A team of agricultural economists, environmental scientists and policy experts has envisioned a path toward a carbon-neutral agricultural future by expanding the reach of policies designed to promote low-carbon biofuels.
The researchers propose policies that would reward farmers for adopting “climate-smart” practices when growing low-carbon biofuel crops and remove the hurdles that currently thwart such efforts.
Climate-smart practices include techniques that build soil carbon, like cover-cropping, not tilling fields after harvest and adding biochar or finely ground silicate rock to soils.
Furthermore, measures that reduce the carbon footprint of crop production are also recommended, such as optimising the timing of fertiliser application, electrifying farm vehicles, and improving crop genetics.
Low-carbon biofuels can reduce over 4 million tonnes of emissions from farming
Studies show that, if adopted globally, low-carbon biofuels could reduce carbon emissions in agriculture by 4.8 billion tonnes per year, the researchers wrote. In 2024 alone, global carbon dioxide emissions reached an all-time high of about 40 billion tonnes.
Madhu Khanna, a professor of agricultural and consumer economics at the University of Illinois Urbana-Champaign, explained: “Currently, our biofuel policies don’t reward farmers for adopting climate-smart practices. For example, they treat all corn grown for the corn-ethanol market the same, regardless of whether the farmers adopt such practices.
“By accounting for differences in practices implemented at the farm level and paying a premium for corn grown with climate-smart practices for corn ethanol, biofuel policies can incentivise adoption of these practices.”
Performance-based incentives for climate-friendly practices
Low-carbon biofuel markets have already established mechanisms for accounting for the carbon intensity of different feedstock types and have well-developed channels for transferring payments from energy markets to biofuel producers, the researchers reported.
This opens the door to using these channels to expand performance-based incentives to increase the adoption of climate-smart practices in agriculture.
“For example, the ‘40B’ Sustainable Aviation Fuel tax credit of 2023-2024 was designed to differentiate the credit based on the climate-smart practices adopted while producing the crop,” Khanna said.
“The lower the carbon intensity, the higher the tax credit paid for sustainable aviation fuels and for the crop used to produce them.”
At present, however, the channels for crediting farmers for soil-carbon sequestration or other climate-friendly practices on the farm are segregated from the markets that provide credits for low-carbon biofuels.
To be compensated for their sustainability efforts in growing the crops, farmers must either enrol in a conservation program or sell carbon credits to one of several companies specialising in agricultural carbon offsets.
However, space is limited in government conservation programmes, and farmers must prove that they aren’t already engaging in climate-smart practices to obtain credits.
Merging biofuels and climate offsetting
To overcome this, the researchers propose an approach for merging the biofuel feedstock market and climate-offset market into a single channel to reward farmers and others in the biofuel supply chain who use practices that lower the carbon intensity of their operations.
This approach could subsequently be broadened to reward farmers for adopting climate-smart practices for crops to supply food and feed markets.
Like existing policies, any new approach would require verification that farmers are actually implementing the practices they’ve pledged to follow.
Bruno Basso, a co-author of the study and an expert in modelling and digital agriculture at Michigan State University, stated: “Emerging digital technologies and modelling advances can document farming practices and accurately calculate their carbon intensity. This can simplify and scale this process.”
Future work and recommendations
Khanna concluded: “By developing a market for agricultural products that accounts for all the direct and indirect carbon emission effects from the farm to the consumer, we can better address these concerns.
“The main premise of our proposal is that we need to have a full and accurate assessment of carbon emissions from the beginning to the end of any product’s life cycle. Right now, the way that biofuel policies are designed, they treat crop producers supplying crops for biofuel as all being the same.”
