Carbon reduction has been the buzzword for the U.S. ethanol industry over the last few years, particularly since mid-2022 with the passage of the Inflation Reduction Act. However, one of the major components of corn-based ethanol’s carbon intensity score occurs—with unacknowledged but important variability—before an ethanol plant ever receives its feedstock, while the corn is being grown. Farming is a frequently overlooked element of the carbon reduction conversation in the ethanol space, while carbon capture and sequestration (CCS) is receiving an extraordinary amount of ethanol producer attention and investment, largely due to enhanced tax credits for CCS and the possibility of CO₂ aggregation pipelines.

However, the potential impact of “climate-smart” farming practices is certainly not lost on industry leaders like Brian Jennings, CEO of the American Coalition for Ethanol. “The production of corn is responsible for about half of ethanol’s carbon footprint, and the other half of ethanol’s carbon footprint can be attributed to manufacturing of the ethanol and then the use of the ethanol,” Jennings says. “A big chunk of the ethanol carbon footprint is what happens on the corn farm or what happens in the corn field.”

ACE Climate-Smart Farming Project
ACE received a grant from the U.S. Department of Agriculture to partner with South Dakota State University, the South Dakota Corn Growers Association, the U.S. Department of Energy Sandia National Laboratory, and Dakota Ethanol LLC, a 100 MMgy ethanol plant in Wentworth, South Dakota, to compensate farmers in the surrounding seven counties for using regenerative or climate smart practices such as cover cropping, reduced or no tillage, and nutrient management. 

The goal of the project is to get more farmers involved in these practices and gain data on how these practices impact soil health and carbon intensity. “We will do baseline testing, as we want the soil data from these farmers engaging in these practices,” Jennings says. "What’s the carbon content of their soil before they begin the practice, [and] what’s the carbon content of the soil after they’ve adopted these practices for four or five years?” Jennings explains that ACE plans to provide this data to Congress, the California Air Resources Board and the U.S. Environmental Protection Agency, showing documentation of the impact these practices have on reducing nitrous oxide emissions and the increase in soil carbon sequestration. 

Regenerative or climate-smart farming practices are nothing new. In fact, many farmers have already been using them for years. “The adoption rates are increasing. Maybe not at the pace that some would like to see but it’s not a small sliver of farmers that are engaged in sustainable and climate-smart practices,” Jennings says. 

David Clay, past president of the American Society of Agronomy and distinguished professor of soil science at South Dakota State University, agrees that farmers are using these techniques already, explaining that the amount of carbon stored in the soil has been increasing over the past few decades as a result. “What we’ve been seeing is an increase in soil carbon levels,” he says. “That increase in soil carbon levels helps hold our soils together, reducing the risk of erosion and so we see the benefits of that.” Improved carbon levels and crop genetics have also enabled farmers to rely less on fertilizers to achieve high yields. For example, in a drought year in 1974, South Dakota farmers harvested only 33 bushels per acre, while in 2012 farmers harvested around 100 bushels an acre statewide in similar drought conditions. 

These practices have potential to significantly benefit farmers, and the program is gaining a lot of interest. “We ended up having a large list of people that wanted to participate, and we are working our way through developing projects with them to be involved with,” Clay says. “One of the things they’re most interested in at this point is [cover cropping].”

The practices ACE will incentivize include reduced tillage, nutrient management and cover cropping. Clay explains that some contracts will be signed for this summer, while others will start in the fall. The incentives will allow farmers to not have to shoulder the entire financial burden of transitioning to low-carbon farming practices. The project will compensate farmers for roughly 75 to 85 percent of the costs associated with implementing these practices, according to Jennings. 

Switching to these practices will probably come with a learning curve for corn growers, because they are learning to do farming differently than the way their parents or grandparents did, according to Clay. To help aid in the transition, farmers will also have access to a learning community with other growers participating, including those with experience using reduced tillage or other regenerative agriculture practices. 


Reduced Tillage
Switching to reduced or no tillage allows for carbon to remain sequestered in the soil, reducing the carbon intensity of the corn and improving the soil quality. “Instead of intensively going in after you’ve harvested your corn and discing up those stalks or plowing those corn stalks up and turning that field black, there are a wide variety of methods at your disposal as a farmer to reduce the number of tillage passes that you make on that land,” Jennings says. “And that in and of itself has a tremendous benefit in terms or retaining moisture in the soil, keeping the soil more intact to prevent wind and water erosion.”

Clay explains that reducing tillage improves long-term soil health by reducing the mineralization rates of the carbon found in it, thereby reducing erosion. 


Cover Crops
Cover crops are planted after the primary “cash crop” is harvested, Clay says. Jennings explains that in certain regions, cover crops improve nitrogen retention as well assisting in carbon retention. Some studies have shown that cover crops drastically reduce the CO₂  equivalent emissions from roughly 500 kilograms per hectare without cover crops to negative 1,000 kilograms per hectare with cover crops. 

Farmers in colder climates may dormant seed after harvesting corn or soybeans, since they are harvested too late in the season for the cover crop to germinate, he says. Even though dormant seeded crops do not produce as much biomass when they germinate in the spring, they will still greatly reduce greenhouse gas emissions. Rye is a frequently used cover crop because of its low cost. Clay explains that these crops need to be controlled before planting the primary crop to prevent them from becoming a weed problem and reducing yields.

Nutrient Management
Farmers manage application of nitrogen fertilizer using the “four Rs” of nutrient management: right place, right time, right form and right rate, according to Jennings. Nitrogen fertilizer is one of the major contributors to corn’s CI score. “Anything a farmer can do to reduce or more efficiently use nitrogen fertilizer that helps bring down the overall carbon intensity score of that corn that is being delivered to the ethanol plant,” Jennings says. 

Nitrogen fertilizer is a source of nitrous oxide emissions, the greatest contributor to the CI score of corn.  Overall, farmers are already careful about how much fertilizer they use, Jennings explains, because fertilizer is an expensive input. 

Policy Progress and Industry Impacts
The ethanol industry has a lot to gain with the adoption of these practices, and a lot to lose without them. Since producers are selling to markets on the coasts and those markets are asking for low carbon intensity biofuel, Clay believes that looking for ways to meet those requirements will help insure those markets continue to be profitable. “A major goal of the American Coalition for Ethanol is to convince policymakers to change the way they implement those policies, to give credit to farmers and ethanol producers for reduced tillage or no-till or cover crops or nutrient management,” Jennings says.

Although the transition to low- or no-till farming is expensive, there are currently no credits provided to farmers who implement these practices. “Farmers and bioethanol producers are penalized by policies that make certain assumptions about what happens on the farm,” Jennings says. “For example, the nitrous oxide emissions are counted as part of ethanol’s carbon footprint, land use change is counted as part of ethanol’s carbon footprint, but ... policy does not yet give credit to farmers or ethanol producers for these regenerative or climate-smart practices.” 

Jennings explains that the ACE team has been vocal with lawmakers about the difficulties of transitioning to low-carbon farming. Legislation is in motion nationally and at the state level that would give farmers credits for implementing these practices. “In order to get the change that [policymakers] want to see in terms of [their] sustainability or carbon reduction goals, there are going to have to be incentives in place for farmers to adopt these,” Jennings says.

Midwestern states may be more aware of the need for these credits and ready to assist farmers he explains. In early March, the Clean Transportation Standard was introduced to Minnesota State legislators. While the bill had not yet passed at press time, it contains language that would give credits to farmers and ethanol producers for climate-smart practices. ACE has assisted with a similar potential bill in Nebraska, which has currently been postponed until 2024.

On the federal level, there was a hearing in mid-February to explore the concept of a national low-carbon fuel standard in the Senate Environment and Public Works Committee. ACE submitted testimony that climate-smart practices need to be a part of any future low-carbon fuel standard, Jennings says. He also sees the Farm Bill, which needs to be reauthorized by Congress in 2023, as an opportunity to “encourage a new policy that would reward farmers and ethanol producers.”

With the implementation of more low-carbon fuel standards, the market for ethanol would grow, as higher ethanol blends are a quick way to reduce the carbon intensity of transportation fuel.  If some of these policies pass and are implemented, it could mean millions of dollars for ethanol producers, Jennings explains. Farmers would also benefit, gaining credits around $200 an acre if they implemented all of these regenerative practices, according to an analysis done by Jennings and his team based on LCFS credits over the past three years. 

These credits, if implemented, would be key to accelerating the widespread adoption of climate-smart farming, which would help solidify ethanol’s place in low carbon markets. “How do we move to the future? Whether or not we believe in global warming doesn’t really matter because the people buying our products do,” Clay says. “And we need to provide the products that they want and are insisting.”
 
Author: Katie Schroeder
Contact: katie.schroeder@bbiinternational.com

Printed in the June 2023 issue of Ethanol Producer Magazine