USDA Publishes Interim Rule on Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks Public Comment DEADLINE TBD

January 15, 2025

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(U.S. Department of Agriculture) Guidelines will facilitate the recognition of climate-smart agriculture within clean transportation fuel programs, creating new market opportunities for biofuel feedstock producers while enhancing climate benefits.

WASHINGTON, Jan. 15, 2025 – Today, the U.S. Department of Agriculture (USDA) announced the publication of an interim rule on Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks. The interim rule establishes guidelines for quantifying, reporting, and verifying the greenhouse gas (GHG) emissions associated with the production of biofuel feedstock commodity crops grown in the United States. These guidelines will facilitate the recognition of climate-smart agriculture within clean transportation fuel programs, creating new market opportunities for biofuel feedstock producers while enhancing climate benefits.

“The new guidelines are a win for farmers, biofuel producers, the public, and the environment. The action today marks an important milestone in the development of market-based conservation opportunities for agriculture,” said Agriculture Secretary Tom Vilsack. “Today’s action also builds on the Biden-Harris Administration’s historic work to create greater opportunity for homegrown, renewable biofuels. From making E15 more widely available at gas station pumps and approving record biofuel levels, to investing in infrastructure to help communities invest in biofuels, to accelerating a future for Sustainable Aviation Fuels, this Administration created pathways for economic growth that will reverberate for generations to come.”

“America’s farmers play a critical role in building the clean energy economy,” said White House Senior Advisor for International Climate Policy John Podesta. “Today’s announcement from USDA reinforces the important role climate-smart agriculture plays in our rural economy, including in fueling clean transportation solutions, as well as the importance of providing pathways for unbundled, science-based accounting of the carbon benefits of climate-smart practices that help farmers earn more for what they grow.”

The rule issued today establishes a framework to connect climate-smart agriculture (CSA) practices applied in the production of feedstock crops with reductions in the carbon footprint of biofuels. The rule includes three feedstock crops: corn, soy, and sorghum. It also covers CSA practices that could reduce GHG emissions or sequester carbon, including reduced till and no-till; cover cropping; and nutrient management practices, such as the use of nitrification inhibitors. Importantly, the interim rule allows for adoption of CSA practices both individually or in combination. This means that participating farmers would have the flexibility to adopt the CSA practices that make sense for their operation, while still being able to produce feedstocks with reduced carbon intensities under the rule.

Through this interim rule, USDA is establishing standards that can be used to quantify, track, and report the impacts of these practices. The interim rule establishes voluntary guidelines that may inform the development of requirements for other programs which incentivize low-carbon biofuels.

Establishing quantification and verification standards for climate-smart practices helps to ensure that the net GHG emissions reductions from these practices are real, thereby improving credibility and confidence, which could facilitate market opportunities for U.S. farmers growing biofuel feedstocks. In addition to reducing GHG emissions and increasing carbon sequestration, CSA practices can also generate additional environmental benefits, including improved water quality and soil health.

The interim rule includes guidelines on the following:

Biofuel feedstock crops and entities in the biofuel supply chain;
Quantification of farm-level crop-specific carbon intensity;
Chain of custody standards for entities in the biofuel supply chain, including traceability and recordkeeping standards;
Auditing and verification requirements; and
Climate-smart agriculture practice standards for the biofuel feedstock crops included under the rule.

USDA is also publishing a beta version of the USDA Feedstock Carbon Intensity Calculator (USDA FD-CIC) to facilitate the quantification of farm-level crop-specific carbon intensity. USDA FD-CIC allows for the calculation of a farm-scale carbon intensity in line with the standards in the interim rule. USDA will complete a peer-review process to finalize the methodology and resulting carbon intensities included in USDA FD-CIC. USDA will evaluate and respond to the public feedback and peer-review provided on USDA FD-CIC, after which USDA will establish a final version. Until that time, users should consider values from USDA FD-CIC as preliminary. As part of this process of testing and feedback prior to finalization, the public will have the opportunity to examine and download USDA FD-CIC to experience how it would operate.

USDA is requesting public comment on the interim rule to help inform future revisions or additions to the final rule. Interested parties are welcome to submit comments on any aspect of the rule. The interim rule will be posted for public inspection on January 16 on www.regulations.gov and will be published on January 17. Interested parties may submit comments during the 60-day public comment period.

Learn more about this interim rule, or contact Bill Hohenstein, Director of the Office of Energy and Environmental Policy at William.hohenstein@usda.gov or 202-720-4165.

USDA touches the lives of all Americans each day in so many positive ways. In the Biden-Harris Administration, USDA is transforming America’s food system with a greater focus on more resilient local and regional food production, fairer markets for all producers, ensuring access to safe, healthy, and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate smart food and forestry practices, making historic investments in infrastructure and clean energy capabilities in rural America, and committing to equity across the Department by removing systemic barriers and building a workforce more representative of America. To learn more, visit www.usda.gov. READ MORE

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RFA Welcomes USDA Interim Rule on Climate-Smart Ag Guidelines (Renewable Fuels Association)
Clean Fuels Reacts to Release of 45ZCF GREET Model and Climate Smart Ag Calculator (Clean Fuels Alliance America)

Excerpt from Renewable Fuels Association: The Renewable Fuels Association today welcomed the U.S. Department of Agriculture’s release of an interim rule on Technical Guidelines for Climate-Smart Agriculture (CSA) Crops Used as Biofuel Feedstocks. The interim rule establishes guidelines for quantifying, reporting, and verifying the greenhouse gas emissions associated with the production of corn, sorghum, and other biofuel feedstock crops grown in the United States. The USDA guidelines could help inform the inclusion of CSA practices in future clean fuel regulations and tax credit programs, like the 45Z clean fuel production credit.

“America’s ethanol producers applaud USDA for publishing these important guidelines, and we sincerely thank Secretary Tom Vilsack for his extraordinary vision and leadership,” said RFA President and CEO Geoff Cooper. “The entire team at USDA deserves much credit for the enormous effort and technical work that went into this process. These new guidelines begin to open the door to new value-added opportunities for farmers and renewable fuel producers.”

Cooper noted that emissions related to feedstock production account for more than half of ethanol’s carbon footprint; and to date, policies and regulations have not allowed farmers and ethanol producers to embrace more efficient, lower-carbon feedstock production practices as a pathway for reducing the carbon intensity of renewable fuels and breaking into new markets like sustainable aviation fuel.

“Today’s USDA guidelines finally create a much-needed structure for properly assessing, valuing, and integrating the carbon reduction benefits of certain farming practices into lifecycle analysis. We thank USDA for developing this initial framework that could ultimately allow farmers to actively participate in carbon markets, bringing new revenue streams and unprecedented value creation to rural communities.”

USDA is requesting public comments on the interim rule to help inform future revisions or additions to the final rule. RFA will provide comments to USDA on potential improvements, including the need for a decoupled, book-and-claim approach for supply chain management of CSA feedstocks.

Relatedly today, the Department of Energy released details on the 45ZCF-GREET model, which has been adopted by the U.S. Department of the Treasury to calculate the emissions reduction percentages under the Clean Fuel Production Credit (“45Z”) established by the Inflation Reduction Act of 2022. READ MORE

Excerpt from Clean Fuels Alliance America: Long-awaited carbon intensity scores can provide stability for clean fuel producers -- Today, Clean Fuels Alliance America welcomed the Department of Energy’s release of the 45ZCF-GREET model for use in calculating carbon intensity scores and associated values for the §45Z Clean Fuels Production Credit. Clean Fuels also appreciated USDA for issuing an Interim Rule on Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks, along with a beta version Feedstock Carbon Intensity Calculator.

The 45ZCF-GREET model and associated documentation provide needed clarity on how producers can calculate the credit and include its value in negotiating fuel sales and feedstock contracts. The Climate Smart Ag model outlined by USDA requires further work and cannot currently be calculated into the value of the §45Z credit.

Kurt Kovarik, Clean Fuels Vice President of Federal Affairs, stated, “We appreciate Treasury, USDA, and the Department of Energy issuing these long-awaited rules and models. We also thank the many Members of Congress who urged the Administration to publish this guidance as soon as possible. Biodiesel and renewable diesel combined are meeting 9% of U.S. demand for distillate fuel for heavy-duty transportation needs. These rules are crucial to our industry, and continued growth in the industry is essential to the agricultural sector and to U.S. energy security. We will continue to work with our members to evaluate whether today’s releases provide clean fuel producers the policy certainty they need to negotiate feedstock and fuel offtake agreements, and ultimately grow the production and market for biomass-based diesel.”

Kovarik added, “USDA’s rule could enable American farmers and biofuel producers to calculate the carbon benefits of conservation practices. We look forward to continued work with USDA, Treasury and the Department of Energy to ensure that farmers can financially benefit by adopting these practices and cooperate with clean fuel producers to increase the value of domestically produced clean fuels.” READ MORE