By Andi Anderson
Farmers now have a useful tool to better understand their Carbon Intensity (CI) Score, thanks to a new calculator developed by an economist from Iowa State University Extension and Outreach.
Alejandro Plastina, the creator of the calculator, explains that it relies on just five input numbers: corn acres, nitrogen use, corn yield with current farming practices, change in nitrogen use, and change in yields under new farming practices.
The CI Score measures the amount of carbon used per bushel of crop production, a crucial metric for selling grain to certain ethanol plants that plan to participate in the federally incentivized Carbon Intensity Score program.
From 2025, these participating ethanol plants will receive tax credits for accepting crops produced with lower carbon emissions. Some may also offer incentives to farmers for delivering lower-carbon crops.
The tax credit that grain buyers will receive is known as the Federal Tax Credit 45Z, or the “Clean Fuel Production Credit.” This new credit consolidates and replaces several fuel-related credits set to expire at the end of 2024.
Plastina encourages farmers to use the calculator to understand their current CI Score and explore ways to reduce it. “Farmers could potentially receive extra payments if their carbon intensity score is lower than the buyer’s threshold,” Plastina said.
Although it is not yet clear how much of the credit will be passed on to producers, the potential benefits are significant.
In a recent article in the Ag Decision Maker, Plastina details the importance of the CI Score and how the calculator can assist farmers.
Unlike private calculators, this tool is free and easy to use, providing farmers with a clear picture of their current standing and what adjustments they might need to make in the future to lower their scores.
However, Plastina reminds farmers that the rules and the model for the Carbon Intensity Score program will not be finalized until 2025. Final decisions on the program could affect how the CI Score is calculated.
This new tool represents a significant step towards helping farmers prepare for upcoming changes in agricultural policy and ensuring they can take full advantage of potential financial incentives.
As farmers begin to adopt new practices to lower their CI Scores, they contribute to a more sustainable and environmentally friendly agricultural sector.
Understanding and improving CI Scores will be crucial for farmers aiming to benefit from the Federal Tax Credit 45Z and other related incentives.
By utilizing the Iowa State University calculator, farmers can start making informed decisions now, positioning themselves for success when the new policies take effect.
Photo Credit: iowa-state-university
Categories: Iowa, Education