William Hohenstein

Director, Office of Energy and Environmental Policy, USDA

1400 Independence Avenue SW, Washington, DC 20250

July 25, 2024

RE: Procedures for Quantification, Reporting, and Verification of Greenhouse Gas Emissions Associated with the Production of Domestic Agricultural Commodities Used as Biofuel Feedstocks [Docket No. USDA-2024-0003]

Taxpayers for Common Sense (TCS) appreciates the opportunity to provide public comments on procedures for quantification, reporting, and verification of greenhouse gas emissions associated with the production of domestic agricultural commodities used as biofuel feedstocks.

TCS is a nonpartisan budget watchdog serving the American taxpayer. We support a federal safety net for American farming and ranching businesses, provided tax dollars are invested wisely and efficiently. Federal investments should focus on assisting those farmers and ranchers in need of financial assistance, be directed only at risks that are too costly or complex to manage independent of Washington, and have a tangible, quantifiable impact on achieving critical public resource concerns.

Climate change is a real and increasingly costly threat to both agricultural producers and federal taxpayers. There is a critical need for federal policies that enable the agricultural sector to reduce its contributions to climate change while increasing its ability to mitigate the effects on both agriculture and the public. Direct spending and tax incentives must be grounded in sound science and implemented transparently to ensure they provide both documentable and meaningful benefits toward climate mitigation. In a limited budget environment, and with our nation holding a $34 trillion debt, it is critical that taxpayer investments are based on effectiveness toward mitigating the effects of climate change rather than political popularity. In the context of biofuels this is especially important as any political favoritism to particular feedstocks runs the risk of undercutting alternatives that may provide a greater return on investment for taxpayers and agricultural producers.

Stringent GHG Modeling

When evaluating and quantifying greenhouse gas (GHG) emissions associated with climate smart practices, the USDA must ensure that these practices will not perversely incentivize the conversion of carbon-rich wetlands, forests, and grasslands into croplands. And in order to fully account for the GHG emissions impact of land use changes caused by biofuels feedstock production, the USDA should strive to utilize Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), developed by International Civil Aviation Organization (ICAO), or a methodology that is as stringent and sufficiently similar. If a methodology used to calculate lifecycle GHG emissions to evaluate biofuels programs, as well as related tax credits, results in fuels qualifying for the tax credit that would not have otherwise qualified under CORSIA, then that methodology should not be considered sufficiently similar.

The Argonne National Laboratory’s Greenhouse gases, Regulated Emissions, and Energy use in Transportation (GREET) model is one such method that should not be considered sufficiently similar to CORSIA and should not be utilized. For example, the American Soybean Association calculated that soybeans would not qualify for the sustainable aviation fuel credit under CORSIA. However, using GREET, soybean oil would be eligible to claim $1.30 per gallon of credits.[1] This is because the GREET methodology attributes lower emissions to indirect land compared to CORSIA. Failure to adopt a methodology that takes into account indirect land use changes like crop area expansions and conversions of food production for biofuels feedstock will lead to the subsidization of counterproductive climate-related policies instead of investing in solutions that reduce climate risk, costs, and future liabilities.

Qualifying Practices

When determining which agricultural practices qualify as climate smart practices, the USDA must take into consideration how encouraging these practices might lead to increased demand for biofuels feedstock which in turn causes increased cropland conversion. Induced land use change and associated increased GHG emissions would cancel out any potential emissions reduction benefits that the practices might provide. Additionally, the impact practices have on other critical conservation concerns, like water quality, biodiversity, etc., should also be considered when evaluating qualifying practices. We encourage flexibility in determining what suite of conservation practices qualify as climate smart, as long as there is credible, documentable evidence the practices provide a significant net return on investment for taxpayers.

Verification and Recordkeeping

The USDA must require third-party verification of climate smart adoption and GHG emissions reduction claims in the production of domestic agricultural commodities used as biofuel feedstocks. The USDA must also require regular audits to verify the adoption of climate smart practices, through a combination of onsite and remote sensing or other emergent technologies.

Supply Chain Traceability

Tracking fuel feedstocks through supply chains will help provide transparency and ensure that climate smart practices are actually utilized during the production of biofuel feedstock. Supply chain traceability and information transmission requirements must be established when evaluating biofuels programs and biofuels tax credits, especially given the lack of similar requirements in EPA’s past implementation of the Renewable Fuel Standard (RFS). While the Book and Claim (B&C) system was designed to facilitate the tracking of emissions reduction, it has potential vulnerabilities that could be exploited by biofuels producers. The B&C system allows administrative record flow to be disconnected from the physical delivery of materials or fuels. A biofuels producer can “book” the amount of GHG emissions reductions from feedstock that has been produced with climate smart practices in a different location without the feedstock being physically transported to produce the biofuels. Without a universally recognized registry, there is a risk of double-counting, as feedstock producers could sell the same sustainability or emissions reduction certificates to multiple buyers. Robust and accurate bookkeeping is needed to verify the emissions reduction claims.

Conclusion

To best protect taxpayers, agricultural producers, and the climate, the USDA must ensure an accurate accounting of the GHG emissions associated with the production of domestic agricultural commodities used as biofuel feedstocks. This includes fully accounting for the GHG emissions impact of land use changes caused by biofuels feedstock production by utilizing CORSIA or a similarly stringent methodology, and not allowing the use of the GREET or similarly insufficient models. The USDA must also verify GHG emissions reduction claims in biofuel feedstock production and accurately track fuel feedstocks through supply chains, including by ensuring GHG emissions reduction claims are accurate and not double-counted through robust and accurate bookkeeping. By implementing these standards, the USDA can better direct federal tax dollars towards investments that reduce the agricultural sector’s contributions to climate change while building industry resilience.

[1] American Soybean Association. A Look at 40B and 45Z Credits for Soy Biofuels. https://soygrowers.com/news-releases/a-look-at-40b-and-45z-credits-for-soy-biofuels/#:~:text=For%20soy%2C%20the%20GREET%20model,as%20a%20feedstock%20results%20in%20%24.