USDA recently made a $25 million investment in a Regional Conservation Partnership Program (RCPP) led by the American Coalition for Ethanol designed to unlock corn ethanol access to clean fuel markets and new tax incentives, such as the 45Z clean fuel production credit, based on the adoption of climate-smart agricultural practices which reduce greenhouse gas (GHG) emissions.
We are enormously grateful for USDA’s vote of confidence in the work ACE is doing to ensure corn ethanol has a strong future as a meaningful part of the climate solution.
The new RCPP funding will help farmers adopt reduced tillage, nutrient management and cover crops on nearly 100,000 acres across 167 counties surrounding 13 ethanol facilities partnering with ACE to implement the project in the 10-state region of Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin. The sites were strategically chosen to provide our project’s scientific team with statistically significant data regarding the GHG effect of conservation practices in different soil types and climates.
ACE and our partners will accomplish three important objectives through this RCPP project. First, we will incentivize farmers in 10 states to adopt conservation practices, in fact, three-fourths of the funding will go toward farmer adoption of practices. Second, our team of soil scientists and agronomists will monitor, measure and verify how the conservation practices adopted by the farmers reduce GHG emissions from corn production. The data they collect will be shared with the U.S. Department of Energy who will use it to pressure test existing models such as GREET to address real and perceived ‘information gaps’ which currently prevent farmers and ethanol producers from adequately monetizing climate-smart ag practices. Third, our ultimate objective is to empower ethanol producers and farmers with modeling and calculator tools to earn higher tax credits and premium prices in clean or low carbon fuel markets based on climate-smart ag practices. We want to establish an alternative to burdensome and costly quantification and verification protocols that would discourage farmers and ethanol producers from reaping maximum benefits from these practices in the future.
Our near-term goal is to work with farmers in the 167 eligible counties to adopt conservation practices after the 2024 harvest.
The economic potential of capitalizing on climate-smart farming practices to produce corn ethanol for clean fuel markets or new tax incentives is significant. Through the 13 partner ethanol facilities, there’s the potential to remove over 2,679,843 metric tons of CO2 per year. Across the 10-state project area, this could amount to over $500 million per year in estimated maximum value from clean fuel markets — a $266 per acre benefit for farmers based on the three-year average carbon price in the California Low Carbon Fuel Standard. This potential economic value is similar to what the carbon benefits could be worth under a properly implemented 45Z tax credit.
To learn more about this project, visit ethanol.org/usda-rcpp.
