Section 45Z of the Inflation Reduction Act provides tax credits to biofuel producers based on the carbon intensity of their fuel. Because feedstock production accounts for a large portion of a fuel's lifecycle emissions, producers may pay premiums for low-carbon corn and soybeans to increase their credit value. While the credits go to fuel makers rather than farmers, the market could shift toward verified low-carbon grain. The actual benefit to growers depends on local competition, the cost of carbon verification, and the willingness of processors to share the financial gains.
