(Bloomberg) — Top U.S. ethanol maker Poet LLC is looking to encourage greater production of climate-friendly grains in a bid to help farmers profit from an increasingly “green” energy economy.
The company said it plans to use Gradable — a digital platform owned by agriculture-tech firm Farmers Business Network — at its 33 ethanol plants. The tool is able to rate grains used to make biofuel based on their so-called carbon intensity.
The idea is to spur more sustainable farming and help growers track their greenhouse-gas data, ultimately enabling them to get a premium for crops through low-carbon fuel markets. Programs already in California and spreading worldwide are expected to put higher value on such fuel ingredients to encourage lower global warming emissions.
“Based on our trials, the carbon intensity of corn production is all over the board, with farmers in the same region using different practices that yield widely varying results,” Bob Whiteman, chief financial officer for Poet’s biofuels division, said in an interview.
Sioux Falls, South Dakota-based Poet currently supplies about 280 million gallons of ethanol per year into California, where there is a push for changes in how biofuel feedstocks are valued. The state’s market-based fuel program, which aims to cut carbon intensity of all transportation fuels by 20% by 2030, is serving as a model in other regions and eventually could be mirrored nationwide.
“We want to be prepared for when these markets come online,” Devin Lammers, president of Gradable, said. “If we wait it will take years to put the infrastructure in place.”
The Gradable platform allows farmers to submit information including nitrogen fertilizer use, which makes up the biggest share of global warming pollution tied to grain production, according to the companies. FBN says it doesn’t share farm data with grain buyers.
Closely held Poet, which helped develop Gradable, has no ownership stake in California-based Farmers Business Network.
(Updates to add background starting in the fifth paragraph.)
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