We know our farmer partners have many questions about current-year 45Z credits and how on-farm
practices may be recognized. ADM continues to review federal guidance and evaluate how 45Z may
interact with our re:generations program in 2026. We want to provide clear context on what is known
today, what remains uncertain, and how ADM is assessing potential program impacts.

USDA’s finalization of the FD-CIC calculator is an important step toward allowing certain on-farm practices
to be recognized under 45Z. The announcement creates a potential pathway for farmer practices to
generate additional value for both farmers and biofuel producers. However, additional action from the
Department of Energy and U.S. Treasury/IRS is still needed before the framework is fully operational.
ADM is currently reviewing the USDA updates and assessing whether and how farm-level practices can be
included at our facilities. While we cannot yet determine how these changes may translate into payments
or program requirements, we are encouraged by the progress and will provide updates as additional
federal guidance is released.

Even with uncertainty around how 45Z may apply to on-farm practices, ADM’s ongoing downstream
customer, AMP, and certification programs allow us to continue offering competitive incentives for eligible
practices and outcomes. Those programs provide a current pathway to support farmer participation while
the 45Z framework continues to develop.

We want to be transparent about the factors that may affect whether and how 45Z value can be
incorporated into ADM farmer programs:

Facility Eligibility
To qualify for 45Z, a biofuel facility must meet the required carbon intensity threshold. Some ethanol
facilities may not reduce their carbon intensity enough to qualify for the credit, while others may already
qualify for the full credit value without needing to include on-farm practices. Facilities also must meet
prevailing wage and apprenticeship requirements to receive the full value of the credit; otherwise, the
credit value is reduced. As a result, the potential value of farm-level practices will vary by facility.

Practice Eligibility and Geography
The value of specific practices may vary by crop, geography, baseline, production system, and facility
pathway. Not every practice will create the same CI reduction or economic value in every situation.
How Farm-Level Reductions May Affect Facility Scores
ADM remains committed to working with farmer partners as the 45Z framework develops. Importantly,
ADM’s current re:generations program is not dependent on 45Z; our ongoing downstream customer
programs allow us to continue offering competitive incentives for eligible practices and outcomes today.
While important 45Z questions remain, we see USDA’s action as a constructive step toward recognizing
the value of on-farm practices and creating a potential additional pathway for future value. Our focus is to
build programs that are practical, credible, and capable of supporting farmer participation while meeting
federal requirements and customer expectations.

How Participation Affects Facility-Wide Value
A biofuel facility may receive only one facility-wide CI score each year. If so, the credit value would be
based on all feedstock processed at that facility, not just grain delivered by one farmer or one group of
farmers. This means the impact of eligible practices depends on both the size of the CI reduction and the
share of total facility bushels represented by participating farmers.
For example, if a facility grinds 100 million bushels per year and participating farmers provide 90 million
bushels with an average five-point reduction, the facility-wide reduction would be 4.5 points. Depending
on how final credit rules are applied, that may not be enough to increase the credit value if the next
five-point threshold is not reached. As a result, broad participation and consistent documentation across
participating acres may be important to creating measurable facility-level value.

Why Field-Level Scores May Not Translate One-for-One
Farm-level CI reductions may not translate one-for-one into final biofuel CI scores because biofuel models
account for how feedstocks are processed and how value is allocated across co-products. For example, in
soybean-based biodiesel, a 20-point reduction at the field level could result in a smaller reduction in the
final biodiesel score because only a portion of the soybean is allocated to soybean oil, while the rest is
attributed to soybean meal and other co-products.
Similar allocation issues may exist in certain corn-processing pathways, particularly at wet milling facilities,
which generally produce more co-products than dry-grind facilities.
In practical terms, a farmer may see a specific field-level CI reduction in the USDA FD-CIC calculator or
through a third-party provider, but that reduction may not apply directly or fully to the final biofuel credit
calculation.

Program Administration and Verification
There is a significant timing gap between when farmers decide to adopt eligible practices and when a
biofuel facility can confirm the value of any related 45Z credit. As a result, ADM may need to set farmer
incentive levels before the final credit value is known. ADM will use models and projections to estimate
that value, but final carbon intensity reductions may differ from estimates due to factors outside the
control of ADM or the farmer. For that reason, incentive levels need to reflect uncertainty in the final
credit value.
In addition, 45Z will require strong documentation and verification throughout the supply chain. Farmers
will need to maintain records supporting their claimed CI reductions under the FD-CIC calculator, and
biofuel producers are expected to need third-party verification across the chain, including farms,
aggregators, and processors. If a biofuel producer transfers the credit to another party, additional
verification may also be needed to provide confidence to potential credit purchasers.
These administration and verification requirements create additional program costs that must be
considered when evaluating the potential value of 45Z. In addition, if a credit is transferred to another
party, the facility may not receive the full-face value of the credit after transfer-related costs or discounts.
This can reduce the net value available to support farmer incentives, verification, and other program
costs.
ADM expects these administrative and verification requirements to create meaningful additional costs,
separate from farmer incentives and other program operating costs.

New Rule Implementation
The FD-CIC framework is new, and implementation will take time across the industry. ADM and other
market participants will need to develop supporting contracts, documentation processes, verification
systems, and operational best practices. As companies, farmers, verifiers, and federal agencies gain
experience with the framework, additional guidance, adjustments, and practical learnings should be
expected.