At the hazard of being accused of being a libitard, I am going to take a chance and try to explain how farms selling their corn into a local ethanol plant, might sort out what their low CIS corn might be valued in 2026 if trump's USDA, DOI, and Treasury can stop sitting on their hands to fully include US farmers in the 45Z program...

Building a "farm perspective napkin budget" for the 45Z ethanol tax incentives is the best way to cut through the regulatory noise of the 45Z program and see the actual dollars and cents at play.

I am going to use a KISS approach for the main parameters you need to think about. Here is the step-by-step math illustrating the value your low-CI corn unlocks, followed by a necessary reality check on how that value actually reaches the farm gate.

The 45Z Napkin Calculation

1. The Carbon Reduction (Farm Level) First, we find the exact carbon opportunity your regenerative practices created compared to the local baseline. To get your CIS and you have already developed your farm and its field by field GHG and carbon footprint using the NRCS www.COMET-FARM.com accounting and planning system, the numbers will already be in this whole farm GHG and carbon accounting process.  Otherwise, you need to as your Land Grant for their spreadsheet USDA FD-CIC calculator. 

We will assume you are using no-till, have discovered that cover crops do work, and have understanding of how to account for hog manure in your corn crop planning.

• Your County Average Convention Corn Baseline CI: 30.0

• Your Regenerative Farm CI: 10.0

• Total Farm CI Ex-farmgate Reduction: 20.0 points per bushel

2. The Translation (Ethanol Plant Level) When your corn arrives at the plant, its carbon score is blended into the facility's overall footprint. Because feedgrain represents typically 45% of the plant's total Carbon Intensity Score (CIS), your and the other farmers with the same 20-point farm reduction is scaled down to reflect its proportional impact on the final ethanol.

• Plant CI Reduction: 20.0 points × 0.45 = 9.0 points

• (Note: This 9-point drop takes the plant from their baseline of 49 down to 40, ensuring they are well below the 50 CI statutory threshold required to claim 45Z credits).

3. The Premium Value Generated (Per Bushel) Next, we calculate the financial value of those 9 points based on the anticipated tax incentive and the conversion rate of corn to ethanol.

• Incentive per Gallon: 9.0 points × $0.05/point ex-plant-gate = $0.45 per gallon

• Conversion Rate: 3 gallons of ethanol produced per 1 bushel of corn

• Total 45Z Premium Generated to the ethanol plant: $0.45/gallon × 3 gallons/bu = $1.35 per bushel

4. The Total Contract Value (500 Acres) Finally, we apply that per-bushel value to the total volume of the contract.

• Total Production: Assume a contract for 500 acres × 200 bu/acre = 100,000 bushels

• Total 45Z Premium Pool: 100,000 bushels × $1.35/bu = $135,000

The Reality Check: The Ex-Farmgate Split

While $135,000 (or $1.35 per bushel) is the total 45Z tax credit financial premium generated by your farming practices, that is likely not the final ex-farmgate value you will receive.

Under the statutory rules of 45Z, the IRS awards the tax credit directly to the biofuel producer (the ethanol plant), not the farmer. The ethanol plant relies entirely on your data and practices to get the credit, but they also carry the administrative burden, auditing costs, and capital risks of running the facility.

Therefore, the actual ex-farmgate premium added to your local cash corn price will be a negotiated split of that $1.35/bu.

• If the plant offers a 50/50 split, your ex-farmgate premium is $0.67 per bushel ($67,500 total).

• If the plant offers a 70/30 split (favoring the plant), your ex-farmgate premium is $0.40 per bushel ($40,500 total).

• If you are a member supplier to a farmer owned cooperative ethanol plant, most of this Tax Credit share will likely be handled via your patronage detailing's.

When negotiating that 500-acre contract, your napkin math is your ultimate leverage. Knowing that your specific grain is definitively unlocking $1.35 per bushel in federal tax credits for the ethanol feedstock buyer allows you to negotiate your share of that premium from a position of absolute data-backed strength.

The 45Z Tax Credit has been essentially settled by the IRS, the Department of Energy has tested the GREET model for 2026, and the USDA/NRCS has sorted out the necessary FD-CIC calculator to figure-out the farm's ex-farmgate CIS score.  But the whole farmer participation step is being held back within the Trump's OMB for the necessary Executive EO order.  You might write a note into our Secretary of Ag and the Whitehouse to get them off sitting on their hands? 

Another note:  What 45Z provides are tax credits to reward the CIS efficiency at the 200 ethanol plants nationally.  These tax credits are transferable if the ethanol plant can not use all the credits generated meaning farmers, other suppliers to the ethanol plant, as well as sold on the open market.  So if the farm were to receive the $67,500 in tax credits noted above but can not offset farm profits directly, they can sell these or have the coop or ethanol plant to sell these for them.  Typically you will need to assume these transactions will also have a transaction fee of 5 to ten or more percent to convert to cash?