Carbon Intensity Score

 

Farmers, starting in 2025, will get paid for corn delivered to ethanol plants based on a carbon intensity score (CIS). This is part of the Biden’s Inflation Reduction Act (BIRA) which has to do with trying to reduce climate change impacts. The BIRA program starts in January 2025 and runs for 3 years. Farms with a lower CSI may get higher premiums while farms with higher CSI may not even be able to sell their corn to an ethanol plant. Farmer’s need to start planning, collecting data, and even change some farming practices to lower their CSI if they want to take advantage of the program.

BIRA pays ethanol plants and biofuel companies (biodiesel and sustainable aviation fuels) to collect the data and they are the ones that get paid the tax incentives and tax credits. According to Mike Estadt, OSU Extension Educator, “The government decided it was easier to work with close to 100 ethanol plants and pay them to conduct the program then to try to collect data from 100,000 farmers.” Mike is a leading expert on CSI ratings and how farmers and these biofuel plants can take advantage of the new program.

The goal of BIRA is to reduce greenhouse gasses. Your CSI or carbon foot print is based on the greenhouse gas emissions and takes into account all your fuel practices and farming practices that may contribute to greenhouse gasses. Currently grain contributes 1/3 to 1⁄2 of the CSI of a gallon of biofuel. For an average farmer, their CSI is about 29.1 gram of greenhouse gas (GHG) per Mega Joule (29.1 g GHG/MJ) of energy. If a farmer can lower their CSI, they may get a premium. If it is higher, they may get a discount or even get rejected from selling their gran to a biofuel plant. How the premiums get split between the farmer and the company is still a question mark. Farmers will have to prove their lower CSI by collecting additional data and they may have to shop around for the companies that pay the best CSI premiums.

What’s it worth? Dropping your CSI to zero or a neutral level is worth about $1.57 per bushel. On 200-bushel corn that is $314 per acre; 250-bushel corn, about $392. A tax credit of about $.054 per bushel is given for every 1-point drop in the CSI. However, that tax credit has to be divided between the biofuel company and the farmer. It will probably not be an even split because the biofuel company has to collect a lot of data.

What data will a farmer need to collect? Yield data is important because the higher the yield, the lower the CSI because it is spread over more bushels. Cover crops, reduce tillage or no-till, and lower fuel usage will lower your CSI. Reducing fertilizer, especially nitrogen-based fertilizers, will reduce your CSI. As Mike Estadt says, “Reducing fuel and fertilizer while achieving high yields go back to good management and are good for the environment.” Less fuel and tillage lower GHG emissions but also build soil organic matter (SOM) which is a source of carbon and carbon dioxide. Cover crops and no-till build SOM and reduce soil erosion while conserving and keeping fertilizer nutrients on the land.

While carbon dioxide is a major GHG, nitrous oxide is an even larger GHG multiplier. Nitrous gas is associated with agriculture and comes from nitrogen fertilizer. Nitrous oxide is the gas that is emitted under wet compacted soils and from excess nitrogen fertilizer. Compared to carbon dioxide, the global warming potential of methane (CH4) is 72x higher and nitrous oxide is 310X.

Mike Estadt says farmers can calculate their own CSI score by using two different calculators. The American Coalition for Ethanol (ethanol.org) and Argonne National Laboratory (What’s Your Carbon Footprint?). Ohio is a big ethanol producer, ranking 7th and producing about 750 million gallons per year. With about 2.8 gallons of ethanol per bushel of corn, that’s about 268 million bushels of corn. Every one-point drop in CSI is equal to $.054/bushel of corn and on 268 million bushels, that equals about $14.4 million dollars to be shared by biofuel companies and the farmer. A 10-point drop is worth about $144 million dollars.

Water vapor is still the biggest contributor to greenhouse global warming, however; it’s needed for growing crops. Carbon dioxide contributes more to global warming when it reaches the upper atmosphere. Most carbon dioxide for crops comes from the carbon stored in the soil, not the upper atmosphere. No-till, cover crops, and less fertilizer per unit of yield give farmers the most return and is better for the environment.