Carbon markets may have cooled, but 45Z is heating up. Kelly Garrett and Mike Busing join us to explain what the new tax credit could mean for ethanol, CI scores, and ultimately the profitability of American farmers.
Carbon credits. Regenerative agriculture. CI scores. 45Z.
If you've been hearing these terms but still aren't sure what they actually mean for your farm, this episode is for you.
Tanner, Corey, and Dave sit down with Kelly Garrett of XtremeAg and Mike Busing of Windy Ridge Ag to unpack one of the most talked-about opportunities facing corn growers today: 45Z.
The conversation begins by looking back at the rise and fall of carbon markets. Mike shares his experience helping build one of the country's largest carbon programs through Regenerative Roots, while Kelly explains why the lack of standardized rules ultimately slowed the market's momentum. Together, they discuss why voluntary carbon programs struggled, how international demand still exists, and what lessons were learned from the "Wild West" days of carbon credits.
From there, the discussion shifts to 45Z—a federal clean fuel production tax credit that could fundamentally change how ethanol plants value grain. Kelly and Mike explain how carbon intensity (CI) scores work, why low-CI corn could become increasingly valuable, and how competition between ethanol plants may create new revenue opportunities for farmers. They also discuss why the Treasury Department's final guidance is so critical and how regional differences could determine who benefits the most.
The group also explores larger questions surrounding government incentives, environmental policy, and whether 45Z is simply another subsidy or a meaningful shift toward rewarding more efficient farming practices. Along the way, they debate whether the current program represents a "carrot" that encourages voluntary change—or whether future regulations could eventually become the "stick" if agriculture doesn't continue improving on its own.
Whether you're skeptical, optimistic, or simply trying to understand what everyone is talking about, this episode delivers one of the most practical conversations we've had on the future of carbon markets and the role 45Z could play in improving farm profitability.