Burnsville, July 29 - Last week, the Minnesota Bio-Fuels Association (MN Bio-Fuels) submitted comments urging the the U.S. Department of Agriculture (USDA) to provide additional flexibility for farmers and biofuel producers in the upcoming 45Z guidance by “unbundling” climate-smart agricultural (CSA) practice requirements and including a broader array of conservation practices and industrial decarbonization technologies into the models. 

In the letter, MN Bio-Fuels also weighed in on the traceability of CSA feedstocks and recommended “decoupling” CSA attributes from physical grain in a “book-and-claim” accounting system. Without changes that reflect the realities of grain marketing, sales, purchases, and movements from feedstock growers to commercial grain aggregators, elevators, and ethanol plants, the 45Z tax credit will be limited in its applicability.

The comments were in response to the USDA’s Request For Information on procedures for the quantification, reporting, and verification of the effect of CSA practices on the greenhouse gas (GHG) net emissions associated with the production of domestic agricultural commodities used as biofuel feedstocks.

“If implemented properly, these credits offer the opportunity to scale the production capacity of low-carbon, homegrown renewable fuels, support farmers and rural communities, and incentivize investment in additional technologies and conservation practices that will further reduce emissions and help the domestic renewable fuel industry achieve carbon neutrality by mid-century,” said Brian Werner, executive director of MN Bio-Fuels. 

Among the comments submitted include the following:

1. USDA should allow Argonne GREET model to serve as a qualifying lifecycle model for 45Z
2. USDA should unbundle the CSA practice requirements and include the full list of Climate Smart Agriculture and Forestry Mitigation activities published by USDA’s Natural Resource Conservation Service (NRCS) as eligible for demonstrating GHG reductions. USDA should conduct further analysis to better quantify GHG emissions for biofuel feedstocks in the GREET model’s Feedstock Carbon Intensity Calculator to unlock a broader list of qualifying practices and promote farmer participation across diverse geographic conditions and soil types.
3. USDA should “decouple” CSA attributes from physical bushels of grain, as in a “book-and-claim” accounting system. A “book-and-claim” system would lower the cost of compliance and reduce GHG emissions associated with transporting grain.
4. When quantifying GHG emission outcomes related to both CSA and conventional farming practices, the USDA should rely on the predominant scientific consensus on the GHG emission benefits of biofuels and avoid incorporating discredited, outdated or flawed research on land use changes.
5. USDA should recognize that corn is a primary feedstock crop for biofuel production and include it in USDA’s quantification analysis for GHG emissions associated with CSA practices.

Additionally, Werner said the 45Z tax credit guidance should be done in a timely manner or the congressional intent of the credit to increase low-carbon domestic renewable fuels and further decarbonize existing biofuel production would be undermined.

“We understand the importance of due diligence when it comes to the quantification, reporting, and verification of CSA agricultural practices and their impact on biofuel CI scores. However, ethanol producers cannot make forward-looking business decisions when facing regulatory uncertainty,” he said. 

Read our full comments here.