Rural Matters: Landus Comments on Farm Practices for 45Z Credit

The USDA recently issued a Request for Information (RFI) to gather input and data to evaluate procedures for quantifying, reporting, and verifying the effect of climate-smart farming practices on the greenhouse gas (GHG) emissions associated with U.S.-grown biofuel feedstock crops. Input from this RFI will help with the long-awaited development of guidelines for the 45Z tax credit. This tax program provides green fuel producers with a monetary incentive to drive down the carbon intensity (CI) score of their end fuel, and for the first time will account for farm-level practice changes to be incorporated into the ultimate score, thus driving more value down to the farm.

There were 260 unique comments submitted into USDA. You can review all of those public comments online, or jump directly to the Landus comments. Below are the key themes we outlined to USDA:

1. Use regional USDA/academic data: Scientifically validated data from USDA research or accredited academic institutions should guide the determination of inclusion of additional practices in the program - let science lead the way. To help account for differences in weather patterns, seasonality, topography, and other factors, the programs should utilize regionalized data sets that best capture the scientific understandings of that localized cropping region.
2. Remove practice bundling requirement: Farmers need the flexibility to be able to work with their agronomists and other trusted advisors to make the best decisions for each of their fields. Bundling of practices, as was outlined in the 40B program, creates an all-in or all-out situation instead of providing flexibility to the farmer, and thus imposes significant barriers to farmer participation in this program.
3. Don'tlimit feedstocks or practices: Innovation is constant in agriculture and bioscience, and as such there should not be limitations on the types of feedstocks and conservation practices recognized for eligibility under the program. We want as many tools in our toolbox as possible to drive carbon reduction and provide farmers with the ability to do what is best for each of their fields.
4. Consider green ammonia: One specific example of an innovative tool that should be considered as a significant tool of GHG reductions is green ammonia, which also is being produced here locally. Landus had partnered with Talus Ag on developing green ammonia sites in the Midwest.
5. Use domestic feedstocks: Building our domestic energy supply chain is not only ensuring the production and consumption of green fuels in the U.S., but also requires those fuels to be made from domestically sourced sustainable feedstocks.
6. Verifiers should bear responsibility: Third-party verifiers should certify a farmer each year on their identified climate smart ag practices, which can be done several ways (aerial/drone imagery, application records, purchase records, physical inspections, and much more that ag retailers like Landus are working with our farmers on each and every day). Once a farmer is certified the verifier should bear the liability and the initial point of any audits.
7. Protect data and make it streamlined: It is imperative that farm data remains the property of the farmer and is protected, but it is also important to streamline the paperwork requirements and reduce data double entries, especially when some of the necessary information is reported to USDA agencies by farmers on a regular basis throughout the growing year, such as acre certification to FSA, crop insurance information to RMA, and conservation practices to NRCS.
8. Remove direct contract requirement: It is important that the grain or other feedstock be able to change hands (buy/sell) as it moves through the supply chain, and that the CI valuation remain with those bushels/quantities. We are concerned about the direct contract requirement of a farmer with a SAF producer that is outlined in the 40B guidance and would encourage that be removed as part of the 45Z program.
9. Track with mass balancing: We support utilizing mass balancing as a means of supply chain traceability, and we have successfully utilized it in a sustainable soy oil pilot program just a few years ago.