There has been a seismic shift in the discourse surrounding “agricultural carbon” – a shift that's reverberating from corporate boardrooms to small town coffee shops to Capitol Hill. Many would consider this shift a win for all engaged parties, but that winning trend is under threat.
And that threat is disguising itself as an “easy button.”
A New Day for Carbon
Gone are the days when government officials viewed agriculture solely through a regulatory lens. Instead, there’s an increasing recognition of its potential as a solution to environmental challenges. For many, the narrative has evolved beyond curtailing overall production or livestock rearing; now, it's about enhancing environmental stewardship while sustaining agricultural productivity. This refreshing iteration on the narrative surrounding those environmental challenges aligns with the core tenants of agricultural production; to produce more, with less and ensuring that your future generations can do the same.
At incite.ag, we see it in our own metrics.
We have years of adoption data and direct feedback on the “carbon topic” from feedstock producers. This data stretches to nearly every corner of the corn belt and includes farmer demographics from the slower-to-adopt-new-technology operator to the cutting edge, large scale “top producer”. And what is that data showing us?
Nearly 100% of the farmers who are introduced to the topic of corn carbon intensity (CI) scoring, enroll in a CI scoring project with the goal to secure and reduce scores.
Those rates are a stark contrast to the 3% adoption rate for carbon offset programs even with their 97% farmer-awareness.
But the shift doesn't end there.
Raising the Stakes and Incentivizing Carbon Reduction
Anticipation is palpable for the U.S. Treasury Department's imminent release of tax credit details for the Inflation Reduction Act’s (IRA) 40B sustainable aviation fuel (SAF) credit – a development announced by USDA Secretary Tom Vilsack, who promises clarity within "weeks, not months." Additionally, a forthcoming modification to the Greenhouse Gases, Regulated Emissions and Energy Use in Technologies (GREET) model, jointly reviewed by USDA, EPA, and other agencies, holds promise for delivering clarity towards how the industry will recognize feedstock carbon intensity at the field level within the IRA’s 45Z credit.
Central to this evolving landscape is the Feedstock Carbon Intensity Calculator (FD-CIC) embedded within the GREET model. It encompasses a myriad of factors, from crop inputs and energy usage to farm practices and land management, offering the gold standard for assessing and optimizing carbon footprints.
Incentivized by substantial tax breaks, agriculture and aviation have become newfound partners with an increasing focus on ethanol and SAF production. These incentives, pegged to achieving a minimum 50% reduction in lifecycle greenhouse gas emissions compared to petroleum-based fuels, underscore the potential profitability of eco-friendly alternatives. As U.S. biofuel producers and airlines ramp up efforts to meet ambitious SAF production targets set by the administration, the agricultural sector stands poised to reap the benefits, buoyed by federal and state support.
Unfortunately, the progress we’ve made is being threatened.
A Critical Next Step
Challenges persist, particularly in ensuring the viability of corn ethanol as a key component of SAF. While the GREET model indicates a substantial emissions advantage for corn ethanol over conventional alternatives, achieving the requisite 50% reduction threshold demands further innovation from parties across the industry and recognition of those innovations within incentive guidance.
Today, the commercial feasibility of decarbonization options in biofuel depends largely on the decisions of a select few rulemakers.
The tools to decarbonize are being proposed or even implemented commercially, but will they be recognized within the incentives [and rules] powering the industry’s evolution?
It's a complex question to answer. The uncertainty surrounding said answer reveals the greatest threat to biofuel decarbonization; an oversimplification of access to these incentives which will take the form of regional averages, high level data assumptions, and watered down technologies, all designed to make Treasury’s workload in verifying reductions easier.
Meeting newly established reduction thresholds starts with following the science of the full GREET model and recognizing each granular, efficient, and optimized farm management practice being deployed across all regions of the corn belt today. Average data, at most, yields single digit CI reductions. And when established regional climate smart agricultural practices are left out of the formula to reduce CI, winners and losers are being selected before the game even starts.
