News & Insights

Key Terms

• IRA – Inflation Reduction Act; signed into law in 2022 as an effort to invest “in the American economy, energy security, and climate” by providing tax incentives for groups working on clean energy production, including biofuels. (source)
• SAF – Sustainable Aviation Fuel; made from non-petroleum sources, SAF can be mixed with jet fuel to reduce emissions from air transportation. 
• Section 40B – a section of the Inflation Reduction Act providing a tax credit for the sale or use of Sustainable Aviation Fuel. It expires at the end of 2024.
• Section 45Z – an extension of section 40B that will be valid from 2025 through 2027. It also provides a tax credit for producers and users of Sustainable Aviation Fuel, and outlines a standardized measurement for Carbon Intensity scores.
• CI score – Carbon Intensity score; a measurement of how much greenhouse gasses (GHG) are released in a production process. This includes CO2 emissions from machinery used to plant and harvest crops and GHG emissions resulting from fertilizer production and application.
• CSA – Climate Smart Agriculture; methods such as no-till, cover cropping, and enhanced efficiency fertilizers that can reduce the CI scores of crop production.
• EEF/ EENF – Enhanced Efficiency Fertilizer/ Enhanced Efficiency Nitrogen Fertilizer; a fertilizer product that improves plant utilization and reduces nutrient loss in the form of leaching, runoff, or gasses. EENF refers specifically to nitrogen fertilizer products.

Key Takeaway

• Trace Genomics helps farmers growing fuel corn take advantage of the 40B and 45Z tax credits by providing custom guidance on placement of nitrification inhibitors, urease inhibitors, and slow-release nitrogen applications.

In April 2024, the IRS released guidance  for the Sustainable Aviation Fuel (SAF) credit under section 40B of the Inflation Reduction Act (IRA). This updated release outlines the requirements for biofuels producers to verify that they have reduced the Carbon Intensity (CI) score of their crops. As part of their model for measuring Greenhouse Gas (GHG) emissions, a reduction credit is available if growers use certain Climate Smart Agriculture (CSA) practices: no-till, cover crop, and enhanced efficiency fertilizer (EEF).

There are three strategies for using enhanced efficiency nitrogen fertilizers (EENF) outlined in section 45Z:

1. Nitrification inhibitor products
2. Urease inhibitor products
3. Slow-release nitrogen fertilizer

Much like placing synthetic fertilizers, agronomists need to apply EENFs at the right rate, time, and place. A comprehensive chemical and biological soil profile is crucial for the successful placement of these products. TraceCOMPLETE provides unparalleled insights into the soil microbiome for pathogen and soil fertility management, which can be leveraged for better EENF placement.

New Release: TraceN Report

Trace Genomics has recently released our TraceN report, a new component of the TraceCOMPLETE product that provides guidance on where best to utilize each of these EENF strategies. In addition, TraceN provides guidance on other nitrogen management strategies that can reduce a grower’s carbon footprint such as split applications of N fertilizer. Using the power of metagenomic sequencing and our proprietary analytical pipeline, we are able to accurately quantify where the potential for biological nitrogen loss is high and would benefit from including one of the EENF strategies. Utilizing TraceN to support these strategies gives growers access to the valuable tax credits outlined in Section 45Z.

For a deeper dive into the benefits of lowering your CI score, check out this article from Farm Journal. To learn more about how you can benefit from TraceN, contact us here or by emailing support@tracegenomics.com.