Climate Policy

Trump Signals More DEF Rollbacks, Pushes Manufacturers to Lower Equipment Costs

Fri, 27 Mar 2026 18:48:39 GMT

In front of a gathering of farmers, ranchers and growers at the White House, President Trump and EPA announced new guidance that will remove the DEF sensor requirements, which the Small Business Administration (SBA) estimates will save farmers $4.4 billion a year and translate into $13.79 billion for Americans. Administrator Lee Zeldin says the move impacts farmers, truckers, motor coach operators and other diesel equipment operators.

“I have heard from truck drivers, farmers and many others complaining about DEF and pleading for a fix in all 50 states I visited during my first year as EPA administrator,” Zeldin says. “Americans are justified in being fed up with failing DEF system issues. EPA understands this is a massive issue and has been doing everything in our statutory power to address this. Today, we take another step in furthering our work by removing DEF sensors. Farmers and truckers should not be losing billions of dollars because of repair costs or days lost on the job.”

Every farmer now has the Right to Repair their own equipment thanks to President Trump. It’s crazy that our talented farmers were being prevented from doing this previously. This announcement is about common sense. Farmers will be able to spend more time in the field and less… pic.twitter.com/4hROUN45EU
— Lee Zeldin (@epaleezeldin) March 27, 2026

New Guidelines Focus on DEF Sensors

EPA says that sudden speed losses and shutdowns caused by DEF system failures compromise safety and productivity. It calls the issue unacceptable and problematic. In a release, EPA says it plans to continue to pursue all legal avenues to address Americans’ complaints. On Feb. 3, 2026, EPA demanded critical data on DEF system failures from the manufacturers that account for over 80% of all products used in DEF systems. This information will arm EPA with what it needs to permanently address DEF system failures. Thus far, the agency has received data from 11 of the 14 manufacturers, and in less than a month, EPA has turned around preliminary findings to issue today’s guidance, demonstrating Administrator Zeldin’s commitment to fixing this issue.

“Today, by eliminating DEF mandates, the Trump Administration is taking yet another step to free up hardworking Americans to focus on the vital work of feeding, clothing, building, and fueling our nation,” says SBA Administrator Kelly Loeffler. “I applaud Administrator Zeldin for his leadership on this issue, and I look forward to our continued collaboration to cut red tape for small businesses across the U.S. food supply chain.”

Several ag equipment manufacturers were highlighted during the event at the White House, including John Deere. The company weighed in EPA’s latest announcement about DEF.

“John Deere applauds the EPA’s leadership to provide as much flexibility through agency guidance as possible to limit the frequency of false DEF-quality inducements,” says Kyle Gilley, vice president for global government affairs at John Deere. “Today’s announcement builds upon EPA guidance from February 2026, requested by John Deere, to provide farmers additional tools to complete emissions-related repairs. These announcements are a win for farmers and their ability to keep modern equipment operating in the field.”

EPA says the preliminary review of the warranty data suggests that DEF sensor failures are a significant source of warranty claims and DEF-related inducements. The agency’s new guidance makes clear that under existing regulations, manufacturers can stop inaccurate DEF system failures by removing traditional emission sensors, known as Urea Quality Sensors, and switching to nitrous oxide (NOx) sensors.

EPA also affirms that approved NOx sensor-based software updates can be installed on existing engines without being treated as illegal tampering under the Clean Air Act. This is in line with EPA’s February 2026 Right to Repair clarification guidance , which removed a major barrier keeping farmers from fixing their faulty DEF systems in the field. EPA anticipates the switch will greatly curb errors that traditional sensor technologies have been prone to and reduce the issues Americans face with inaccurate DEF failures.

For more information, see EPA’s Diesel Exhaust Fluid .

Trump Calls on Manufacturers to Lower Equipment Prices If DEF Rolled Back

During Friday’s event, Trump also spoke about the rising complexity and cost of modern farm equipment.

“When you buy a tractor today, you spend 50 percent of your time fixing the environmental — I say environmental impact statement garbage that’s on the tractor,” he says.

He adds that equipment often includes computerized systems that can shut down tractors unnecessarily, increasing repair costs.

“I said to the head of John Deere, ‘Is this a good thing or a bad thing?’ He said, sir, you have no idea how bad it is. It’s made our tractors so complicated. … We want to go back to the old ways, sir. And I said, I agree with you 100 percent.”

During remarks at the event at the White House today, President Trump said EPA is working to further roll back DEF-related requirements and pushed manufacturers to cut equipment costs:

“You’re going to lower the cost of a tractor… they’re going to be able to very shortly…
— Tyne Morgan (@Tyne_Ag) March 27, 2026

The president says the administration is looking into further rolling back DEF requirements, but as he does, he is also urging manufacturers to reduce equipment prices for farmers if the added environmental regulation costs are no longer there.

“Lee (Zeldin), I think we can say, I know you’re in the process of cutting out massive amounts of nonsense that are mandated to be put on your tractors, that all of your trucks that cost your fortune…and I know that they’re going to do this. And I asked one thing, you got to promise me one thing. You’re not going to take any profits. You’re going lower the cost of a tractor. I want you to lower the costs. And if they don’t lower the course, you’ll let me know. And I’ll have to do a big number of those companies. Okay? They’re going to be able to, very shortly, produce a bigger, better tractor and substantially less money. It’s going to be better. It’s gonna be a better tractor at substantially less,” Trump says.

He adds that future tractors will be simpler, more reliable and less expensive.

“I want John Deere and Case and all of the great companies … to give it to you in the form of lower tractor and equipment costs. And I think it’s going to have a huge impact,” he says.

President Trump then directed EPA Administrator Zeldin to explore ways to require, or mandate, manufacturers to lower the cost of farm equipment.

EPA’s guidance issued on Friday is part of a broader effort to address complaints from farmers, truckers and other diesel equipment operators about DEF system failures that cause equipment shutdowns, but Trump says more action on DEF is currently underway.

White House Sets Record Biofuel Volumes for 2026 and 2027

Fri, 27 Mar 2026 18:36:32 GMT

In the 20th year of the Renewable Fuel Standard (RFS) program, the White House has established the renewable fuel volume requirements for 2026 and 2027 at the highest levels in program history. The Set 2 final rule, announced at the White House Great American Agriculture Celebration in front of 650 invited attendees, realigns the program with Congress’ intent to increase the use of homegrown American biofuels.

“Today’s announcement is truly historic for our nation’s farmers and energy producers. These numbers represent the highest levels of biofuels ever required to be blended into our fuel supply,” says Brooke Rollins, Secretary of Agriculture. “With President Trump and Administrator Zeldin’s leadership, these historically high volumes are expected to create a $3 to $4 billion increase in net farm income. The Renewable Fuel Standard Set 2 Rule will create a $31 billion dollar value for American corn and soybean oil for biofuel production in 2026, which is $2 billion more than in 2025. Our farmers are stepping up to grow American energy dominance.”

Just this week, EPA renewed emergency waivers for E15 gasoline sales during the summer driving season.

What Does the Set 2 Final Rule Mean for Farmers

To meet the 2026 and 2027 volume levels, EPA estimates biodiesel and renewable diesel production and use will need to increase by more than 60% versus 2025 volumes. The increase was above the initial proposal.

“The proposal that we saw nine months ago was extremely robust,” explained Kurt Kovarik of the Clean Fuels Alliance America. “In fact, our industry, along with the petroleum sector and the soybean growers, asked for a volume requirement for 2026 of 5.25 billion gallons. They proposed 5.61 billion gallons. And today’s proposal is right in that neighborhood between 5.5 to perhaps as high as 5.6 or 5.7. There’s a little bit of math yet that needs to be done.”

He said that in 2025, biodiesel and renewable diesel facilities were forced to shut down or run far below prior-year production levels due to market uncertainty. U.S. biodiesel production declined by one-third in 2025, compared to 2024.

“Biodiesel and renewable diesel represent 10% of the value of every bushel of U.S.-grown soybeans, contributing to President Trump’s desire for American energy dominance and domestic market demand for agriculture commodities,” said Kovarik. “American farmers and other feedstock providers are eager for the growing domestic clean fuel market to drive value in agriculture, along with economic growth and job creation in rural communities. American consumers are desperate for secure, affordable domestic energy. Today’s rule is a clear win for the nation’s energy security.”

With the benefits Set 2 will bring to America’s farmers, EPA estimates the rule will generate more than $10 billion for rural economies and create more than 100,000 new jobs in the agricultural and manufacturing sectors. To provide continued certainty for American corn growers and ethanol producers, EPA will maintain the 15 billion conventional biofuel level for 2026 and 2027.

Based on EPA’s latest release on March 27

(EPA)

What are Renewable Volume Obligations?

RVOs are targets set by EPA to determine how much renewable fuel must be blended into the U.S. transportation fuel supply. EPA determines the total volume of different categories of biofuels that should be used in the country for multi-year periods. Once decided, EPA converts the total volumes into percentage standards, which represent the ratio of renewable fuel to the total amount of gasoline and diesel expected to be consumed in the U.S. that year.

Each “obligated party,” typically refiners and importers of gasoline and diesel, calculates its RVO by multiplying EPA’s percentage standards by the total volume of non-renewable gasoline and diesel they produce or import. To prove they have met their RVO, obligated parties must use a serial number attached to each gallon of biofuel, known as Renewable Identification Numbers (RINs). When the biofuel is blended into the fuel supply, the RIN is “separated” from the physical fuel.

At the end of the compliance year, obligated parties must submit to EPA enough RINs to cover their specific RVO. If a refiner blends more biofuel than required, they can sell their excess RINs to other refiners who have not met their obligations.

Adjusted Small Refinery Exemptions

The EPA also finalized the reallocation of the volumes from Small Refinery Exemptions from 2023 through 2025. Those are now set at 70%.

“Adding it to the top line volume for 2026 and 2027, the volumes that were waived over those three years will be made up in 2026 and 2027,” Kovarik. “For our industry, that’s somewhere between an additional 200 to 250 million gallons a year.”

He says that is on top of the already robust minimum volume that EPA set. The agency claims the RFS rule will create $31 billion in value for American corn and soybean oil.

Renewable Fuels Association (RFA) President and CEO Geoff Cooper noted that while they advocated for full reallocation of the 2023-2025 SREs, the 70 percent reallocation included in today’s rule is better than other options that were under consideration. EPA had proposed 50 percent reallocation as an option and also solicited public feedback on no reallocation at all.

“We continue to believe small refinery exemptions are completely unjustified, and the SRE petition process—including EPA’s reliance on the Department of Energy’s ‘scoring matrix'—is fundamentally flawed,” Cooper said. “SREs distort the market, undermine fair competition, and destabilize the RFS program. And while RFA appreciates EPA’s efforts to minimize market disruptions by reallocating most of the renewable volume lost to SREs, we believe the Agency has a duty to fully restore all exempted volumes.”

RVO Reaction Pours In

The Renewable Fuels Association (RFA) and other farm groups applaud the RVO announcement from EPA.

“Today’s RFS rule supports continued growth in American-made renewable fuels like ethanol and brings much-needed certainty and stability to the marketplace,” said RFA on X.com .

Today’s RFS rule supports continued growth in American-made renewable fuels like #ethanol and brings much-needed certainty and stability to the marketplace. We are grateful to @POTUS and @epaleezeldin.https://t.co/FdovzBqLUr
— Renewable Fuels Association (@EthanolRFA) March 27, 2026

“Congress intended year-to-year renewable fuel blending to increase under the RFS and today’s announcement with the highest-ever volume obligations helps fulfill their intention,” said Brian Jennings, CEO for American Coalition for Ethanol. “We’ve consistently advocated for strong final blending obligations for 2026 and 2027, reflecting the full potential of the RFS and ensuring small refinery exemptions (SREs) do not erode demand for renewable fuels.”

Jennings says the integrity of the RFS depends on ensuring volume obligations translate into real-world demand. Any gap between required volumes and actual blending undermines the program and creates uncertainty for ethanol producers, farmers, and rural communities.

“We appreciate President Trump, Administrator Zeldin and Secretary Rollins for delivering strong RVO volumes and doing so in a way that recognizes the importance of American farmers,” said NSP Chair Amy France, a farmer from Scott City, Kan. “These volumes provide critical certainty for sorghum producers and help strengthen demand across the biofuels sector.”

NSP also highlighted EPA’s decision to reallocate 70 percent of previously exempted volumes, helping ensure that promised demand is realized.

“Maintaining the integrity of the Renewable Fuel Standard is essential,” France said. “Reallocating those gallons helps protect the market opportunities farmers depend on. We need to build on this momentum and get year-round E15 across the finish line.”

Ohio farmer and National Corn Growers Association President Jed Bower, who was present at the White House for the announcement, also weighed in on the latest volumes.

“Our deep thanks go to President Trump and Administrator Zeldin for releasing these robust RVO numbers in an exceptionally timely manner and, appropriately, during an event honoring America’s farmers. This action provides certainty to corn farmers across the country who rely on a stable biofuels industry. Today’s announcement, coupled with the Trump administration’s E15 summertime waiver earlier this week, is a positive move for the nation’s corn growers who are navigating an exceptionally difficult economic environment. There is still more to be done to help our growers, and we look forward to working side-by-side with the president and our allies in Congress to get permanent year-round E15 legislation over the finish line.”

Fuel and Fertilizer Costs Surge

While there’s hope that embracing biofuels can help bolster the farm economy and lower prices at the pump, farmers are feeling the fallout of higher oil prices. According to AAA on Friday, the national average for a gallon of diesel fuel was $5.38. That’s nearly $2 per gallon higher than it was just a year ago, and it’s happening right as farmers gear up for the spring planting season.

“To help lower gasoline prices for farmers and consumers, this week, I issued an emergency order to allow immediate sales of E-15 — and just as I promised in the campaign, I’m seeking Congressional action to allow E-15 all-year-round,” said President Trump.

Fertilizer prices are also significantly higher in the last few weeks. While some farmers pre-applied acres last fall and others bought earlier in 2026, there are still a number of acres left to cover.

Inside the Room: What Farmers Heard as USDA Rolled Out Its $700M Regenerative Ag Plan

Tue, 27 Jan 2026 21:55:25 GMT

When USDA quietly selected a small group of farmers to help roll out a new $700 million regenerative agriculture pilot program, most producers never knew the meetings were happening. Missouri farmers Jon and Brittany Hemme did, because they were invited into the room, sitting face-to-face with two cabinet secretaries and hearing firsthand how Washington plans to reshape soil health policy.

“We are very average farmers,” Hemme says. “It was a very humbling experience that we were chosen. My biggest takeaway is that I truly believe they’re trying to do the right things, bringing better health options to people through the way food is produced.”

Reinventing a Small Dairy to Stay Viable

Jon is one of three Hemme brothers continuing a dairy operation their father started 30 years ago. Today, the Hemmes operate the only dairy left in Saline County. Survival hasn’t come easily. As small dairies disappeared, the Hemmes reinvented their business model, adding on-farm processing and direct-to-consumer sales.

“That’s where our direct market part of our business came in, the creamery,” Hemme says. “Being able to go to processing and then direct market that end product has made us a viable operation yet as a small dairy.”

Their Hemme Brothers cheeses are now sold throughout Kansas City and central Missouri, but what also caught the attention of USDA was how they manage their land.

“We started planting cover crops the first time in 2017, got really aggressive by 2018 to where we tried to have all of our acres covered in one way or another,” Hemme says.

That shift began at the request of a landlord nearly a decade ago. Hemme says it pushed him to learn what regenerative agriculture really meant and how it could pencil out.

“We initially started just looking to try to reduce inputs to where we could keep a little more of our income,” he says. “For quite a few years we managed them that way trying to reduce our herbicide and we were successful, but that takes a lot of time and management. Here recently we’ve kind of mainstreamed it to where the main reason for them is erosion control.”

A Text Message From USDA

That work that started nearly a decade ago led to an unexpected invitation from Washington.

“We got a text message on Dec. 8 saying: ‘Would you and Jon want to come to USDA and be a part of Secretary Rollins’ announcement?’” Brittany Hemme says. “Thought it was a joke maybe at first, because it was so random. But we were on a plane the next morning and then with them in D.C. on Dec. 10.”

In the midst of the madness of the holiday season and school activities for their kids, the Hemmes went ahead and said yes, knowing this could be a once-in-a-lifetime opportunity.

A First-of-its-Kind $700 Million Pilot Program

Not knowing exactly what USDA was going to unveil, at the event, USDA and HHS announced what they call a first-of-its-kind, $700-million Regenerative Agriculture Pilot Program, administered through NRCS. The goal is to test a farmer-first model that improves soil health while maintaining long-term farm viability.

“We’re doing things a little bit differently than typical Washington, D.C.,” said U.S Secretary of Agriculture Brooke Rollins during the announcement at USDA. “We have encouraged the states to think differently and creatively as our laboratories of innovation about how to solve the many health issues facing America ... but really today is about the next step in making America healthy again, and that is talking about regenerative agriculture.”

During thee announcement, Rollins said the focus of USDA and HHS for the new pilot program was on protecting soil and is critical for farm productivity and longevity.

“Protecting and improving the health of our soil is critical not only for the future viability of farmland, but to the future success of American farmers,” she said. “We must protect our top soil from unnecessary erosion and boost the microbiome of the soil.”

But it wasn’t just USDA unveiling the new program. Rollins was standing beside Department of Health and Human Services Secretary Robert F. Kennedy Jr., who called the program a milestone tied to promises outlined in the MAHA Report.

“Among the recommendations of the report was the promise to make it easier for farmers in this country, farmers who are dependent on chemical and fertilizer inputs, to give them an off-ramp,” Kennedy said in December. “An off-ramp where they can transition to a model that emphasizes soil health. And with soil health comes nutrient density.”

An ‘Off Ramp’ for Farmers

When “U.S. Farm Report” recently caught up with the Hemmes to get their reaction, Jon says one of the key takeaways from the announcement is the structure of the pilot program and why that matters.

“It’s a five-year program, a five-year contract,” he says. “You can address multiple things in the same contract that you want to address. The farmer gets to pick his goal. They’ll develop a plan to help them achieve that goal, and then they’re going to quantify it with a soil test up front and one at the end.”

Along with the announcement, the Hemmes then had the chance to take part in a closed-door roundtable discussion with Rollins, Kennedy and Dr. Mehmet Oz, who serves as administrator for the Centers for Medicare and Medicaid Services under Kennedy.

“They notified us that we would be in a roundtable discussion with Secretary Kennedy, Secretary Rollins and Dr. Oz; that made us pretty nervous,” says Jon, laughing.

Brittany says one word stood out during that discussion.

“He said ‘off-ramp’ several times,” she says. “I really appreciated that, because this is voluntary. There’s nobody forcing anyone to do this program. It’s not all or nothing. You can work with USDA NRCS and come up with a plan that is going to work for you on your farm, in your context.”

With no cameras in the room, Hemme says the conversation felt genuine.

“They wanted some feedback from farmers,” he says. “They allowed us to each go down the line and explain our operations, our motivations behind using regenerative agriculture, and then they followed it up with some really good questions.”

Those questions included market access and how long the transition takes.

“You could see him, the wheels turning,” Hemme says of Kennedy.

What Was (And Wasn’t) Discussed

Before Kennedy joined the cabinet, some farmers worried his focus would be on restricting tools like glyphosate. The Hemmes say that never came up.

“It’s been more voluntary, putting something out there instead of coming in with a stick,” Jon says.

“There was mention of tools in the toolbox, and there was no mention of taking any of those tools away,” Brittany adds.

As Brittany has watched Jon’s regenerative journey on their own farm, she says regenerative agriculture is often misunderstood.

“Some of the negative connotation has come in from an all-or-nothing mindset,” she says. “They demonize certain tools in the toolbox, and that’s unfortunate. True regeneration is what works in your context.”

Lessons From Their Nearly Decade-Long Journey in Regenerative Ag

For Jon, this really isn’t unconventional or something new. He says regenerative ag, to him, all comes back to building resilience in your soil.

“It is conservation, but it’s also trying to build resilience into your soil,” he says. “If you follow the soil health principles, minimize disturbance, keep residue on the surface, a living root in the soil, you will start to build carbon. You’ll hold more water, perform better in dry conditions, and handle weather shifts.”

But in the nearly 10 years of diving into regenerative ag, Jon says that journey didn’t come without mistakes.

“I was very aggressive when I started out, and I kind of set myself back,” Hemme says. “If I were to give any advice, it would be to start slow and safe.”

He points specifically to cover crops. He says by trying to put cover crops on every acre at the start, he learned the hard way that if you let those cover crops get too tall, it can actually negatively impact crop production.

“If you’re too aggressive up front, you almost constipate your soil,” he says. “Eventually that residue has to leave.”

As the Hemmes say, they still want to pinch themselves over a trip that seemed like a dream, it was those direct conversations with President Donald Trump’s cabinet members that made them believe USDA’s support of regenerative ag will be a practical approach and one any farmer can try or do.

What else should you expect when it comes to regenerative ag? That’s exactly what “AgriTalk” Host Chip Flory asked Richard Fordyce, USDA Undersecretary for Farm Production and Conservation, just last week.

The Death of DEF? Trump Says He’ll Roll Back Environmental Requirements to Cut Farm Equipment Costs

Tue, 09 Dec 2025 16:41:02 GMT

During a White House roundtable on Monday tied to a new $12 billion “bridge payment” plan , President Donald Trump said his administration will move quickly to ease environmental requirements affecting tractors and other farm machinery, arguing the changes will lower sticker prices and simplify repairs.

While the headline of the event was to announce the payments, which Trump says will be funded by tariff revenue, the roundtable discussion with farmers also revealed other actions the Trump administration is working on to reduce regulations. Trump told farmers Monday his administration plans to scale back environmental requirements on tractors and other farm equipment, framing the move as a way to bring down machinery costs that have climbed in recent years.

President Trump said that farming equipment has gotten too expensive and his administration would help tractor companies by removing some environmental rules that affect them https://t.co/nKzE5ACyBp pic.twitter.com/oexiZnfxgf
— Reuters (@Reuters) December 9, 2025

“The other thing I’d like to add … we’re going to also give the tractor companies, John Deere and all of the companies that make the equipment … we’re going to take off a lot of the environmental restrictions that they have on machinery,” Trump said. “It’s ridiculous.”

While Trump didn’t provide specifics on how the details of that plan will come together, Trump said EPA Administrator Lee Zeldin would be involved in carrying out the effort. There’s speculation on if that will be removing diesel exhaust fluid (DEF) requirements on tractors or also addressing the long-standing right-to-repair issue.

Earlier this year, EPA announced guidance to change, not eliminate, DEF requirements, allowing for softer power loss in new trucks (from model year 2027) when DEF runs low, preventing sudden shutdowns and enabling software fixes for existing vehicles, easing burdens on truckers and farmers. This guidance removed what EPA called “red tape,” allowing manufacturers to develop less disruptive fixes for performance issues caused by emissions systems, though it doesn’t legalize “deleting” emissions equipment.

EPA Says DEF Is “Unacceptable”

While Trump didn’t outline exactly what EPA plans to roll back, he hinted toward DEF being the target. Farm Journal reached out to EPA for clarification and comment, and EPA’s press secretary confirmed rolling back DEF requirements is the target for this administration.

“EPA has heard loud and clear from truckers and farmers across the United States that the Diesel Exhaust Fluid (DEF) system was unacceptable and cost millions of dollars in lost productivity,” Brigit Hirsch, EPA press secretary, told Farm Journal. “This summer, Administrator Zeldin issued clear guidance urging engine and equipment manufacturers to revise DEF system software in existing vehicles and equipment to prevent sudden shutdowns. It is essential manufacturers give operators more time to repair faults without impacting their livelihoods or safety. EPA will continue to evaluate ways to expand the work the agency has already done on DEF and looks forward to working across the administration to do so.”

She also pointed farmers toward EPA’s website dedicated to actions on Diesel Exhaust Fluid .

Trump Says “It Makes the Equipment Much More Expensive”

Trump argued added systems meant to meet environmental rules have driven up price tags and made equipment harder to operate and repair.

“You buy it, it’s got so much equipment on it for the environmental, it doesn’t do anything except it makes the equipment much more expensive and much more complicated to work,” he said, adding, “it’s not as good as the old days.”

Trump said the administration’s goal is to remove what he called “nonsense” and require manufacturers to pass savings along to farmers.

“And we’re going to do it, and we’re going to say: ‘You’re going to reduce the prices.’ We’re not going to do it, and they’re not going to reduce. They’re going to have to reduce their prices because farming equipment has gotten too expensive,” Trump said during the roundtable. “A lot of the reason is because they put these environmental excesses on the equipment which don’t do a damn thing except make it complicated, make it impractical.”

Trump Claims Modern Equipment is Overly Complex and Difficult to Service

Trump also described modern equipment as overly complex and more difficult for farmers to service themselves.

“For you really have to be, in many cases, you need about 185 IQ to turn on a lawn mower,” he said. “So we’re going to take that … off … that they put on Biden mostly.”

Trump claimed the changes would quickly impact costs, bringing down equipment prices and saying: “We’re going to do that immediately.”

“The machines, they’re always under repair because they’re so complicated that you can’t fix them,” “he said. The old days you used to fix it yourself. Now you can’t do that. You have to be a Ph.D. from, let’s say, MIT.”

Comments Came During Event Announcing $12 Billion in Bridge Payments

Trump made the remarks during a roundtable discussion with farmers at the White House that coincided with an announcement by the White House and USDA of $12 billion in bridge payments for farmers.

Up to $11 billion will go toward a newly designed Farmer Bridge Assistance (FBA) program targeted toward row crop farmers hit hardest by trade disruptions. Those payments will be sent by the end of February, according to U.S. Secretary of Agriculture Brooke Rollins. The remaining $1 billion will be set aside and is designated for other crops affected by the ongoing disputes.

USDA says the bulk of the funding will run through the new FBA program, administered by the Farm Service Agency (FSA) and funded under the Commodity Credit Corporation (CCC). Rollins framed the package as near-term help while trade and farm-safety-net updates ramp up.

John Deere Reacts

In a post on X following the announcement, John Deere commended the Trump administration’s announcement of relief and bridge payments for farmers saying: “The timely assistance will protect this essential industry, help rural communities and support critical long-term investments in the future of U.S. agriculture and manufacturing.”

Hat’s off to those who feed and fuel America pic.twitter.com/UWBvmAus20
— John Deere USA (@JohnDeere) December 8, 2025

John Deere also said it shares the administration’s focus on reducing costs for both producers and consumers.

“We are doing all we can to help U.S. farmers reduce input costs,” according to the post. “The equipment and technologies Deere makes here in the U.S. are giving American farmers new tools and technologies that can substantially reduce their input costs and labor costs while increasing yields, boosting margins.”

Those comments are drawing backlash from farmers and others online. Some argue if John Deere truly wants to help farmers, then they can start by lowering the price of their equipment. While others Deere will be one of the beneficiaries of farmers receiving these payments.

https://cms.farmjournal.com/cms/content/edit.jsp?id=0000019b-0351-d956-a5ff-8bdf58620000&typeId=c2a98712-61fa-35ef-bd5d-e0bfe394c8b6

Of course you commend relief and bridge payments, you make more financing tractors than you do selling them 🤣
— Drake (@silvopasturist) December 9, 2025

Breaking Down the Biggest Differences in the Big Beautiful Bill Proposals and Potential Impact on Agriculture

Fri, 20 Jun 2025 14:14:36 GMT

Senate republicans are racing against the clock to finish their version of President Donald Trump’s Big Beautiful Bill. As the Senate continues to roll out its versions of the reconciliation bill, there are some differences between the House and Senate proposals when it come to agriculture.

The main variations come down to changes in the tax provisions, but it’s key to note proposed changes to the farm safety net are similar in both the House and the Senate.

What’s Next?
The House and Senate will now need to work out their differences in the two versions of the Big Beautiful Bill. President Trump said he wants to sign the legislation on July 4, but many reports cast doubt Congress can meet that approaching deadline. Politico even reported this week the Senate GOP’s version of the bill is “facing major headwinds in the House.”

Read More: Big, Beautiful Bill: What’s in it for Agriculture?

Farm CPA Paul Neiffer believes the July 4 deadline isn’t likely as the debate heats up, but he still remains optimistic the bill is close to the finish line.

“I think July is the date, but not July 4,” Neiffer says. “They’ll get it done before the August recess. I think they’re actually pretty close. The media out there talks about how they’re really far apart on Medicaid and state and local taxes. But I think when push comes to shove, the president has a lot of clout, and they’ll come up a compromise. So, I’m pretty optimistic they’ll get it done.”

Weighing the Differences Between the Senate and the House
Neiffer says he would grade the Senate’s overall budget reconciliation proposal as a “B” for ag, which is slightly below how he rated the House’s proposal. One reason is what the Senate is proposing for Section 199A:

The Senate has a Section 199A deduction of 20%, while the House’s version is 23%.
Both the House and Senate are calling for 100% bonus depreciation, but the Senate’s would be permanent. The House’s version would expire at the end of 2029.

“With the Senate making that permanent, that’s a really good deal for ag,” Neiffer says. “They would now have some certainty all of the assets that a farmer purchases — combines, tractors, buildings and everything but land — they can deduct 100%.”

Neiffer says another difference is on state and local tax deductions.

The Senate is keeping the current $10,000 deduction and reducing the benefit of the pass-through entity tax deduction.
The deduction is at the $40,000 level in the House and retains the pass-through entity deduction in full for farmers.

Beefed Up Farm Safety Net
Under the Senate’s version, Neiffer says farmers would be paid the higher calculated payment rate under Price Loss Coverage (PLC) or Agricultural Risk Coverage (ARC) during the 2025 crop year.

The Senate Ag Committee’s proposal also increases the reference price formula, and instead of having a floor based on 85% of the Olympic moving average marketing year price, the Senate is proposing an increase up to 88%.

“That actually results in a boost on the corn PLC price by about $0.15. And I think on soybeans, it’s about $0.35,” Neiffer says. “So, that’s very beneficial. Now, I was hoping they were going to boost the ceiling. Right now, the ceiling is 115% of the EFR. And they had talked last year about boosting it up to 120%. I think that was too much for the budget, so they kept it at 115%.”

The Differences on 45Z
When it comes to the 45Z Clean Fuels Production Tax Credit, there’s one major difference. The Senate allows foreign feedstocks to be eligible for the credit, just with a 20% “haircut.”

In the House’s version, only feedstocks produced or grown in the United States or Canada qualify for the tax credit. That change would help detour some of the used cooking oil imports from China.

“To me, a 20% haircut means there’s got to be some senators out there maybe pandering to somebody that I don’t know about. Because really, they should eliminate the whole foreign feedstock and just give you a credit based on domestic production,” Neiffer says.

The Bigger Issue with 45Z
Peter Meyer of Muddy Boots Ag says no matter what version of the 45Z tax credit makes the final cut, there’s a bigger issue at hand. The Trump administration needs to provide guidance and rules around 45Z — something the Biden administration failed to do during its time in office.

“We’re just clamoring for clarification, right? All I want is clarification. They can say all they want about extending this to 2030. That’s great. That’s a positive. But tell me what the rules are. We still don’t know the rules,” Meyer says.

Meyer knows there’s been so much talk about 45Z and sustainable aviation fuel, but little action in terms of demand. Meyer says the lack of action in terms of demand is largely because there’s no clarity around the tax credit.

“We need more demand for the ethanol they’re producing,” Meyer says. “Soybean oil can be converted to sustainable aviation fuel. But you just cannot produce sustainable aviation fuel without a credit. You can’t.”

US EPA Plans to Cut Staff to 1980s Levels, Dissolve Research Office

Tue, 06 May 2025 20:25:11 GMT

The U.S. Environmental Protection Agency announced plans on Friday to slash its budget by $300 million in fiscal year 2026, reduce staffing to 1980s levels and dissolve its research and development office as part of a sweeping overhaul of the agency.

The reorganization will consolidate several key offices, reflecting plans to cut regulatory red tape and promote more energy development, as laid out in President Donald Trump’s executive orders, EPA Administrator Lee Zeldin said in a video message.

“With these organizational improvements, we can assure the American people that we are dedicated to EPA’s core mission of protecting human health and the environment,” Zeldin said, adding the agency will be better positioned to match Trump’s goals to “unleash American energy, revitalize domestic manufacturing, cut costs for families and pursue permitting reform.”

Critics including the Union of Concerned Scientists said the staff cuts and changes in organization of the EPA would force staff members to follow the political program of the president rather than scientific evidence.

Zeldin said EPA staffing will fall to a level last seen when President Ronald Reagan occupied the White House in the 1980s, when the agency was led by an administrator who was critical of it. In 1984, the EPA had just over 11,400 staff members compared
to more than 15,100 in 2024.

The reorganization follows weeks of speculation about staff cuts and Zeldin announcing the cancellation of billions of dollars of EPA grants.

Major changes to the agency’s structure include shifting scientific research from the Office of Research and Development to different program offices, such as a new office of applied science that would align research with the politically-appointed administrator’s policy priorities.

Researchers had warned that dissolving the research unit would undermine scientific independence.

The EPA also announced it was dissolving the Office of Science and Technology, which helped develop scientific research and guidelines for water policy.

Other changes will include creation of an Office of State Air Partnerships within EPA’s Office of Air and Radiation that will work with state permitting agencies to resolve permitting concerns and process state plans to meet federal rules.

It will also add 130 positions to the Office of Chemical Safety and Pollution Prevention to work on reviewing a backlog of over 504 new chemicals and over 12,000 pesticides.

The 1,500 research and development staff would need to apply for around 400 of the newly created positions in other offices, employees were told in an all-hands meeting at EPA on Friday. It was not clear what would happen to those employees that do not get new positions.

The agency extended the deadline by a week, to May 5, for accepting a deferred resignation for employees.

The EPA will also elevate issues of cybersecurity, emergency response, and water reuse and conservation, it said.

Advocacy group the Union of Concerned Scientists on Friday said that shuttering the EPA’s scientific arm that conducts independent research and folding it into policy offices will turn the EPA into a purely political agency.

“Dismantling this office, along with the administration’s plans to reclassify scientists as political appointees ... could very well turn a premier science agency into a political arm of the president,” said Chitra Kumar, managing director of UCS’ Climate and Clean Energy Program.

(Reporting by Valerie Volcovici; Editing by Leslie Adler and Nia Williams)

House Republicans Unveil Budget Resolution, Calling for $230 Billion in Ag-Related Cuts Over 10 Years

Wed, 12 Feb 2025 20:59:45 GMT

House Republicans released a budget resolution to begin the reconciliation process. The resolution allocates $4.5 trillion to the House Ways and Means Committee for tax cuts, falling short of what tax writers say is needed for the president’s tax priorities.

It also includes a $4 trillion debt limit increase and outlines $1.4 trillion in spending cuts over the next decade. The plan also calls for $300 billion in new spending, likely for immigration enforcement and defense.

Dozens of current GOP lawmakers are opposed to raising the debt ceiling on principle and have never voted to support an increase to the nation’s borrowing limit. Previous increases have required bipartisan support.

House Speaker Mike Johnson’s (R-La.) budget plan is at risk due to ongoing Republican infighting and a slim House majority. Any two Republicans joining with Democrats could derail the plan.

Johnson wants the Budget Committee to approve the plan on Thursday, Feb. 13. A full House vote is expected at the end of the month. If passed by both chambers, a bill aligning with the budget must be crafted to enact tax cuts and a debt ceiling increase.

GOP members also disagree on how much deficit increase is acceptable to facilitate tax cuts.

House Ways and Means Chairman Jason Smith (R-Mo.) advocates for deficit flexibility to prioritize Trump-era goals like ending the tax on tipped wages. Coastal Republicans (N.Y., N.J., Calif.) want to end the cap on state and local tax deductions, benefiting property owners in their states.

Impact on Ag

The House budget resolution does not provide specific details on the $230 billion in agriculture-related cuts. The resolution directs the Agriculture Committee to find $230 billion in spending reductions over 10 years. However, the exact breakdown of these cuts is not specified in the resolution itself. Key points about the proposed agriculture cuts:

The $230 billion figure is a target for the Agriculture Committee to meet through spending reductions.
While specific details are not provided, it is likely that a significant portion of these cuts would come from the Supplemental Nutrition Assistance Program (SNAP/food stamps). Republicans have stated that any SNAP-related changes would focus on reducing waste and fraud rather than cutting existing benefits for participants. Some potential areas for cuts being considered include updating work requirements and limiting future updates to the Thrifty Food Plan, which is used to calculate SNAP benefits.
The $230 billion figure is not necessarily all from SNAP.

Largest Cuts From Energy and Commerce Committee

On the spending side, the largest cuts would be at least $880 billion from the Energy and Commerce Committee, which has jurisdiction over Medicaid, the health insurance program for low-income people. Republicans have talked about several Medicaid changes, including work requirements for able-bodied beneficiaries and revisions to funding formulas for the federal-state program. Other possible spending-cut targets include student-loan programs.

Proposed cuts

(Bloomberg )

Of note:
This budget resolution is a blueprint for a later reconciliation bill, and the specific details of the cuts will need to be worked out by the Agriculture Committee and negotiated with the Senate. The final numbers and policy changes may differ from what is currently proposed in the resolution.

Senate’s Alternative Plan.

Frustrated by House delays, Senate Republicans are proposing a scaled-back plan. Defense and border security funding would be offset by unspecified spending cuts. Tax cuts are postponed for now.

Democrats argue that the GOP’s plan prioritizes tax cuts for the wealthy at the expense of social programs that help low-income Americans.

Republicans are using the process known as budget reconciliation to advance Trump’s priorities. That approach lets them push a bill through the Senate with a simple majority, avoiding the 60-vote filibuster threshold and the need for Democratic votes.

Without congressional action, the 2017 tax cuts — such as lower individual tax rates and business-related tax breaks— will expire at the end of 2025.

RFK Jr. and Zeldin Comment on How They Would Implement Trump Policy

Fri, 31 Jan 2025 13:41:54 GMT

Robert F. Kennedy Jr.'s confirmation hearing for Secretary of Health and Human Services (HHS) on Wednesday (Jan. 29) before the Senate Finance Committee lasted over three hours, revealing key points:

Vaccine stance: Kennedy attempted to soften his past anti-vaccine rhetoric, stating support for vaccines but struggling to explain previous controversial statements.
Health policy priorities: He emphasized addressing chronic diseases, promoting safe food, removing conflicts of interest in health agencies, and using “gold-standard science.” Kennedy said that federal dollars spent on SNAP and school lunch programs could be one place to start, “helping kids” avoid obesity and chronic illness by cutting out sugary drinks and “ultra-processed foods.” He would also fund federal research into the link between food additives and chronic illnesses, though he didn’t specify which ingredients sparked the most concern. “I don’t want to take food away from anybody,” Kennedy said.
Kennedy emphasized his support for American farmers, stating:
- “American farms are the bedrock of our culture, of our politics, [and] of our national security.”
- He was a “4-H kid” and spent summers working on ranches.
- He wants to work with farmers and food producers to remove burdensome regulations and unleash American ingenuity.
Agricultural practices and health. Kennedy expressed concerns about current agricultural practices:
- He criticized the use of certain chemicals in farming, stating they destroy soil microbiomes and cause erosion.
- He linked chemical-intensive agriculture to health problems, mentioning clusters of cancers, autoimmune diseases, and obesity in farming communities.
- He called for incentivizing transitions to regenerative agriculture and less chemically intensive practices.Kennedy told Sen. Roger Marshall (R-Kan.) that farmers are affected by cancers and autoimmune illnesses that he believes are caused by ingredients like food dyes. “We need to fix our food supply,” Kennedy said, noting that “seeds and chemicals” used by U.S. farmers are “destroying our soil” in the long term. When asked about Kennedy’s “seeds and chemicals” comment, Grassley told Politico: “I’ll have someone from Iowa State University talk to him.”
Collaboration with USDA. Kennedy emphasized his intention to work closely with the Department of Agriculture:
- He stated that MAHA (Make America Healthy Again) “simply cannot succeed without a partnership a full Partnership of American farmers.”
- He committed to working collaboratively with USDA and other federal agencies before implementing policies affecting food supplies.
- Kennedy mentioned that President Trump instructed him to work with Brooke Rollins at USDA to ensure policies support farmers. Rollins told reporters last week that she was supportive of Kennedy’s “Make America Healthy Again” movement. “But what is important and, if confirmed, what my role will be, will be to strike a balance between defending our farmers and our ranchers but also working with Bobby Kennedy, who I adore, to effectuate the president’s vision on all of the above,” Rollins said
Regulatory approach. Kennedy outlined his approach to agricultural regulations:
- He promised to work with farmers to remove burdensome regulations.
- Kennedy acknowledged the “very thin margins” farmers operate on and stated he doesn’t want any farmer to leave their farm for economic or regulatory reasons.
- He agreed that agricultural practice regulations should primarily be left to USDA and EPA.
- “I expect you to leave agricultural practice and regulation to the proper agencies,” Sen. Chuck Grassley (R-Iowa) told Kennedy. That means, for the most part, leaving policies that impact farmers to USDA and EPA, Grassley clarified.
Future of agriculture. Kennedy shared his vision for the future of American agriculture:
- He called for fixing the food supply as a top priority. Sen. James Lankford (R-Okla.) told Kennedy that he was happy the nominee addressed the “social media rumors” about agriculture.
- “You made it very very clear you’re not going to tell Americans what to eat, but you do want Americans to know what they’re eating,” Lankford said, calling that a “pretty fair perspective” on food policy.
- Kennedy advocated for supporting the transition to regenerative and sustainable farming practices.
- He mentioned plans to rewrite regulations to give smaller operators “a break.”
- Throughout the hearing, Kennedy attempted to position himself as an ally to farmers while also advocating for changes in agricultural practices to address health and environmental concerns.
Controversial past: Democrats challenged his history of health misinformation and grasp of Medicare and Medicaid.
Republican support: Some GOP senators backed Kennedy, with Sen. Ron Johnson (R-Wis.) calling him “awesome,” though the final vote remains uncertain.
Financial concerns: His financial ties to lawsuits against Merck raised conflict-of-interest questions.
Abortion stance: Kennedy sidestepped direct answers but aligned with Trump’s anti-abortion policies, shifting from his previous pro-choice stance.

Bottom line: With strong opposition and divided support, Kennedy’s confirmation vote is expected to be closely contested. Today he attends another confirmation hearing before the Senate Health, Education, Labor, and Pensions Committee. The Senate Finance Committee expects to hold its RFK Jr. vote next week.

Zeldin Confirmed as EPA Administrator

On Wednesday (Jan. 29), the Republican-led Senate confirmed former Congressman Lee Zeldin as the new administrator of the Environmental Protection Agency (EPA) in a 56-42 vote. A staunch Trump ally, Zeldin is expected to steer the agency in alignment with the former president’s environmental policies.

Vote breakdown: All 53 Republicans backed Zeldin, joined by three Democrats — Sens. Ruben Gallego (Ariz.), Mark Kelly (Ariz.), and John Fetterman (Pa.).
Policy direction: Zeldin is expected to roll back environmental regulations, emphasizing economic growth and private-sector collaboration.
Biofuel policy. Zeldin has raised concerns among ethanol and biofuel advocates due to his past opposition to the Renewable Fuel Standard (RFS) and ethanol. However, during his confirmation process, Zeldin made some commitments that suggest a potential shift in his stance. As a congressman, Zeldin had a history of opposing biofuels and the RFS. He signed letters expressing concern about proposed RFS volume increases, citing issues with the “E10 blend wall.” In 2017, Zeldin cosponsored an unsuccessful bill to repeal the RFS. He raised concerns about the validity and practicality of higher ethanol blends like E15 and E85. But during his confirmation process, Zeldin made several statements that indicate a potential change in his approach:
- He committed to giving producers and the industry certainty in the marketplace regarding Renewable Volume Obligations (RVOs).
- Zeldin acknowledged the importance of the RFS issue to President Trump and certain senators.
- He stated that no person or industry has any special influence over his decision-making, addressing concerns about his past connections to the oil industry.
Biofuel industry representatives have expressed cautious optimism:
- The Renewable Fuels Association (RFA) looks forward to working with Zeldin on keeping the RFS on track and addressing other priorities like E15 availability.
- The Iowa Renewable Fuels Association (IRFA) encouraged Zeldin to pursue the role biofuels can play in U.S. energy dominance.
- The American Coalition for Ethanol (ACE) appreciated Zeldin’s commitments to follow the law regarding RVO rulemakings and supporting year-round E15 nationwide.

Of note: While Zeldin’s past positions raised initial concerns, his recent statements during the confirmation process suggest he may be open to working with the biofuels industry in his new role as EPA Administrator.

Climate stance: Critics warn his leadership could weaken climate initiatives, favoring fossil fuel interests.
Reactions: Republicans praise his “common-sense regulation” approach, while environmental groups call his confirmation a serious setback for public health and environmental justice.

Bottom line. As Zeldin assumes leadership, his tenure is likely to reshape the EPA’s role in U.S. environmental policy for years to come.

Cassidy Casts Doubt on RFK Jr.’s HHS Nomination

Senate HELP Committee Chair Bill Cassidy (R-La.) delivered a blunt message to Robert F. Kennedy Jr. during Thursday’s hearing, signaling serious concerns about his nomination for Health and Human Services (HHS) secretary.

“I’ve been struggling with your nomination,” Cassidy stated in his closing remarks, a potential roadblock for Kennedy, given Cassidy’s influential position on the Senate Finance Committee. If Cassidy votes against Kennedy in the panel’s decision, the nomination may not advance.

The Louisiana senator expressed deep skepticism about Kennedy’s stance on vaccines, questioning whether he could be trusted to uphold sound public health policy. Cassidy specifically criticized Kennedy’s history of vaccine skepticism, warning that such views could erode trust in essential immunizations.

“A worthy movement, called MAHA, to improve the health of Americans?” Cassidy asked. “Or will it undermine it, always asking for more evidence and never accepting the evidence that is there?”

He also recounted a recent case of two children dying in a Baton Rouge ICU from vaccine-preventable diseases. “My concern is that if there’s any false note, any undermining of a mama’s trust in vaccines, another person will die from a vaccine-preventable disease,” Cassidy warned.

Beyond his own reservations, Cassidy’s remarks signal broader challenges for Kennedy’s nomination. Senate Minority Leader Mitch McConnell (R-Ky.), a childhood polio survivor, is unlikely to back a nominee with anti-vaccine ties. Sens. Susan Collins (R-Maine) and Lisa Murkowski (R-Alaska) also remain key votes to watch, with both urging Kennedy to support vaccinations.

Cassidy, up for re-election in 2026, has already drawn a Trump-aligned challenger, State Treasurer John Fleming. Though Cassidy emphasized his desire for Trump’s policies to succeed, he warned that anti-vaccine rhetoric could tarnish Trump’s legacy.

“I want President Trump’s policies to succeed,” Cassidy said. “But if there’s someone that is not vaccinated because of policies, of attitudes we bring to the department, and there’s another 18-year-old who dies of a vaccine-preventable disease… The greatest tragedy will be her death. I can also tell you an associated tragedy will be that it will cast a shadow over President Trump’s legacy, which I want to be the absolute best legacy.”

Bottom line: With Cassidy’s support in doubt and broader Senate skepticism, Kennedy’s path to confirmation remains steep.

Biggest Takeaways From President Trump's First Day in Office

Tue, 21 Jan 2025 20:45:18 GMT

President Trump may enact 25% tariffs on Mexico and Canada on Feb. 1, he said during remarks in the Oval Office. Trump had initially suggested implementing these tariffs on his first day in office. This delay may allow for some negotiation or preparation time.

The exchange happened while the president was signing a number of executive orders just hours after inauguration. While signing those orders, Trump fielded a host of reporter questions, answering or commenting on them specifically. He asked the reporters if they ever had a similar opportunity with former President Joe Biden. During one of the exchanges, that’s when Trump revealed he may enact 25% tariffs on Canada and Mexico on Feb. 1.

Proposed 25% Tariffs on All Goods Imported from Canada and Mexico

The proposed 25% tariff would apply to all goods imported from Canada and Mexico, although there have been some conflicting reports about some product exemptions.

Trump has cited concerns about illegal immigration and drug trafficking, particularly fentanyl, as the primary reasons for these tariffs. He aims to pressure these countries to increase their efforts in addressing these issues.

Economic Impact

If implemented, these tariffs could have significant consequences for the North American economy:

Increased consumer prices in the U.S. for a wide range of goods, including produce, automobiles, and manufactured products.
Potential disruption of integrated supply chains across North America.
Estimated job losses of up to 1.5 million positions in Canada and significant GDP contractions for both Canada and the U.S.

Legal and Trade Agreement Implications

The proposed tariffs would likely violate provisions of the U.S.-Mexico-Canada Agreement (USMCA). This could lead to legal challenges and potentially undermine the agreement.

Responses from Canada and Mexico

Both countries have expressed concern about the tariff threats. Canada has indicated it would consider a “robust” response, potentially involving retaliation in sectors such as energy and critical minerals.

Global Trade Implications

These tariffs, combined with proposed tariffs on China and other countries, could significantly reshape global trade patterns and potentially trigger retaliatory measures from affected nations.

Trump Orders Comprehensive Trade Policy Overhaul

President Trump has ordered an expansive investigation into America’s trade policy, divided into three critical areas, with recommendations due by April 2025.

The investigations aim to address trade imbalances and unfair practices, focusing on trade deficits, currency manipulation, and counterfeiting. Key areas under review include:

The USMCA and other trade agreements.
Anti-dumping duties and discriminatory taxes.
The potential establishment of an External Revenue Service (ERS) to collect trade-related revenues.

Of note: While Trump has announced this intention, the actual implementation of these tariffs remains uncertain and may be subject to change or negotiation in the coming weeks.

Trumps Signs Several Executive Orders

President Donald Trump signed several executive orders on stage at a rally in Washington, D.C.'s Capital One Arena on Monday, immediately following inauguration. It marked a dramatic and public start to his administration.

Hours after being sworn in, Trump rescinded 78 executive actions from the Biden era, froze federal hiring (excluding the military), and initiated a regulatory freeze to halt bureaucratic rulemaking.

He also ordered federal agencies to address cost-of-living concerns, formally withdrew the U.S. from the Paris Climate Accord, gave TikTok another 75 days before being banned; withdrew the United States from the World Health Organization, and ordered an end to birthright citizenship (if it makes it through court).

Paused Spending in Inflation Reduction Act

He also ordered federal agencies to “immediately pause” the spending of money from the Inflation Reduction Act , Biden’s signature climate law that provided billions of dollars in subsidies to clean energy and other climate initiatives.

In the directive, Trump included an executive order that mandates agencies to review grants, loans and other payments associated with the IRA.

Other Executive Orders and New Directives

Trump signed many executive orders an d announced new directives , including:

America First priorities
Detailed the America First Trade Policy
Unleashing American Energy
Temporary withdrawal of all areas on the Outer Continental Shelf from offshore wind leasing and review of the federal government’s leasing and permitting practices for wind projects .
Declaring a national emergency at the southern border of the United States, triggering the use of Pentagon resources and personnel that will be deployed and used to build the border wall.
Declaring a national energy emergency
Withdrew the U.S. from the World Health Organization
Re-evaluating and realigning U.S. foreign aid
Emergency price relief for American families and defeating the cost-of-living crisis
Reversed dozens of Biden-era orders, including a sweeping measure to regulate artificial intelligence.
“Department of Government Efficiency” aimed at spending cuts and regulatory reform
Putting people over fish : Stopping radical environmentalism to provide water to Southern California ( link ).
Tapped new leadership and acting heads who will guide regulatory and enforcement priorities

Trump Meets with Congressional Leaders

House and Senate Republican leadership will meet with President Donald Trump at the White House today. The list includes Senate Majority Leader John Thune (R-S.D.), Senate GOP Whip John Barrasso (R-Wyo.), House Speaker Mike Johnson (R-La.) and House Majority Leader Steve Scalise (R-La.).

This is an important gathering to discuss the new administration’s legislative agenda. This meeting is likely to focus on coordinating efforts to implement Trump’s policy agenda, including issues such as immigration reform, tax policy, energy initiatives, potential budget cuts and spending reductions. Also likely to be discussed: budget reconciliation strategy and the debt limit.

There’s a sense of urgency among Republicans to make progress quickly:

The first 18 months are seen as critical for implementing major changes
There’s pressure to show early victories to the American people
Trump needs to move fast because he can’t run for re-election

Potential challenges. The leaders may discuss obstacles to their agenda:

The slim Republican majority in the House
Potential divisions within the party on certain issues
The need for Democratic support on some legislation due to Senate rules

Upcoming deadlines. Important deadlines that may be addressed include:

A March 14 government funding deadline
The need to raise the debt ceiling by early summer

From Early Executive Orders to Delaying Tariffs Against China, Here's What to Expect as Trump Takes Office

Mon, 20 Jan 2025 14:49:41 GMT

This week is mostly about President Donald Trump’s inauguration as the 47th president, with a flurry of executive orders and illegal immigrant deportations expected soon.

President Donald Trump and Senator JD Vance were sworn into office inside the Capitol Rotunda, avoiding the dangerously cold temperatures forecast for Washington, D.C. The entire ceremony, including prayers and speeches, will take place indoors, according to Trump’s announcement on Truth Social.

This marks the first indoor inauguration due to weather since Ronald Reagan’s second term in 1985, and the second such event in history, following James Monroe’s indoor inauguration due to a snowstorm.

Mexico’s Slim and Cervantes to Attend Inauguration; Sheinbaum Left Out

Billionaire Carlos Slim, Mexico’s wealthiest man with a net worth nearing $100 billion, will attend Donald Trump’s inauguration as the 47th president of the United States in Washington, D.C. He will be joined by Francisco Cervantes, president of Mexico’s influential Business Coordinating Council (CCE), who confirmed plans to begin talks with high-ranking U.S. officials during the event.

Notably absent from the invitation list is Mexican President Claudia Sheinbaum. Mexico will be officially represented by Ambassador Esteban Moctezuma. The Trump administration’s policies, including a planned 25% tariff on Mexican exports and mass deportation operations, are expected to pose significant challenges to Mexico.

Slim expressed confidence that the Mexican economy would navigate these challenges effectively, emphasizing its complementary relationship with the U.S. economy. Meanwhile, Sheinbaum’s government has signaled readiness to implement reciprocal tariffs and address deportation logistics if needed.

World leaders, including Argentina’s Javier Milei and El Salvador’s Nayib Bukele, are also set to make history by attending a U.S. presidential inauguration.

Early Executive Orders: A Preview

Stephen Miller, Trump’s top domestic policy adviser, briefed Republican lawmakers Sunday on an ambitious slate of executive orders planned for the early days of the administration. These orders, many of which Trump had campaigned on, will focus on government reform, energy policy, and immigration. While details remain fluid, key areas discussed:

Government reform: Streamlining federal hiring and dismissal processes, targeting DEI initiatives, and reforming rules for Schedule F employees.
Energy policy: Halting climate-related spending, accelerating energy infrastructure projects, expanding drilling — including in the Arctic — and repealing electric vehicle mandates. Also: declare a national emergency related to energy.
Immigration: Declaring cartels as terrorist organizations, reinstating strict border policies like “Remain in Mexico,” declare an emergency at the U.S./Mexico border, which will allow Trump to deploy military forces to the border, and ending “catch and release.”

Miller cautioned that these orders are still under development, with specific details yet to be finalized. Miller, a key architect of Trump’s immigration policies, is expected to play a significant role in shaping and implementing these executive orders. Miller’s involvement suggests a continuation of the hardline approach to immigration that characterized Trump’s first term.

Trump to Delay Tariffs on China, Signals Shift Toward Negotiation

President-elect Donald Trump is not expected to impose China-specific tariffs on his first day in office, signaling a strategic shift toward engagement with Beijing rather than reigniting a trade war.

According to the Wall Street Journal, the decision reflects Trump’s desire to begin his second term in a negotiating mode, with hopes of striking a new deal with Chinese President Xi Jinping.

During his first term, Trump brokered a “Phase 1” trade deal with China, but many of Beijing’s commitments to purchase U.S. goods were not fully realized. While plans are underway for a memorandum directing federal agencies to review trade policies with China, Canada, and Mexico, the approach appears more measured than the aggressive tariff rhetoric from Trump’s campaign.

However, sources caution that Trump’s strategy could shift, given his history of abrupt decisions. His swearing-in ceremony is scheduled for midday Monday in Washington.

Trump to Declare National Energy Emergency to Boost Domestic Production

President-elect Donald Trump will declare a national energy emergency after his inauguration on Monday to lower energy costs, an incoming White House official announced.

The emergency declaration is expected to “unlock a variety of different authorities” to enhance natural resource production, though specific measures were not disclosed.

The official emphasized the importance of energy independence in the context of the U.S./China AI race, highlighting the need for domestic energy to power advanced technology. Additionally, Trump plans to sign an executive order to accelerate energy production in Alaska, citing its geostrategic significance and potential for LNG exports to the Asia-Pacific region.

Focus on Deregulation

President-elect Donald Trump plans to start one of the most sweeping deregulatory drives in U.S. history. Border czar Tom Homan says the incoming administration is assessing plans to launch post-inauguration immigration raids in Chicago after plans leaked in news reports about plans for a large-scale immigration raid in Chicago Tuesday.

Trump has outlined a sweeping array of 31 major policy initiatives for his second term, according to the Washington Post. These include moves on immigration, such as mass deportations, reinstating a travel ban, and ending birthright citizenship. He also plans significant economic shifts, like imposing high tariffs on imports, cutting taxes, and promoting cryptocurrency. The list, according to the WaPo:

1. Immigration

Mass Deportations: Pledges to implement the largest deportation operation in U.S. history, including undocumented workers.
‘Remain in Mexico’ Program: Plans to reinstate policies requiring asylum seekers to wait in Mexico.
Travel Ban: Intends to reimpose restrictions on travelers from several majority-Muslim countries.
Birthright Citizenship: Proposes ending automatic citizenship for children of noncitizens.
Punish Sanctuary Cities: Plans to cut federal funding to cities refusing to cooperate with deportations.
Death Penalty for Migrants: Advocates for automatic death sentences for migrants who kill U.S. citizens.
Border Wall: Plans to complete construction of the U.S./Mexico border wall.

2. Economy

Tariffs: Proposes imposing tariffs on all imports and higher rates on goods from China, Mexico, and Canada.
Inflation: Vows to lower prices, including energy and gas costs.
Tax Cuts: Promises extensive tax reductions, potentially adding to the national debt.
Eliminate Taxes on Tips and Overtime: Suggests removing taxes on certain income sources.
Cryptocurrency: Aims to make the U.S. a global leader in cryptocurrency by adopting industry-friendly policies.

3. Education

Abolish Education Department: Proposes dismantling the department, redirecting its responsibilities elsewhere.
Punish Schools Over Content: Plans to cut federal funding for schools promoting “critical race theory” or “radical gender ideology.”
Transgender Policies: Seeks to ban trans athletes from women’s sports and revoke inclusive school policies.
School Vouchers: Advocates for taxpayer-funded school-choice programs.

4. Environment

Rollback of Regulations: Plans to remove policies addressing climate change and protecting species.
Oil and Gas Expansion: Proposes increasing domestic production and exports of fossil fuels.
Paris Climate Agreement: Intends to withdraw the U.S. from this global pact.

5. Healthcare

Lower Costs: Pledges to reduce healthcare and prescription drug expenses.
Preserve Social Security and Medicare: Promises to maintain these programs while cutting waste.
Abortion Laws: Plans to leave decisions on abortion to state legislatures.
Free IVF: Proposes covering in vitro fertilization costs.

6. Democracy and Governance

Retaliation Against Rivals: Suggests acting against political enemies and media outlets.
Reshape Federal Workforce: Plans mass job cuts, reduce union power, and make civil servants “at-will” employees.
Voting Requirements: Proposes stricter voter ID and citizenship proof, ending mail-in and early voting.
Pardon Jan. 6 Defendants: Pledges to pardon individuals charged in the Capitol riot.

7. Defense and Foreign Policy

Isolationism: Advocates for “America First” policies, including shutting out imports and withdrawing from international conflicts.
End Wars in Ukraine and Middle East: Claims he would end these conflicts quickly, potentially conceding to adversaries.
Military Diversity Policies: Plans to reverse diversity initiatives and restrict women in combat roles.
Strike Mexican Cartels: Proposes military action against cartels operating in Mexico.

These policies reflect significant shifts across numerous domains and have raised concerns about their feasibility and broader implications.

It’s also key to note Trump will meet with House and Senate GOP leadership at the White House on Tuesday.

Vance, Han Discuss Trade and Fentanyl Ahead of Inauguration

Vice President-elect JD Vance met with Chinese Vice President Han Zheng in Washington to discuss trade and the fentanyl crisis, a day before Donald Trump’s second presidential inauguration.

The meeting follows a call on Friday between Trump and Chinese President Xi Jinping, which addressed similar topics, including TikTok. Han is expected to attend Monday’s inaugural ceremony, relocated indoors due to subfreezing temperatures in the capital. it will be the first time a high-ranking Chinese official attends a U.S. presidential inauguration. The Vance/Han meeting represents the most substantial individual engagement for Vance since securing his election victory alongside Trump last year.

Of note: Han also met billionaire Elon Musk and other U.S. business figures, underscoring Beijing’s efforts to set a positive tone in ties with the US before President-elect Donald Trump returns to office.

TikTok Returns After Brief U.S. Shutdown Amid Uncertainty

TikTok has reappeared in the United States following a temporary shutdown that began late Saturday night, Jan. 18. The app was blocked due to a federal law mandating that its Chinese parent company, ByteDance, divest its U.S. operations. Service began to be restored on Sunday, January 19, driven by two key developments: (1) President-elect Donald Trump’s intervention: Trump announced plans to issue an executive order on his inauguration day, Jan.20, to delay the ban’s implementation.

He emphasized the need for negotiations to protect national security and suggested the possibility of a joint venture granting the U.S. a 50% ownership stake in TikTok’s operations. (2) TikTok’s agreement with service providers: TikTok confirmed service restoration through agreements with its service providers.

The company thanked President-elect Trump for providing “necessary clarity and assurance.” While the app is back online, its future remains uncertain, contingent on the Trump administration’s actions and potential negotiations with ByteDance.

Biden Issues Pre-emptive Pardons on Final Day in Office

Outgoing President Joe Biden issued pardons to members and staff of the Jan. 6 select committee. including GOP Reps. Liz Cheney of Wyoming, Adam Kinzinger of Illinois; and Sen. Adam Schiff (D-Calif.), as well as police officers who testified before it.

The pardons also extended to Gen. Mark Milley, former chair of the Joint Chiefs of Staff, and Dr. Anthony Fauci, former director of the National Institute of Allergy and Infectious Diseases.

In a statement, Biden emphasized that the pardons “should not be mistaken as an acknowledgment that any individual engaged in any wrongdoing.”

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USDA's Interim Rule for Climate-Smart Crops Used As Biofuel Feedstocks Viewed Favorable for Farmers

Wed, 15 Jan 2025 18:35:12 GMT

Today, USDA announced the publication of an interim rule on Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks. The interim rule establishes guidelines for quantifying, reporting, and verifying the greenhouse gas (GHG) emissions associated with the production of biofuel feedstock commodity crops grown in the United States.

USDA says these guidelines “will facilitate the recognition of climate-smart agriculture within clean transportation fuel programs, creating new market opportunities for biofuel feedstock producers while enhancing climate benefits.”

Highlights:

Farmers can choose one or more of the CSA actions — no-till or reduced-till, cover crops, and nutrient management.
Unlike prior rules, farmers no longer have to use all three on the same field at the same time.
Corn, soybeans, and sorghum are the crops specified as was noted in 45Z guidance.
USDA will release a beta version of what is called the USDA Feedstock Carbon Intensity Calculator (USDA FD-CIC) to facilitate the farm-level, crop-specific reductions.
There will be a final version established and results via the beta version should be viewed as preliminary.
60-day comment period on the interim final rule.
Key will be the chain of custody and traceability and recordkeeping requirements.

“The new guidelines are a win for farmers, biofuel producers, the public, and the environment. The action today marks an important milestone in the development of market-based conservation opportunities for agriculture,” said USDA Secretary Tom Vilsack.

He added that today’s action builds on the prior work to create greater opportunity for homegrown, renewable biofuels. From making E15 more widely available at gas station pumps and approving record biofuel levels, to investing in infrastructure to help communities invest in biofuels, to accelerating a future for Sustainable Aviation Fuels (SAF).

“America’s farmers play a critical role in building the clean energy economy,” said White House Senior Advisor for International Climate Policy John Podesta. “Today’s announcement from USDA reinforces the important role climate-smart agriculture plays in our rural economy, including in fueling clean transportation solutions, as well as the importance of providing pathways for unbundled, science-based accounting of the carbon benefits of climate-smart practices that help farmers earn more for what they grow.”

The rule establishes a framework to connect climate-smart agriculture (CSA) practices applied in the production of feedstock crops with reductions in the carbon footprint of biofuels.

The rule includes three feedstock crops: corn, soy, and sorghum. It also covers CSA practices that could reduce GHG emissions or sequester carbon, including reduced till and no-till; cover cropping; and nutrient management practices, such as the use of nitrification inhibitors.

Importantly, the interim rule allows for adoption of CSA practices both individually or in combination. This means that participating farmers would have the flexibility to adopt the CSA practices that make sense for their operation, while still being able to produce feedstocks with reduced carbon intensities under the rule.

Through this interim rule, USDA is establishing standards that can be used to quantify, track, and report the impacts of these practices. The interim rule establishes voluntary guidelines that may inform the development of requirements for other programs which incentivize low-carbon biofuels.

USDA says establishing quantification and verification standards for climate-smart practices helps to ensure that the net GHG emissions reductions from these practices are real, thereby improving credibility and confidence, which could facilitate market opportunities for U.S. farmers growing biofuel feedstocks. Besides reducing GHG emissions and increasing carbon sequestration, CSA practices can also generate additional environmental benefits, including improved water quality and soil health.

The interim rule includes guidelines on the following:

Biofuel feedstock crops and entities in the biofuel supply chain;
Quantification of farm-level crop-specific carbon intensity;
Chain of custody standards for entities in the biofuel supply chain, including traceability and recordkeeping standards;Auditing and verification requirements; and
Climate-smart agriculture practice standards for the biofuel feedstock crops included under the rule.

USDA is also publishing a beta version of the USDA Feedstock Carbon Intensity Calculator (USDA FD-CIC) to facilitate the quantification of farm-level crop-specific carbon intensity. USDA FD-CIC allows for the calculation of a farm-scale carbon intensity in line with the standards in the interim rule. USDA will complete a peer-review process to finalize the methodology and resulting carbon intensities included in USDA FD-CIC.

USDA will evaluate and respond to the public feedback and peer-review provided on USDA FD-CIC, after which USDA will establish a final version. Until that time, USDA says users should consider values from USDA FD-CIC as preliminary. As part of this process of testing and feedback prior to finalization, the public will have the opportunity to examine and download USDA FD-CIC to experience how it would operate.

Next Steps

USDA is requesting public comment on the interim rule to help inform future revisions or additions to the final rule. Interested parties are welcome to submit comments on any aspect of the rule. Interested parties may submit comments during the 60-day public comment period at regulations.gov.

Trump Return Likely to Slow, Not Stop, U.S. Clean-energy Boom

Thu, 07 Nov 2024 00:10:45 GMT

Donald Trump’s return to the White House will refocus the nation’s energy policy onto maximizing oil and gas production and away from fighting climate change, but the Republican win in Tuesday’s presidential election is unlikely to dramatically slow the U.S. renewable energy boom.

Investor fears of a reversal under Trump sent clean-energy stocks down sharply on Wednesday. The MAC Global Solar Energy index was down 10% in midday trade, while shares of top renewable project developer and owner NextEra Energy slid 6.2%.

A Biden-era law providing a decade of lucrative subsidies for new solar, wind and other clean-energy projects would be near-impossible to repeal, however, thanks to support from Republican states, while other levers available to the next president would only have marginal impact, analysts say.

“I don’t think a Trump president can slow the transition,” said Ed Hirs, energy fellow at the University of Houston. “This is well under way.”

Renewable energy sources such as solar and wind are the fastest-growing segments on the power grid, according to the Department of Energy, driven by federal tax credits, state renewable-energy mandates, and technology advancements that have lowered their costs.

President Joe Biden in 2022 signed into law the Inflation Reduction Act guaranteeing billions of dollars of solar and wind subsidies for another decade as part of his broader effort to decarbonize the power sector by 2035 to fight climate change.

Before the election, Trump slammed the IRA as being too expensive and promised to rescind all unspent funds allocated by the law - a threat that, if accomplished, could pour cold water over the U.S. clean energy boom. But dismantling the IRA would require lawmakers, including those whose states have benefited from IRA-related investments such as solar-panel factories, wind farms and other projects, to vote to repeal it.

“The jobs and the economic benefits have been so heavy in red states, it’s hard to see an administration come in that says, ‘we don’t like this,’” said Carl Fleming, a partner at law firm McDermott Will & Emery, who advised the Biden White House on renewable energy policy.

Many of Trump’s allies also benefit from the IRA through their investments in clean-energy technologies, Reuters has previously reported.

Fleming said Trump could, however, slow things down around the margins by hindering federal agencies that deliver IRA grants and loans, or by reducing federal leasing for things such as offshore wind.

“You could see a new administration come in and they can very quickly begin to cut budgets or restrict budgets or restrict the freedom of agencies to do certain things that are tied to funding,” he said. “But I think that’s a smaller subset of the larger renewables market that’s really relying on those, so I don’t think it would have a shocking effect.”

The Biden administration has rushed to ensure it spends the majority of available grant funding under the IRA before a new president arrives, Reuters has previously reported.

One way Trump could slow the transition is through executive action by changing public lands leasing, analysts said. The Biden administration had sought to expand lease auctions for offshore wind in federal waters, along with solar and wind on land.

“I think you would see more preference given to fossil-fuel extraction on public lands and waters,” said Tony Dutzik, associate director and senior policy analyst at Frontier Group, a non-profit sustainability think-tank.

That could have an outsized impact on the offshore-wind industry, which aims to site projects in federal waters. Most onshore solar and wind projects are located on private property, as is the vast majority of oil and gas drilling. Trump has said he intends to end the offshore-wind industry “on day one,” arguing it is too expensive and poses a threat to whales and seabirds, a dramatic policy reversal after his first administration supported offshore-wind development.

Bernstein Research said Trump is likely to enact a moratorium on new offshore-wind lease sales. Meanwhile, U.S. fossil-fuel production is likely to look much the same under Trump, experts said. The U.S. has already become the world’s largest oil and gas producer, under the watch of Biden, thanks to a drilling boom in fields such as the Permian Basin under Texas and New Mexico.

The production boom started under former President Barack Obama and has continued through the Trump and Biden presidencies. Even so, Trump’s campaign has sought to claim credit, saying his efforts to slash regulatory red tape during his 2017-2021 term paved the way, and arguing he could further expand U.S. fossil-fuel production in a second term by rolling back Biden’s climate initiatives.

“Presidents can make a lot of noise about plans for U.S. oil and gas, but ultimately it’s individuals and companies responding to prices of a global commodity that make the decisions on when to drill,” said Jesse Jones, head of North American upstream at Energy Aspects.

Dan Eberhart, Trump donor and CEO of oilfield-services company Canary, LLC, said he supports Trump’s encouragement of increased oil-and-gas drilling, saying it could further lower energy prices for businesses and consumers.

He added he would also welcome a move by Trump to once again withdraw the United States from international climate cooperation, like he did in his first term, arguing other big greenhouse-gas emitters were not doing enough.

“The Paris accord was aspirational and meaningless if China and India don’t participate,” he said, referring to a landmark U.N. deal in 2015 to limit global warming.

A Win for Private Property Rights, Voters Reject Carbon Pipeline Measure in South Dakota

Wed, 06 Nov 2024 20:24:19 GMT

A key state ballot issue in South Dakota is poised to go against carbon pipelines, according to Farm Journal Washington Correspondent Jim Wiesemeyer. The referendum let voters decide whether to uphold a pipeline bill that was passed by legislators.

90% of votes were in as of mid-morning Wednesday, and 60% voted no and 40% voted yes. A “no” vote means the state law in question would be rejected, and that raises fresh questions about the Summit Carbon Solutions pipeline and similar projects.

Proponents of the law argued it would create a revenue stream for counties with a a $1-per-foot surcharge of pipeline projects. They also argued it would serve as a compromise between landowners and pipeline companies.

However, landowners didn’t agree and fought against he bill saying the law would take power out of the hands of the counties and infringe on personal property rights.

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Carbon Pipeline Plans

The vote could have a direct impact on Summit Carbon Solutions pipeline. The company’s planned Midwest Carbon Express pipeline would be the largest in the country, spanning across 2,500 miles. It would cover several hundred miles in eastern South Dakota and is estimated to cost $8 billion.

The company said the goal is to remove carbon dioxide (CO2) from the exhaust stream of 57 ethanol plants in a five-state region in Iowa, Minnesota, North Dakota, South Dakota and Nebraska, according to Jimmy Powell, chief operating officer for the Ames, Iowa-based company.

On June 25, the Iowa Utilities Board approved the permit for the pipeline. For construction on the pipeline to begin, permits must be secured in North Dakota and South Dakota.

Referred Law 21 was originally passed by legislators and signed by Gov. Kristi Noem (R). The law was meant to ease the path of carbon dioxide pipeline construction. But after garnering enough signatures, the law was put on the November ballot.

According to legal expert John Dillard, state governments have the primary authority to approve the siting and construction of CO2 pipelines as well as the eminent domain authority of the pipeline companies. These laws vary state-to-state, but they generally require pipeline companies to address safety and environmental concerns, provide notice to potentially impacted landowners, and minimize damage to landowner property. Some states preempt or restrict the authority of local governments to restrict pipelines while others allow zoning laws that would make construction difficult or impossible.

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More Than Just U.S. Grown Feedstocks Qualify for 45Z, Farm Groups are Now Urging for That to Change

Fri, 19 Jul 2024 15:16:23 GMT

At a time when corn and soybeans are desperately searching for new demand, sustainable aviation fuel (SAF) could be the ticket for commodities to cash in. New production outlook numbers show just how big that new demand could be, but policy - and what qualifies for the tax credits and what doesn’t - seems to be the biggest roadblock so far.

According to Reuters, production capacity of SAF in the United States could jump by 1400% in 2024. The U.S. Energy Information Administration (EIA) says that jump will happen if all the previously announced capacity additions come online.

The EIA also anticipates domestic production of biofuels to increase by about 50% in 2024, which they say will be led by rising SAF production.

The White House has made it clear that this administration wants to see more SAF. Reuters also reports the Biden administration aims to meet all of the U.S.'s aviation fuel demand with SAF by 2050 and to supply at least 3 billion gallons of SAF annually by 2030.

What Qualifies for SAF?

The demand potential is huge, however, the issue today is policy, and what qualifies for SAF and how carbon intensity scores (CIS) are calculated. Currently, sugarcane from Brazil can be imported into the U.S. for SAF, and it has a lower CIS than corn produced right here at home.

Farm groups are now urging for that to change, advocating for domestic feedstock in tax credits. Four farm groups in a letter ( link ) urged the Biden administration to ensure that lucrative tax credits of up to $1.25 a gallon are available only for low-carbon fuels made from U.S.-grown feedstocks. They also recommended broadening the list of climate-smart farming practices to produce lower-carbon “sustainable” crops.

• Request for 45Z tax credits: Four farm groups urged the Biden administration to limit lucrative tax credits (up to $1.25 per gallon) to low-carbon fuels made from U.S.-grown feedstocks.
• Broader climate-smart practices: The groups also called for an expanded list of climate-smart farming practices for producing lower-carbon “sustainable” crops.
• Signatories: The letter was signed by: American Farm Bureau Federation; National Farmers Union; National Corn Growers Association, American Soybean Association.

Program details:
• 45Z Tax credits: These tax credits will be available in 2025 for sustainable aviation fuel (SAF). The administration has yet to issue regulations for these credits.
• 40B tax credits: Current guidance for 40B tax credits (for SAF produced from 2022-24) only qualifies a fraction of U.S. biofuels, lacking a domestic feedstock requirement and being rigid in its farming practice stipulations.

Concerns and recommendations
• Domestic benefits: The farm groups emphasized that without clear domestic feedstock requirements, the policy’s benefits might be diverted from American farmers.
• Expanded compliance options: They criticized the 40B guidelines for being too strict and suggested additional compliance options for qualifying feedstocks.

Related developments
• Pilot project announcement: CF Industries and Poet announced a pilot project using low-carbon ammonia fertilizer to grow corn for ethanol production, potentially reducing ethanol’s carbon intensity by up to 10%. The project will start this fall and continue through the 2025 harvest.

What To Know From The Biden Administration's New Carbon Policy Statement

Thu, 30 May 2024 19:03:45 GMT

At the end of May, the Biden Administration published the Joint Policy Statement and Principles on Voluntary Carbon Markets . Farm CPA Paul Neiffer joined the AgriTalk podcast to break down the details of this 12-page document and what the ag industry needs to know.

According to Neiffer, part of the publication’s purpose is to steer companies toward more reliable methods of using carbon.

“You have these large, publicly traded companies that have been greenwashing. They’ve been trying to help the climate, so they go out and buy these credits that really aren’t very valid,” he says. “They’re trying to state the goals for these companies should not be to buy these carbon credits. Their goal really should be to fix their own carbon footprint in their own company and in their supply chain.”

Overall, he says the publication isn’t quite a policy, but more of a statement encouraging companies to clean up their supply chains.

When it comes to farmers, Neiffer believes the ag industry should begin focusing more on 45z tax credits and carbon intensity scores rather than carbon credits.

“It seems to be implying if you’ve already done a great job of reducing your carbon footprint, you’re not going to get a payment because you can’t really reduce your carbon footprint any further,” he says. “Whereas if you’re a farmer that maybe hasn’t done a great job [of reducing your carbon footprint], we’ll give you a payment because we can see in that case where we can reduce your footprint.”

For those who still intend to purchase carbon credits, the second half of the policy statement made an effort to create standards for program participation and make sure there is transparency, identification and documentation.

“They want to make sure it’s legit if you’re buying this carbon credit that you’re actually removing carbon dioxide from the atmosphere,” Neiffer says.

To hear more from Neiffer, listen to this episode of AgriTalk.

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Sen. Chuck Grassley Pushes Back on Tariffs, GREET Model

Thu, 16 May 2024 20:39:05 GMT

U.S. Senator Chuck Grassley (R-IA) pushed back on the major new tariffs President Joe Biden placed on a variety of Chinese goods on Tuesday.

“I’m for free trade, because Iowa manufactures and does services, and does agriculture way beyond what we consume domestically, and we must be exporting,” Grassley told AgriTalk Host Chip Flory.

“I think that this is going to invite retaliation by China, and it’s possible retaliation could be (against) agriculture,” Grassley added.

Flory said there’s been almost a “rolling retaliation” in place, a freezing of relations between the U.S. and China, because China appears to have backed away from U.S. commodities such as corn and pork.

“Do you think that by design, or is that by just simply the fundamentals of the market?” Flory asked.

“I don’t know the price of Brazil soybeans compared to U.S. soybeans – and what that does to a Chinese decision – but we shouldn’t be surprised that there’s this sort of potential for retaliation,” Grassley said.

However, Grassley said China “invites” some of the tariffs because the country emphasizes overproduction in manufacturing.

“That’s a subsidized overproduction, and then they’re exporting it onto the world market. They aren’t following the rules of international trade the way that they should,” Grassley said.

A Look At Lessons From History
The new tariffs reminded Grassley of the Smoot-Hawley Tariff Act, U.S. legislation passed on June 17, 1930, that raised import duties to protect American businesses and farmers.

“We should learn a lesson that the United States thought it could tariff its way out of an economic problem, but that’s not necessarily the case as history shows. It can create more problems,” Grassley said.

Some historians believe the Smoot-Hawley Tariff deepened the Great Depression and “may have contributed to the rise of political extremism, enabling leaders such as Adolf Hitler to increase their political strength and gain power,” write the Editors of the Encyclopedia Britannica.

“Free trade and capitalism have elevated the lives of a lot of people around the world,” Grassley said.

Flory responded by citing former President Donald Trump’s reaction to the Biden administration’s decision.

“(Trump) said that he will be even more aggressive with tariffs on China, and more aggressive on imports, in general. That’s obviously concerning to you,” Flory told Grassley.

“Sometime in the four years of the Trump administration, I brought this up in the Oval Office,” Grassley recalled.

“He had two of his economists there with him. And I said, ‘Your two economists aren’t serving you well if they’re backing up these high tariffs that you want to do.’ I don’t know what sort of an impact it made, because he still ended up with the tariffs. But I wanted to educate him about the history of high tariffs and the negative impacts they have,” Grassley added.

No Enthusiasm for GREET

Flory asked Grassley about his reaction to the GREET model, designed to calculate GHG reductions more accurately, incorporating new data and methodologies including climate-smart agricultural practices for soybeans and corn as a feedstock for sustainable aviation fuel.

GREET stands for Greenhouse gases, Regulated Emissions, and Energy use in Technologies.

Flory said it appears there are a lot of boxes to check on the production side to make U.S. corn eligible for the aviation fuel market.

“It’s just a bad situation,” Grassley said. “In other words, we’ve got a bunch of bureaucrats in Washington, D.C., that don’t know anything about how we handle our agricultural products in Iowa. And they write these regulations that nobody’s going to be able to make use of.”

For more on Grassley’s response regarding GREET, check out the AgriTalk conversation here.

Farmers Are Now Being Offered $1,000 Per Acre or More to Lease Their Land For Solar

Wed, 08 May 2024 19:57:37 GMT

The push to add solar energy is gaining traction across the U.S., and it’s coming with sticker shock on just how much solar companies are willing to pay farmers to lease their ground. A survey of farmers shows the majority of farmers are being offered more than $1,000 per acre by companies for solar leasing, and that could also drive up the price of cash rental rates.

The Biden administration has a goal of a net-zero electric grid by 2035, with solar and battery-powered energy as three vehicles to get there. As the administration works to accelerate their “clean energy” plan across the U.S., land is in high demand, especially for future solar projects.

Michael Langemeier, an agricultural economist with Purdue University, says the Ag Economy Barometer is revealing the sticker shock of solar leasing rates. The survey of 400 agricultural producers, is now asking farmers how many had actively engaged in discussions with any companies about leasing farmland you own for solar installation, and the response was surprising.

“It was 19% who said they have engaged in discussions, and so think about that, that’s a huge percentage of the survey respondents have actually engaged in someone about leases. That doesn’t mean they’ve signed a thing, but that means that they’ve actually been approached,” says Langemeier.

The April survey showed a noticeable uptick in the percentage of farmers who reported having a discussion with a company about it in the last 6 months. In April, 19% of farmers said they’ve had discussions, up from 12% in March.

The bigger surprise may be in the high rates solar companies are offering farmers.

58% say the rates were over $1,000 per acre
30% say the rates they were offered ranged from $,1000 to $1,250 per acre
28% say rates were more than $1,200 per acre.

With expanding renewable energy installations such as wind and solar, The Top Producer Podcast host Paul Neiffer asked David Muth of Peoples Company Capital Markets , the Investment platform for Peoples Company, how those land uses change long term land values.

“This is for the entire U.S.,” he adds. “That’s a high rate even for the eastern Corn Belt where our cash rates are much higher, but think about what even a $750 rate would mean in the Great Plains where the cash rents are much, much lower. And so what you’re having here is these solar lease rates that are multiples of the current cash rent rates.”

Langemeier says as farmers and land owners are offered high leasing rates for solar, he thinks the push for solar will then spill over to other cash rents.

“That’s going to put upward pressure on cash rents, and it’s probably going to put upward pressure on land values, given that it’s local,” he says. “And so it probably impacts a fairly local area, depending on whether your area has solar leasing or not, but it certainly has pretty wide ramifications on what’s going on in agriculture.”

How Do Wind, Solar, Renewable Energy Effect Land Values?

With a price tag of more than $1,000 per acre, t’s enticing for farmers who are staring at crop prices below their cost of production. The April Ag Economists Monthly Monitor survey released this week showed farmer sentiments are dropping. The survey, which is conducted by Purdue University and the CME group, fell 15 points from March to 99.

Purdue says it was the weakest farmer sentiment reading since June of 2022 and the lowest current condition rating since May of 2020 as both the current condition index and the future expectations index saw a drop.

“People became less optimistic about what was taking place on their farms today, and they’re also starting to show some evidence of being some concerns about where we’re headed here over the course of the next year,” says Jim Mintert, director of the Center for Commercial Agriculture at Purdue University.

Purdue economists say farmers are concerned about their current financial situation and expectations for weak financial performance in the year ahead were the driving forces behind the fall-off in farmer sentiment. The April Barometer survey was conducted from April 8 through April 12, 2024.

The New GREET Model is Finally Here: An In-Depth Look at What it Means for Farmers

Fri, 03 May 2024 15:01:37 GMT

The U.S. Treasury and IRS issued updated guidance on the Sustainable Aviation Fuel (SAF) tax credit, aligning with the Inflation Reduction Act’s goal to boost SAF production by providing incentives based on lifecycle greenhouse gas (GHG) reductions. The initial guidance on the Biden Administration’s SAF subsidy program, which includes three climate-smart practices for corn-based ethanol to qualify; two qualifying practices for soy-based biodiesel and producers of SAF are eligible for a tax credit of $1.25 to $1.75 per gallon

The new guidance includes the release of the now called 40BSAF-GREET 2024 model, designed to calculate these GHG reductions more accurately, incorporating new data and methodologies including climate-smart agricultural practices for soybeans and corn as a feedstock for SAF. GREET stands for Greenhouse gases, Regulated Emissions, and Energy use in Technologies.

EPA’s new model is designed to address previously identified shortcomings in the R&D GREET model, particularly in how it calculated lifecycle greenhouse gas emissions. The lifecycle approach accounts for all emissions from the initial production stages through to the final use of the fuel.

Similarity to CORSIA Methodology

The Treasury Department notes that the methodology used by the new 40BSAF-GREET 2024 model is like that of the CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) methodology. CORSIA also evaluates the full fuel lifecycle, which includes all stages from the production of feedstock to the end use of the finished fuel.

Both these methodologies aim to provide a comprehensive assessment of the environmental impact of aviation fuels, focusing on reducing greenhouse gas emissions throughout the entire lifecycle of the fuel. This is crucial for developing effective strategies and regulations for mitigating the aviation industry’s impact on climate change.

The SAF tax credit provides a base of $1.25 per gallon for SAF that achieves at least a 50% reduction in GHG emissions compared to traditional jet fuels, with additional incentives for greater reductions, capped at $1.75 per gallon. This move is aimed at fostering the use of domestically produced, lower-carbon fuels and enhancing the role of U.S. agriculture in sustainable fuel production.

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Significantly, a pilot program was introduced to credit SAF production using feedstocks grown under specific climate-smart agriculture (CSA) practices, like no-till farming and cover cropping. This pilot, part of the broader strategy to decarbonize aviation fuels, represents a shift towards recognizing and rewarding agricultural practices that contribute to carbon reduction. The release from Treasury on the credit noted that the CSA practices incorporated into the USDA CSA Pilot Program “are not a part of either the 40BSAF-GREET 2024 model or any CARB program including the LCFS program. Therefore, the Treasury Department and USDA have developed additional unrelated party certification requirements for the USDA CSA Pilot Program.”

Industry Reaction

Industry reactions have been largely positive, highlighting the progress towards integrating farming practices into carbon scoring for biofuels. However, some critiques focus on the need for less rigid frameworks to encourage broader adoption of innovative, carbon-reducing technologies and practices in agriculture and biofuel production. There is a desire for ongoing refinement of these models to ensure they are scientifically robust and economically beneficial, paving the way for significant reductions in GHG emissions from aviation fuels and strengthening the role of American agriculture in achieving these goals.

SAF production requirements:

SAF producers seeking to use the CSA reduction for producing SAF from CSA crops must contract directly with farmers enrolled in the USDA CSA Pilot Program for either CSA corn or CSA soybeans.

CSA corn production practices:

Farmers producing CSA corn for Alcohol to Jet (ATJ)-ethanol must implement three specific practices on the same acreage:

No-till farming.
Planting cover crops.
Using enhanced efficiency nitrogen fertilizer.

CSA soybean production practices:

For CSA soybeans, only two practices are required:

No-till farming.
Planting cover crops.

Added nitrogen is not required for soybean production.

USDA CSA pilot program and emissions reduction:

In partnership with the USDA, the Treasury Department allows for a SAF synthetic blending component produced from CSA corn or soybeans to be eligible for an additional proxy reduction (CSA reduction) in emissions calculation, without needing a full lifecycle analysis.

Emissions reduction example:

A synthetic blending component using CSA corn or soybeans is granted a safe harbor, with Treasury citing an example where CSA corn used in SAF production achieves a 53% emissions reduction.

Regulatory alignment and definitions:

The definitions and practice requirements outlined by the Treasury in their notice align with USDA’s Natural Resources Conservation Service (NRCS) practice standards and enhancements, with specific details provided in the notice.

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CSA pilot program practices:

No-till farming defined:

No-till involves limiting soil disturbance to manage the amount, orientation, and distribution of crop and plant residue on the soil surface year-round.
Residue must not be burned and should be uniformly distributed over the entire field. Removal from the seeding or transplanting area is acceptable.
In-row soil disturbance is permitted during strip tillage, planting, and when closing seed rows/furrows. Full-width soil disturbance is prohibited between crop cycles.
The Soil Tillage Intensity Rating (STIR) for the crop interval must not exceed 20. Examples include a tandem disk (STIR 19.5) and a rotary stalk chopper (STIR 31.2).

Cover crop practices:

Include grasses, legumes, and forbs for seasonal vegetative cover.
Planting must adhere to local criteria regarding species, seedbed preparation, seeding rates, dates, depths, fertility, and methods.
Cover crops should be compatible with other cropping system components and selected herbicides.
Establishment can occur during the fallow season, or as companion or relay planting.
Residue from cover crops cannot be burned, and crops must be terminated according to NRCS guidelines.
If grazed or hayed, management must not compromise soil health or organic matter.
Cover crops cannot be harvested for seed.

Enhanced Efficiency Nitrogen Fertilizer (EENF) practices for corn:

EENF is used to improve nutrient use efficiency, reduce nutrient loss risk, and lower greenhouse gas emissions.
Defined by AAPFCO as products that increase plant uptake and reduce nutrient losses compared to standard fertilizers.
For corn, strategies include using nitrification inhibitors, urease inhibitors, or slow-release fertilizers for a minimum of 50% of nitrogen applications.
This practice does not apply to soybeans as they do not require added nitrogen.

Upshot: These practices and definitions are integral to the USDA CSA Pilot Program and aim to enhance sustainability in crop production by minimizing environmental impact and improving resource efficiency.

Record Keeping Requirements for Farmers in the CSA Pilot Program

General records:

Maintain records on the type and amount of feedstock produced.
Document ownership or operational control of the enrolled land; if leased, the lessee must declare operational control.
List all CSA practices implemented as per the guidelines.
Sign a letter of intent to continue using no-till and cover crops on the same acreage, allowing periodic tillage only once every five or ten years.
Declare that the produced feedstock using CSA practices is exclusively for SAF production and affirm no sale of GHG offset credits or associated GHG benefits.
Provide all records to an unrelated third party for verification.

Crop-specific records:

Document crop rotation and tillage practices for each crop before implementation and note any changes to ensure compliance with no-till practices.
Record planting and harvesting dates for each crop, detailing the month and year.
Document field operations and the timing of these operations.
Record total planted and harvested acreage and yield for crops produced under the no-till system and sold as SAF feedstock.
Keep records of seed purchases, seeding dates and rates, and field locations (using FSA maps or other reliable sources).
Document the amount of SAF feedstock delivered to various points such as elevators, millers, refiners, or other delivery locations.

Cover crop and fertilizer management:

Maintain similar records for cover crops as required for primary crops.
Keep management records for the use of Enhanced Efficiency Nitrogen Fertilizer (EENF) strategies.

Bottom line: These record-keeping practices are crucial for ensuring accountability and verifying compliance with the sustainable practices stipulated by the CSA Pilot Program.

SAF producer requirements

Contractual obligations:

Farmers must have a direct contract with the SAF producer.

Record keeping and compliance:

SAF producers are responsible for collecting and maintaining all records from each supplying farmer. Note that the EENF portion is not relevant for soybean production.
Maintain full supply chain traceability records as per requirements.
If a grain elevator is used as an intermediary for storing feedstock, it must also maintain appropriate records linked to those bushels.

Intermediary entities:

Any intermediary entity that takes physical possession of the feedstock, including the registered SAF producer, must comply with traceability requirements aligned with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

Documentation and forms:

Forms for farmers to provide their supporting information for the CSA Pilot are included in the notice covering the process, ensuring transparency and adherence to guidelines.

Impacts and Implementation

CSA pilot program requirements and participation:

All three CSA actions are required for corn, while only the first two (no-till and cover crops) are needed for soybeans.
Soybeans might qualify more easily due to the commonality of no-till, but fewer farmers use both no-till and cover crops together.

Land eligibility and coverage:

According to the Census of Agriculture, no-till is practiced on 105.2 million acres, but cover crops are much less common at 17.99 million acres.
There are 382 million acres of cropland, with 301 million acres harvested, raising questions about the universe of land eligible for the CSA Pilot.

SAF production and consumption:

SAF consumption has risen from 5 million gallons in 2021 to 24.5 million gallons in 2023.
The limited number of SAF producers in the US could pose a challenge for meeting program goals.

Periodic tillage and soil health:

Periodic tillage is crucial for some farmers using no-till to maintain soil health, requiring clarity on permissible tillage practices under the program.

Record-keeping requirements:

Farmers must maintain detailed records and provide them to third parties for verification.
Elevators used by SAF producers for storing CSA commodities also have specific record-keeping requirements.

Regulatory and financial considerations:

New domestic plants using the ATJ pathway with ethanol as feedstock are expected, though details are sparse.
Farmers selling CSA crops to SAF producers cannot earn GHG offset credits or sell associated GHG benefits, impacting participation in private carbon credit efforts.

Future developments and clarity:

The Clean Fuel Production Credit (45Z) starting in 2025 will require further modeling, data assumptions, and verification.
A new 45Z-GREET model will be developed to align with the 45Z tax credit, necessitating rapid development and expanded use of cover crops.

What is a Carbon Intensity Score (CSI) and what does it mean for farmers? We share some FAQs from farmers.

How Do Wind, Solar, Renewable Energy Effect Land Values?

Thu, 26 Sep 2024 18:31:51 GMT

Since the signing of the Paris Agreement and its Net Zero by 2050 iniative, the ripple effects are still being ironed out as the demand for renewable energy increases.

With expanding renewable energy installations such as wind and solar, The Top Producer Podcast host Paul Neiffer asked David Muth of Peoples Company Capital Markets , the Investment platform for Peoples Company, how those land uses change long term land values.

“We’re really seeing emerging revenue streams from our land base–outside of the ag production,” he says. “We’re trying to get our arms wrapped around the asset management strategy and really get this well positioned. So over the next 10 or 20 years, we’re expanding revenue right and capturing that correctly.”

Muth shares the estimate that over $1 trillion dollars a year is being invested globally in the low-carbon energy transition.

“If we step back and look at what that means for farmland, we’re taking our energy production system from highly centralized production facilities and we have to distribute it,” he says.

The team at Peoples Company used the Princeton Net Zero America study as the basis scenario for its work, which shows if there are 6,000 wind turbines in Iowa today, it needs to increase to about 48,000, which could bring almost $1 billion a year in additional revenue back to the landowners from the turbines.

Muth highlights the considerations for landowners with solar power are different than wind.

“With solar, it’s different. There’s certainly a free market element to this where the revenue streams and the value equations associated with the land in different areas will drive just how high they’ll push those numbers,” he says.

Solar’s Impact On Rural Property Values

He notes he’s seen annual leases with standard escalators for $1,100, and there are additional state and federal incentives.

“In Illinois, there’s been a big push, and we’ve seen options for solar development contracts on some of the best of the best farm ground for $1,400. It is what they’re talking about as a starting place on these assets. The core question is because it’s a fundamental shift in land use, how do you look at the underlying land value where you put solar in place?”

Thinking of recent trends, he says Illinois farm land has appreciated 7% a year, but the future appreciation rate is unknown just as the productivity of the land after solar panels are removed is unknown.

“It’s part of this sort of chaos that landowners are having sort through,” he says. “That’s where a pretty detailed discounted cash flow and understanding how much am I really making on that $1,400 an acre lease payment with a 2% escalator if the underlying farmland value doesn’t appreciate the way that the rest of that highly productive Illinois farm ground is going to appreciate.”

Pop-Up Solar: Can Farmers Make Fertilizer, Fuel and Electricity from the Sun?

Muth says the biofuels industry growth will also effect land values as the production of corn and soybeans is needed for Sustainable Aviation Fuel and renewable diesel.
He discusses more about wind, solar, biofuels as well as carbon storage opportunities on The Top Producer Podcast.

The Conservation Cliff and Redirecting Climate Funds, Two of the Latest Controversies in Passing a New Farm Bill

Tue, 19 Mar 2024 18:53:05 GMT

Odds of a new farm bill in 2024 are declining, with Senate leadership continuing to spar over climate funding and Senate Ag Committee Chairwoman rejecting the GOP’s proposal to redirect climate funds into the commodity title of the new farm bill.

The Republican staff of the Senate Agriculture Committee published a report on conservation in the farm bill earlier this week. Senate Ag Committee Chairwoman Debbie Stabenow (D-Mich.) has said she is unwilling to reprogram conservation money in the Inflation Reduction Act (IRA/Climate Bill), but the GOP report says, “Any discussion about ‘protecting IRA resources’ that does not begin with prioritizing additional baseline for the conservation title risks missing out on this investment.”

The report discusses a potential bipartisan solution to address a looming “conservation cliff” resulting from the IRA of 2022. This act allocated significant funds for climate-smart agriculture and forestry activities (CSAF), but these funds are set to expire by 2031, creating uncertainty for conservation efforts. The proposal suggests moving the IRA funds into the farm bill to create permanent funding streams for conservation activities.

Key takeaways from the GOP staff report include:

Opportunity for increased funding: Congress has an opportunity to increase funding for conservation, natural resource preservation, and wildlife habitat needs by moving IRA funds into a bipartisan farm bill.
Potential impact: By reallocating IRA funds, there could be a substantial increase in conservation spending over the next 25 years, totaling more than $44 billion, which is three times larger than the expiring IRA resources.
Bipartisan solution: Moving IRA funds into the farm bill could represent a historic bipartisan investment, benefiting farmers, ranchers, foresters, conservationists, and other stakeholders.
Mechanism for funding: By utilizing Section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985, the new increased funding levels for conservation programs would continue into perpetuity, subject only to Congressional reauthorizations.
Potential agreement: The report suggests rescinding funding for IRA agriculture conservation programs in fiscal years 2025 and 2026, redirecting these funds to provide nearly $1.8 billion per year for local communities, farmers, and ranchers for conservation efforts.
Need for action: The report emphasizes the urgent need for Congress to act to address the conservation cliff, highlighting the demand for conservation program spending that exceeds available funds.
Stakeholder involvement: The proposal involves various stakeholders, including farmers, ranchers, foresters, and conservationists, who rely on voluntary conservation programs to meet their local conservation needs.
Environmental benefits: Redirecting IRA funds into the farm bill could help improve soil health, water quality and quantity, reduce greenhouse gas emissions, and sequester carbon, contributing to the economic and environmental sustainability of farming for generations to come.

Stabenow Rejects GOP’s Proposal to Redirect Climate Funds

The Senate Ag GOP report was a “pre-buttal” to event to the climate-smart agriculture expo on Capitol Hill Thursday. Stabenow and USDA Undersecretary for Farm Production and Conservation Robert Bonnie spoke at the event. During Stabenow’s remarks, she rejected GOP’s proposal to redirect climate funds into the commodity title of the new farm bill.

Stabenow emphasized the importance of retaining climate funds for their intended purpose during an expo on climate-smart agriculture practices. She criticized the idea of splitting the funds, with half going towards commodities, as unacceptable.

Republican staff members from the Senate Agriculture Committee suggested moving $13 billion in climate funds, provided by the 2022 climate law (Inflation Reduction Act/IRA), into the conservation title of the farm bill to bolster conservation spending in the long term. Stabenow expressed support for increasing the conservation baseline but insisted that it must align with the statute’s language on climate-smart agriculture.

In negotiations over the farm bill, farm groups and GOP farm-state lawmakers have prioritized higher reference prices and a stronger crop insurance program, both of which require funding. Climate funds have been considered as a potential source to offset these costs. However, Democrats, including Stabenow, have been firm in their stance against cuts to climate funds or the Supplemental Nutrition Assistance Program (SNAP).

Meanwhile, Stabenow highlighted ongoing negotiations on various aspects of the farm bill, expressing optimism about reaching agreements, particularly regarding strengthening the climate funds title. She emphasized the need to ensure that climate funds are used appropriately.

There's a New Way to Cash in on Your CI Score on the Farm, Thanks to the Inflation Reduction Act

Mon, 18 Mar 2024 03:04:25 GMT

As a farmer, Kelly Garret is extremely carbon conscious. He grows 7,000 acres of no-till crops and switched from applying synthetic fertilizer to using regenerative wastewater as plant food.

“I believe in being collaborative with Mother Nature, not in competition. And this is a collaborative effort,” says Garrett, who farms in west-central Iowa, near Arion.

There’s no doubt Garrett is a forward thinker. He says he was the first farmer in the U.S. to sell carbon credits. Now, he thinks there’s a new opportunity coming for farmers to possibly cash in on.

“I believe in five years, almost every product that we buy, especially food-wise, will have a CI score affixed to it. I think as producers we need to educate ourselves and be at the forefront of that,” says Garrett.

How Much Your CI Score is Worth Down to the Bushel

CI score stands for Carbon Intensity score. Garrett says now, with the 45Z tax credit that was passed in the Inflation Reduction Act and slated to go into effect Jan. 1, 2025, your CI score will soon be worth even more, especially if your corn goes to an ethanol plant.

“It states that for every point an ethanol plant can get below 50, on their CI score, there’s a two-cent-per-gallon tax credit,” says Garrett. “The ethanol plants don’t have a lot of hope of getting below 50, not very far at least, without traceability of our corn.”

Garrett says, by his calculation, for every point below the current average of 29.1, it’s worth 2 cents a gallon, or 5.5 cents per bushel of corn.

“My [CI] score is a -6, because of the no-till, the cover crops and the regenerative things I do. So, my score is 35 points below the average. If you take 35 times 5.5, that’s just over $1.92 per bushel,” Garrett says.

Regenerative Roots Solutions

Seeing how crucial farmers’ CI score will be to ethanol plants in the years ahead, Kelly saw a new opportunity for more than just himself. So, he teamed up with Peter Meyer, who worked in the energy space, Jarod Creed, who works with growers across the country and Mike Busing, who’s experienced in carbon markets, to create Regenerative Roots Solutions , a business designed to start educating all farmers.

“The four of us got together here in the last couple of months, and we’re really trying to hone in on what the opportunities are for our network combined. This is specifically geared towards these CPG programs and 45Z tax credits coming down the pipeline,” says Creed.

Peter Meyer says a farmer’s CI score is based on the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model. An essential update to the model is expected soon from the Environmental Protection Agency (EPA).

“The Greet Model here in the U.S. was originally geared toward ethanol for automobiles, and now we’re talking about a whole different energy source with sustainable aviation fuel,” says Meyer.

The Ethanol Business Can’t Survive Without Farmers

With 45Z now in the picture, the new tax credits for ethanol plants will also hinge on CI scores from farmers.

“I’m advocating for this, what’s very much a partnership with an ethanol plant,” says Kelly. “The tax credit is available to the ethanol plants, not to farmers. But the ethanol plant doesn’t have a lot of hope of gaining much of this tax credit without traceability to us.”

Adds Meyer, “The ethanol business cannot survive without the farmer. And this has to be, as Kelly Garrett said earlier, a 50/50 partnership.”

New Domestic Demand... and More Money for Farmers

The team at Regenerative Roots Solutions admits it’s still a bit of the Wild West when it comes to carbon and how much your CI score is worth, but Creed says more clarity is coming.

“Ten to 15 years ago, there was a tremendous amount of angst when ethanol started to come into the marketplace. And then here, most recently, the renewable diesel space of expanding the soybean crush in the U.S. market. And ultimately, all we’ve done is continue to create more domestic demand for our products as we’ve become less competitive with the rest of the world. The market dynamics have changed,” says Creed.

The team’s goal is to provide transparency and information to growers. But today, the biggest challenge is just how much misinformation is out there.

“Well, there’s an incredible amount of skepticism with farmers, starting with the carbon market as a whole, things like that government intervention,” says Kelley. “I think farmers are eternally skeptical, and a lot of times we’ve been sold a bill of goods, so you can’t necessarily blame farmers. But then when it comes to a CI score, there are a lot of questions or skepticism about how it’s calculated, whether the government is telling us how to raise our corn, and things like that.”

It’s All About the Data

Mike Busing has already taken a deep dive into the carbon market. Through his company, Windy Ridge Ag, he and his team handle the data collection for growers on current carbon programs that are available today.

“Over the last four years, we’ve brought a little over $10 million back to our grower base. It’s pretty incredible, and that’s what we hope to do with Regenerative Roots,” Busing says.

While those carbon contracts can be one-year contracts, Busing says 45Z has the potential to be a longer term, steady revenue stream for farmers.

“Data is going to be the key piece to everything,” Busing says. “We would all love to just have our growers walk in with a piece of paper that says, ‘My CI score is a 10, pay me for my grain.’ However, there will be a large data piece of this, it’s going to have to go through third-party verification, things of that nature. So, everything is tracked, we know the data is good and the plants can acquire that tax credit.”

The Future of CI Scores and 45Z

It’s a new opportunity for farmers to possibly cash in on, one the team at Regenerative Roots Solutions doesn’t see as a fad.

“I think there is already a smorgasbord of different programs that the producer is participating in, whether that be carbon programs, whether that be CPG programs,” says Creed. “I think this is just the icing on the cake. And it’s all in an effort to continue to find additional demand opportunities for the crop domestically, with less dependency on the rest of the world.”

“We’re advocating for the farmer to be educated about what practices he or she can employ to reduce their carbon intensity score to make it a little bit more palatable for the Greet model, and thus, end up with more money in their pockets at the end of the day,” Meyer explains.

As the team continues to explore how this partnership could work as 45Z comes into play, the best part for Garrett is he doesn’t have to change any production practices on his farm—or adopt something new—to qualify.

“Well, like most things in life, this is luck. These are things I was already doing, because I believe in this way of farming. I see it’s working,” says Garrett.

Creed says one of the biggest pieces of misinformation attached to this new opportunity today, is the belief that in order to qualify, producers will have to make major changes. Creed says Garrett is proof that a farmer doesn’t necessarily have to change how they farm.

Meyer says his biggest piece of advice for farmers is to look into what your CI score is, and if needed, for ways to lower that score. However, he says there’s no value in verifying your CI score until the updated Greet model is unveiled.

Farm Journal’s Smart Farming Week is an annual week-long emphasis on innovation in agriculture. The goal is to encourage you to explore and prioritize the technology, tools and practices that will help you farm smarter. Innovation today ensures an efficient, productive and sustainable tomorrow.

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Choose Wisely: Smart Strategies to Select the Right Corrections Service

10 Easy Ways to Take Your Crop-Scouting Practices to the Next Level

You Can’t Afford to Be Complacent About Tar Spot

Here’s How to Bridge the Data Gap With Your Ag Retailer

Inside AMVAC’s Strategy To Widen Precision Agriculture Adoption

10 Tips to Shorten Your Cover Crop Learning Curve

Will Europe's Farmer Protests Make Their Way To The U.S.?

Thu, 26 Sep 2024 20:11:08 GMT

In case you haven’t heard, farmers across Europe are fed up with their politicians and bureaucrats telling them how to farm. Such sentiment is nothing new. What is new is that the level of frustration has grown to the point where thousands of farmers are taking to the streets with their 15-ton tractors and marching to the capitals and major cities of European countries to give government officials a message: enough already.

For those of us old enough to remember, this moment has a bit of historical déjà vu to it. Flash back to the late 1970s when on this side of the pond, Washington, D.C. was stormed by thousands of farmers driving their tractors to protest critically low commodities prices, higher input costs, falling land values and rising interest rates. This was the warning shot signaling even more dire times to come as the farm crisis of the 1980s followed.

Now, nearly 45 years later, the flame still burns. But this time the fire is taking off in Europe. The ingredients for the discontent are much the same—low prices, costly inputs, high interest rates and so forth. However, the recipe has added an ingredient that has quickly become the biggest fly in the soup as far as European farmers are concerned.

Policy Pushback
The European Green Deal, approved in 2020, is a set of policy initiatives established by the European Commission. Its overarching aim is to make the European Union (EU) climate-neutral by 2050. For European farmers, one of the most controversial components of the deal was the goal to reduce chemical fertilizer and pesticide use by 50% by 2030. That, combined with plans to idle more farmland to increase land biodiversity and forests, along with very little funding directed to farmers to facilitate and harbor such a transition, set the stage for a revolt.

From Berlin and Paris to Brussels and Bucharest, European farmers have driven their tractors to the streets in protest in recent weeks. In Germany, an estimated 30,000 protestors and thousands of tractors brought Berlin’s city centre “to a standstill” in mid-January due to dissatisfaction with the government over the cutting of agricultural fuel subsidies. The protests in France erupted over plans to reduce agricultural fuel subsidies and the government’s push to halve pesticide use by the end of this decade.

The situation escalated to a point where farmers sprayed manure on a local government building in the city of Dijon. In Paris, hundreds of tractors blocked off major roads into the country’s capital in what was called the “siege of Paris” by many media outlets—one of which being BBC News.

By mid-February, protests had spread to other European countries including Italy, Greece, Belgium, Poland, Spain and even Romania and Lithuania. There seems to be no sign of this fire going out any time soon. All the politicians can hope for is that springtime and Mother Nature will draw the farmers and their tractors back to their fields to sow their spring crops and allow the political firestorm to cool off.

But hope is not a strategy, and European farmers know it. Now the question may be how much of the “green gains” are EU’s leaders willing to concede in order to save their political hide. The European Commission, the executive arm of the EU, now intends to scrap the plan to halve pesticide use. It also decided to exclude the agricultural sector from the strict timeline for cutting greenhouse gas emissions by 90% before 2040. In Germany, farmers gained some concessions from the government on the issue of fuel subsidies but continue their demand for full reinstatement. On Feb. 1 in France, the main farmer unions called for an end to the protests after “securing promises of governmental assistance” on finance and regulatory issues. And in the EU’s home base, farmers “won their first concession from Brussels” after the commission proposed to delay rules for setting aside land for biodiversity.

Whether it is luck, strategy or irony on the part of the farmers, Europe’s reassessment of its climate policies comes as the bloc approaches EU parliamentary elections in June. The elections are expected to bring more far-right and fringe lawmakers into Parliament. Already, the continent’s political pundits are saying the next political cycle (2024-29) “will undoubtedly be less green to the point of putting into question the implementation of the green new deal.” Plus, the recent protests “are just a prelude of the further clashes to come.”

Too Many Sticks, Too Few Carrots
Will this fire jump the pond, and could we once again see tractors showing up on the National Mall in Washington, D.C.? Need I remind you, it is an election year here, too.

It is unfair and unwise to think farmers—no matter the continent where they live—are going to carry the costs of going green on their backs alone. At some point, all this needs to stop being an academic exercise and become an economic one. Start paying more to the farmer for carbon credits. Provide the tax incentives to finance the transition to “greener” farms. And stop with the rhetoric that burping cows are going to cause the next apocalypse.

Down on the farm in the U.S., the green agenda is at a crossroads. The question will be whether we will make the same mistakes Europe did and try to drive a green agenda too fast with a stick-heavy approach. The first litmus test may come sooner rather than later as Congress still has a new farm bill to pass. It is expected to be the “greenest” farm bill on record. This election year, given what’s happening in Europe, will our politicians pile on the carrots instead of giving us more sticks? Come November election time, we will see which road we are headed down.

Why Farmers Are Protesting In Europe

Tue, 20 Feb 2024 21:08:22 GMT

Farmers are protesting across the European Union, saying they are facing rising costs and taxes, red tape, excessive environmental rules and competition from cheap food imports. Demonstrations have been taking place for weeks in countries including France, Germany, Belgium, the Netherlands, Poland, Spain, Italy and Greece.

While many issues are country-specific, others are Europe-wide. Here is a detailed look at the problems that have prompted the protest movement across the bloc and in individual countries.

IMPORTS

Demonstrations in eastern Europe have focused on what farmers say is unfair competition from large amounts of imports from Ukraine, for which the EU has waived quotas and duties since Russia’s invasion. Polish farmers have been blocking traffic at the border with Ukraine, which Kyiv says is affecting its defense capability and helping Russia’s aims. Meanwhile, Czech farmers have driven their tractors into downtown Prague, disrupting traffic outside the farm ministry.

The farmers resent the imports because they say they put pressure on European prices while not meeting environmental standards imposed on EU farmers. Renewed negotiations to conclude a trade deal between the EU and South American bloc Mercosur have also fanned discontent about unfair competition in sugar, grain and meat.

RULES AND BUREAUCRACY

Farmers take issue with excessive regulation, mainly at EU level. Centre stage are new EU subsidy rules, such as a requirement to leave 4% of farmland fallow, which means not using it for a period of time.

They also denounce bureaucracy, which French farmers say their government compounds by over-complicating implementation.

In Spain, farmers have complained of “suffocating bureaucracy” drawn up in Brussels that erodes the profitability of crops.

In Greece, farmers demand higher subsidies and faster compensation for crop damage and livestock lost in 2023 floods.

RISING DIESEL FUEL COSTS

In Germany and France, the EU’s biggest agricultural producers, farmers have railed against plans to end subsidies or tax breaks on agricultural diesel. Greek farmers want a tax on diesel to be reduced.

In Romania, protests in mid-January were mainly against the high cost of diesel.

In France, many producers say a government drive to bring down food inflation has left them unable to cover high costs for energy, fertilizer and transport.

WHAT ARE GOVERNMENTS DOING?

The European Commission late last month proposed to limit agricultural imports from Ukraine by introducing an “emergency brake” for the most sensitive products - poultry, eggs and sugar - but producers say the volume would still be too high. The Commission has also exempted EU farmers for 2024 from the requirement to keep some of their land fallow while still receiving EU farm support payments, but they would need to instead grow crops without applying pesticides.

French Prime Minister Gabriel Attal announced measures including controls to insure imported foods do not have traces of pesticides banned in France or the EU, and talks to get farmers higher prices and loosen bureaucracy and regulation.

Paris and Berlin have both relented to the pressure and rowed back on plans to end subsidies or tax breaks on agricultural diesel. In Romania, the government has acted to increase diesel subsidies, address insurance rates and expedite subsidy payments.

In Portugal, the caretaker government has announced an emergency aid package worth 500 million euros, including 200 million euros to mitigate the impact of a long-running drought.

WHY FARMERS ARE PROTESTING, BY COUNTRY:

FRANCE

- EU red tape

- Diesel prices

- Need more support to shore up incomes

- Access to irrigation

- Criticism over animal welfare and use of pesticides

POLAND

- Cheap imports from Ukraine

- EU regulation

CZECH REPUBLIC

- Bureaucracy

- Cheap imports

- EU farm policy

SPAIN

- “Suffocating bureaucracy” drawn up in Brussels that they say erodes the profitability of crops

- Trade deals that they say open the door to cheap imports

PORTUGAL

- Insufficient state aid, subsidy cuts

- Red tape

ROMANIA

- Cost of diesel

- Insurance rates

- EU environmental regulations

- Cheap imports from Ukraine

BELGIUM

- EU requirement to leave 4% of land fallow

- Cheap imports

- Subsidies favoring larger farms

GREECE

- Demands for higher subsidies and faster compensation for crop damage and livestock lost in 2023 floods

- Diesel tax and surging electricity bills

- Falling state and EU subsidies

(Reporting by Sybille de La Hamaide and Gus Trompiz; Editing by Crystal Chesters)

Farmers on the International Stage

Thu, 18 Jan 2024 20:31:41 GMT

By Whitney McFerron

The United Nations recently held its 28th Climate Change Conference, known as COP28, in Dubai, United Arab Emirates. As the world’s largest climate change event, COP28 brought together tens of thousands of stakeholders from around the world, including leaders of governments, businesses, international organizations and the nonprofit sector.

Joining in the conversation were several groups of farmers, including two farmer ambassadors from Farm Journal Foundation who attended the event with the nonprofit organization Solutions from the Land. A.G. Kawamura, a fruit and vegetable grower from California, and Brad Doyle, a row crop producer from Arkansas, share their thoughts on this historic event.

A.G. Kawamura | Orange County, Calif. | Owner of Orange County Produce, LLC, and co-chair of Solutions from the Land

I first attended COP in 2009, for COP15 in Copenhagen, and it has been incredible to see how much has changed over the past several years. Back then, agriculture was nowhere on the agenda. All of us who work in agriculture know just how devastating extreme weather events such as droughts, floods and severe storms can be, both for our businesses and for global food supplies. Yet, those early UN conferences didn’t acknowledge agriculture in their deliberations, and few, if any, members from our community were invited to participate.

Now, 14 years later, a lot has changed, but we still have a long way to go. At COP28, there was an entire day devoted to discussions about food and agriculture. This was heartening, because farmers need innovative solutions to adapt to increasing challenges, and as stewards of the land, we can also play an important role in solving climate change. I was proud to be able to address the UN body myself as part of the Farmers Constituency, helping ensure global leaders pay attention to farmers’ contributions and listen to our perspectives.

For too long, some members of the international community have viewed agriculture as part of the problem when it comes to climate change, instead of part of the solution. This misconception underscores why it’s so important for farmers to speak up at international events like COP and also at state, regional and local venues. Leaders and the general public need to know that farming today is not like it was 40, 30, or even 10 years ago. Whether it’s by sequestering carbon in our soils, producing our own renewable energy or using precision agriculture to grow more food with fewer and fewer inputs, farmers are in many cases leading the fight against climate change. With investments in agricultural research and technology, we will do more in the future.

Speak Up for Agriculture
Following COP15 in Copenhagen, my colleagues and I started Solutions from the Land — a nonprofit organization that puts farmers, ranchers and foresters at the forefront of resolving climate change and other mega global challenges. This movement was long overdue, but we are now making good progress. Organizations such as the Farm Journal Foundation are also helping amplify the voice of agriculture on a global stage.

The reality is that agriculture stands at the center of so many of the issues the international community is trying to solve. The UN has a set of sustainable development goals it hopes humanity can achieve by 2030. None of the goals will be achievable without strong input from agriculture. As I told the UN body in my speech, a reliable food supply is essential for humanity to be able to live on earth. This is why I will continue to speak up for agriculture, at COP events and beyond, because all of our futures depend on it.

Brad Doyle | Weiner, Ark. | Soybean, rice and wheat farmer, and owner of Eagle Seed LLC
COP is a huge global event, with approximately 80,000 people in attendance, and it’s spread out over a giant venue. There are the main UN meetings that observers can attend, but the event has evolved to be so much more than that. Countries, including the U.S., host side events at their own pavilions, as do many international organizations, non-profits, industry associations and companies. There are thousands of talks, demonstrations and panels to choose from over the course of two weeks, on every subject that touches on climate change, not just food and agriculture.

In some ways, COP can be overwhelming, but it also provides unique and valuable opportunities to engage with people outside our agricultural community. As farmers, we often attend industry events hosted by our respective commodity groups and agricultural organizations. These are great, but they can sometimes feel like preaching to the choir. Venues like COP can enable agriculture to reach beyond agriculture, putting us in front of new audiences that might be uninformed, indifferent or even hostile. Here is where we can really move the needle. So many activists and global decision-makers don’t know much about where their food comes from – many have never even met a farmer. COP enables us to sit down with people whom we might not otherwise encounter face to face and have civil conversations over cups of coffee as we begin to find common ground.

A Seat at the Table
No matter what you think about climate change, conversations about it are happening on an international scale, and decisions are being made that will impact agriculture. It’s important farmers pay attention and participate, so we can have a voice in the decisions that affect us. I found at COP that most people are willing to listen, as long as we show up. Farmers have important stories to tell and vital contributions to make when it comes to protecting our land and natural resources for future generations. To truly make a difference, we must step out of our comfort zones from time to time so we can inform people about the value of agriculture and everything farmers do to protect global food security, the climate and environment.

USDA Secretary Tom Vilsack Reveals the Final COP28 Declaration Will Not Focus on Agriculture and Food

Mon, 11 Dec 2023 20:28:02 GMT

Despite calls from countries to focus on food and agriculture as a way to meet the world’s climate goals, USDA Secretary Tom Vilsack revealed that the final COP28 declaration would not focus on agriculture and food. This decision was influenced by a request from the G77 group of developing countries for additional review and participation related to agriculture and food, leaving no time for negotiations.

While Vilsack highlighted the importance of a special day dedicated to agriculture and food policy and the participation of U.S. farm and food leaders, he considered the Emirates Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Change, signed by 152 nations, and commitments by countries and companies to reduce greenhouse gas emissions and fund related projects as significant achievements. However, some observers were disappointed because this would delay progress until June 2024.

Today, at the first-ever day dedicated to food and agriculture at a COP conference, we’re proud to highlight the steps we’re taking to tackle the climate crisis, invest in food systems innovation, and bring new opportunities to producers #COP28 pic.twitter.com/69uyWVdmcZ
— Secretary Tom Vilsack (@SecVilsack) December 10, 2023

Vilsack mentioned the Agriculture Innovation Mission (AIM) for Climate , a joint initiative between the U.S. and the United Arab Emirates aimed at addressing climate change and global hunger through increased investment in climate-smart agriculture and food systems innovation.

Regarding reducing meat consumption, Vilsack said he had not heard much about that goal but instead emphasized strategies for reducing methane emissions related to livestock. The U.S. is taking a leadership role in methane reduction through research, feed additives, recapturing methane for energy production, and managing manure.

A Focus on Dairy to Start

Leading into the meeting, there was a lot of talk about how agriculture practices and food production may be impacted by the climate goals. And to start the meeting, dairy was on the list.

According to a report from Reuters last week, advocacy groups said that tackling livestock methane should be a major priority at this year’s COP28 summit. In addition, at the summit in Dubai this week, six of the world’s largest dairy companies announced an alliance to cut methane emissions from dairy cows.

Reuters reported members of the Dairy Methane Action Alliance include Danone, Bel Group, General Mills, Lactalis USA, Kraft Heinz and Nestle. The Alliance says it will begin reporting their methane emissions by mid-2024 and will write methane action plans by the end of that year.

While the world’s largest dairy companies are working together, it’s also sparking an argument of how essential dairy is in the diets of people around the globe.

#UN #Roadmap to 1.5 #Livestock plan unveiled at #cop28 listed in this thread.

Livestock plays a crucial economic role contributing to the livelihoods of about 1.7 billion poor people and 70 percent of those employed in the sector are women
— Steven Middendorp (@smiddendorp22) December 10, 2023

Cop28: An Explanation

What is COP28? It’s a meeting of politicians, diplomats, NGOS and representatives of national governments. There are also other stakeholders who attend to try to influence the outcome. The meeting actually dates back to June of 1992 when 154 countries signed the United Nations Framework Convention on Climate Change (UNFCCC). At the time, those countries agreed to combat human impacts on the climate.

COP meetings have been held every year since, with a different country becoming the COP president. Since that country is in charge of organizing the meeting, the host city typically moves year to year. Then, any new agreements struck from that year’s meeting, is typically named after the host city, such as the 2015 Paris Agreement and the 2021 Glasgow Climate Pact.

According to the COP28 website, the goal is to “correct course and accelerate action to tackle the climate crisis.” The website also states, “COP28 is where the world will take stock of progress on the Paris Agreement – the landmark climate treaty concluded in 2015 – and chart a course of action to dramatically reduce emissions and protect lives and livelihoods.”

The Goal

According to COP28 organizers, the science shows “to preserve a livable climate, the production of coal, oil, and gas must rapidly decline, and global renewable power capacity – including wind, solar, hydro and geothermal energy – needs to triple by 2030. At the same time, financing for adaptation and investments in climate resilience need a quantum leap.”

COP28 organizers say the goal is to create “concrete solutions to the defining issue of our time.”

U.S. CFTC Issues First Guidelines for Carbon Credit Markets

The U.S. Commodity Futures Trading Commission on Friday approved the first guidelines for the trading of voluntary carbon credit derivative contracts in the country.

Carbon credit derivative contracts are financial instruments that derive their value from carbon credits, which represent the right to emit one metric ton of carbon dioxide or an equivalent amount of greenhouse gases.

The contracts allow traders and market participants to hedge against or speculate on the future price of carbon credits, similar to how traditional derivative contracts function in commodities or financial markets.

Regulators have pushed for heightened scrutiny of voluntary carbon markets, which have developed outside government oversight, due to concerns over quality and double counting.

The U.S. derivatives watchdog has outlined guidance for derivatives exchanges to crack down on price manipulation.

“The CFTC’s unique mission focused on risk mitigation and price discovery puts us on the front lines of the now global nexus between financial markets and decarbonization efforts,” said CFTC Chairman Rostin Behnam.

Regulators in the Americas and Europe have increasingly been worried about greenwashing.
Earlier this year, the CFTC said it was investigating greenwashing - when companies exaggerate their environmental credentials- as part of its crackdown on fraud and misconduct in the voluntary carbon markets.

In May, the U.S. government unveiled rules to govern the use of voluntary carbon credits, seeking to boost confidence in a nascent market after some high-profile offset projects failed to deliver the promised emissions reductions.

“Voluntary carbon markets can help unlock the power of private markets to reduce emissions, but that can only happen if we address significant existing challenges,” Treasury Secretary Janet Yellen had said at the time.

Many companies “offset” their own greenhouse gas emissions by buying voluntary carbon credits, which represent the avoidance or removal of emissions via projects largely located in developing countries.

(Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)

Your Next Read: The ABCs of 45Z: Take Time Now to Prepare for Low-Carbon Market Opportunities

Why Is It Taking So Long to Get the Necessary Guidance on the 45Z Tax Credit Program?

45Z is set to take effect on Jan. 1, 2025. While the 45Z credit has the potential to significantly boost sustainable aviation fuel (SAF) production, the current lack of detailed guidance is causing some uncertainty in the industry.

Producers and investors are eagerly awaiting further clarification from the Treasury Department to make informed decisions about SAF production and investments.

There are a few key reasons why guidance on the 45Z clean fuel production tax credit program is taking a long time to be issued:

• Complexity of the program: The 45Z credit is a new, technology-neutral credit based on carbon intensity scores, which is more complex than previous biofuel tax credits. Developing the emissions rate tables and carbon intensity scoring methodology is technically challenging.

• Interagency coordination: The Treasury Department and IRS need to coordinate with other agencies like the Department of Energy to develop the emissions rate tables and carbon intensity methodologies.

• Stakeholder input: The government is likely taking time to gather and incorporate input from various industry stakeholders on how to structure and implement the credit.

Technical details: Determining specifics like eligible fuels, feedstocks, and how to calculate and verify carbon intensity scores requires careful consideration.

• Transition from existing credits: The 45Z credit will replace several existing biofuel credits in 2025, so the transition needs to be carefully managed.

• Limited resources: The Treasury and IRS have been working on implementing many new tax provisions from recent legislation, potentially straining their resources.

• Desire for accuracy: Given the credit’s importance for clean fuel investment, the government likely wants to ensure the guidance is comprehensive and accurate before releasing it.

Impact of delay. The lack of full guidance is causing uncertainty for fuel producers trying to plan investments and production for when the credit takes effect in 2025. However, the government has issued some initial guidance on registration requirements to help producers prepare.

The 45Z Clean Fuel Production Credit differs from previous fuel production credits in several ways:

• Technology-neutral approach: Unlike previous credits that targeted specific types of fuels, the 45Z credit is technology-neutral and applies to any transportation fuel that meets the emissions reduction criteria.

• Carbon intensity-based: The credit amount is calculated based on the fuel’s carbon intensity score, rather than a flat rate per gallon. Fuels with lower emissions receive a larger credit.

• Producer credit vs blender credit: The 45Z credit goes to the fuel producer, whereas some previous credits like the $1/gallon biodiesel tax credit went to fuel blenders.

• Emissions rate requirement: To qualify, fuels must have an emissions rate no greater than 50 kg of CO2e per mmBTU.

• Registration requirement: Producers must be registered with the IRS before claiming the credit, which is a new requirement.

• Limited duration: The 45Z credit is currently set to apply only to fuels produced from 2025-2027, whereas some previous credits were repeatedly extended.

• Replaces multiple credits: The 45Z credit will replace several existing fuel credits that are set to expire, including those for biodiesel, renewable diesel, and alternative fuels.

• Potentially larger credit amounts: For fuels meeting certain labor requirements, the credit could be up to $1.75 per gallon for sustainable aviation fuel or $1.00 per gallon for other fuels, which is potentially higher than some previous credits.

The 45Z Clean Fuel Production Credit has several important implications for sustainable aviation fuel (SAF) production:

• Incentivizes SAF production: The 45Z credit provides a significant financial incentive for producers to manufacture SAF, with a maximum credit of $1.75 per gallon for aviation fuels that meet certain requirements.

• Technology-neutral approach: Unlike previous credits that targeted specific fuel types, the 45Z credit is technology-neutral. This means any SAF that meets the emissions reduction criteria can qualify, potentially spurring innovation in SAF production methods.

• Carbon intensity-based: The credit amount is calculated based on the fuel’s carbon intensity score. SAF with lower emissions receives a larger credit, encouraging producers to minimize the carbon footprint of their production processes.

• Replaces previous credits: The 45Z credit will replace several existing fuel credits set to expire, including the current sustainable aviation fuel credit (Section 40B).

• Registration requirement: SAF producers must register with the IRS before claiming the credit, which is a new requirement compared to previous fuel credits.

• Emissions reduction threshold: To qualify for the credit, SAF must have an emissions rate no greater than 50 kg of CO2e per mmBTU.

• Potential for higher credit amounts: For SAF meeting certain labor requirements, the credit could be up to $1.75 per gallon, which is potentially higher than some previous credits.

• Uncertainty due to delayed guidance: The lack of final guidance on how to calculate carbon intensity scores is causing uncertainty for SAF producers and potentially delaying investments in new production facilities.

• Impact on feedstock choices: The credit may influence which feedstocks are used for SAF production, depending on how carbon intensity is calculated for different agricultural inputs.

• Transition period: The shift from the current SAF credit (Section 40B) to the new 45Z credit in 2025 is creating some challenges for producers in planning future production and sales.

What is 45Z?

The new credit will be based on emissions rates, providing $1.75 minus $.035 per kg of CO2e per mm BTU for SAF with emissions below 50%. This shift may reduce incentives for agricultural feedstocks, favoring waste-based materials. The 45Z program also establishes a tax credit for biodiesel and renewable diesel, which will receive $1.00 minus $.02 per kg of CO2e per mm BTU, indexed to inflation. The GREET model will be used for CI scoring.

The potential 45Z credits for soy-based biofuels are lower than the current biomass-based diesel tax credit, with most renewable diesel receiving additional Low Carbon Fuel Standard credits in California. The 45Z program may further increase demand for waste-based feedstocks over agricultural ones.

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