ACE highlights importance of low-carbon farming practices

The American Coalition for Ethanol (ACE) urged the US Department of Treasury and Internal Revenue Service to swiftly finalise practical and workable regulations implementing the Section 45Z Clean Fuel Production Credit, emphasising the importance of fully recognising low-carbon farming practices within the programme.

During Treasury’s public hearing on proposed 45Z regulations, ACE Chief Consultant and Policy Advisor Jonathon Lehman stressed that ethanol producers and farmers need clear rules that allow the industry to fully monetise carbon reductions achieved through conservation practices and innovation.

“ACE members sit at the intersection of American agriculture and American energy,” Lehman testified. “45Z — strengthened in the One Big Beautiful Bill through transferability and extension through 2029 — is a genuine market-based lifeline, but only if Treasury finalises rules that allow full monetisation of low-carbon farming practices.”

ACE highlighted that farming practices account for roughly half of ethanol’s carbon intensity profile and argued that conservation efforts such as no-till, reduced tillage, cover crops, and precision nutrient management must be incorporated effectively into the final rule.

“If Treasury allows these practices to qualify properly, billions of dollars annually will flow to ethanol producers and farmers,” Lehman said.

ACE also encouraged continued improvement of the USDA Feedstock Carbon Intensity Calculator (FD-CIC) and for the tool to be integrated directly into the 45ZCF-GREET model.

Lehman pointed to ACE’s ongoing partnership work with USDA and DoE, including a project in South Dakota, generating field-level data validating the emissions benefits of conservation practices. ACE further urged Treasury to build verification requirements around existing USDA conservation programmes rather than imposing costly new compliance systems.

“Farmers and rural communities cannot afford further delay,” Lehman concluded.