The Clean Fuel Production Credit (45Z)
At POET, we work alongside farmers to drive demand for their crops and create innovative market opportunities. POET is committed to creating and sharing value with farmers who participate in our low-carbon grain programs. That becomes even more important as we await federal guidance and rulemaking related to 45Z.
POET is focused on creating value for agriculture, which includes working with our farmers to provide information and access to the growing opportunities for low-carbon grain. Our aim is to work together to maximize 45Z opportunities and create value for our farm partners. The first step for producers is to understand the farming practices that may impact your carbon intensity score so you are positioned to take advantage of 45Z opportunities once federal guidance is made.
Harvesting Profits
POET offers a fast, easy, and free tool for our producers to estimate their farm's carbon intensity score based on the current default GREET model.
The process is simple, takes less than 5 minutes, and estimates your farm’s carbon intensity score. In the GREET model, yield, enhanced efficiency fertilizer, tillage practice, manure usage, and cover crops are some of the most impactful practices when measuring a farm’s carbon intensity score. An internal POET study shows that our producers have an average of 5 points (or 20%) lower CI score than the default GREET national average farm score!
LEARN MORE
Contact your local POET Grain representative to discuss your opportunities and get your free carbon intensity score today!
What is 45Z?
The Clean Fuel Production Credit (commonly referred to as 45Z) is a tax credit that incentivizes the production of clean transportation fuel, including bioethanol. This credit is scheduled to commence on January 1, 2025, and continue for the following three years. The market is anxiously awaiting the final “rules” from the US Treasury Department for this tax credit, presumably prior to the incentive's effective date.
What are the benefits of 45Z?
Growth Energy, the nation's largest biofuels trade association, released a study analyzing the impact of 45Z’s implementation on the U.S. economy. The study found that, if implemented properly, the 45Z tax credit would add $21.2 billion to the U.S. economy, generate roughly $13.4 billion in household income, support more than 192,000 jobs across all sectors of the national economy.
What to look for in the 45Z rules when they are released?
There are many critical factors for bioethanol and corn producers to look for in the 45Z rules when they are released. These rules will ultimately determine which bioprocessing facilities and, as a result, which farmers may be positioned to take advantage of the tax credit. A few of the key items to look for include, but are not limited to:
- Are farming practices scored based on a revised GREET model?
- Are farming practices assigned a carbon score reduction, or are scores calculated based on actual farming practice measurements?
- Will corn be scored based on whole farm or individual field practices?
- Does a bioethanol plant’s carbon intensity score depend on the weighted average score of all bushels delivered, or can the bioprocessing facility digitally identify and preserve specific low-carbon corn bushels?
What is POET currently doing to reduce carbon intensity at its bioprocessing facilities?
POET is committed to carbon intensity reductions and continues to invest in technology to help improve our level of sustainability.
Examples include:
- Solar farm at POET’s headquarters in Sioux Falls, SD
- Biomass-to-power
- Steam-powered turbines
- Total water recovery
- And more
In 2021, POET pledged to ensure that its renewable, plant-based bioethanol reduces greenhouse gas (GHG) emissions by at least 70 percent compared to gasoline by 2030. According to a recent study, today’s bioethanol reduces carbon emissions by 46 percent compared to gasoline. POET plans to achieve net-zero carbon at its bioprocessing facilities by 2050.
To learn more about opportunities to participate in POET’s other sustainable grain programs, contact your local POET Grain representative for more information.
