Elected officials are adopting decarbonization policies. To future-proof our industry, steps must be taken to reduce greenhouse gas (GHG) emissions.
That’s what ethanol producers have been doing – innovating and becoming more efficient. During this time, ACE has tackled the other half of the carbon intensity equation – how ethanol companies can further reduce GHGs based on farming practices.
Our goal – to make corn ethanol the gold standard clean fuel.
Agriculture is part of ACE’s DNA, which is why the U.S. Department of Agriculture (USDA) has entrusted us to lead an effort designed to help ethanol producers and farmers unlock new opportunities through climate-smart agriculture (CSA).
USDA Secretary Vilsack discussed our partnership during his keynote at our conference. First, USDA awarded funding for ACE to lead a climate-smart ag project through the Regional Conservation Partnership Program (RCPP) in South Dakota. Based our progress there, USDA approved funding for ACE to lead a larger 10-state RCPP project.
In South Dakota, we have incentivized farmers to adopt conservation practices on 18,000 acres. For the 10-state initiative, we will be able to fund 100,000 additional acres. Once farmers have adopted the practices, soil samples and other data will be shared with the Department of Energy to pressure test the global gold standard tool for assessing GHG emissions – the GREET model. The purpose of running our data through GREET is to address the ‘information gaps’ which currently prevent farmers and ethanol producers from monetizing conservation practices in regulated fuel markets.
What are these ‘information gaps?’
Earlier this year, the U.S. Treasury released guidance for the 40B Sustainable Aviation Fuel (SAF) Tax Credit. While there were positives, including the first explicit recognition by a government body that farming practices have GHG benefits for biofuels, the requirement to bundle three practices (no-till, 4R nitrogen management and cover crops), and the artificial 10-point limit on the credit value of those bundled practices, was completely unworkable.
Why did Treasury take such a conservative approach to climate-smart agriculture for SAF? Because of the perceived information gaps about the true GHG benefits of no-till, 4R nutrient management and cover crops in different soil types and climates. The work ACE is doing through our RCPP projects will generate the data to solve for these information gaps. We will produce the data to show the carbon benefits of these practices in every region of the Corn Belt.
How can that information be of value? With respect to 45Z, our work with USDA will justify more flexibility for farmers, such as credits for stand-alone conservation practices, or stacking of practices, without the bundling requirement. Our work will also justify removing artificial limits on the carbon value of ag practices, so farmers and ethanol companies can maximize opportunities.