BASF and Arva link low-carbon grain to 45Z biorefinery procurement

BASF and Arva on May 26 unveiled a collaboration built to solve the 45Z market’s hardest operational problem, linking field-level carbon-intensity data to the procurement systems that actually buy grain for biorefineries. The model is aimed at helping biofuel producers capture the Clean Fuel Production Credit once Treasury finalizes the rules, while giving farmers a clearer path to be paid for lower-carbon practices.

The companies said the effort will connect biorefineries with verified low-carbon-intensity grain through both farmer-direct and commercial channels. That matters because BASF said roughly half of U.S. ethanol production relies on commercially sourced grain, meaning a 45Z strategy built only around direct farm contracts would leave a large share of the supply chain outside the credit framework. Arva’s CropForce platform provides the scoring and verification layer, while BASF said its xarvio FIELD MANAGER and xarvio BIOENERGY tools are intended to help agronomists boost yield potential, lower carbon intensity and push the data into biorefinery procurement systems.

BASF said the collaboration expands its Circalo: Low Carbon Intensity Crops program. The company also said field-specific reporting from xarvio FIELD MANAGER and CropForce could help biorefineries meet current and future sustainability requirements set by the California Air Resources Board, giving the tools a use case beyond federal tax-credit claims. Commercial elevators that score and verify low-CI grain through CropForce can also connect to xarvio BIOENERGY, allowing a biorefinery to identify and verify commercial procurement of lower-carbon bushels.

The timing tracks closely with Treasury and IRS rulemaking. The agencies published proposed 45Z regulations on February 4, with comments due April 6 and a public hearing held May 28. The docket drew 863 comments, underscoring how much remains unsettled around credit eligibility, emissions rates, certification and registration requirements, along with related elective-payment, transferability and excise-tax rules. IRS says the Clean Fuel Production Credit is available beginning January 1, 2025, applies to clean transportation fuel sold domestically through December 31, 2029, and for fuel produced after December 31, 2025, the feedstocks must come from the United States, Mexico or Canada.

Industry groups are still pressing for more clarity. Clean Fuels Alliance America said at the May 28 hearing that producers need timely final rules and updates to the 45ZCF-GREET model, including more flexibility for farmers in the FD-CIC module. BASF and Arva are moving before that certainty arrives, betting that verified traceability and commercial grain integration will turn 45Z from policy promise into usable margin.