Carbon Markets: Market Influence and Education from Field to Final Product

Background

Minnesota has one of the highest biofuels use rates in the US. The Minnesota B20 mandate requires that most diesel fuel sold to contain biofuels. Biofuels help reduce greenhouse gas (GHG) emissions compared to traditional fuels. Better understanding biofuel carbon footprints provides valuable insight into the future of fuel in Minnesota.

The Project

For this project, Houston Engineering, Inc. (HEI) developed a systematic approach that links the carbon footprint of on-farm soybean production to downstream biodiesel production across Minnesota. The project used carbon footprint data and offset strategies to showcase the potential GHG reductions associated with biofuels production, particularly under a B20 mandate, by comparing them to traditional petroleum-based production methods. The project demonstrated how different carbon market offset and inset opportunities could impact the market opportunities of biofuels production.

HEI used a multi-model ensemble (MME) approach to estimate carbon emissions of Minnesota grown soybeans and how the reduction of GHG emissions from management practices transfer downstream to biodiesel production. An MME approach is commonly used in weather forecasting and is starting to be used for GHG modeling due to its ability to enhance the reliability and robustness of emission estimates.

Our team used five models in this study, COMET-Planner, Cool Farm Tool (CFT), DNDC, GREET, and USDA-FD-CIC. We used these models to estimate carbon intensity (CI) scores for farms across the state. Our team was sure to use sample farms from all agricultural regions of Minnesota in this study to provide maximum value.

This project provided CI scores for Minnesota’s biodiesel and comparison with traditional fuels. Additionally, the report provided valuable information about how CI scores vary by management practice and region. Finally, the study demonstrated how reduction in soybean feedstock CI could result in a reduction of CI scores for biofuels. These results showed how soybeans and biofuels can be a carbon asset to a biodiesel plant and could be managed as a credit within the biodiesel supply chain (i.e., insets) or exchange outside of the supply chain (i.e., offsets).