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USDA Releases 45Z Feedstock Details, Drops Bundling Requirement

Progressive Farmer’s Chris Clayton reported Wednesday that “less than a week after biofuel groups lamented the lack of details about the Clean Fuels Production (45Z) tax credit, USDA released an interim rule for climate-smart crops being used as biofuel feedstocks that should provide the biofuels industry more clarity on how to move forward.

“The interim rule, titled ‘Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks’ — or ‘CSA rule’ — outlines how practices that reduce greenhouse gas emissions or sequester carbon will score out on a county-by-county basis,” Clayton reported. “Rather than requiring a bundling of practices, USDA noted that the interim rule allows for measuring the carbon benefits of individual practices such as no-till planting, cover crops and nitrogen inhibitors. The rule outlines procedures for quantifying and verifying a wider range of farm practices.”

“Agriculture Secretary Tom Vilsack, in what he said would be his final press call, explained the release of the rule, which will allow farmers who grow corn, soybeans and sorghum to calculate how different individual practices can lower their carbon-intensity score for crops when selling to biofuel plants,” Clayton reported. “Ideally, the Treasury Department and Department of Energy will take the technical work done by USDA and incorporate that data into the final work updating the Greenhouse gases, Regulated Emissions and Energy Use in Technologies (GREET) model. That makes it easier for biofuel facilities to qualify for the 45Z credit and produce Sustainable Aviation Fuel (SAF), Vilsack said.”

“‘This rule could essentially be rolled into, or dropped into, whatever work they need to do to finalize 45Z,’ he said,” according to Clayton’s reporting. According to the USDA, the interim rule will be open for a 60-day comment period, meaning the final rulemaking will be left to the Trump administration.

Agri-Pulse’s Rebekah Alvey reported Wednesday that “Vilsack said the interim rule demonstrates significant progress from the 40B credit. He cited the inclusion of sorghum as an additional feedstock option, and the fact the rule removes bundling requirements.”

“Additionally, the rule allows for reduced tillage and fertilizer application timing practices. The practices can also be used individually or in combination,” Alvey reported. “Vilsack said that 40B credit was a ‘foot in the door,’ and the interim rule ‘opens the door wide open.’ He said there is still potential for growth, and more climate-smart practices could be integrated later. ‘We can continue to build and improve this interim final rule to create meaningful markets for climate-smart feedstocks that will improve both the greenhouse gas emissions of liquid transportation fuels and the rural economy,’ Vilsack said.”

USDA Also Releases Carbon Intensity Calculator

Alvey said that “to accompany the rule, USDA published a beta version of the feedstock carbon intensity calculator (USDA FD-CIC). It’s designed to make farm-scale carbon intensity calculation more simple for farmers. USDA will complete a peer-review process to finalize the methodology on the calculator and will accept public feedback before establishing a final version.”


“Vilsack said the calculator allows users to see preliminary CI values given the specific crops, practices and counties,” Alvey reported. “The USDA rule and calculator will still need to be adopted by other entities like the Treasury Department. However, Vilsack said there could be substantial economic benefits for farmers, including up to $1 or more per bushel.”

Clayton reported that “using the calculator, Vilsack said farmers in McLean County, Illinois, growing corn with no-till planting, cover crops and nitrification inhibitors can reduce their carbon intensity by as much as 70%. A sorghum producer in Gray County, Kansas, using the same practices could reduce the carbon intensity by 90% per bushel, he said.

“‘Now, obviously, these are preliminary numbers,’ he said,” according to Clayton’s reporting. “‘They’ll need to be finalized after the peer review process, but I think they demonstrate the potential for significant emission reductions gained through climate-smart agriculture.'”

Ryan Hanrahan is the Farm Policy News editor and social media director for the farmdoc project. He has previously worked in local news, primarily as an agriculture journalist in the American West. He is a graduate of the University of Missouri (B.S. Science & Agricultural Journalism). He can be reached at rrh@illinois.edu.

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