The American Coalition for Ethanol (ACE) has recently been approved for a $25 million investment from the United States Department of Agriculture (USDA). The investment will fund an ACE-led Regional Conservation Partnership Program (RCPP)expansion that builds on the successful South Dakota-based project announced in 2021 to unlock corn ethanol access to clean fuel markets and new tax incentives.
Possible incentives include the 45Z clean fuel production credit, based on the adoption of climate-smart agricultural practices which reduce greenhouse gas (GHG) emissions.
The new RCPP funding will help farmers adopt reduced tillage, nutrient management and cover crops on nearly 100,000 acres across 167 counties surrounding 13 ethanol facilities partnering with ACE to implement the project in the 10-state region of Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin.
The sites were strategically chosen to provide the project’s scientific team with statistically significant data regarding the GHG effect of conservation practices in different soil types and climates.
“We are enormously grateful for USDA’s vote of confidence in the work ACE is doing to ensure corn ethanol has a strong future as a meaningful part of the climate solution,” said Brian Jennings, ACE CEO. “This project will accomplish three important objectives. First, we will incentivize farmers in 10 states to adopt conservation practices. Three-fourths of the funding will go toward farmer adoption of practices. Second, our scientific team will monitor, measure and verify how the conservation practices reduce GHG emissions from corn farming. The data they collect will be used by the U.S. Department of Energy to pressure test existing models such as GREET to address real and perceived ‘information gaps’ which currently prevent farmers and ethanol producers from adequately monetizing climate-smart ag practices. Third, in the long term, we will empower ethanol producers and farmers with modeling and calculator tools to earn higher tax credits and premium prices in clean or low carbon fuel markets based on climate-smart ag practices. It is our goal to establish an alternative to burdensome and costly quantification and verification protocols that would discourage farmers and ethanol producers from reaping maximum benefits from these practices in the future.”
“The existing project in South Dakota has successfully expanded adoption of important conservation practices that benefit soil health, improve productivity and reduce GHG emissions,” South Dakota NRCS State Conservationist Tony Sunseri said. “Expanding the project will result in more conservation on the ground while furthering the scientific underpinnings of the climate benefits that result from deploying these climate-smart practices. We are excited to continue our partnership on this expanded effort.”
The economic potential of capitalizing on climate-smart farming practices to produce corn ethanol for clean fuel markets or new tax incentives is significant.
Through the 13 partner ethanol facilities, there’s the potential to remove over 2,679,843 metric tons of CO2 per year, or the equivalent of taking 596,346 cars off the road annually. Across the 10-state project area, this could amount to over $500 million per year in estimated maximum value from clean fuel markets — a $266 per acre benefit for farmers based on the three-year average carbon price in the California Low Carbon Fuel Standard (LCFS).
This potential economic value is similar to what the carbon benefits could be worth under a properly implemented 45Z tax credit.
To learn more about this project and the expansion, visit this link.