Agriculture Calls for Rethinking Indirect Land Use Rules

Experts say farmers and ethanol producers would benefit from a risk-based ILUC system that protects forests without relying on speculative modeling.

upper midwest_fall landscape_adobe stock.png

Adobe Stock

LUBBOCK, Texas (RFD-TV) — A long-running debate over indirect land-use change — often called ILUC — is resurfacing as biofuel policy again weighs carbon penalties tied to theoretical global land-use impacts. John Duff of Serō Ag Strategies says ILUC began as a reasonable idea meant to prevent deforestation overseas.

Still, the system that grew around it quickly crossed into modeling assumptions that cannot be seen or measured. The result is a policy structure in which U.S. farmers and biofuel producers are penalized for land clearing that may not actually be happening, while fuels from regions with real deforestation concerns sometimes receive more favorable treatment.

Duff explains that large economic forecasting models mainly drive today’s ILUC penalties. These models aim to predict how farmers worldwide might respond if more U.S. grain is used for ethanol. Because they rely on assumptions about human behavior and international markets, the models often disagree and can drift far from real-world conditions. Still, their projections were built into federal and state carbon rules more than a decade ago, giving hypothetical outcomes the weight of law.

This mismatch has created uneven carbon scores, competitive disadvantages for U.S. ethanol, and a system that can punish farm efficiency rather than rewarding it. Duff says a better approach already exists: a risk-based framework used in Canada and parts of Europe. Instead of assigning blanket penalties, regulators verify whether feedstocks come from established cropland and whether local practices pose any real risk of land conversion.

Duff argues that such an approach keeps the focus on preventing deforestation while grounding policy in observable, verifiable facts —not in global economic guesses.

Farm-Level Takeaway: Duff says farmers and ethanol producers would benefit from a risk-based ILUC system that protects forests without relying on speculative modeling.
Tony St. James, RFD-TV Markets Specialist
Related Stories
The phone call injected optimism into the soybean market, but actual Chinese buying and its timing will ultimately determine the extent of U.S. agricultural export benefits.
Regulatory uncertainty could slow the growth of fiber and grain hemp unless implementation is delayed.
Jeramy Stephens of National Land Realty breaks down current trends in the farmland real estate market and how landowners should consider water availability and its impact on land values as they plan for the year ahead.
Mexico has fallen behind by several hundred thousand acre-feet in required water deliveries to the United States, a shortfall that has had devastating consequences across the Rio Grande Valley.
Modest rate relief may come late in 2026, but borrowing costs are likely to stay elevated.
U.S. Senator Roger Marshall of Kansas discusses expected changes to the 45Z tax credit and what they could mean for agriculture and rural America.

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

LATEST STORIES BY THIS AUTHOR:

Stronger U.S.-Guatemala trade rules favor dependable, regionally integrated supply chains — rewarding execution and commitment over cost-only sourcing.
China-led demand continues to anchor soybean and sorghum exports despite weekly swings.
Shrinking slaughter capacity may delay heifer retention, complicating herd rebuilding plans.
Strong seasonal demand and manageable production growth continue to support poultry markets.
Clearer 45Z rules favor U.S. oilseeds, but final RFS volumes remain critical to locking in demand.
Even small declines in the calf crop translate into sustained supply pressure, supporting cattle prices over multiple years.