**November 5, 2010 Camelina: an Annual Cover Crop Under**  

### 40 CFR Part 80 Subpart M In 40 CFR Part 80, Regulation of Fuels and Fuel Additives, EPA has designated applicable D codes for use in generating RINs dependent on feedstock and fuel pathway. Included a s a feedstock are annual cover crops which are defined as:

“Annual cover crop means an annual crop, planted as a rotation between primary planted crops, or between trees and vines in orchards and vineyards, typically to protect soil from erosion and to imp rove the soil between periods of regular crops.” Camelina sativa (camelina) is a flowering plant in the family Brassicaceae which includes mustard, cabbage, rapeseed, broccoli, cauliflower, kale, and brussels sprouts. It is native to Northern Europe and Ce ntral Asia and has been grown there for at least 3,000 years. Camelina is tolerant of low rainfall and needs little nitrogen to flourish; it can be grown on marginal agricultural lands and does not compete with, but is a complement to food crops especially dryland wheat cropping systems. Crop oil yields are double those of soybeans, and it may be used as a rotation crop for wheat fields to increase the health of the soil. It is cold tolerant and its oil is more resistant to cold temperatures than other oils
. Camelina fits the definition of annual cover crop that EPA has put forth in 40 CFR Part 80 Subpart M and therefore fuel derived from camelina should qualify for the applicable D codes to generate RINS. Additional information on camelina and its attribu tes is below.

 How does camelina fit the definition of an annual cover crop?

 What is the general geographic and agronomic fit for camelina production?

 What nutrients are needed for camelina production?

 What are the economics of camelina farming compared to wheat farming and what is the probability that camelina will take away wheat production?

 What is the energy required for camelina production?

 Are modifications to existing processing technologies necessary to process camelina?

 Is camelina food? **How does c amelina fit the definition of an annual cover crop?**  Camelina is an advanced generation biofuel feedstock targeted as a cover crop complement to dryland food production acres, especially cereals in the Great Plains. As per the definition above, camelina is:

 An annual crop;

 Is planted in rotation with dryland wheat
– the primary crop; Protects the soil from erosion as these geographic areas are prone to wind and rain erosion;

and,

 Improves the soil between periods as it provides organic matter to improve so il tilth.
In addition, camelina has the following additional attributes:

 Camelina is capable of being planted very early in the season when soil temperatures are much cooler than other potential crops. As a result, the camelina germinates rapidly and sha des/chokes out the subsequent weed germination.

 Because it is a 90
- 110 day crop. Camelina complements spring wheat practices by being planted, and harvested earlier than the spring cereal crop. Cropping and growing practices in farming communities vary wi dely based on local conditions, and the same would be true for camelina. Camelina would be planted as a cover crop to improve land that is currently left fallow, so its incorporation into a rotation would be influenced, at least partly, by on

-farm conditi ons, such as a need for pest control, desire to improve soil tilth and related needs. The below examples, however, capture a relatively ordinary wheat rotation that is common throughout the Northern Great Plains, and a standard wheat/camelina rotation.

o In a standard wheat rotation system, winter wheat is planted during the fall (Year 0), usually in October or November, and is harvested the next summer, in mid

-August of Year 1. After harvest, that strip of land is left fallow for the remainder of Year 1, un til the spring of Year 2 (as no

-till farming becomes more common, wheat stubble is left standing and treated with chemicals; hence the term “chemfallow”). Depending on farm

- specific conditions such as moisture and nutrient levels as well as the broader fa rm - wide rotation pattern, that strip of land may either be seeded with spring wheat in March/April of Year 2, or remain fallow for an entire 12

- month period, until winter wheat planting in the fall of Year 2. If spring wheat were planted, after August harv est in Year 2, that strip would then be fallow for an entire 12

- month period, August Year 2

- August Year 3. In fall of Year 3, winter wheat would be seeded and the rotation begins again.
o In a camelina/wheat rotation system, winter wheat is planted during the fall, as above, and harvested in mid

-August of Year 1. That ground would remain fallow until spring of Year 2, at which point camelina would be seeded in March or April and harvested in August. That ground would remain fallow again until spring of Year 3, at which point spring wheat would be planted. After spring wheat harvest in August of Year 3, winter wheat would be seeded in October, beginning the rotation again. Note that, based on moisture conditions in various regions of the country, a camelina/w heat rotation might require a full year of fallow land. For example, after the spring wheat harvest in AugustYear 3, a 12
- month fallow period may be needed before beginning the rotation in the fall of Year 4, with winter wheat planting.

As fallow acreag e is a primary target, camelina as a cover crop replaces at least two chemical treatments to remove weeds. **What is the general geographic and agronomic fit for camelina production?** Research conducted since 1997 regarding camelina production in the United States indicates that the best production fit for the crop is likely to be as a complement to dryland wheat production systems (McV ay and Lamb, 2008;. Wheeler and Guillen

- Portal, 2007, unpublished document; Ehrensing and Guy, 2008) There are several reasons for this conclusion: **Example A: Ordinary wheat (winter wheat/spring wheat) rotation**

**Jan Feb**  **Ma r**  **Ap ril**  **Ma y**  **June July**  **Au g**  **Sept Oct**  **Nov Dec**  Year 0 WW Planting Year 1 WW Harvest Year 2 SW Planting SW Harvest Year 3 WW Planting
**Example B: Wheat/camelina rotation**

**Jan Feb**  **Ma r**  **Ap ril**  **Ma y**  **June July**  **Au g**  **Sept Oct**  **N ov**  **Dec** Year 0 WW Planting Year 1 WW Harvest Year 2 C Planting C Harvest Year 3 SW Planting SW Harvest WW

Planting Economic. Camelina represents an additional cash crop for dryland wheat farmers who may

not have alternative choices due to marginal climatic and soil conditions in their production area, by allowing those producers to grow a dedica ted energy feedstock in lieu of idling land.

 Economic. Camelina production utilizes the same equipment necessary to plant and harvest wheat, so it is not necessary to make significant capital investment for a wheat farmer to cultivate camelina while the utilization of the equipment can be amortized against additional revenues.

 Agronomic. Crop rotation is an essential practice as it allows the pest/disease cycles to be broken, moisture to be captured, and soil tilth improved for subsequent crop production . When an alternative crop is not available, as in the targeted dryland wheat production acres for camelina, the rotation is to fallow ground. Typically in current production schemes this means that the ground remains as wheat stubble for a crop season w ith at least two herbicide applications to kill weeds that germinate. Farmer’s decisions to rotate from wheat production are based on a number of factors and include considerations around the previously mentioned agronomic as well as economic drivers. In much of the targeted production area for camelina, where the rotational decision is commonly fallow (no viable alternative crop), we expect that one of three rotation scenarios will apply: 1) wheat

-fallow

- camelina

-wheat; 2) wheat

- wheat

fallow

- camelina; 3) wheat

-wheat

- camelina

-fallow. Rotational choices such as these provide an additional crop within a 4

- season cycle, allowing for up to 40% more revenue in the period from acreage that is frequently subject to drought, high heat, and other stressors that ma ke generating revenue challenging. Other rotational minor crops currently available in the target region include lentils (Lens culinaris), flax (Linum spp.), peas (Pissum spp.), garbanzo (Cicer arietinum), and millet (Pennisettum spp.), although the total acreage devoted to these minor crops is comparatively very small, all of them together comprising no more than half a million acres of the annually available rotational acreage in dryland wheat production (estimated to be up to 20
- 22 million acres). Camel ina as a complement to dryland wheat production, and a substitute for fallow land fits generally into the highlighted areas in the map below.The acreage potential for camelina is best calculated using the following from the USDA Agricultural

proje ctions:

Wheat plantings **to be relatively stable over the next decade.** Wheat plantings are projected to rise to 61.0 million acres in 2011 because of 1) additional land becoming available from expiring CRP contracts and 2) incentives provided by high expect ed net returns (expected farm price times projected yield minus variable costs). The projected farm price is above the loan rate for the entire projection period, so loan benefits do not enter into net returns or influence plantings. Plantings are expected to fall off slightly toward the end of the decade as land is switched away from wheat to more profitable crops.

As you can see in the chart, the acreage projections during the next decade for wheat are approximately 60 million acres of production. Further USDA and wheat state cooperative extension reports through 2008 indicate that 83% of that production is under non

- irrigated, dryland conditions, an d of the resulting 50 million acres at least 45 % are estimated to follow a wheat/fallow rotation
. The remaining 55%, typically in somewhat better agronomic climate and soils, follow a continuous crop rotation (wheat/barley/wheat; wheat/lentils/wheat, etc. ) The resulting 22 million acres are therefore the prime target for camelina production and fall into the previously illustrated geography. Of those 22 million acres where there is an opportunity to grow camelina, only about a third, or 9 million acres, have the appropriate climate, soil profile, and market access to be economically desirable. A commercially viable renewable diesel facility would produce about 75 million gallons of advanced biofuel annually. Approximately 38 million bushels of camelina per year would be necessary to supportthat facility. Assuming 33 bushels/acre yield, on average, approximately 1.1 million acres of cropland

would be necessary for a single facility. However, renewable diesel facilities, like other advanced biofuel fac ilities, will likely choose to use multiple feedstocks to mitigate risk. **What nutrients are needed for camelina production?** Camelina nutrient and moisture requirements are minimal, significantly less than wheat or other oilseeds. As a result, supplemental nutrients are low, soil moisture is managed and required production costs are low. Some application of nitrogen and phosphate improves yields. We advise farmers to apply 25 pounds of nitrogen per acre and 15 pounds of phosphate per acre. **What are the eco nomics of camelina farming compared to wheat farming and what is the probability**  **that camelina will take away wheat production?** The scenario of an open market of camelina competing for acres currently targeted for cereal production is unlikely. There are three basic reasons why:

 Cereal markets (wheat, barley especially) represent the opportunity for much higher return than camelina because there is a significant open market opportunity for farmers to take advantage of market fluctuations. These market flu ctuations can mean huge upside for the farmers, as in 2007 and 2008 when wheat prices spiked to over $10/ bushel at times. Farmers have the opportunity to grow cereals with or without production contracts. Conversely, camelina markets as biofuel feedstock sources will be virtually 100% contracted acres.

 Integrated companies with access to biofuel outlets will have economic incentive to both maintain and lower commodity values to reduce economic risk and increase predictability of the resulting biofuel. As such, camelina is priced such that farmers have economic incentive to plant it instead of leaving the acres fallow, but would not replace acres scheduled for wheat rotation with camelina.

 Farmers utilize Federal crop insurance for cereal production. T o maintain their insurance base, farmers must plant annually a specified percentage of that basis. Therefore there is a strong incentive not to plant more than 25% of the cereal crop insurance base for fear of losing that important risk tool in subsequent years. Producers must plant at least 75% of their maximum potential crop acres with the primary crop
– wheat, for example
– to maintain the maximum available crop insurance. This leaves only 25% of the crop land, which would ordinarily remain fallow, for planting of camelina. There is no similar crop insurance in place for camelina. A cost comparison of the value to farmer per acre of camelina versus wheat is below. These cost comparisons are based on Sustainable Oils production contracts, local seed (agents for Sustainable Oils’ seeds) who also supply chemicals and fertilizers, farmers accounts provided to Sustainable Oils, and Chicago Board of Trade wheat quotes. As one would expect from a cover crop, the cost per acre to produce camelina is about 1/3 lower than it is to produce wheat. The average annual yield per acre has been trending up but is still less than 800 pounds. Camelina contracts are paying $0.145 per pound so the expected revenue per acre is $116, netting the farmer $13.24 per acre.Wheat contracts are currently around $5.35 per acre (with yields around 40 bushels per acre),

netting the farmer almost 5x more economic value per wheat acre than camelina acre. Camelina yields are expected to improve significantly over the next 5 years. As this happens, contractors will lower the price paid per pound in order to gain some of the economic value of creating higher yielding germplasm, down to about $0.125 per pound. Even if camelina yields would increase 50%, to 1200 pounds per acre, the n et value to farmers would still be less ($47.24 per acre

– not including extra costs associated with harvesting and hauling the extra materials) than what is expected for wheat acreage. Finally, wheat prices on the open market are relatively volatile. As mentioned above, in 2007 and 2008 average wheat prices in Montana for all types of wheat were $7.14/ bu and $6.55/ bu respectively (USDA), although prices spiked much higher than that in different months. In these exceptional years, wheat farmers are capabl e of more than doubling their net profit.



## Camelina Total Production Cost **Wheat Inputs**  **Rates Cost**  **Cost Herbicides**  **Glysophate (Fall) 16 oz. ( $0.39/oz)**  **$7.00 $14.00**  **Glysophate (Spring) 16 oz. ( $0.39/oz)**  **$7.00**

**Post 12 oz ( $0.67/oz)**  **$8.00 Seed**  **Camelina seed 4 pds./acre**  **$5.76 $9.00**  **Fertilizer Nitrogen Fertilizer**  **25 pds ( $1/pd) $25.00**  **$90.00 Phosphate Fertilizer**  **15 pds ( $1/pd) $15.00** 

**Sub -** **Total $67.76**  **$113.00 Logistics**  **Planting Trip $10.00**  **$1 0.00**  **Harvest& Hauling $25.00**  **$25.00 Total Cost**  **$102.76 $148.00**  **Total Revenue at avg prod/current pricing $116.00**  **$214.00 Return**  **$13.24 $66.00** Another scenario that could occur is that oil prices spike, causing contractors to pay more for camelina

while wheat prices drop. However, looking at the price of wheat and oil futures contracts during the last 5 years it is apparent that that is an unlikely scenario as wheat and oil prices are highly correlated. **Wheat Futures Versus Oil Futures 20 04**  **- 2009** 

**What is the energy required for camelina production?** Camelina production requires minimal energy inputs. As stated above, current guidance to farmers is that they apply 25 pounds per acre of nitrogen and $15 pounds per acre of phosphate. The add itional energy input is diesel for the farming equipment. Compared to other feedstocks, the amount of diesel used to plant and harvest camelina should be the same or less because of the high ratio of seed to biomass for the plant. **Are modifications to exi sting processing technologies necessary to process camelina?**  Commercial camelina production has been in place for several years. An advantage of camelina production is that the planting and harvesting equipment used for wheat can be used for camelina and that the existing crushing, extraction and processing infrastructure is suitable for camelina. No modifications to these technologies are necessary. **Is camelina food?** Camelina is most properly understood as a cover crop that complements existing food crop s, such as wheat. Growing camelina exclusively as a dedicated energy feedstock, therefore, does not create a “food vs. fuel” scenario, as camelina has no role in the food chain and only a small role in the feed chain. The US Food and Drug Administration (FDA) is responsible for approving food additives. There are different routes for this, including being accepted as GRAS
– generally recognized as safe
– or going through a premarket approval process. Camelina has not received GRAS designation from the F DA nor has any organization petitioned for it or started a full approval process. Assuming canola would be thelikely predicate crop for the route to GRAS status by the FDA, it is useful to look at its history to

determine what camelina producers would nee d to do to achieve the same status. Canola was specifically developed in Canada to provide Canada with a cold tolerant, healthy oilseed crop. Rapeseed was the initial crop that was bred to get rid of the anti

- nutritional components of erucic acid and glu cosinolates. The allowable levels of those two components in canola are less than 2% erucic acid and fewer than 30 micromoles/ gram glucosinolate. (Camelina varieties typically contain over 2% and as much as 4% erucic acid while glucosinolate levels vary but can be as high as 36 micromoles/gram.) Canola, with the support of the Canadian government and strong trade groups dedicated to its development, received GRAS status after submission of a lengthy petition which detailed years of animal and human stu dies. It is highly unlikely that camelina will achieve the same status because (a) there is not a market need for another cold

-tolerant oilseed as canola is a superior crop with attractive health benefits (b) camelina has an inferior profile compared to c anola because of its erucic acid and glucosinolate profile (c) the trade groups developing camelina are focused on it as a energy crop, and (d) camelina oil has an off

- odor and taste and therefore is not a desirable food. Camelina is not poisonous, howeve r, and on

- line searches may reveal examples of camelina oil being used in recipes, as one would also find recipes for pennycress, dandelions and other plants that are not regarded as “food.” While camelina is not considered food for direct human consumptio n, camelina has the potential to add to the food supply because its meal can be used in some animal feeds. Camelina meal accounts for ~62% of the seed (after the oil has been extracted) and while the FDA has approved its use in beef cattle and broiler hen s it is only as a small percentage of the total ration (10% and 2% respectively). **Summary** Camelina has tremendous potential as a near

-term feedstock that can contribute to reducing our nation’s carbon footprint and increase our domestic energy supply. Man y of the advantages of camelina are derived through its use as an annual cover crop, grown by farmers in rotation with dryland cereal acres. Camelina provides some economic benefit for the farmer, protects the soil, and helps reduce the pest cycle. We re spectfully request that the EPA confirm that camelina is included in the existing definition of “annual cover crop” under 40 CFR Part 80, Regulation of Fuels and Fuel Additives.
For further information, please contact Scott Johnson at scott.johnson@susoils.com or Margaret McCormick at mmccormick@targetedgrowth.com.