fbpx Skip to main content

How to boost farmer engagement for Section 45z tax credits


Section 45z is a set of tax credits from the Inflation Reduction Act. These tax credits are available to biofuel producers for producing low emission fuels. Tax credits could range from $0.20 per gallon for ethanol and biodiesel to $0.35 per gallon for sustainable aviation fuels, multiplied by emissions factors. 

Many ethanol processors are wondering how to get started, often first turning to the task of beginning to benchmark the carbon intensity (CI) score for the grain they purchase. Even in states like North Dakota and South Dakota that might produce naturally lower CI corn, renewable fuel producers still need to engage growers to enroll and verify their farming practices. 

Getting farmers involved and tracking on-field data seems like a tough task, but there are a few ways to help boost enrollment: 

  • Make it easy: Offer a farm management software, like Bushel Farm, so farmers can easily share the most up-to-date farm practice data and field location. Additionally, offer a website landing page where farmers can log in and easily share specific field data required for enrollment. 
  • Make it worth their while: While there are no guidelines for passing the tax credit savings onto farmers, this report from ABF Economics suggests that some processors are considering sharing up to 20 percent with farmers to incentivize data sharing. 

A Farm Journal column shares this scenario: “Assume a farmer delivers corn with a CI of 15 and the plant qualifies for the full credit of 5.4 cents per CI reduction. This equals a credit of 76.14 cents per bushel. If we assume that plant will pay a premium based on 40% of the credit, this equals a premium of about 30 cents per bushel. If the farmer grows 220 bushels per acre, this is an extra $66 per acre of revenue.” Regardless, for both fuel processors and farmers, these are new opportunities with greater incentives than before.

  • Make it known: It all begins with informing farmers about these opportunities. Traditional marketing efforts such as statement stuffers and posters, and more modern ones such as Facebook ads, can support these efforts. 

It may seem overwhelming. Engaging with Bushel can help. Tapping into our experience of providing easy-to-use digital tools that bring agribusinesses and farmers together, we will support you in the measurement and verification of data, from the field to the final destination. 

We’d love to chat! Fill out the form below to learn more on how to get started. 

2024 Bushel Buddy Seat Conference: Join us in Fargo June 11-12 for networking, learning and more.