The American Coalition for Ethanol (ACE) welcomed the U.S. Department of Agriculture’s (USDA) final rule establishing a Feedstock Carbon Intensity Calculator (FD-CIC) and technical guidelines for the production of reduced carbon-intensity crops, calling it a necessary step toward recognizing and rewarding farmers for farming practices that reduce the carbon intensity of biofuel feedstocks.
The rule provides guidance for quantifying, reporting, and verifying greenhouse gas (GHG) emissions reductions associated with agricultural feedstock production and builds on USDA’s earlier release of the beta version of the FD-CIC. Given ACE’s unique leadership and experience leading USDA Regional Conservation Partnership Program (RCPP) activity to ensure low-carbon farming practices are accurately valued by modeling tools, USDA asked ACE to help beta test and improve the FDCIC.
ACE CEO Brian Jennings said if Treasury incorporates the FDCIC and USDA rule into the final 45Z rule, it will provide certainty for farmers and biofuel producers wanting to monetize low-carbon farming practices in 45Z and emerging clean fuel markets.
"USDA's final rule represents meaningful progress toward enabling farmers who have been adopting low-carbon practices to work with biofuel producers who may want to monetize those practices through the 45Z credit," Jennings said. "For years, ACE has advocated for science-based approaches to clean fuel programs which accurately reflect the benefits of reduced tillage, cover crops, nutrient management, and other low-carbon farming practices. This rule, if adopted by Treasury for 45Z and other jurisdictions for their low carbon markets, will enable farmers and biofuel producers to finally monetize those practices."
ACE welcomes USDA's efforts to create tools that provide greater flexibility for producers while relying on sound science and measurable outcomes.
"The success of this rule will ultimately depend on how it is implemented across federal and state clean fuel programs, particularly the 45Z tax credit," Jennings added. "As farmers and ethanol producers make investment decisions, they need clear, workable guidance and this is a big piece of that puzzle.”
"Through our RCPP activity, we’re generating the real-world data needed to strengthen carbon accounting and ensure farmers and biofuel producers are properly credited for the environmental benefits they deliver, and USDA benefited from this data as we helped pressure test the beta version of their FDCIC," Jennings said. "As these programs evolve, it is critical that federal agencies continue incorporating new science and field data to improve accuracy and expand opportunities for participation."
ACE also encourages continued coordination among USDA and the U.S. Department of Treasury as 45Z rules are finalized to implement these guidelines so producers can maximize on the credit, and verification requirements are streamlined to minimize administrative burdens for farmers and biofuel producers.