The Renewable Fuels Association today submitted comments urging the U.S. Department of Agriculture to implement the use of a “book-and-claim” accounting framework for tracking and transferring the greenhouse gas benefits of climate-smart agriculture (CSA) practices through the biofuels supply chain.
The comments were filed in response to USDA’s request for information (RFI) on procedures for quantifying, reporting, and verifying the GHG benefits of CSA practices. The RFI is expected to inform the U.S. Treasury’s upcoming proposed rule for implementation of the Inflation Reduction Act’s clean fuel production credit, otherwise known as the “45Z credit.”
“Clean fuel tax credits established under the Inflation Reduction Act of 2022 provide an unprecedented opportunity to position U.S. agriculture and crop-derived biofuels as immediate solutions for reducing emissions and combatting climate change,” RFA President and CEO Geoff Cooper said. “But in order to capture this extraordinary decarbonization opportunity, regulators must allow for flexible supply chain management approaches. Our goal is to maximize CSA adoption and minimize market disruptions.”
According to RFA’s comments, “Decoupling CSA attributes from the physical feedstock and allowing the renewable fuel producer to use book-and-claim accounting would encourage widespread adoption of CSA practices by growers and broad incorporation of CSA emissions improvements into biofuel lifecycle carbon intensity values. At the same time, book-and-claim accounting will allow the grain market to continue operating rationally and efficiently for all participants.”
The benefits of adopting a book-and-claim system for CSA are many, according to RFA. Such an approach:
- Allows farmers who are not in close physical proximity to ethanol, SAF, or other biofuel facilities to be rewarded for adopting CSA practices;
- Allows the grain market to continue operating rationally and efficiently by facilitating the flow of grain to natural buyers based on location, logistics and other market factors; and
- Allows farmers and producers of ethanol, SAF, and other biofuels to better manage market and weather risk.
RFA also encouraged USDA to analyze and quantify a much broader range of “unbundled” CSA practices, rather than relying on the one-size-fits-all approach taken to CSA under the 40B sustainable aviation fuel tax credit.
As part of its discussion on the existing structure of the grain market and the benefits of book-and-claim, RFA submitted a new white paper from Polaris Analytics and Consulting.
