A new U.S. Department of Agriculture rule could create additional revenue opportunities for corn growers by establishing a voluntary framework to measure and verify the carbon intensity of biofuel feedstocks, positioning producers to benefit from future incentives tied to lower-emission grain.
The final rule outlines how farmers can document the effects of certain regenerative agricultural practices on the carbon intensity of crops used for biofuel production. Corn is among the four eligible commodity crops, along with soybeans, sorghum and spring canola.
The National Corn Growers Association said the rule is an important step toward allowing farmers to capture added value from grain produced with practices that reduce greenhouse gas emissions.
Published alongside the rule is USDA's Feedstock Carbon Intensity Calculator, which measures greenhouse gas emissions on a per-bushel basis. The calculator uses field-level information on production practices such as tillage, nutrient management and cover crop adoption to generate a carbon intensity score. Biofuel producers seeking lower-carbon feedstocks could use those scores when sourcing grain.
For corn growers interested in participating, the program requires detailed production records and submission of farm data through the calculator. Records also must be verified by an independent third party.
The rule also requires a mass balance chain of custody, meaning grain must be physically traced from the farm to the ethanol plant to qualify. NCGA continues to support a book-and-claim system that would allow growers to market the carbon benefits of their production separately from the physical grain.
The new framework also could play a key role in future implementation of the 45Z Clean Fuel Production Tax Credit.
Earlier this year, the U.S. Department of the Treasury released proposed guidance for the tax credit indicating that low-carbon farming practices could eventually be incorporated into the value of biofuel production incentives. With USDA's rule now finalized, NCGA is urging Treasury and the Department of Energy to update their guidance so farmers can participate directly in the program.
According to NCGA, widespread participation could provide corn growers with an additional market opportunity by rewarding documented reductions in carbon intensity while strengthening demand for corn used in ethanol production.
The association encouraged growers to stay engaged through their state corn organizations and NCGA as federal agencies continue developing the policies needed to connect the new USDA framework with the 45Z tax credit.
Source: National Corn Growers Association, "USDA’s Regenerative Feedstock Guidance Could Create New Value for Corn Growers"