en.Wedoany.com Reported - The U.S. Department of Agriculture recently released final guidelines on reducing the carbon intensity (CI) of biofuel feedstocks through regenerative agricultural practices, marking a step forward for farmers to participate in the 45Z Clean Fuel Production Tax Credit program.
In a news release, the USDA stated that the regenerative feedstock rule establishes a framework linking regenerative agricultural practices to new markets in the biofuel supply chains for corn, soybeans, sorghum, and spring canola. The agency also announced an updated feedstock carbon intensity calculator.
USDA Secretary Brooke Rollins said in the announcement that farmers implementing regenerative practices will have the opportunity to earn premiums, reduce input costs, improve soil health, and enhance the long-term profitability of their operations.
Mitchell Hora, founder and CEO of Continuum Ag, explained during a conference call with industry stakeholders that the U.S. Department of Energy and the Treasury Department also need to take corresponding steps to incorporate the carbon intensity reductions calculated under the USDA guidelines into the 45Z tax credit. Hora noted that farm practices can achieve sufficiently large reductions to make it a worthwhile goal. However, he pointed out that a key element of the USDA rule is that for carbon-reducing practices to count toward 45Z, crops must be delivered directly into the biofuel supply chain, such as grain elevators or ethanol plants. This could significantly limit the number of farmers who can benefit from the program and create cost pressures for livestock producers.
In response to the news, several industry stakeholders weighed in. American Soybean Association President Scott Metzger said the rule will open new premium soybean markets by empowering farmers to produce high-value biofuel feedstocks using on-farm conservation practices. Kurt Kovarik, Vice President of Federal Affairs at the Clean Fuels Alliance America, expressed gratitude for the USDA's responsiveness to industry input and the simplified calculator. Emily Skor, CEO of Growth Energy, said the rule makes it possible for farmers to be recognized for their innovation and regenerative farm practices under the 45Z tax credit.
Mark Mueller, President of the Iowa Corn Growers Association, said the rule provides a framework to reward conservation-minded farmers. Monte Shaw, Executive Director of the Iowa Renewable Fuels Association, said the rule represents a significant step forward from the draft, offering farmers greater flexibility. He noted that recognizing the benefits of regenerative agricultural practices benefits all of rural America, with both farmers and biofuel producers standing to gain. Geoff Cooper, President and CEO of the Renewable Fuels Association, said the USDA rule begins to provide a mechanism to quantify and recognize the environmental benefits of farming practices already widely in use.
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