Your tax dollars at work for you – I really mean it

In a politically charged environment where competition for resources runs at a fever pitch

The Chasm in Opinions

In a politically charged environment where competition for resources runs at a fever pitch, it is not a big surprise that the chasm in opinions is probably at one of its widest points in memory. I recently had the opportunity to listen to Karl Rove contextualize this situation and he went deep into the history of the United States with its frequent raucous power struggles – the data would show that our current friction is nothing new. 

Sustainable Development Goals (SDGs)

• Goal 1: No Poverty
• Goal 2: Zero Hunger
• Goal 7: Affordable and Clean Energy
• Goal 13: Climate Action

Settling Disputes in the Modern Era

The Role of Social Media

What is different in this era is that we do not settle disputes in a Burr vs. Hamilton manner, instead we take to social media to make our side look rosy and the other side look oh-so terrible. The general approach from the agricultural community is to live within our means, make good on our obligations and generally operate as responsible financial stewards. We may be out of touch a bit with societal demands that are financed by our tax payments. 

The Impact of the Inflation Reduction Act

Provision 45Z

That whole scenario is about to make an abrupt shift under a provision called 45Z in the controversial Inflation Reduction Act. Proponents of the legislation see it as a modern-day New Deal with the goal of uplifting society via the addressing of carbon initiatives. Others see it as yet another boondoggle of wasteful spending with a marginal opportunity for meaningful impact. Regardless of your political views, the pork sector is on queue to be a huge beneficiary of the law, here is how.

The Role of the Ethanol Industry

Reducing Carbon Footprint

The 45Z provision of the tax code provides credits to the ethanol industry (hang with me, this will turn back to pork) if they are able to reduce their carbon footprint via a model from the Department of Energy called GREET (Greenhouse gases, Regulated Emissions, and Energy use in Technologies).  If they are able to meet the thresholds, they receive tax credits that could be used to offset federal tax liability. The biggest component of carbon index scoring for an ethanol plant is corn they grind followed by the energy used to run the facility. 

The Role of the Pork Sector

Reducing Carbon Index with Manure

One of the biggest components of carbon indexing for the corn producer is synthetic fertilizers – this is where the pork sector comes into play. There are a lot of moving parts and interplay between various agronomic practices, but in a recent example of farm ground in northeast Iowa, the carbon index was cut in half via the use of manure. If this makes sense to you – hog manure is more carbon friendly compared to commercial fertilizer -then you have the premise behind the subsequent math.  And the math is impressive.

The Value of Carbon Intensity Reduction

Implications for Ethanol Plants and Pork Producers

Each point of reduction in carbon intensity is worth about 5.5 cents per bushel to the ethanol plant. In my stated example, a hog farmer using his own manure raising 220 bushel/acre corn could be generating a value of an additional $.80/bu compared to not using manure. Remember, this is the value to the ethanol plant and there will be a water down effect by the time it gets to the row-crop producer, but we are talking about big enough values per acre (220 bpa x $.80 = $176/ac) that we can afford some slippage and still do quite well.  For the pork producer selling his manure, the value of the product to the agronomic community via these credits just went up substantially. 

Implementation and Timeline

Commencement of 45Z Credits

The 45Z credits are scheduled to commence in January of 2025 and run for three years. Ergo, the crop that is currently going in the ground now will be the first production that is practically available to participate in this program. Many of you may remember the identity preservation efforts of high-lysine corn or high-oil corn that required physical segregation for a relatively paltry return. This program is significantly more lucrative without near the hassle, that is a win on both counts.

Considerations for Producers

The GREET Model and Carbon Index Score

There are details for consideration for all producers as the GREET model does not treat all fields equally, there are several sites that offer an opportunity to discover your current carbon index score and learn more about the program – continuum.ag is my current favorite. (Note: the GREET model is scheduled to undergo a revision that had a self-imposed deadline of March 1 that has not been released as of this writing

SDGs, Targets, and Indicators in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 7.2: Increase substantially the share of renewable energy in the global energy mix.
• SDG 9.4: Upgrade infrastructure and retrofit industries to make them sustainable.
• SDG 12.4: By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle.
• SDG 13.2: Integrate climate change measures into national policies, strategies, and planning.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator for SDG 7.2: Share of renewable energy in the total energy consumption of the ethanol industry.
• Indicator for SDG 9.4: Reduction in carbon footprint of the ethanol industry through the use of GREET model and carbon index scoring.
• Indicator for SDG 12.4: Reduction in carbon intensity and use of synthetic fertilizers in corn production.
• Indicator for SDG 13.2: Increase in the number of ethanol plants meeting the thresholds for carbon credits.

Table: SDGs, Targets, and Indicators

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: nationalhogfarmer.com

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