gardeners and landscapers working on a much smaller scale. For instance, the company sells biochar granules and micronized biochar in different formulations and sizes intended for potted plants.

Estrella sees a bright future for biochar in Iowa, but further development of pyrolysis technology and favorable agricultural policies can help ensure that potential is realized.

New uses for prairie and biomass

ISU research has shown prairie strips can reduce soil loss from nearby farm fields by 95% and nitrogen and phosphorous runoff by 70-80% by putting more roots in the ground to hold soil and nutrients in place. Now, ISU scientists are looking for new uses for the biomass that could be harvested from prairie grasses established for conservation purposes (see the video below for more on the benefits of planting prairie strips).

ISU scientists are collaborating with others at Penn State University to expand the use of anaerobic digesters, or large covered pools that hold a mixture of manure and biomass from plants to produce biogas that can provide on-farm heat and electricity or be cleaned and sold through existing natural gas pipelines.

The digester keeps the mixture at a carefully controlled temperature and pH level to facilitate microbial decomposition. The process results in renewable natural gas, or biomethane. It also yields materials that can be applied to fields as fertilizer and as a carbon-rich soil amendment.

Schulte Moore said larger farms currently are better able to accommodate the layout and equipment necessary for a digester, but she hopes the technology’s rapid progress will make the technique accessible to an ever-expanding number of smaller farms as well.

ISU researchers with the Consortium for Cultivating Human and Natural reGenerative Enterprise (C-CHANGE) are studying how to optimize the grassy biomass placed in the digesters. They’re also looking at how to position the digesters near existing farm infrastructure to make the most efficient use of the technology. Schulte Moore is the project director for C-CHANGE, which received a $10 million grant from the U.S. Department of Agriculture in 2020 to advance its mission.

C-CHANGE, along with the Iowa Beef Center and Practical Farmers of Iowa, is also studying the viability of perennial corridors, or long stretches of perennial grass strategically placed on the landscape to act as conduits that connect important pieces of agricultural infrastructure. The concept could revolutionize how farms are laid out and organized in the Corn Belt, with corridors of perennials and trees connecting multiple farms with livestock processing facilities. These corridors would perform critical environmental functions, such as limiting nutrient runoff from the row crops bordering the corridor. But they would also provide an opportunity for farmers to grow and harvest a more diverse range of crops, such as nuts, berries or timber.

Livestock could forage on the corridors, and, rather than loading livestock on trucks to move them to processing facilities, the animals could simply walk the corridors.

Omar de Kok-Mercado, a program assistant in natural resource ecology and management at Iowa State, led much of the grazing corridor research.

“How we connect farm infrastructure with diverse perennials is going to be a key piece of how this gets used,” de Kok-Mercado said.

Most fields used to grow row crops include some marginal acres that are poorly suited for growing corn and soybeans because of erosion or poor soil. Farming those acres can actually costs farmers money because the yields they produce fall short of the input costs that go into planting, managing and harvesting them. Routing perennial corridors through those acres could strengthen a farmer’s bottom line in the long term if adequate markets for the grassy vegetation and environmental services can be developed.

It’s a sweepingly different vision for the Iowa agricultural landscape, and many challenges must be overcome before farmers could begin implementing these ideas. For instance, harvesting so many diverse crops would require more people farming the landscape with more diverse sets of expertise. And farmers would have to invest in virtual fencing along perennial corridors before livestock could be transported on them. But de Kok-Mercado said the possibilities for protecting the environment while simultaneously creating new revenue opportunities are too exciting to ignore.

“We’re envisioning a future where we have a healthier planet and expanded opportunities in agriculture,” Schulte Moore said. “We can build a future where both those goals reinforce one another, but we’re going to need science and innovation to make it happen.”

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Innovation At Work

Innovation At Work is a series of stories, photos, video and audio highlighting the new approaches Iowa State University is taking to big challenges that affect Iowa’s communities and landscape. To learn more about how #IowaStateInnovates, visit the Innovation At Work story gallery or read the other entries in the series:

A beaker containing biomass alongside a beaker containing black biochar and several containers fuill of bio-oil sit on a table in an ISU laboratory

Samples of milled biomass, biochar and bio-oils. The biomass is converted into the char and oils in the pilot-scale pyrolizer at the Biorenewables Center. Photo by Christopher Gannon/Iowa State University News Service.

#IowaStateInnovates

Iowa possesses some of the best agricultural soil in the world, positioning the state to lead the way on new agricultural frontiers like carbon markets and next-generation biofuels. ISU innovators are laying the scientific foundation for the state to take advantage of these new opportunities – all while protecting the environment.