Carbon Reduction & The American Farmer webinar transcript

Watch our a panel discussion webinar from July 8, 2021. We talked about how carbon markets can reward sustainable farming. Learn steps you can take today to be part of scalable change to clean energy!

Lyndsey Nielsen: (00:00)
Good afternoon, everybody. I wanted to welcome you to this webinar. My name is Lyndsey Nielsen. I’m the marketing coordinator for EcoEngineers. This webinar is really cool. It’s something that we’re really excited about. We have a panel of experts here to talk about carbon reduction and the American farmer. So before we get it kicked off, you will recognize this slide per usual. Everybody in the audience is going to be muted, but you can type questions into the chat function throughout the video. Per usual, there’ll also be a short survey sent after the webinar and just telling us how we did, and if you have any suggestions for future webinars and you will all receive a link to this video, once that is done processing after the webinar. So without further ado, let’s get this thing started.

Narrator: (00:52)
Carbon is the biggest disruptor of the 21st century, and the world as we know it is changing. EcoEngineers can guide you to make the best decisions as you navigate toward your clean energy goals. A diverse team of carbon analysts, engineers, scientists, auditors and regulatory specialists, a trusted advisors of the clean energy fuel sectors worldwide. Clean energy regulations are a maze. We simplify them with an unbiased approach and fully manage your compliance. Modeling your carbon reduction is complicated. We quantify your emissions with a rigor based [inaudible 00:01:32]. Together, we can create markets that will protect and grow your investment. We create sustainable solutions for a better tomorrow. We are EcoEngineers.

Shashi Menon: (01:48)
I’m Shashi Menon, CEO, EcoEngineers. That video you just saw is EcoEngineers in a nutshell. One of the biggest disruptive forces impacting businesses today is the uncertainty around climate change. Each week we see a new regulation, a new technology, a new lawsuit, and a new attempt to shape policies and market forces to deal with the increasing concentration of carbon emissions in the atmosphere. We also see extreme weather events that impact supply chains, markets, asset values, insurance costs, and people’s lives. At EcoEngineers, we specialized in helping you navigate this maze. Our team has deep expertise in low carbon fuels, regulations and carbon markets. We cover all alternatives to natural gas, gasoline and diesel, from ethanol to electricity and from renewable natural gas to renewable diesel. We monitor policies at the state and federal levels and several foreign countries. And we’re instrumental in a successful build out of carbon markets.

Shashi Menon: (02:43)
We have a systematic approach to help you find your way to all this information. One, we deliver critical information to you when you need it through a training and education modules. Two, we perform rigorous lifecycle analysis to measure your carbon footprint. Three, we help shape public policy that is based on science and sound carbon accounting. Four, we help you protect your investments, while reviewing your risks and opportunities and helping you chart a path forward. Five, we manage your compliance through our data management systems. And finally six, we audit and verify your corporate reduction claims.

Shashi Menon: (03:22)
Today, we are bringing this entire wealth of experience and expertise to address a very important issue facing us, and that is how does climate change and carbon markets affect farming. If America is going to lead the world in sustainable living, we need to establish a marketplace for farmers to sell products going through sustainable practices. And that is exactly what we’re here to discuss today. Mark Heckman, our lead in farm practices is going to moderate the webinar. And with that, I want to hand it over to you Mark. Welcome to the webinar.

Mark Heckman: (03:55)
Thanks Shashi. And thank you attendees for showing your interest in farm practices and I want to also thank the panelists that are here today participating. We’ve assembled a great field of experts. Kelly Nieuwenhuis, Ron Alverson, Tim Baye, Bill Northey, all of these guys are farmers. Lisa Streck comes from a farm background and as you can tell, it’s farm focused. My background is also in farming and these guys are going to share their experiences. They’re going to share their vision of how these things may look in the future.

Mark Heckman: (04:28)
We’re talking today, carbon reduction and the American farmer. These are going to be great opportunities in ag. And ag. being the solution, it’s going to give us a little bit of a different perspective. And so as ethanol plants, we’ll have to take a look at our supply chains, scope three emissions are going to drive all the way down to the farm level and that’s what we’re looking at.

Mark Heckman: (04:46)
So what you’ve got in front of you is the current flow low-carbon fuels flowchart. Basically the commodity starts on the left, corn gets into ethanol, ethanol to the blender, and then the commodity gets all the way to the end user with then credits or the rinse being driven back through the process and financially benefiting the participants. We’re going to focus on the front end of this because scope three emissions may require to go back down to the farm level and include supply chains.

Mark Heckman: (05:19)
Here’s a little bit of a slide that is a little bit of a busy slide, but it’s before we get to the plant. The crop and the corn still goes the exact same way. But with this slide, what we’re trying to illustrate is the owners now rests with the farmer and the farmer and the accountability, the responsibility, and even the money flow all comes back to the farmer.

Mark Heckman: (05:39)
So with that today we are going to be turning to our panelists and our first panelist Kelly Nieuwenhuis is going to talk about this. All of these opportunities are also going to present challenges. I’m really excited about these opportunities and that this panel is going to bring to us. With that, I’m turning it over to Kelly. Kelly is a Northwest Iowa farmer, runs a seed business. He’s on an ethanol plant board. He is also very engaged with Iowa Corn. He’s vice-president of Iowa Corn. He’s engaged with National Corn. He’s connected. He has a farm. His farm is different than my farm that’s in Southeast Iowa. But the point of all of this is all these farms and different areas are going to have different challenges. And certainly looking forward to the discussion. Kelly, take it away.

Kelly Nieuwenhuis: (06:31)
Thanks, Mark. I appreciate the opportunity to be involved here with EcoEngineers on this video conference, but yeah. I farm in Northwest Iowa with two brothers. We have a foreign soybean rotation farming operation. I have a seed business and my brothers have a trucking business, but over the last several years we’ve been trying to improve our farming practices constantly and we feel pretty confident that we are very sustainable in our farming practices and done a good job of improving them.

Kelly Nieuwenhuis: (07:08)
We’ve got some heavy clay-based soils in Northwest Iowa and it’s usually cool and damp in the spring. So we’ve trialed with no till and one path vertical tillage side by side. And we found that for our operation, the one path vertical tillage work better for our production numbers. And still maintaining our residue on top, we’re very minimizing our tillage practices. So through the combination, we went to 20 inch rows on corn about 17 years ago and with a higher population of corn, the reduced use of nitrogen actually, and the one path vertical tillage practice, we’ve increased our organic matter drastically through this practice. So we had a lot of farms years ago that were three to three and a half percent organic matter and most of ours today are five to six and a half. So we feel we’re sustainable. And I agree with you not every farming practice works the same across the state because of soil types and variabilities. So looking into this carbon program moving forward, we need to make sure it’s not a one process fits all. And let the other all farmers show that their farming practices are sustainable and are doing the right thing.

Mark Heckman: (08:40)
Wow. Just watching some of this Kelly on your farm, it’s pretty impressive. The amount of cover that you have and it certainly appears that comparing my farm to yours, it looks to me like you’ve got essentially the same coverage and you’ve got the tillage best. So the modeling of all of that. So it looks like you certainly doing a good job of doing what the intent is of no-till farming and also raising a sustainable crop.

Kelly Nieuwenhuis: (09:13)
I visited with one of our other panelists Ron Alverson over the past several years and told them my story and basically I would be considered a no-till farmer with our farming operation. And we do this on a little over 90% of our acres. The best thing we like about it is we don’t touch hardly any of our production ground over the fall and winter months. We do a one pass in the spring and plant. And that’s basically our cover crop, maintaining our residue. In our area, as you can see on some of the videos, we don’t have a lot of roll through our ground. When erosion used to be more of an issue, but we feel pretty confident that we’ve reduced that drastically with the farming practice and feel pretty good about it.

Mark Heckman: (10:05)
Yeah. Wow. Kelly, that’s pretty impressive. All of the stuff that you’re doing on the farm and now you’re being faced with other carbon programs. And as you sign up for them, the challenges that the farmers consider. Talk a little bit about that.

Kelly Nieuwenhuis: (10:20)
Thanks Mark for having me on your panel today here with EcoEngineers. I guess my biggest concern for the carbon credits and carbon programs is are they prepared well yet? My personal opinion is I’m going to be patient and make sure everything’s done right before I sign any contracts for any carbon credits and I think the biggest part for me is that they perfect a scoring system for different farming practices for the amount of sequestration your farm operations, doing both above ground and below ground. Right now, my plans are to be patient.

Mark Heckman: (11:06)
There’s costs that are involved. How do you get paid for it? In some places, I actually had a person tell me that a green is money to them. So that’s green farming to them but at the same time there’s a balance, right?

Kelly Nieuwenhuis: (11:23)
Yeah. I guess the key for our farming operation is we’ve always been trying to reduce our input costs, but yet increase our production. And if the technology helps you to get things done properly, we feel we can do that. We’ve been raising really good crops, 250 bushel corn pretty consistently with 150 pounds of nitrogen. I think that’s a big part of it. We’re using more micronutrients in our fertility program and we’re actually reducing our herbicide and pesticide uses because of our farming practices. So I’ve always said that my dad farmed better than my grandfather and with technology we’re farming better than our dads did. And not that they weren’t doing a good job, but just through time and learning and technologies, we can make these improvements.

Mark Heckman: (12:21)
Well, and that’s a great message. You’re doing more with less, that’s sustainable farming at its best. How do we get that message out? I know we’ve assembled this forum to really talk about that and get it out there and talk about how do we get compensated for what we’re doing, but more so the message.

Kelly Nieuwenhuis: (12:41)
Yeah. I think this was a great part of sharing our messages, having these panels. But I’ve always, I’ve talked to a lot of people over the years and a big question, farming practices, the first thing I say is I raised my family here. My whole family’s grown up here. We’ve been here for three generations or more and we want to protect our soils and our water quality, and we’re doing everything we can. There’s always room for improvement, there’s no doubt about that, but I feel pretty confident that we are very sustainable already today. And we’ve been sequestering carbon for generations. And I think it’s time we get credit for that. And I’m confident that farming or agriculture is part of the solution to climate change and definitely going to continue to be that way.

Mark Heckman: (13:33)
Wow. Kelly, that’s a great message. Well, thank you for your time here today. Certainly thank you for your time and all the activities that you’re doing to promote agriculture and ag. as a solution.

Kelly Nieuwenhuis: (13:45)
Thanks a lot, Mark. I enjoy it. It’s a great message to share with as many people as possible. And our consumers need to know how we’re doing our farming practices and I’m happy to share that with anyone and everyone, so.

Mark Heckman: (13:59)
All right. Thanks, Kelly. That was really good information. Next up, we’re going to hear from Ron Alverson. He is from Southeast, South Dakota. He is a former grain farmer, farms with his son. And he is on the board of directors for American Coalition for Ethanol, and also the Dakota Ethanol. Ron, let’s hear your thoughts on all of this.

Ron Alverson: (14:21)
Well, thanks Mark for the introduction. Maybe just a little bit of background, I’ve been involved with the Corn Growers Association and the ethanol industry here in South Dakota, since it really got going. When the California air resources board started the low carbon fuel standard in California back about 10 years ago, Dakota Ethanol started looking at that market and started calculating their carbon intensity to try to capture some of the value out of that market. And at the same time, I realized that even though they’re not incentivizing and allowing auditing and verification for that market by corn producers, I started calculating using GREET modeling in calculating the carbon intensity of corn production on our farm way back. So I’m real familiar with the model and know exactly how it works.

Ron Alverson: (15:13)
Okay, just a little bit of background of the current life-cycle accounting of biofuel greenhouse gases in those markets. Biofuel manufacturing and transportation greenhouse gases are audited and verified at each ethanol, biodiesel and renewable diesel plant for use in the California LCFS and Oregon Clean Fuel Programs.

Ron Alverson: (15:33)
If total-life cycle greenhouse gases are below fossil gasoline and diesel greenhouse gases in those markets, credit’s worth about $150 to $200 per ton of CO2 reduction are earned in those markets by these biofuel producers. As a result of these nice big incentives, I hope you manufacturers have made a lot of investment on low carbon practices and they reduce their carbon footprints in response to these incentives.

Ron Alverson: (16:02)
However, biofuel feedstock production greenhouse gases by farmers are not audited and verified and thus not incentivized. If low carbon biofuel feedstock production practices were incentivized like they are biofuel manufacturing plants, I think biofuel feedstock carbon footprints could be significantly reduced.

Ron Alverson: (16:23)
Okay, here’s here’s the current emissions profile using two different models. The one used in California and then the one that the US Department of Energy GREET model use. And this is what they call for a Midwest Average Corn Ethanol. As you can see the left pie chart in a total 71.8 grams per megajoule. On the right is the US DoE green model and it shows 51.4, so a big difference. This difference is mostly the result of that California still uses an old and older analysis of land use change that calls for a 19.8 penalty for corn ethanol. California also uses a slightly older GREET model and that results in some minor differences. But you can see that about half of the greenhouse gases for corn ethanol come from the manufacturing and about half come from the corn production.

Ron Alverson: (17:25)
Okay, here’s the profile for the corn production part of each of those former pie charts. California comes up with about 32.3 for Midwest Average and the US Department of Energy GREET model, the latest model, comes up with about 26.9 grams per megajoule.

Ron Alverson: (17:45)
And you can see that the greenhouse gases for corn production are dominated by nitrogen. The emissions that result from nitrogen manufacturing and transportation, the nitrous oxide emissions after nitrogen was applied to soil. So between those two, it’s about three quarters of all emissions during corn production. You can see the various categories there. One at the bottom there is soil carbon sequestration. That doesn’t show up on this, but it will show up on a subsequent chart as we talk about that a little bit.

Ron Alverson: (18:20)
Okay. How might farmers reduce their low carbon footprint or their carbon footprints for corn? Number one, utilize low carbon biofuels in farm tractors, sprayers, combines and trucks. The current models used in California as well as the Department of Energy assumed that farmers do not use any low carbon biofuels. For instance, if farmers used high levels of biodiesel and renewable diesel in their tractors, sprayers, combines and trucks, they can reduce greenhouse gases by about 50%.

Ron Alverson: (18:58)
They can implement precision nitrogen fertilizer management, what we call 4R, right placement, right time, right rate, and right farm. This would greatly improve their nitrogen use efficiency, allow them to keep the rates just right and also reduce the nitrous oxide emissions that happen when that nitrogen is applied to soil.

Ron Alverson: (19:22)
Reduce tillage intensity to build soil organic matter and sequester atmospheric carbon in the soil. This is currently not accounted for in biofuel greenhouse gas economy. The Department of Energy and carbon models assume that all biofuel feedstocks have the same exact effect on soil carbon. And there’s not a soil scientist in the world that would say that each crop has its own unique impact on soil organic carbon and corn happens to be one that’s very good for soil organic carbon. So corn should really receive a [inaudible 00:19:57] especially if it’s done using reduced tillage, you should receive a credit for so carbon sequestration.

Ron Alverson: (20:03)
Farmers could use cover crops to increase the annual photosynthesis. And they do, and they can further utilize manure to reduce fertilizer inputs and build soil organic matter and carbon stocks.

Ron Alverson: (20:20)
Okay, this is what happens when you put that all together. Say this low-carbon corn farm in Webster County, Iowa, roll that up into the whole carbon profile bore a ethanol plant in Webster County, Iowa. You can see it’s way down on there. Down to 7.6 grams per megajoule for the entire life cycle, corn ethanol. And for corn itself, it’s down to 10.1 grams per megajoule. And you’ll notice in that greatly reduced nitrous oxide emissions due to 4R and add of the soil carbon sequestration credit of minus 6.65. And they’ve also added for the low carbon ethanol, lots of plants are talking about capturing the CO2 from the fermentation at their ethanol plants and sequestering it into the ground and reservoirs. And this represents that technology too. So as you can see, nearly zero carbon corn ethanol and nearly zero carbon corn production. That’s all the best practices.

Mark Heckman: (21:27)
Wow, Ron, those are impressive numbers. It’s just incredible to see with the technology and also using different modeling or modeling that’s available to make this happen. So what do we need to do to get it from where we are, to these kinds of models?

Ron Alverson: (21:50)
Yeah, well actually California Air Resources Board has started the process to start allowing farmers to submit their own carbon footprint or corn production footprint. So I think it we’re making baby steps to get that way. In California and Oregon it’s going to take some time, probably a year or two before they sort things out and get to all the auditing and verification protocols in place. But it will happen and I think it will happen for one very good reason. California really needs more low carbon fuels to meet their reduction schedule for their standard in the coming years. So, this is a way to make that happen. To incent low carbon practices at the fuel level.

Mark Heckman: (22:40)
This is really good information, Ron. We’re going to go next to our presenter, Lisa Streck from Bayer. As we continue Carbon Reduction & The American Farmer, it’s going to take all kinds of people, it’s going to take all kinds of partners in this. And so we wanted to bring in someone from the industry that’s got a voluntary carbon program to introduce that. And so to do that, we got some good information on Lisa. She is the Carbon Business Model Grower Lead. In this role, she’s responsible for acquisition and ensuring that a positive grower experience in Bayer Carbon Program. She’s been with Bayer for over 20 years and held roles of increasing responsibility in the supply chain and product management. She grew up on a family farm, Central Missouri. Lisa, can you tell us a little bit about this exciting program in the world of voluntary carbon?

Lisa Streck: (23:34)
Yeah. Thanks Mark. Really excited to be with you guys here today and talk about the Bayer Carbon Program. So we’re in year two of our programs. So we are rapidly scaling the amount of acres to participate in our program after we learned from our pilot last year. So our program is simply incenting farmers to adopt climate smart practices, such as no-till strip-till and cover crop. So as we designed our program here at Bayer, we’ve really incorporated feedback from farmers throughout this process, collecting feedback from growers who participated in our pilot program. We’ve also recently established a grower carbon advisory panel consisting of about 20 growers across the country to help advise us on this program.

Lisa Streck: (24:25)
So why did we do that? So we knew for our programs to be able to scale and have the impact on the environment and in the industry that we wanted it to, we know it has to work for farmers. So as we’ve built our program, we’ve really tried to build it through the lens of the farmer and make sure that we’ve got really three key pillars within our program, certainty, simplicity, and flexibility.

Lisa Streck: (24:53)
So the certainty comes from how we have incented farmers to adopt these practices on their farms. So, like I said, our program covers no-till strip-till and cover crop. We incent growers for adopting these practices. So every year after verification validation, growers can expect to receive a payment from Bayer for these practices.

Lisa Streck: (25:17)
Simplicity. When you think about the tools that Bayer has available to offer farmers, particularly our digital platform with Climate FieldView where we’ve got over 90 million acres enrolled, it provides farmer with a simplicity to share their fields with us through the Climate FieldView app and simply select the fields they want to enroll in the farm as well as select those practices that they plan to implement.

Lisa Streck: (25:44)
And then flexibility. So nobody knows farmers as well as we do here at Bayer. We work with them every day, sometimes even all day long. So we know that flexibility’s important. So we’ve structured our contract with flexibility, and we’ve tried to give farmers the flexibility to participate on a field by field basis so that they can incorporate this on their farm in the best way that makes sense for them.

Mark Heckman: (26:10)
You couldn’t have said it any better at Lisa. Farmers like it’s simple. If they do step-by-step what they commit to, are going to get paid, that’s awesome. And that’s why I really wanted you to come on and talk about your program. If a farmer signs up for your program, how does that compete or compliment some of the other programs that are out here say with the LCFS or Midwest Fuels Initiative or any other programs?

Lisa Streck: (26:36)
Yeah, so within the Bayer Program, right, our goal with our program is to reduce the amount of the greenhouse gas emissions. So farmers would have the opportunity to stack other programs depending on what the eligibility of those programs are. Which this is something that we encourage farmers to do to look at some of those other programs, see what the eligibility requirements are and see if they could potentially stack those programs on top of each other to really have the impact that they want to have, not only on their farm, but on the environment as a whole and from a soil’s health perspective.

Mark Heckman: (27:12)
And it’s all focused on practices, not necessarily amounts?

Lisa Streck: (27:17)
Exactly. And that’s a key point when we think about the simplicity of the program, we’re really focusing on incentivizing growers to adopt those practices. That way farmers don’t have to worry about the amount of carbon they’ve sequestered. They can do what they do best, which is really focused on growing a crop.

Mark Heckman: (27:39)
Wow, this is really exciting. Certainly appreciate the time that yourself and Bayer’s dedicating to these clean economy initiatives. And certainly look forward to hearing more of your responses to some of the questions that we’re getting. I hope for all of Bayer success in their program and as we continue to scale this up. Anything else that you’d like to add?

Lisa Streck: (28:03)
I would just encourage not only farmers, but other industry folks to go out to our website, Learn more about our program. We’ve got a really robust FAQ out there, as well as you’ll see our 1-800 number where folks could get in contact with us to learn more about our program.

Mark Heckman: (28:24)
Thanks a bunch, Lisa. And now on to our next panelist. We’ve assembled this panel really to give people insight all the way around and Bill’s got some tips for farmers, also suggestions, and really he’s attending the panel to give us his input, USDA Undersecretary to Farm Production and Conservation. Bill, tell us a little bit about what you’ve been doing and you’ve had a busy schedule the last few years, and certainly looking forward to all that you’ve got going right now.

Bill Northey: (28:56)
Well, appreciate it, Mark. Thank you. And great to be back in Iowa. So I’m an Iowa farmer and served as secretary of agriculture in Iowa. Still farmed on the side on weekends and then three years ago went to US Department of Agriculture and so was there in a Farm Production and Conservation, so farm programs, conservation programs, and crop insurance programs. Now back in Iowa and doing some consulting as I came back, lots of conversations around carbon and sustainability, what’s that all mean? And so I have a few things that I think it’s important for folks to look for and some things that a farmer should work on.

Bill Northey: (29:38)
So as you look at kinds of the things that, one of those questions I hear from folks is, is this real? Is it going to last? And I think there are some things to watch out there that would suggest to me that carbon has legs as an issue. Sustainability has legs. Certainly, one of those is the growing Climate Solutions Act, it passed the Senate. And I really think what it does is it says agriculture can be a solution, but voluntary solution, not a regulated solution.

Bill Northey: (30:14)
Lots of things for USDA to do, like figure out what a carbon credit is, put some frame around it, be able to describe it. Maybe it’s like number two yellow corn. They provide a definition. We still sell white corn. We still sell waxy corn and other kinds of corn. We still have different qualities, but USDA has helped define what that is.

Bill Northey: (30:40)
Another might be that they will look at take that as kind of a lead for them to figure out what a carbon bank is. You’ve heard them talk about a carbon bank. That language gets a little more serious. That could mean USDA is looking at potentially buying credits. Maybe they had to find them themselves beyond what the market defines a credit as. Maybe they support the early adopters. There’s this conversation that everything about carbon needs to be an improvement from where we were. Now where we were maybe where we are right now, maybe it’s five years ago with a look back, but it needs to be an improvement to get a reduction in carbon, additionality it’s called, which puts those early adopters at a place where they can’t get some of the things they have already decided to do. Now, they didn’t do it for a carbon market. But USDA I think, is looking at a fairness and train to be able to help those early adopters, help the smaller farmers that can’t accumulate a lot of credits, maybe put credits together, sell them to others and then all the headlines around private markets out there. There’s a ton of headlines around private markets.

Bill Northey: (31:56)
And then I think as time goes on, you’re starting to see a little bit, you’re starting to see some supply chain. So private markets buying carbon is companies out there saying I want some carbon because of the changes you’ve made. Supply chain is when they say, I want your corn and I want a credit score on your corn, more similar to the conversation around low carbon fuel. That fuel isn’t about a long-term. It’s about that fuel was created with less carbon than other fuel. Can your corn be created with less carbon? Maybe it sells to an ethanol plant and they have a way of monetizing that.

Bill Northey: (32:38)
So my next slide really talks about what should a farmer do. So I don’t think you have to be in a real hurry but I do think you should take this serious and figure out how you get to the place where you’re more sustainable as time goes on. Certainly would care about or soil quality, let’s look at more conservation practices. Hey, we encourage that a lot around water quality, around maintaining soil quality, other kinds of things. So these practices work together in most cases.

Bill Northey: (33:12)
But try some of that. If you’re not using cover crops, try cover crops. If you’re using a few simple ones, try more complex mixes, try planting green, try no-till in an area that works for you. And so that when somebody comes to you, your ready to be able to do. And then look into those technology solutions. Maybe we will look at different ways of collecting data that will make it easy for you to show compliance, whether it’s on your combine or your sprayer or remotely figure some of those out, look at some other tools out there. Maybe it’s other ways of being able to reduce the amount of fertilizer we use and therefore gain some credit as time goes on, figure out as time goes on, maybe what your own footprint is. How much fuel do you use? Let’s figure out if there’s a mechanism out there to say how close are you to net zero corn? What would it take? Maybe you have a woodlot that contributes some carbon credits they could offset some of the fuel or fertilizer use that you all have. It’ll give you some things to look at. So dip your toe in the water, figure out what’s out there, don’t have to be in a hurry and at the end of the day, right now, these markets are not large dollars, they’re small dollars, but I do think they have an opportunity to grow over time.

Bill Northey: (34:41)
Certainly care about your productivity. Don’t get so focused on this, that you miss your weed control or miss marketing of the crop at the right time. So take care of the finances on the rest of your operation. But I think doing some of these things will also help productivity in the longer term.

Mark Heckman: (35:02)
Farmers are asking for standardization. Farmers are asking for how do we play by the rules that might exist for an ethanol plant, and then also play by the rules as part of these voluntary markets. So how do you balance the public private relationships in all of these and how do we create these standards and disciplines?

Bill Northey: (35:26)
Yeah, that’s a great question. I really do think Mark that a lot has to be developed yet. Certainly we’ll watch USDA and what happens there. We’ll watch California Resources Board to see if they offer some opportunities for ethanol plants or others to be able to look at the different input of corn into a plant. I do think personally, we need to prepare and figure out how we certified as somebody that comes to us exactly how much fertilizer did we use and what’s different in different fields. It may be that they’re looking for one field versus another because we treated that field different. And if we can’t do anything more than say what my total fertilizer use was or nutrient use was, or manure application was, then we may be limited on how we can comply. So I think our own records, first of all, they’re important for us on the production side. But they probably will be helpful to whatever form that compliance may look like over time.

Mark Heckman: (36:34)
Wow, Bill, Carbon Reduction & The American Farmer. Certainly great tips for the farmer and it’s really great to have you talk about that today.

Mark Heckman: (36:47)
Most importantly, Bill. Thanks for your service. You’ve dedicated your life to help the farmers and then it’s great to see you back in Iowa. Thanks a bunch.

Bill Northey: (36:56)
Thank you.

Mark Heckman: (36:57)
Our next and last panelist today is Tim Baye. Tim comes to us from Wisconsin. He’s a Professor of Business Development, Energy Specialist at University of Wisconsin. Tim’s here to talk a little bit about the role of government and he’s got some really interesting things he’s going to show us today that is happening or at least working toward in the State of Wisconsin. So Tim, take it away.

Tim Baye: (37:21)
Thanks Mark. Thanks for the opportunity. On June 17th, the Wisconsin legislature leaders from various committees launched a program policy project to investigate ways of providing more structure for the animal ag. sector in Wisconsin. And this is structure around managing carbon at a profit.

Tim Baye: (37:51)
This next slide is a capstone of what this project’s about. If you start looking at the upper left hand corner, that’s our beginning point, what conventional animal ag enterprise. We’re focusing on animal ag. in Wisconsin because of its importance to the economy. And there’s has been given a fair amount of attention by stakeholder groups that are concerned about carbon footprints.

Tim Baye: (38:16)
Start with the beginning part of the conventional animal ag. and the first effort in this project is to look to adopting a carbon accounting system, statewide, through a voluntary tax schedule. The merits behind developing that voluntary tax schedule is that one, it’s self verified, hopefully very low cost. And two, it remains the proprietary information of the farm.

Tim Baye: (38:44)
Now the next four boxes, starting with on-farm energy, our tools in the toolkit. These are policy and rule changes that are being investigated and considered by the legislative committees to find ways to enhance the toolkit available to the farm.

Tim Baye: (39:04)
Adjacent to that on farm energy is nutrient recovery and reuse. This may or may not include digesters but we’re looking at state policies to encourage more effective use of nutrients. The upper right hand corner, it says produce on-farm or source lower carbon intense inputs. This includes the Carbon Offset Program. So once you have that kind of key on that Carbon Offset Programs, I’ll circle back to that later.

Tim Baye: (39:34)
And the last set is to develop a statewide carbon labeling program. Again, this is a voluntary program. But based upon the carbon accounting and the tax form, we’re asking department of ag. trade and consumer production to develop a capacity to calculate the carbon footprint for the farm. Again, that’s proprietary information for the farm to use.

Tim Baye: (39:57)
Here’s a busy but illustrative example of the potential impacts of these policy actions on the farm. Then the non highlighted columns for the conventional farm, you can look at it at your own. And then the next column highlights what the potential impacts of these policies may be. For traditional commodity sales, the market response, compliance to your buyer’s expectations on carbon accounting, we enhanced the ability and to sell more product to retain a customer.

Tim Baye: (40:34)
The yellow tab, the yellow cells are additional revenue streams. From power sales to bio gas sales from carbon offsets. The green cells reflect inputs and they may be plus or minus the cost of the liquids but the intention is to allow and encourage the farms to source lower carbon intensity inputs to reduce their carbon footprint. Final column to the right and highlighted in orange are the targeted legislative and policy actions and which agencies are charge of managing those rules.

Tim Baye: (41:13)
Let’s peel the onion back a little bit and explore what each of these tools and metrics are about. The carbon accounting system is a voluntary tax form. We have a work group assigned to that, that’s actually headed up — one of the co-team leaders is Shashi Menon, CEO of EcoEngineers. And we’ll be getting input from a lot of different stakeholders to develop this voluntary tax schedule that can be filed by the farm and provide the basis for calculating the carbon footprint of the farms output.

Tim Baye: (41:49)
On-site energy. We’re seeking standardized commercial contracts. These are either PPAs, Power Purchase Agreements or agreements with the utility shared savings contracts that include expanded revenue sources and net metering policies. Really the two things that we’re referencing here is the new FERC 2222 order that enables the distributed energy resources to participate in the wholesale markets and in the State of Wisconsin, both discussions open dockets on contracts and carbon footprint.

Tim Baye: (42:25)
Biogas. Many of you involved in the biogas space understands that this is the interconnection agreement with the pipeline, gas specifications, to what degree the pipeline has to accept gas, is an evolving space. And a lot of these contracts are one-offs. We’re seeking to standardize the contracting process, standardized the interconnection process, the gas specification process, and the tolling fees. In addition, we’re investigating an expansion of the gas collection system. This is not the distribution system, but the gas collection system and infrastructure in the State of Wisconsin. Really to expand the potential biogas producers, both in the ag. sector and in the processing and wastewater treatment system.

Tim Baye: (43:14)
Carbon inputs and offsets. First effort on this will be to develop a marketplace for farmer to farmer or farmer to business marketplace. For those animal ag. operations that are seeking to manage their carbon footprint, to be able to find like-minded suppliers that are also managing their footprint and to be able to optimize their ability to reduce it. The other area addresses carbon offsets and all of us in the space, all of us have realized and increased interest activity in carbon offsets specifically soil carbon sequestration.

Tim Baye: (43:58)
This slide highlights our approach increasing the confidence level and addressing some of the concerns and soil carbon sequestration. The objective is to optimize this, to make it consistent across all participants and stakeholders, and increase the trust, both in affiliated stakeholders and the trading community. The concern is that scientific basis for soil carbon sequestration and what the costs of verification of that sequestration are at the farm level.

Tim Baye: (44:37)
The big question, as you can see here, we say, is their confidence in the financial instruments. We’re looking for a solution USDA in recent announcements is going down this path. In the State of Wisconsin, we’re going to hopefully compliment what’s happening at the federal level. We’ve wanted to do whatever we can to learn from the RIN and the REC, the Renewable Energy Credit, from power producers to learn from their examples how those markets have worked, the liquidity and seek to see if we can make this a confident commodity that can be traded routinely.

Tim Baye: (45:21)
Some of the fundamentals of this is setting a flow value for the offsets based on practices. Practice changes, enhance the value of this. Assign RINs to it through verification after the fact. And the eventual modern would be to have these soil carbon offsets vary by region, by soil type, by practice, et cetera, et cetera, actually reflecting what can be verified on the ground.

Tim Baye: (45:52)
It’s an aggressive program with five work groups working on it. We have team leaders from the private sector and elected officials. And next week we start rolling up the sleeves and doing the hard work, hopefully delivering a series of recommendations to the legislature by November.

Mark Heckman: (46:12)
Wow, Tim, this is really good. It’s complete, it’s concise, it includes the parties that need to be a part of it, it provides a structure. You got it really mapped out well. Well, I see, we’ve got a lot of questions that are coming in and we need to turn to that section of this panel discussion. So Tim, thank you very much for the time. This is great insight and we look forward to the question and answer session.

Tim Baye: (46:44)
Thanks Mark.

Mark Heckman: (46:46)
All right. So, Kelly, I think and maybe Ron, this question might pertain to you, do you subscribe to the principles of soil health outlined in Gabe Brown’s book, Dirt to Soil? And so Kelly or Ron, can you comment a little bit about that?

Kelly Nieuwenhuis: (47:02)
I guess I’ll just make the comment that yeah, I don’t subscribe to that, but I do follow all the practices of the soil health partnership programs. And also I’ve been involved in the 4R Plus information this year as a crop scout for them and sharing what we’re doing in Northwest Iowa and how… I guess the biggest thing too, for my involvement with that is the testing of water quality out of my tile lines and also the way I’ve increased my organic matter. I’ve had farms that have we’ve increased organic matter by over one full percent over the last over five-year period. And they’ve been told in the past that that’s not possible, but we’ve been doing it. So just might continue those programs. Thank you.

Ron Alverson: (47:57)
Yeah, Mark. I can’t say I am familiar with Gabe Brown’s books, so I hesitate to even comment.

Mark Heckman: (48:05)
All right. Anybody else have any comments on that or I’ll go to another question? Lisa, maybe this one pertains to you. Can a panel or anyone on the panel, can you comment on what party generates the carbon credit or it must span across many years, any contract that store CO2 must in the soil generate a credit must span across many years and endure many renters or operators to assure approved practices. Comment a little about that. Who should own that? The landowner or the grower?

Lisa Streck: (48:48)
Mark, I can talk a little bit about how we’ve addressed that within the Bayer Program and definitely invite others to weigh in here. So within the contract for the Bayer Program, the contract is with the farmer or the operator with an understanding that they’ve got the right approvals from the landowner to generate carbon credit on their ground. And then we work with the carbon registries who were actually the groups that generate those carbon credits. And then through our contract, the farmer gives the right for ownership of those carbon credits to Bayer. And with the understanding, it can take multiple years for a carbon credit to be generated on that ground which is one of the differentiators of our program in the marketplace. Since we’re paying by practice, it’s a yearly payment post verification validation that those practices were put in place.

Mark Heckman: (49:50)
Thanks Lisa. Anyone else have any comments or… So Bill, I might turn to you. I’ve got a question that… There’s two questions USDA as a credit buyer, and that’s an interesting comment. And maybe associated with that is there a compendium of best farm level, low CI practices that can be used as biofuel advocates to show that biofuels have a key role in a net zero future?

Bill Northey: (50:21)
So USDA as a credit buyer, I think is an interesting concept and certainly not there yet. And they may be there, but that could be one way to be able to either address some of the early adopter piece or the smaller farmer piece, so we’ll see whether that comes about. And then to come up with those practices, there are private efforts out there. Ron shared some of those tools to be able to look at. Most of those have some sort of numeric standards to them although again, some of these… looking at fertilizer, that’s going to have the same amount in different places, but looking at soil in practices, if we’re going to look at soil carbon, that may be different between that corn growing in North Dakota and corn growing in Louisiana, because soil conditions are different winters are different, other kinds of things.

Bill Northey: (51:19)
So really growing Climate Solutions Act is about trying to come up with some of those standards. But in the meantime if we do get carved to go along with some things, as Ron laid out, I think there’d be some opportunities to be able to look at some of those practice changes, the fertilizer changes, fuel reductions, other kinds of things other than soil that could be good that there is some numbers around that. I don’t have those, but there are numbers in models around that.

Mark Heckman: (52:00)
Ron, maybe it’s a double question and then Tim, I’m going to come to you. I’ve got a question for you as well. It appears nitrogen fertilizer appears to have the lowest or largest impact on CI for corn farmers. What nitrogen fertilizer has the lowest CI. And then so then related to that, do you see value in moving away from fossil synthetic fertilizers?

Ron Alverson: (52:25)
Absolutely. There’s some nitrogen manufacturers out there now that are making moves for what they call green nitrogen. They’re getting their hydrogen from electrolysis, from wind power, so that’s eliminating the fossil fuel input out of that. And when you compare the different fertilizer types or the different fertilizer forms, we got the anhydrous ammonia, we got urea, we got nitrate and we’ve got UAN, urea ammonium nitrates. There’s a large difference in carbon footprint between those different forms. Anhydrous ammonia has got by far the lowest carbon footprint because there’s just less manufacturing. And as everybody knows, everybody uses anhydrous ammonia to produce urea and urea ammonium nitrate and other forms. So it’s just got an actually lower footprint. So if you’re serious about reducing your carbon footprint from nitrogen, you use as much anhydrous ammonia as you can. You inject it in the soil, you apply it at the right time, side dress type thing or late spring is preferable. And so you’re using the lowest CI form of nitrogen and you’re applying in a manner that minimizes nitrous oxide emissions. So you can [inaudible 00:53:50] up between nitrogen manufacturing and nitrous oxide about half the total footprint. So seven, eight grams.

Bill Northey: (54:01)
And Ron, maybe in addition, certainly if you have access to manures, those are opportunities to be able to further decrease that nitrogen footprint, right?

Ron Alverson: (54:12)
That’s for sure. Yeah. No fossil fuel involved with manures.

Mark Heckman: (54:19)
So Tim, I’m going to jump to you. Any thoughts on the most likely program to adopt soil carbon sequestration crediting? And if anybody else wants to take a shot at that question.

Tim Baye: (54:34)
The most likely one, change in tillage practices. That’s the most likely and most universal. But to the point that Bayer and Ron just made about looking at the whole farm’s carbon footprint, not just on change of practices in terms of your tillage and agronomy practices, but operational practices as well. It was shifting to biodiesel for your machinery, talking to your truckers, talking to and then securing carbon-free solar power or carbon-free program for your utility or putting all your own soil manure behind the milkhouse. I mean, there’s lots… That’s what the program in Wisconsin is intended to do, is to offer that type of flexibility so that the farm operator can look at it as alternatives, figuring out what pencils out as a standalone investment, and also reduces the carbon footprint.

Mark Heckman: (55:39)
Thanks. Ron. I got a question back for you. It says, how are your soil carbon storage credits calculated? And how does the concept of additionality effect the counting for carbon credits?

Ron Alverson: (55:54)
In the low-carbon, I do almost all my work and look at the low carbon fuel markets and additionality doesn’t exist in those markets. You can produce that corn and that biofuel and not corn yet that we hope it’s coming, but if you can preset biofuel with using less carbon emissions than fossil fuel diesel and gasoline, you generate credits based on that difference. So there’s no additionality in that at all.

Ron Alverson: (56:25)
The soil carbon thing, I look at several models. There’s a real good, easy to use online model called Michigan State University Cropland Greenhouse Gas Calculator. It’s got three inputs for your stick in your crop, you stick in your yield, you sticking your tillage practice and you pick the county that you’re in. So it gets in the climates and soils factors and all that stuff and it spits out a number for soil carbon sequestration. That’s what I used in those pie charts.

Ron Alverson: (56:55)
There’s other good models, century model, not as easy to use. They sent NDC model, but all these soil carbon models have strong validation, they’ve been working on these models for decades and they’re very good and even validated with lots of soil test information out of the major soil testing labs in the United States, which just about all of them show a nice uptrend in average soil, organic matter content across the Midwest. So the good actors out there that are reducing tillage and growing high yield corn are making a difference. And it’s when you see that trend and it keeps going up, you don’t worry about the preeminent so much. It’s happening as we speak.

Mark Heckman: (57:43)
That’s great response, Ron. Lisa, any comments, any further thoughts on that? The effect of carbon credits, additionality carbon credits. And then maybe just give us a wrap up on your side.

Lisa Streck: (57:57)
Yeah. From my side and great panel here today, Mark, with a lot of diverse perspectives and really appreciate the opportunity to be here. But I would just really encourage farmers to take a look at the different programs that are out there. This space is continuing to evolve. It’s probably going to look different next month from now and especially one to five years. So make sure farmers take the time, explore. But I would encourage farmers to maybe enroll a field into a program, adopt some of these practices and see how it goes and learn quickly here because this space is evolving so rapidly.

Mark Heckman: (58:39)
Bill, final thoughts?

Bill Northey: (58:43)
I would agree with Lisa. Step in and try some things. And certainly I think there’s opportunity to be able to learn, figure out some differences with fertility maybe see if you can find some manures out there, certainly looking at tillage practices and different types of cover crops, figure out if those can work. Be ready as those opportunities come to know whether you can climb into those or not, what works for you and your farm. So I really do think this has legs. We’ll still be talking about it. It’ll still probably be evolving five and twenty-five years from now. But we’ve got a lot of evolution to happen yet but jump in.

Mark Heckman: (59:30)
It sounds like we’re ready for action. Tim, your group is starting next week. Any final comments?

Tim Baye: (59:37)
It is. If you’re interested, reach out to your FSA, NRCS, tell your banker, tell your accountant, tell your [inaudible 00:59:48] providers that you’re looking at doing this and that you’re going to expect their help. And build team to help you evaluate and execute.

Mark Heckman: (01:00:01)
Awesome. Ron, I’m going to turn to you for a final comment and then Kelly we’ll let you wrap it up.

Ron Alverson: (01:00:09)
Yeah. If I could encourage folks, the corn farmers out there to really become acquainted with models that calculate your carbon footprint and start doing it. The American Coalition for Ethanol just went live with a simplified corn production and corn ethanol carbon calculator that’s based on the US DoE GREET model. It’s pretty easy to use. Jump in there and see how you compare to the Midwest Average. I think you might be surprised. There’s a lot of good actors out there that are growing their corn for half the carbon intensity than others are. So then Midwest Average, because… and part of that, the reason is the US Midwest Average is based on quite old numbers. No USDA data from 10 to 20 years ago on, as we know, this is a changing industry.

Mark Heckman: (01:01:02)
Thanks, Ron. Kelly?

Kelly Nieuwenhuis: (01:01:04)
Yeah. I guess I just make the comment that farmers need to figure out a best way to collect their data from their farms. We’ve got a lot of technology nowadays. I know our planter, our smart farmers tell us our organic matter, our soil moisture, crashing [inaudible 01:01:22], our soil temperatures. And we’ve got the opportunity to collect some pretty impressive data to prove our farming practices are sustainable and capturing carbon. For me, the organic matter improvements I’d really liked to know the score on what 1% of organic matter sequestered for carbon, because I think if you get a score of six and a half percent organic matter, that’s going to have a lot more nutrient holding capability a lot better, moisture olden capability. Just try to figure out the best position for your farming operation because I do know we’re all different and we’re all in different parts of the country and the soils are different everywhere. So just figure out the best way to collect your data from your farm. Thank you.

Ron Alverson: (01:02:11)
You’re a zero carbon corn farmer, Kelly, I’ll guarantee it. If you’re sequestering that much SOC, you’re way below zero.

Kelly Nieuwenhuis: (01:02:23)
Thanks Ronny. That’s what our goal is and we’re going to continue to push forward and get better. Yeah, so.

Ron Alverson: (01:02:28)

Mark Heckman: (01:02:30)
We’ve shared so much information today and we look forward to the change ahead and I think from a farmer perspective, from an industry perspective, it’s really great that we’ve had the time to share this information. EcoEngineers, we stand ready to help the business and ag. work together. To combine these markets, it’s going to take everyone and a collaboration for this. And as Shashi stated at the beginning, we’re ready to assist through a 360 approach to clean energy economy. And if this has sparked anything or any way that we can help you, we certainly want to hear from you. I want to one last time, thank these panelists. They dedicated a lot of time, but they’re also dedicating their lives to really the things that they believe in and that is this low carbon clean energy future. So thanks again. Lyndsey, I’m turning it back at you.

Lyndsey Nielsen: (01:03:22)
Thanks, Mark. I don’t really have anything else to say to follow that up. Thank you to all the panelists and everybody who’s attended and we’ll see you next time around.