Maximize Farm CI Score Cash-In with Inflation Reduction Act

Kelly Garret, a carbon-conscious farmer from west-central Iowa, is leading the way in selling carbon credits and using regenerative practices. He predicts a future where Carbon Intensity (CI) scores are critical for farmers and that products will carry these scores.

Understanding the Value of Your CI Score

The CI score reflects how carbon-intensive a product is. Garret suggests that the 45Z tax credit will increase the CI score value, which could benefit farmers whose corn is used in ethanol plants. The new tax credit is set to take effect from January 1, 2025.

Garret explains that each point a CI score falls below 50 translates to a two-cent-per-gallon tax credit for ethanol plants. He estimates that each point below the average score of 29.1 equates to an additional 5.5 cents per bushel of corn.

Introducing Regenerative Roots Solutions

Recognizing the importance of CI scores to the future of ethanol production, Garret and partners Peter Meyer, Jarod Creed, and Mike Busing have created Regenerative Roots Solutions, a venture focused on educating farmers about these opportunities.

The team explains that a farmer’s CI score is based on the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model, and that an update to this model is expected soon from the Environmental Protection Agency (EPA).

Dependence of the Ethanol Industry on Farmers

The team emphasizes that the ethanol industry’s survival hinges on farmers’ CI scores. Garret highlights the necessity for partnerships between farmers and ethanol plants for the latter to take advantage of the 45Z tax credit.

Future Demand and Revenue for Farmers

While the carbon market and CI scores still lack clarity, the team is confident that understanding and lowering one’s CI score can result in improved profits for farmers. They also assert that despite misconceptions, farmers need not change their farming methods, instead they need to learn how to reduce their CI scores.

The Role of Data

Mike Busing of Windy Ridge Ag, who is experienced in the carbon market, asserts that data will play a crucial role in verifying CI scores and income from the 45Z tax credit. This verification process will involve third-party verification and data tracking.

Future of CI Scores and 45Z

The team at Regenerative Roots Solutions believes this is not a passing trend but a significant opportunity for farmers to increase their income and reduce dependency on global markets. They underscore the need for farmers to explore and understand their CI scores now for future benefits.