Carbon intensity, or “CI,” scores are a growing consideration in the U.S. and abroad for products, companies, industries, and more. Some of this is driven by consumer demand; some is driven by government incentives. For farmers and biofuel producers, either case provides potential opportunities.
That’s why POET is providing a fast and free tool for its producers to understand their own CI scores and position themselves to take advantage of those opportunities.
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Carbon Intensity Scoring
CI scoring attempts to calculate greenhouse gas emissions through the lifecycle of a product. For farms, many elements factor into that calculation, including chemical use, tillage and harvest practices, fuel use, crop yields, and more. The use of these practices to minimize CI scores is often referred to as “sustainable agriculture” or “carbon-smart agriculture.”
Christian McIlvain, President of POET Grain, said agriculture is a key focus for carbon efforts today because people understand how important it is to our future. “The landscape is evolving,” he said, with sustainability and decarbonization as a focus for government and society.
“It gives a nod to what I believe is the fact that agriculture really is the solution to the world's needs for food, the world's needs for energy, the world's needs for a healthier environment,” he said.
Carbon-Smart Agriculture Strengthens Farms
Jeff Reints farms 4,200 acres in Shell Rock, Iowa, with his son. For him, the kind of practices that lead to a lower CI score have been part of his operation for decades — things like strip tillage, manure application, and cover crops. With or without incentives, it just makes sense. “I need to have healthy, vibrant soil. Intensive tilling just kills that,” he said.
Taking good care of the environment is a core value for U.S. farmers, he said. They understand the importance of the land they have been entrusted with.
“This is the only land we have. They’re not making any more of it,” he said. “We have to be stewards of the land, not consumers of the land.”
McIlvain said CI scores are an opportunity to recognize the practices that many farmers have employed to become more efficient and improve soil health. Working with farmers to determine their carbon intensity has confirmed something he has long believed: that POET’s partners are at the leading edge of technology and innovative practices in ag.
“They're doing things that are appropriate for their farms, and many of those things involve advanced farming practices,” he said. “But more and more farmers are becoming educated around carbon intensity, and they want to understand quantitatively, ‘So what do my farming practices amount to in terms of a carbon intensity score?’ And I think that's fantastic.”
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POET’s Free, Fast, Easy Calculator
Going through a full carbon intensity audit can be a costly and time-consuming process. While some opportunities to capture value for advanced farming practices may exist today, most of the opportunities have not yet been finalized.
“While there are a number of voluntary corporate environmental protocols emerging and a collection of USDA initiatives seeking to incubate markets, POET has been investing in the development of various low-carbon programs and technologies that provide farmers the opportunity to capitalize on the demand for lower-carbon bioproducts and add value to every bushel of corn produced,” McIlvain said.
POET developed a CI calculator with fewer inputs that allows farmers to get a good idea of where their operations stand today as they look to the future. The calculator is free, and farmers can participate by contacting their local POET bioprocessing facility.
Reints has gone through other processes to determine his farm’s CI score in the past. He also worked with staff at POET Bioprocessing – Shell Rock to see how their tool compared. “The numbers came up very similar, almost identical if you input the same data,” he said.
Economic Opportunities on the Horizon
At the moment, farmers are not yet seeing much added value for sustainable ag practices, Reints said.
“So far, it means about nothing in the marketplace,” he said. “We hope it will someday. We hope to get rewarded for that.”
McIlvain said those opportunities appear to be coming, and he’s optimistic they’ll prove beneficial for both farmers and biofuel producers. “POET is committed to finding markets that allow us to garner premiums for our products and, where appropriate, share that value with farmers,” he said.
One of the biggest opportunities on the horizon is through the Inflation Reduction Act, in a provision called 45Z. This is a tax credit that takes effect in 2025 for bioethanol with a CI score that is at least 50 percent lower than petroleum-based fuel. It is anticipated that 45Z will include beneficial provisions for advanced farming practices.
“At this point, the rules for 45Z are not yet written, so we don't know yet what benefits associated with advanced farming practices will amount to,” McIlvain said. “But what we're doing in the meantime is helping to educate farmers and, again, offer them carbon intensity score assessment for their individual farming practices so that they can be better prepared to take advantage of these and other opportunities as they emerge.”
POET Partnership Offers New Way to Lower CI Scores
Besides calculating scores, POET is also working to help farmers lower those scores. One such effort is a collaboration with CF Industries, which produces low-carbon ammonia fertilizer among its many products.
The companies are creating a fertilizer supply chain to track, validate, and certify carbon intensity reductions through low-carbon ammonia manufactured at CF Industries’ Donaldsonville Complex in Louisiana. They are also developing monetization opportunities for farmers who use this fertilizer. The program will initially be launched at POET’s locations in Bingham Lake (Minn.), Emmetsburg (Iowa), Fairmont (Neb.), and North Manchester (Ind.).
“There are some key elements that can contribute to a farm's carbon intensity score, and one of those key elements is fertilizer,” McIlvain said. “So the opportunity to improve a carbon intensity score through your inputs, and more specifically through optimizing around fertilizer, is significant.
Exciting Time for Ag
Agriculture has changed in the 21st Century, and biofuels have been a big part of that. New value from carbon intensity is the next opportunity for U.S. farms. Reints is excited about the possibilities.
“This can be one of the biggest markets — and biggest unknowns — I’ve seen in my lifetime,” he said.
For POET, it fits neatly with what the company has always stood for.
“When you think about POET, we've got more than a three-decade history, and really throughout that history, we've been focused on value-added agriculture,” McIlvain said. “That involves expanding markets for our bioproducts, but also improving profit margins for the folks that we associate with, like family farms.”
