The economic opportunity presented by the 45Z Clean Fuel Production Credit is unprecedented for American agriculture and biofuels. With commodity prices down, 45Z has the potential to provide much-needed revenue to farmers while accelerating the adoption of regenerative agriculture practices. However, the IRS must implement fair, science-backed rules for the program to succeed.
The Biden Administration’s handling of 45Z left critical gaps, particularly in how feedstocks factor into biofuel carbon intensity (CI) calculations. Now, it’s up to the current administration to ensure that the program is designed to maximize benefits for farmers, biofuel producers, and the broader economy. Continuum Ag has analyzed more than 350 million bushels of U.S. crops and determined that farmers can contribute an average 17 CI points of reduction based on their existing practices. With over 16 billion gallons of ethanol produced annually, 45Z could create $5.44 billion in shared value across the industry.
To unlock this potential, we urge the IRS to adopt the following key recommendations:
1. Complete the 45Z rules as soon as possible to ensure proper investments and scale can be attained.
2. Use the GREET FD-CIC as the feedstock CI calculator and link it to the 45ZCF GREET Model.
The GREET FD-CIC (Feedstock Carbon Intensity Calculator) is the most scientifically rigorous and accurate tool for measuring feedstock CI scores. Compared to the USDA FD-CIC, GREET is more comprehensive, considers county-level emissions, and accounts for key factors like fertilizer use, tillage, and yield.
Ensuring a robust CI calculation method will reward farmers for sustainable practices and encourage further innovation in the sector.
3. Implement a Book and Claim System for Low-CI Feedstock Tracking
The tracking method for low-carbon feedstocks will determine whether 45Z benefits all farmers or only those near biofuel plants. Book and Claim is the fairest and most scalable approach, ensuring equitable access to incentives.
If Mass Balance is used instead, feed costs for livestock producers could rise by $0.25-$0.35 per bushel, negatively impacting farmers in regions like Washington County, Iowa—one of the top pork-producing areas in the country.
4. Use ISO 14065 for Audits and Verification
Ensuring the integrity of farmer claims is crucial for program success. The ISO 14065 audit protocol provides a reliable and practical framework that has already been tested at scale.
Continuum Ag has successfully certified over 29 million bushels using ISO 14065 audits, demonstrating that rigorous verification can be both effective and manageable for farmers. This standardized audit process ensures integrity, protects against fraud, and maintains efficiency while enabling broader participation in low-carbon agriculture programs.
Conclusion: Get 45Z Right for Maximum Impact
If the IRS implements these recommendations—using GREET for CI calculations, adopting Book and Claim for tracking, and enforcing ISO 14065 audits—the 45Z program will be transformative. It will drive carbon reductions, support rural economies, and position the U.S. as a global leader in low-carbon agriculture and biofuels.
The future of regenerative agriculture and biofuels depends on these decisions. Farmers, biofuel producers, and industry stakeholders must voice their support for a fair and effective 45Z implementation.
Click here to submit your public comment to the IRS today and ensure that 45Z delivers on its promise.
Click here to read Continuum Ag’s full comments submitted to the IRS.