The ability to deliver corn to an ethanol plant may be determined by a farm’s carbon intensity score. The higher the score, corn might be turned away. The lower the score, farmers may receive a premium.

Not knowing your score may take you out of some markets in the near future. The clear message is, collect data and document production practices now going into the 2024 crop year, said Mike Estadt, an Ohio State University Extension educator who spoke during the “Ask the Expert” sessions at Ohio Farm Science Review.

A provision in the Inflation Reduction Act provides biofuel producers (ethanol, biodiesel and sustainable aviation fuel) significant tax credits to make necessary capital expenditures to capture and process carbon dioxide, which will increase pressure for farmers to produce low-carbon corn and soybeans for the production of these fuels.

The IRS has yet to set the program rules, but, by law, it will be in effect for three years starting Jan. 1, 2025.

What’s a carbon intensity score?

Every fuel is scored based on the amount of CO₂ or greenhouse gas emissions associated with a megajoule of energy. The score takes in everything associated with producing, distributing and consuming fuel.

A farmer’s carbon intensity score, or carbon footprint, includes everything in the production and delivery of the crop to an ethanol plant. Currently, grains contribute about one-third, and up to about 50%, of the carbon intensity of a gallon of biofuel.

A CI score of 0 equates to carbon neutrality. The higher the score, the poorer impact the creation of the product has on the environment. Today, the estimated national average CI score for corn is 29.1g GHG/MJ, measured with units specifically for ethanol production.

Farmers who reduce their corn’s CI score below 29.1 are being sought after and paid for their low-carbon crop and the data associated to prove the score. 

The details are still to be approved by the IRS, but the value per bushel is estimated to be as much as 5.4 cents per CI point reduced below 29.1. This means farmers can earn substantial new value by collaborating with biofuel producers to jointly produce low-CI fuels, Estadt says.

“If you could get to net zero, that would be a $1.57 value per bushel of corn,” he says. “With 200-bushel-per-acre corn, that’s $314 per acre.”

It’s not exactly known how this will work out on the farm, because the refiner gets the credit, not the farmer.

“Here’s the trick, how much of that $314 does the ethanol plant want to use to put a premium on the farmer’s raw product?” he asks. “There’s going to have to be some share, because without the corn, you don’t get the credit. It will likely be a negotiation. When you think about grain markets, I look at the basis and where do I want to take my corn today. Now it might be, which ethanol plant am I going to take my corn to that gives me the best premium.”

Why go through the ethanol plants instead of farmers? “It’s probably a lot easier to deal with 100 ethanol plants than 100,000 farmers,” Estadt says. “It’s going to require huge capital investments to capture CO₂. There will be a lot of costs to these ethanol plants to change their plans if they are not currently collecting their CO₂.”

Collect data

Regardless, farmers will need to implement a data-documentation game plan for this coming crop season.

“You will have to keep good records, as companies are going to demand it, or they may not buy your corn — companies in the offset market are asking for the same thing,” Estadt says.

Once a score is determined, there are certain practices that can drastically lower the score. The variables that matter most include:

What companies are asking for toes the line with good management with other side benefits, Estadt says.

“Cover crops grow biomass, help reduce erosion, preserve water quality and provide weed suppression,” he says. “Set yourself up. If you have never done these practices, I encourage producers to go to meetings, talk to experts, go to the no-till council — educate yourself first.”

Beyond capturing CO₂ in the soil through no-till and cover crops, agriculture has other sources of greenhouse gases. “Nitrous oxide is really the biggest contributor to a CI; it’s not so much carbon dioxide,” Estadt says. “If we can manage our nitrogen better and use less of it or make a change when you put it on, it will go a long way.”

Ohio is the seventh-largest ethanol-producing state in the nation, and its seven ethanol plants have a combined production capacity of about 757 million gallons per year.

Get your score

It's rare to find a farmer eager to push more numbers, but no CI score may leave the farm at a considerable disadvantage in the near future. Estadt noted a couple of calculators to help producers with the task including: