A team of agricultural economists, environmental scientists and policy experts envision a path to a future for carbon-neutral agriculture by expanding the scope of policies designed to promote low-carbon biofuels.
Researchers are proposing policies that will adopt “climate smart” practices when growing low-carbon biofuel crops and reward farmers who remove the hurdles that are currently blocking such efforts.
Climate smart practices include techniques to build soil carbon, such as cover groups, rather than adding post-harvest cultivated land or biochar or finely ground silicate rock to the soil.
Additionally, measures to reduce crop production carbon emissions, such as optimizing the timing of fertilizer application, electrification of farms, and improving crop genetics are also recommended.
Low-carbon biofuels can reduce emissions of over 4 million tons from agriculture
Researchers write that low-carbon biofuels can reduce agriculture’s carbon emissions by 4.8 billion tons a year when adopted worldwide, researchers write. In 2024 alone, the world’s carbon footprint reached an all-time high of around 40 billion tonnes.
“Currently, our biofuel policy will not reward farmers with adopting climate-smart practices,” said Madhu Kanna, professor of agriculture and consumer economics at the University of Illinois Urbana-Champaign.
“By paying for the premiums of corn grown in the climate smart practices of corn, taking into account differences in practices implemented at the farm level, biofuel policies can encourage the adoption of these practices.”
Performance-based incentives for climate-friendly practices
The low-carbon biofuel market has already established mechanisms to account for the carbon strength of various raw material types, and has a well-developed channel to transfer payments from the energy market to biofuel producers, the researchers reported.
This opens the door to using these channels to expand performance-based incentives and increasing adoption of climate-smart practices in agriculture.
“For example, the 2023-2024 “40B” sustainable aviation fuel tax credit was designed to distinguish credits based on climate smart practices adopted during crop production,” Kanna said.
“The lower the carbon strength, the higher the tax credits paid for sustainable aviation fuels and the crops used to produce them.”
However, currently, channels for crediting farmers for soil carbon sequestration or other climate-friendly practices on farms are separated from markets that provide credit to low-carbon biofuels.
To compensate for sustainability efforts in crop cultivation, farmers must enroll in conservation programs or sell carbon credits to one of several companies specializing in agricultural carbon offsets.
However, the government conservation programmes have limited space and farmers need to prove that they are not yet engaged in climate-smart practices to get credit.
Merge of biofuel and climate offsets
To overcome this, researchers propose an approach to integrating biofuel raw materials and climate offset markets into a single channel, rewarding farmers and others who use practices that reduce the carbon strength of their businesses.
This approach can then be expanded to reward farmers for adopting climate-smart practices to supply food and feed markets.
Like existing policies, the new approach should ensure that farmers are actually implementing practices they pledge to follow.
“The study is co-authored by Michigan State University and expert on modeling and digital agriculture,” said Bruno Basso, co-author of the study and modeling and digital agriculture at Michigan State University.
Future jobs and recommendations
Khanna concluded: “We can address these concerns by developing a market for agricultural products that explain all the direct and indirect carbon emission effects from farms to consumers.
“The main premise of our proposal is that it requires a complete and accurate assessment of carbon emissions from the beginning to the end of the product’s lifecycle. The way biofuel policies are currently being designed treats crop producers that supply crops for biofuels as all the same.”
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