Why Ag Retailers Are Becoming the Gatekeepers of 45Z
June 30, 2026 As excitement around the federal 45Z Clean Fuel Production Credit continues to build, much of the conversation has focused on ethanol plants, carbon intensity scores, and farmer adoption of conservation practices.
But according to Ryan Pearcy, Managing Director of Biofuels and Renewable Energy at Arva Intelligence, and Jeff Carver, Commercial and Technical Service Manager for Bioenergy at BASF, one group may ultimately determine how successfully the program scales: ag retailers.
“The retailer is really the linchpin,” Carver says. “The grower has that trusted relationship with them.”
For ag retailers, the opportunity extends well beyond helping farmers enroll in another sustainability program. As demand for lower-carbon feedstocks grows, retailers may find themselves serving as the critical connection between growers, grain handlers, biofuel producers, and emerging low-carbon markets.
Scaling 45Z Requires More Than Farmers and Ethanol Plants
The 45Z tax credit rewards biofuel producers for reducing the carbon intensity (CI) of their feedstocks. To qualify, however, ethanol plants must document and verify the sustainability practices used to produce the grain they purchase.
That creates a challenge.
While some programs have attempted to work directly with farmers, Pearcy argues that approach becomes difficult at scale.
“To get the data, verification, traceability, and grower attestation required for this federal program, you’re going to have to have channel partners,” he says. “Those channel partners are retailers and co-ops.”
The reason is this: retailers already have relationships with growers and often have access to the agronomic data needed to support enrollment and verification.
According to Carver, roughly half of the corn purchased by the ethanol industry moves through elevators, making grain handlers and retailers a critical part of the supply chain.
Low-CI Grain Is Becoming a New Revenue Opportunity
For retailers, low-carbon grain programs represent more than a compliance requirement.
Carver describes low-CI grain as a new value stream tied not only to what farmers grow, but how they grow it.
“Retailers and agronomists are uniquely positioned to help growers document practices, understand carbon intensity, and connect those environmental attributes to downstream markets,” he says.
While 45Z is currently driving interest, both Pearcy and Carver see broader opportunities emerging in Sustainable Aviation Fuel (SAF), renewable chemicals, maritime fuels, and other bio-based industries seeking verified low-carbon feedstocks.
That means retailers could increasingly serve as advisors helping growers determine where environmental attributes create the most value.
“We don’t want to commoditize that value,” Pearcy says. “Low-CI grain can be used in multiple markets. Our job is helping growers understand where that value can be captured.”
The Biggest Challenge Isn’t Physical Infrastructure
One of the more surprising takeaways from the discussion is that neither executive believes the industry’s biggest hurdle is physical grain handling.
Instead, the challenge is digital.
“The current grain supply chain works really well,” Carver says. “What the industry needs is the ability to connect farm records, grain movement, and sustainability data into a traceable system.”
Verification, traceability, and chain-of-custody requirements will become increasingly important as carbon markets mature and low-carbon feedstocks command premiums.
Fortunately, both executives believe much of the necessary data already exists.
Farmers are generating information through equipment, digital agronomy platforms, field records, and remote sensing technologies. The next step is making those systems work together more efficiently.
“The challenge is cross-sharing that data and making it available,” Pearcy says. “It’s better than it was five years ago, and way better than it was ten years ago, but there’s still work to do.”
Partnerships Are Just As Important As Expertise
As sustainability markets continue evolving, Carver does not believe retailers need to become experts in every carbon program, certification scheme, or regulatory framework.
Success also depends on choosing the right partners.
“The retailer’s challenge is deciding who they partner with,” he says. “They should be able to rely on partners that understand these markets and can provide the guidance needed.”
That approach allows retailers to focus on what they already do best: serving as trusted advisors to growers.
Pearcy agrees, arguing that the future of low-carbon grain markets depends on collaboration throughout the supply chain.
“It all starts with a good conversation with the grower,” he says.
A New Role for Retail
Perhaps the biggest misconception surrounding carbon markets, according to both executives, is the belief that any one stakeholder can succeed alone.
Farmers need agronomists. Retailers need technology and market partners. Ethanol plants need verified feedstocks. Each link depends on the others.
As 45Z develops and new low-carbon markets emerge, retailers may find themselves playing a larger role than many anticipated – not simply selling crop inputs, but helping growers turn sustainability practices into marketable value.
For an industry built on trusted relationships, that may prove to be the most valuable service retailers provide.
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