Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks

<RULE> DEPARTMENT OF AGRICULTURE <CFR>7 CFR Part 2100</CFR> <RIN>RIN 0503-AA82</RIN> <DEPDOC>[Docket No. USDA-2024-0003]</DEPDOC> <SUBJECT>Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of the Chief Economist (OCE), U.S. Department of Agriculture (USDA). <HD SOURCE="HED">ACTION:</HD> Interim rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This interim rule with request for comment establishes technical guidelines for quantifying, reporting, and verifying the greenhouse gas (GHG) emissions associated with agricultural production of biofuel feedstock commodity crops grown in the United States in the context of environmental service markets. Specifically, the rule establishes guidelines for the reporting and verification of practices and technologies used in the production of certain commodity crops that result in lower greenhouse gas emissions or increases in carbon storage. These practices are referred to in the context of this rule as climate-smart agriculture (CSA) practices. The guidelines established through this rule articulate an approach for farm producers to quantify the GHG emissions associated with crops produced using one or more CSA practices. The guidelines also articulate a framework for how information regarding GHG emissions, resulting from the production of biofuel feedstock commodity crops, could be reported and tracked throughout the supply chain. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective:</E> January 17, 2025. <E T="03">Comment Date:</E> We will consider comments that we receive by March 18, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> We invite you to submit comments on this rule. You may submit comments through the: • <E T="03">Federal eRulemaking Portal:</E> Go to <E T="03">http://www.regulations.gov</E> and search for Docket ID USDA-2024-0003. Follow the online instructions for submitting comments. Comments will be available for viewing online at <E T="03">www.regulations.gov.</E> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> William Hohenstein, Director of the Office of Energy and Environmental Policy, (202) 720-0450, <E T="03">william.hohenstein@usda.gov.</E> Individuals who require alternative means for communication should contact the USDA TARGET Center at (202) 720-2600 (voice and text telephone (TTY)) or dial 711 for Telecommunications Relay Service (both voice and text telephone users can initiate this call from any telephone). </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Background</HD> This rule establishes new technical guidelines for crop commodities that are used as biofuel feedstocks. USDA is issuing this rule to establish guidelines for the quantification, reporting, and verification of GHG reduction benefits resulting from implementation of CSA practices in the production of commodities that are used as biofuel feedstocks in the context of environmental services markets. CSA practices are agricultural management practices, systems, and technologies that have been demonstrated to generally reduce GHG emissions or increase soil carbon sequestration. Greater adoption of CSA practices could lower overall GHG emissions associated with biofuel production and provide other environmental benefits, such as improved water quality and soil health. These technical guidelines are intended for the purpose of biofuels production. USDA's authority allows for the establishment of guidelines related to emerging environmental services markets. At this time, the biofuel market represents a clear market opportunity for climate-smart feedstocks. Producing a carbon offset is a different policy context that would require a different set of standards. These guidelines do not constitute a carbon offset protocol. The net GHG emissions associated with a defined set of CSA practices will be quantified as explained below in the Methodology for Calculating Carbon Intensities used in USDA Feedstock Carbon Intensity Calculator (USDA FD-CIC) section, once USDA FD-CIC is finalized. USDA will shortly publish USDA FD-CIC on its website at <E T="03">https://www.usda.gov/usda-fdcic</E> for peer-review purposes, beta testing, and to obtain public feedback. Crop production generates GHG emissions, including from soil carbon released during tillage and nitrous oxide emissions resulting from fertilizer use, among other sources. When such crops are used as feedstocks to produce biofuels, the GHG emissions associated with their production contribute a significant percentage of the overall GHG emissions associated with crop-based biofuel production. For instance, feedstock emissions account for approximately 56 percent and 55 percent of the direct emissions from producing corn ethanol and soybean biodiesel, respectively. The GHG emissions associated with feedstock crop production can be reduced through CSA practices, in turn reducing the lifecycle GHG emissions of a biofuel. To date, most existing programs have relied on assumptions about average or typical farming practices to estimate emissions associated with biofuel feedstock production. To improve the empirical basis and verifiability of the effects of CSA practices on net GHG emissions, and to quantify net GHG emissions reductions specifically attributed to those feedstocks grown with climate-smart practices, USDA developed this rule to establish technical guidelines for CSA crops used as biofuel feedstocks. This interim rule allows for the differentiation and quantification of carbon intensities associated with the production of CSA crops used as biofuel feedstocks, through USDA FD-CIC, upon its finalization. This interim rule is authorized by the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill (Pub. L. 110-246)), § 2709, (16 U.S.C. 3845), which authorizes the Secretary of Agriculture to establish technical guidelines that outline science-based methods to measure the environmental services benefits from conservation and land management activities in order to facilitate the participation of farm producers, ranchers, and forest landowners in emerging environmental services markets and to give priority to the establishment of guidelines related to farmer, rancher, and forest landowner participation in carbon markets. It further directs the Secretary to establish verification guidelines, including the role of third parties in conducting independent verification of benefits produced for environmental services markets and other functions. Regulations to implement the programs of Chapter 58 of Title 16 of the U.S. Code, as specified in 16 U.S.C. 3846, and the administration of those programs are to be made as an interim rule effective on publication, with an opportunity for notice and comment. Here, the guidelines relate to the administration of a program for participation in environmental markets. Accordingly, USDA is issuing this interim rule effective on publication with request for comment. This interim rule will facilitate farm producers' ability to participate in environmental service markets associated with biofuel production by establishing guidelines for quantification, reporting, and verification of GHG emissions resulting from the production of agricultural crops grown using CSA practices. It also establishes verification guidelines to increase certainty that the practices claimed are implemented according to the standards established by this rule. While USDA is not creating an environmental service market through this rule, USDA is making these guidelines available for consideration in international, national, or state clean transportation fuel policies in accordance with 16 U.S.C. 3845, as described above. Currently, very few U.S.-based clean transportation fuel programs or policies (including private and government programs) have standards or guidelines for climate-smart agricultural practices, such as those described in this rule, to account for the emissions reductions they generate. Those policies or programs that contain some or all of the elements of the standards in this rule (including CSA practice standards, recordkeeping, quantification, reporting and verification of emissions reductions of such practices) are smaller in scale or were only recently developed and at the pilot stage. For example, the U.S. Department of the Treasury (Treasury) 40B Sustainable Aviation Fuel (SAF) tax credit provides one example of a biofuel policy that incorporated emissions reductions for crops produced using CSA practices. This tax credit provided per gallon credits for the sale or use of SAF defined as achieving a life cycle GHG emissions reduction of at least 50 percent as compared to petroleum-based jet fuel. Treasury and Internal Revenue Service (IRS) guidance for the tax credit included a safe harbor for the USDA CSA Pilot Program, making SAF produced using soybeans or corn employing a bundle of CSA practices eligible for a higher tax credit than SAF produced using crops produced without the bundle of CSA practices. For the purpose of the SAF tax credit, the CSA practice standards, quantification, reporting and verification requirements only pertained to the one bundle of CSA practices eligible under the guidance so are not broadly applicable. As the guidance stated, Treasury and IRS established the CSA safe harbor on a pilot basis to advance the development of CSA verification mechanisms, recognizing the potential emissions reduction benefits of CSA and also the limitations of currently available verification mechanisms, empirical data, and modeling. California's Low Carbon Fuel Standard (LCFS) and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) incentivize transportation fuels that have lower GHG emissions, but they do not have standards ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 165k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━