Why Farmers Should Care About the Quality of Their Carbon Credits

07. September, 2021

The demand for agricultural carbon credits is growing. Hundreds of Fortune 500 businesses are making commitments to purchase them in order to further their environmental impact goals. On the one hand, these companies are working to reduce their own carbon emissions. On the other, they’re purchasing credits to offset the emissions they can’t eliminate. But these buyers aren’t just looking for any carbon credit, they want quality—they want to know the credits they’re purchasing are leading to real environmental impact. 

On June 23, 2021, a group of those buyers, carbon market leaders, and farmers came together for Indigo’s Carbon Farming Connection webinar. They gave insights into:

  • What makes a quality agricultural carbon credit and why farmers and companies want them 
  • Who determines whether it’s a high- or low-quality agricultural carbon credit 
  • Why there is increasing demand for high-quality agricultural carbon credits

Who is the Quality Control Department?

If there’s anyone who knows what a high-quality carbon credit is, it’s Craig Ebert, the President of the Climate Action Reserve (CAR). The Climate Action Reserve is a carbon offset registry for North America. “Our job is to establish the guidance and the rules of the game, so to speak, that ultimately determine a high-quality credit,” Ebert said. 

CAR works with companies, such as Indigo, that run carbon projects which bring together and support growers in earning carbon credits and buyers to purchase them. CAR then verifies and issues the credits to project leaders (such as Indigo). From there, Indigo works with the farmers in their carbon program to pay them for the practice changes they make that draw down and trap more carbon in their soil.

Tim Faveri is with Maple Leaf Foods, one of Canada’s largest food companies. He says carbon credits that are verified by organizations like CAR are the only ones they want. “It must be verified by one of those many verifiers and certifiers. We will not source any offset that is not,” he said. This is because the buyers want to make sure they’re actually reaching their emissions reductions and offset goals. “We’re making claims associated with our carbon neutral status, so it’s very, very important that we have credible, certified offsets,” Faveri added. It’s why Ebert and the Climate Action Reserve are so rigorous in their process. “We want to make sure that when there’s a buyer out there that buys one ton of carbon credits from the Climate Action Reserve registry, they understand that represents one ton of carbon benefiting the global climate,” Ebert said. 

What Makes a Quality Carbon Credit?

The criteria for issuing a carbon credit takes into account several factors. Here are the five most important:

  1. Realness - it completely measures greenhouse gas emission changes
  2. Additionality - the climate impact would not have happened without the purchase of the credit
  3. Permanence - the credit upholds its greenhouse gas reduction over time
  4. Verification - a third-party ensures credits were correctly quantified 
  5. Registry Approved - climate experts vet the credits and adopt the project that produces them

(For more on what makes a quality credit, read here)

Among the criteria listed above, one of the most important is additionality, meaning that the credit has to represent something above and beyond business as usual for the farmer. A farmer can’t get a carbon credit based on existing farming practices. Farmers asked the panel what that means for farmers already engaged in regenerative farming practices, such as cover crops and no-till. Can they still participate in and benefit from the carbon marketplace? Max DuBuisson, Indigo’s Senior Director of Carbon Policy, assured them they can. “There’s always something additional you can do. You’re planting one-species cover crop, maybe start doing multi-species cover crop,” he said. Those additional practices, or taking current practices to the next level, are what will pay the farmers. “This is a game changer, to recognize those changing practices that will definitely lead to additional carbon build up in the soils, i.e. removal from the atmosphere. That’s going to buy humanity time to deal with the climate crisis,” said Ebert.

Quality Needed for All

But farmers want to know that the demand for quality isn’t one-sided. During the webinar, farmers asked whether the quality of credits is equally important for farmers as it is for buyers. Darrin Unruh, an Indigo Ag Soil Health Specialist and Kansas farmer believes quality is actually more important for farmers. “I believe this carbon market is going to do nothing but go up. I want to be associated with something that has the highest quality and most value as possible. So, whatever I’m doing on my farm, I want to get as much out of it as I can,” he said.

Jodi Manning is the Director of Marketing and Partnerships at Cool Effect, a nonprofit that sources carbon credits for some of the largest buyers in the world. She agrees with Unruh about the market going up. “In the last six years, we’ve seen a tremendous increase in businesses taking action to decarbonize, but also including carbon credits as part of their sustainability journey. There’s been an even accelerated increase in the last two years,” she said. 

All of the panelists agree that carbon credits alone won't solve the climate crisis. “Carbon credits are a tool, they’re not a solution. But we need a lot of solutions right now,” said Manning. They also agree that without carbon credits, the journey to addressing the climate crisis will take far too long. “The biggest risk right now is the natural experiment we’re all having with our global climate right now and it’s a risk we cannot tolerate,” said Ebert.