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
Industry leaders representing more than 40 nations gathered to discuss the future of ethanol and other corn-based products.
Stay alert for trade announcements—especially border reopening timelines, tariff threats, and developments in Brazil’s export flows.
Set targets and use forwards, futures, or options to manage downside while preserving room for rallies.
Sen. Roger Marshall explains which types of beef are imported into the United States, how there’s room for new imports, and logical reasons for current high prices.
U.S. Senator Deb Fischer (R-NE) discusses the USDA’s new cattle plan, ethanol policy, and the broader challenges ahead for rural America.
Bioethanol continues to gain ground as the bridge fuel connecting agriculture, aviation, and maritime industries in the global shift toward lower-carbon energy.

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:

Global agriculture is stabilizing after years of price swings, with flat to modestly rising returns expected as productivity offsets slower demand growth.
Prepare for softer milk checks into winter, watch cull-cow values and timing, and stress-test cash flow as product prices recalibrate.
Expect incremental near-term lift for feed grains, proteins, and ethanol as tariff cuts and smoother approvals translate into real orders.
If confirmed, early Chinese buys tighten nearby Gulf/PNW capacity and could bump basis in export-oriented regions.
Trade pacts with Malaysia and Cambodia unlock tariff-free and preferential lanes for key U.S. farm goods, expanding long-term demand in Southeast Asia.
The review signals renewed scrutiny of China’s agricultural trade pledges and could reshape farm export opportunities depending on its outcome.