The 45Z Clean Fuel Production Tax Credit could reward farmers for sustainable practices such as no-till, cover crops and improved nutrient management.
John Deere is helping farmers prepare for potential revenue opportunities under the federal 45Z Clean Fuel Production Tax Credit by emphasizing the importance of regenerative agriculture practices and accurate farm records.
The program offers a pathway for certain farming practices to reduce the carbon intensity of biofuel production and support lower-carbon fuel supplies.
Under the 45Z program, eligible biofuel producers, including ethanol and biodiesel facilities, may qualify for tax credits by using lower-carbon agricultural feedstocks such as corn, soybeans, sorghum, and spring canola.
Practices that may help reduce feedstock carbon intensity include reduced tillage, no-till farming, cover cropping, and improved nutrient management.
Participation by farmers is voluntary, and some producers may already use qualifying practices. Eligible fuel production must occur between January 1, 2025, and December 31, 2029.
The financial benefits farmers receive will depend on individual agreements and programs established by biofuel producers. John Deere says it aims to help growers capture a share of the value generated by their agricultural practices.
"John Deere has long advocated for practical implementation of 45Z policies that recognize farmers’ contributions and help connect revenue generated downstream back to the farm gate. If farmers are creating value through their practices, they should share in that value," said Nate Green, Director of Biofuels, John Deere.
"We’re committed to providing the equipment, technology, and data solutions that will help farmers share in the income created through 45Z," Green added.
Farm documentation will be essential as the program develops. John Deere Operations Center™ already enables farmers to organize equipment and operational information, review records, and gain insights into field activities.
The company is expanding these capabilities to help growers validate information, reduce manual data entry, and maintain more accurate records.
The platform is expected to support the creation of a Biofuel Feedstock Report (BFR), which documents field-level carbon intensity reductions. Biofuel producers must submit this report to claim additional 45Z credits.
John Deere plans to pilot its approach with selected ethanol producers that intend to share program value with farmers, working with feedstock suppliers to compile the required documentation.
Farmers can begin preparing by consolidating planting, harvesting, fertilizer application, and field-operation records. Reviewing field boundaries, planting dates, product names, application rates, invoices, and receipts can also improve record quality.
John Deere emphasizes that farmers should retain control over their information. Its Farmer Data Commitment focuses on transparency, choice, and control, helping growers understand how their data may support participation in emerging agricultural revenue opportunities.
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