Part 4 of a 5-part FDCIC series on S&P Global Energy's June 2026 report, Fueling agriculture: biofuels as the catalyst.
Conversations about lower-carbon agriculture often start with a list of practices: optimize fertilizer, adopt precision agriculture, change tillage, plant cover crops, collect better data. Framed that way, farmer adoption sounds like a technical problem, one of identifying the right practice and persuading enough growers to use it. S&P Global Energy's 2026 report, Fueling agriculture: biofuels as the catalyst, argues the deeper constraint is usually economic, and that has direct implications for how low-CI and reduced-CI feedstock programs get designed.
Farmers invest when the market gives them a reason to
The report repeatedly ties strong agricultural markets to technology adoption. S&P argues that periods of strong demand have supported investment in yield-enhancing technology, and that durable markets create the demand structure innovation needs to stick. It also points to the under-adoption of precision technologies as evidence that a tool being available isn't the same as a tool being used. Its conclusion is straightforward: technology expands what's possible, but market incentives determine how much of that potential growers actually reach. Jed Bower, President of the National Corn Growers Association, put it plainly in the report: "Profitability ultimately drives technology adoption and long-term success." He named ethanol, marine fuels, and other low-carbon-intensity markets as important sources of demand capable of sustaining that value over the long run, which is the same lens worth applying to farmer CI programs specifically.
A lower-CI practice is still a farm-management decision
A practice can reduce modeled emissions and still be a bad bet for a given grower, because farm decisions run through real operational constraints: additional input cost, new equipment, more management time, agronomic and yield uncertainty, cash-flow timing, changes to rotation or field operations, and more recordkeeping. Underneath all of that sits a basic commercial question: who's paying for the change? A program that answers only the carbon question and skips the farm-economics question is incomplete, and the report's repeated emphasis on market confidence and investment incentive applies to reduced-CI feedstock programs just as much as it does to any other agricultural technology.
The clearest statement on program design in the report
Dr. Sally Flis, Director of Sustainable Ag Programs at Nutrien Ag Solutions, gives one of the more direct descriptions of what these programs need to accomplish: "Scaling lower-carbon feedstocks will require systems that recognize the value of on-farm data, management practices, and measurable results." The passage around that quote matters as much as the quote itself. Flis connects adoption to clear economic value for growers, says farmers are more likely to stay engaged when they see the benefit and get compensated for outcomes, and concludes that sustainability works best when it supports long-term grower profitability. That's a design principle, not an aside: a farmer CI program can't treat grower economics as an implementation detail bolted onto the carbon accounting. It's part of the product.
Programs create costs before they create value
Reduced-CI programs typically ask for a level of documentation conventional commodity marketing doesn't require. Depending on the methodology and program, a grower may need to provide information that helps establish an emissions outcome, and even without knowing the specifics of any one current program, the commercial challenge is obvious: data collection takes time, management changes can require capital, verification adds effort, and supply-chain tracking adds complexity after harvest. The more burdensome a program is, the more economic value it has to create to justify the trouble, and that's especially true when the environmental benefit isn't visible to the farmer directly. If the value is created downstream at a biofuel facility, the grower needs a commercial structure that translates some of that downstream value into a clear upstream offer.
What a credible farmer offer should be able to explain
Before asking a farmer to enroll, a low-CI feedstock program should be able to answer a handful of questions clearly. What is the grower actually being asked to do: pay for an existing production system, adopt a new practice, or both? That distinction matters because some farms are already close to the target outcome and others aren't. What information does the grower have to provide, and does the program disclose the expected records, time commitment, and documentation standard before enrollment rather than after? How is the payment determined, whether that's participation, a specific practice, a calculated CI outcome, an eligible crop quantity, or some mix, and does the farmer understand the mechanism even if the underlying lifecycle model is complicated? What happens if the expected result doesn't materialize, given that weather, yield, and operational conditions introduce real uncertainty, and does the contract allocate that risk explicitly? And when and how does the farmer actually get paid, since a premium months or years out doesn't cover a near-term cost, and the farmer's cash-flow timing rarely lines up with the buyer's tax or fuel-market timing.
Practice payments and outcome payments solve different problems
S&P doesn't recommend a specific farmer payment structure, but its emphasis on incentives and measurable outcomes points toward why different structures are likely to emerge. A practice-based payment reduces adoption risk by compensating a defined action regardless of the final measured result. An outcome-based payment aligns compensation more directly with the CI result the downstream market actually values. A hybrid can combine a participation or practice payment with upside for stronger verified outcomes. Each allocates risk differently: the more compensation depends on the final CI result, the more the program's quantification methodology, data quality, and verification matter; the more compensation is fixed up front, the more risk sits with the buyer or program operator. There's no single right answer here. The structure just needs to reflect where the value is actually coming from.
The farmer isn't simply selling a carbon credit
Farmer CI programs get confused with traditional agricultural carbon-credit programs, but the economic mechanism can be different. In a reduced-CI feedstock program, the farmer is producing a commodity whose agricultural emissions affect a downstream fuel's lifecycle CI, so the value arises inside the fuel market rather than through issuing a standalone offset. That distinction changes the questions a program has to answer. It isn't enough to show a practice reduced emissions; the program also has to establish that the outcome is recognized by the relevant fuel methodology, tied to an eligible quantity of feedstock, and useful to the downstream buyer. Successful programs end up needing to integrate agronomy, carbon accounting, and commodity logistics at the same time, which is a wider set of disciplines than a typical sustainability initiative requires.
S&P's report is broadly optimistic about agricultural productivity and innovation, but that optimism comes with a condition: adoption requires real market signals, and farmer CI programs should be judged the same way. A technically sophisticated program that growers abandon after one season isn't scalable. Neither is one that produces impressive modeled reductions but too much operational friction, or one that can't explain its value proposition in terms a grower actually understands. If low-carbon fuel markets create durable demand for lower-CI feedstocks, farmers could have a recurring economic reason to improve production efficiency and participate in differentiated supply chains, but that only happens if the economics work at the farm gate first. The technology already exists. Whether it gets used comes down to the incentive behind it.