In a year marked by novel, evolving guidelines and increased scrutiny on Carbon Intensity (CI) scoring, the stakes have never been higher for growers and biofuel producers aiming to meet decarbonization targets and secure potentially valuable incentives. As the incite.ag team reflects on those market evolutions, certain pitfalls surfaced repeatedly throughout our network, impacting CI scores and, in some cases, jeopardizing readiness for revenue opportunities. Here’s a look at three common CI scoring pitfalls we saw across our network this past year, along with actionable tips to avoid them in 2025.
Pitfall #1:
Misunderstanding Units:
The Devil’s in the Details
A surprisingly common issue in CI reporting has been confusion around units of measurement, particularly when converting between grams per megajoule (g/MJ), the “standard” for most low-carbon markets and “CI Vocabulary” and kilograms per million British thermal units (kg/MMBtu), the expected unit of measurement for the Treasury in 45Z. These units might seem interchangeable, but the ~5% delta between them can have real impacts on expected CI values, potentially altering eligibility for credit thresholds and producer incentives.
Example:
Consider a miscalculation from g/MJ to kg/MMBtu that led to an inflated CI score, disqualifying the ethanol product from an "in the money" incentive at a crucial 50 kg/MMBtu threshold.
Solution:
· Standardize unit conversion tools across your team and triple-check units during reporting [1 g/mj = 1.055055853 kg/mmbtu]
· Clearly document unit changes in any report, especially when transferring data between platforms.
Quick Tip:
Implement a checklist with standard unit conversions to ensure accuracy, especially as CI reporting systems vary in their preferred units.
Pitfall #2:
Overlooking “In the Money” Thresholds for Ethanol CI Scoring
Another frequent misstep often occurs as the farmgate and involves missing the importance of "in the money" CI thresholds for 45Z. Specifically the 50 kg/MMBtu mark for ethanol production. This often came from feedstock producers and third party vendors enticed about the “value” of a low CI bushel but failing to recognize the life cycle fuel CI score threshold a clean fuel producer must be at/under in order to recognize tax credit value through 45Z. Because many fuel producers have CI scores in the mid 50’s, there may likely be low-CI bushels a farmer delivers that bring CI reduction value, but don't equate to significant enough reductions to generate a tax credit, which creates a missed expectation and potential conflict for upstream suppliers.
Example:
A feedstock producer with a CI score of 20 kg/mmbtu expects to see their 7-10 point CI “advantage” recognized in a direct incentive, but the fuel producer’s fuel CI score of 57 and a weighted average score from all their sourced bushels only drops fuel CI by 5 points, meaning a year end CI score of 52 kg/mmbtu and no direct tax credits to the fuel or feedstock producer.
Solution:
· Fuel Producers: Manage expectations with corn supplier networks. Educate them on CI dynamics.
· Feedstock Producers: Understand the broader dynamics and details of future credit guidance and recognize that your “CI Reduction” potential may be valued differently by different fuel producers based on their overall Fuel CI.
Quick Tip:
Socialize scoring fuel and feedstock CI thresholds and expected year-end scores in regular organization and supplier conversations.
Pitfall #3:
Inadequate Documentation of Conservation Practices:
Feedstock producers failing to document conservation practices, such as cover cropping and no-till farming, may prove to be a costly mistake that undermines CI scores. Oftentimes these conservation practices or management activities that hinge on NOT performing an action have little to no digital data capture or record keeping, creating a challenge when verification is required. These practices play a crucial role in reducing emissions but only benefit CI scores if well-documented, accurate, and readily available for review.
Example:
A grower deploying cover crops did not log the practice in any farm management system or maintain updated records, receipts, or imagery, leading to an inability for a third party verifier to certify the practice and leaving the producer with a CI Score +10 points higher than expected.
Solution:
· Use a standardized template for documenting conservation practices, including details like planting dates, crop types, and acres affected and maintain source documentation.
· Integrate conservation data tracking with farm management systems.
Quick Tip:
For feedstock producers, make it a habit to record practices immediately after implementation, even if it's in a manual or analog format. Snap a picture of any receipts or application records. And take a roadside image of your field post-application / stand establishment.
Conclusion:
For fuel and feedstock producers, much of 2024 was learning about how to properly navigate CI-specific programs. Take your experiences or missteps from the pilot-year that was 2024 and set yourself up for success in 2025. Each of these pitfalls can be avoided with the right attention to detail, processes, and planning. As CI scoring continues to evolve, keep your local CI-expert’s number on speed dial to help you navigate these complexities when challenges arise. By addressing these common errors, you can optimize your CI score, maintain compliance, and maximize your incentives in the year ahead.
incite.ag Staff
incite.ag
success@incite.ag
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Incite.ag guides producers across the agricultural supply chain to Turn Emissions into Income. Incite.ag’s CI scoring system unlocks novel revenue streams and empowers producers to take control of their unique CI Scores. Learn more by hitting the link below or reach out to the team directly at success@incite.ag or 815.373.0177.