As global carbon emissions continue to hit all-time highs, strategies for achieving net-zero emissions have only become more important. Specifically, bioenergy has an important role in displacing fossil fuels and removing carbon dioxide from the atmosphere through photosynthesis.
Therefore, a team of economists from the University of Illinois Urbana-Champaign (Madhu Khanna and Gal Hochman), the University of California-Berkeley (David Zilberman) and the U.S. Department of Agriculture (Jeffrey O’Hara), including Michigan State University environmental scientist Bruno Basso, came together to propose a groundbreaking “climate-smart” biofuel policy that could revolutionize the agricultural sector’s role in mitigating climate change and improving ecosystems services.
The policy, informed by a recent study published in Science, aims to promote low-carbon biofuels for transportation and aviation, among other industries.
The study highlights how farm-specific carbon intensity, or CI, scores can incentivize climate-smart agricultural practices that reduce greenhouse gas emissions and enhance soil carbon sequestration.
“This policy is about turning farms into drivers of rural prosperity and stewards of our natural resources. By rewarding practices that store carbon in the soil, we can cut emissions, improve soil health and create new revenue streams for farmers and rural communities,” said Basso, study co-author and sustainable agriculture scientist in MSU’s Colleges of Agriculture and Natural Resources, and Natural Sciences.
Leveraging carbon benefits
Biofuels, which are fuels produced from renewable sources such as plants or organic waste, have long been recognized as a key tool for reducing reliance on fossil fuels, but current policies often overlook the climate benefits of sustainable farming practices. The policy
proposes to reward farmers for adopting management practices such as no-till farming, crop rotation, cover cropping, precision agriculture and emerging technologies like biochar and enhanced rock weathering. The environmental benefits from these practices lead to a lower carbon footprint of the bioenergy feedstocks then transformed to biofuels.
“By aligning biofuel policies with climate-smart agricultural practices, we can create a win-win scenario for farmers, the environment and the biofuel industry,” said lead author Khanna.
The policy would leverage existing biofuel markets, such as the Low Carbon Fuel Standard, or LCFS, to provide financial incentives for farmers. Unlike traditional conservation programs, which are limited by budgets, this market-driven approach would scale based on policy targets. Farmers would benefit from premium prices for low-carbon feedstocks, while biorefineries could reduce their supply-chain emissions.
The benefits of the policy
Key components of the proposed policy include farm-specific carbon footprints, which incorporate soil carbon sequestration and greenhouse gas emissions into biofuel CI calculations. Using multimodel ensembles, or MMEs, recently developed by Basso et al., 2025, soil carbon changes, greenhouse gas emission of climate-smart practices could be more easily and accurately assessed.
The policy also proposes long-term contracts between farmers and biorefineries to ensure sustained adoption of climate-smart practices and cost-effective systems like mass-balance or book-and-claim approaches to trace CI reductions.
The researchers acknowledge challenges, such as the reversibility of soil carbon sequestration and potential off-farm emissions leakage. However, they emphasize that even temporary carbon storage has climate benefits and that advancements in digital technology, predictive modeling and policy design can address these issues.
“Delaying action while waiting for perfect solutions will be costly. We need evidence-based policies that can adapt and evolve as we learn more,” Basso said. “Advances in modeling and digital technologies now make it possible to track carbon intensity score, support farmers economically, and help communities reduce their overall environmental footprint. These tools can also enhance other positive ecosystem services from management practices that improve farm profitability and environmental health, added Basso
The study highlights the potential to extend such policies beyond biofuels to include food, animal feed and fiber crops,paving the way for a larger transformation of agriculture.
Basso is a John A. Hannah Distinguished Professor in the colleges of Natural Science, and Agriculture and Natural Resources. His research at MSU is supported by the Great Lakes Bioenergy Research Center; U.S. Department of Energy, Office of Science, Biological and Environmental Research Program (DE-SC0018409); National Science Foundation, Long-term Ecological Research Program (DEB 2224712) at the Kellogg Biological Station; U.S. Department of Agriculture, National Institute of Food and Agriculture, award 2020-67021-32799; Office of the Chief Economist of the U.S. Department of Agriculture; and Michigan State University AgBioResearch.
