CI Score Units

Overview: IRS 45Z, 40B, and tax credit units of measure
The IRS has made some recent updates to pending tax credits and in order to provide unit conversion ease, and avoid ongoing confusion, we must align with the IRS’s chosen units of measure. It has been made clear that the IRS will measure CI Scores with the units: kg CO2E/mmBtu for the 45Z and 40B tax credits.

What happened to 29.1?
29.1 was the standard CI Score that we had been using to align with the GREET model’s published score.  29.1kg CO2E/mmBtu represents the 2022 GREET Feedstock Calculator “Default” CI Score for Champaign County, Illinois (the default county of the Feedstock Calculator). In reality, every county has its own default score. Now that we are using a different unit of measure, the new standard score to compare is 29.1kg CO2E/mmBtu.

What a coincidence, right?
Thanks to the powers that be that the default score for Champaign County is still a 29.1. However, here is how we got to this score for Champaign County, IL:

• 2022 GREET Default = 29.1kg CO2E/mmBtu
• 2022 GREET conversion = 30.7kg CO2E/mmBtu
• 2023 GREET Default = 27.6g GHG/MJ
• 2023 GREET Default = 29.1kg CO2E/mmBtu

   

So what is the 45Z unit of measure?
With the most recent IRS guidelines, it is clear that the unit of measure for the 45Z tax credit is kg CO2E/mmBtu (kilograms of CO2 emission equivalents per 1 million British thermal units of energy). The GREET Feedstock calculator use to provide default units in terms of g GHG/MJ (grams of GreenHouse Gas Equivalents per megajoule of energy).   To align with the IRS we will run these conversions on your behalf and display them on TopSoil.

What is the value of the 45Z tax credit?
The 45Z value is tied to the ethanol production. Transportation biofuel producers can earn up to $0.02/gallon for each CI point reduced from a baseline CI Score of 50. One bushel of corn conservatively creates 2.7 gallons of ethanol (industry average is closer to 2.9gal/bu). Therefore, CI reductions on farms would be conservatively worth $0.054/bushel for each CI point reduced. The gallon-level baseline score is still unknown and will be unique for each ethanol producer.