Gaining Traction: What Farmers Need to Know Now About Carbon Intensity
Since launching the Billion Bushel Challenge in late 2023, Mitchell Hora is on his 25th speaking engagement to educate farmers about the opportunity around carbon intensity (CI) scores.
As of Jan. 1, 2025, biofuels producers can qualify for 45Z tax credits, which were part of the Inflation Reduction Act. Grain will be assessed with a CI score, which has a set of parameters determined by the Department of Energy. Currently, the standard CI score for corn is 29.1, and per the 45Z provisions, the weighted CI score average needs to be below 25.
Hora says his company, Continuum Ag, has helped get CI scores on more than 160 million bushels already. And of course, 20 points below the baseline.
As Hora explains, that is where there is potential money to be made.
“As farmers we can lower our carbon footprint, get that score ran, get it verified and help our friends with the ethanol companies to maximize this opportunity utilizing a more sustainably produced crop,” he says.
What type of financial benefit farmers receive is still yet to be ironed out, and it depends on the ethanol producer.
“The ethanol companies, if they are paying federal income tax, will be able to utilize these credits to reduce their tax liabilities. If the company doesn't pay federal income tax, or creates more credit than what they need, those credits can be resold on the secondary market,” Hora says.
He sees the financial payout to farmers varying on a spectrum. Already, he says one ethanol producer is paying farmers a 2-cent premium on grain with verified data.
Additionally, he has heard one ethanol company say after they cover their expenses, they are planning to pay the farmer 100% of the tax credit value.
What farmers need to know now
“We are talking about fuel produced in 2025, but that is going to use the crop we are growing this year,” Hora says.
Because the CI score depends on current management practices, farmers have the opportunity to start tracking, documenting and making decisions that will drive their CI score.
“It’s time to get the data organized,” Hora says. “This is due to sunset in 2027, and it may be extended—we don’t know. But it’s a short time frame for this opportunity.”
Why this is different than previous opportunities
Hora highlights how CI scores are applicable to every farmer.
“My family has been no tilling since the late ‘70s with cover crops. With other carbon programs we didn't qualify because we were already doing the practices,” he says. “That's not the case of carbon intensity. It's strictly about what is the carbon footprint of your 2024 bushels. It’s per acre and per year.”
