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Carbon Intensity FAQ

Frequently Asked Questions

Questions about Carbon Intensity

Here are some of the frequently asked questions we have been receiving from growers, farmers, dealers and customers across the country… and we wanted to make sure we share this information with you!

Carbon Intensity (CI) 101

We foresee the Carbon Intensity (CI) concept becoming a standard in all industries. Our ongoing efforts aim to establish our program as the most accurate and efficient in this regard.

Unlike separate voluntary and commodity markets, Carbon Intensity integrates with the supply chain, allowing the tracking of the product’s carbon footprint from production to consumers. Rather than selling carbon credits and grain separately, CI efforts keep the data and the bushels bundled.

Installing a CO2 pipeline can reduce the carbon intensity score by approximately 30 points. Pipelines are one solution in the broader decarbonization category of Carbon Capture Utilization & Storage (CCUS).

Carbon Intensity represents the carbon footprint of fuel. Part of the Carbon Intensity of the fuel is attributed to the feedstock utilized to produce the fuel. The lower the Carbon Intensity of the feedstock, the lower the Carbon Intensity of the fuel.

Carbon Intensity is the measure of energy input per bushel of produced grain. The CI Score serves as a standardized unit of measurement to record our carbon footprint and overall environmental impact.

As farmers, we are part of the carbon footprint of the biofuel company or whoever we’re selling our grain to.  Biofuel companies are positioned to profit from lowering their Carbon Intensity via emerging tax credits. Quantifying Carbon Intensity from field to tank is a collaborative endeavor that is here to stay.

MMRV stands for measurement, monitoring, reporting, and verification. The TopSoil software facilitates these initiatives.

The Greenhouse gasses, Regulatory Emissions, and Energy use in Technologies Model was created by the Department of Energy at the Argonne National Lab. First launched in the mid 1990s, this tool is the gold standard and has been chosen by the IRS (Internal Revenue Service) for measuring Carbon Intensity.

Carbon Intensity (CI) Score

According to the Argonne GREET Feedstock Calculator, each United States County has a given default CI score for crop production. Typically the CI Score ranges 28-30.

Our system is directly linked to the GREET model and automatically updates when there are changes. Users with existing CI scores will be notified of how these updates may affect their scores.

In the future, we anticipate CI scores becoming integral to all industries and markets. Staying ahead of these programs is crucial for gaining a competitive advantage.

Optimizing nutrients would lower the CI score. The energy associated with fertilizers, fuel, and other inputs contributes to the CI score, so reducing these inputs results in a lower overall score.

Currently, these two scores don’t have a direct relationship impacting overall scores. However, maintaining healthy soil can reduce the need for fertilizers, improving yield and subsequently lowering the CI score.

We anticipate that farmers will be paid based on how much lower their score is compared to the default score for their county.

The cost is $500 and you can start by creating a Farm Profile on TopSoil.Ag.

29.1 comes from the Argonne National Lab’s Default Score for Champaign County, Illinois (Default County of Feedstock Calculator). At Continuum Ag we’ve chosen this number for simplicity purposes.

Biofuel companies rely on low CI crops from farmers as one method to earning credits, while farmers depend on these credits to monetize their scores. The collaboration between the two is essential, as they complement each other in achieving their respective goals.

Petroleum gasoline has a score of nearly 100, while ethanol has a score most often in the mid-50s.

No, it’s not necessary to wait. The GREET model undergoes occasional minimal changes, and since TopSoil utilizes the actual GREET model, any updates can be readily incorporated. Your CI score, if purchased today, will automatically be updated in your TopSoil account whenever necessary.

Through our pursuit of scoring 1 billion bushels, we have found the average CI Score of approximately 11. To see our most up-to-date statistics, visit our Billion Bushel page on our website.

Getting started is easy with our dealer network and consultants available to assist you. Visit TopSoil.ag to begin the process.

Carbon intensity is the amount of energy that goes into every unit or every bushel of grain. The fertilizer, diesel fuel, and pesticides are just some of the inputs that go towards a Carbon Intensity Score.

The value will be subject to producer-specific factors. We estimate that each point lowered is worth approximately $0.054 (or 5.4 cents) per bushel. A free profile on TopSoil.ag provides access to the CI calculator for precise calculations.

You want your Carbon Intensity (CI) Score to be as low as possible, with the goal of staying below your county default. Ultimately a score of 0 signifies Carbon Neutrality while a negative score signifies Carbon Negative production.

Knowing your score and verifying your practices is critical to capitalize on 45Z tax credits. Data will be paramount and the IRS has already released guidance in regards to verification. We are bullish on the long-term concept and see other emerging programs on the horizon.

The High-Demand for Low CI Grain

The signals suggest yes. Across various industries, manufacturers are actively seeking to reduce their carbon footprints by utilizing low-carbon materials, including crops with low CI scores.

While there is a market for low-carbon grain, specific monetary values are pending IRS rules and regulations.

Biofuel companies appear willing to pay more for crops with low carbon scores as they strive to achieve low carbon score goals for tax credits.

The primary short-term opportunity revolves around biofuels and we highly recommend farmers in the supply chains participate in CI Certification. Non-biofuel supply chain farmers will likely have opportunities to monetize their environmental impact as more efforts mature.

Low CI grains are crucial in various supply chains, including those for fuel and food. Many companies aim for low carbon footprint goals, driving the demand for low-carbon crops from farms.

Biofuel manufacturers will quantify their CI Score in regards to a weighted average CI Score of all the grain they purchase. In order to lower the weighted average, a significant volume of low CI grain will be required.

45Z & 40B Tax Credits

40B is a Sustainable Aviation Fuel (SAF) producer tax credit. The credit is for tax years 2023 and 2024.

45Z is the Clean Fuel Production Tax Credit as created by the Inflation Reduction Act of 2022. The tax credit rewards low Carbon Intensity scores for producers of transportation biofuel (ethanol, biodiesel, renewable diesel, and SAF (Sustainable Aviation Fuel)). The tax credit is currently in play for tax years 2025-2027.

Biofuel manufacturers can earn $0.02 per gallon of production for each CI point reduced below a baseline CI score of 50. For SAF producers, this value could be $0.035 per gallon.

45Z enables, for the first time, biofuel companies to leverage scope 3 reductions to decrease their carbon intensity. This means farmers could be financially compensated for participating in low Carbon Intensity practices.

The 45Z tax credits can be used by biofuel producers to offset tax liability or can be sold to the secondary market for cash.

45Z is a federal tax credit designed for low-carbon transportation biofuel. To qualify, manufacturers must maintain a carbon intensity score below 50, and each point reduction earns an additional $0.02.

In order to create the tax credits, biofuel producers will need verified low CI grain. The data associated with the grain is therefore valuable and will likely be monetized as the producers seek to capitalize on the tax credits.

The 45Z tax credits, disclosed by the IRS, allow biofuel companies to offset prior year taxes, utilizing excess credits for amended returns and future offsets.

When the IRS published the 40B rules, they disclosed an initiative called the Climate Smart Agriculture pilot program. Corn farmers using no-till, cover crops and enhanced efficiency fertilizers could qualify and be verified as “Climate Smart.” Soybean producers using no-till and cover crops could also qualify. This concept is only in regards to 40B.