Carbon Farming Connection Q&A

Carbon can be thought of like a crop, similar to the other crops you produce on your farm. A carbon credit (also known as a carbon offset) represents either greenhouse gases (GHG) removed from the atmosphere or greenhouse gas emissions reduced. In the case of farming, carbon credits are created based on carbon dioxide you draw down into your soil and GHG emissions you reduce above the soil (for example, through less nitrogen usage) – beyond what was already happening on your farm. 

Carbon credits operate like crops in some ways. If you produce corn to sell, the buyer will want to know the quantity and quality. Grain handlers will want to facilitate that trade by meeting those information needs. So they weigh your corn and test it for quality so the buyer can have confidence in your product. 

Similarly, carbon credits measure and track the quantity of additional carbon sequestered in the soil and GHG emissions reduced. Our carbon program supports and guides you in carbon farming, and generates carbon credits through modeling, soil samples, analysis, and handling of all the paperwork with the carbon registries. We also recruit and manage a global network of carbon credit buyers, including major corporations like JPMorgan Chase, Ralph Lauren Corporation, The North Face, and Barclays. 

A carbon credit must be real, additional, and permanent, as well as independently verified and uniquely claimed.

• Real: Credits are generated through complete, accurate, and thorough accounting methods.
• Additional: The credit leads to GHG reductions that would not have happened without the incentive provided by the carbon market.
• Permanent: The changes in the project's carbon stock represent a permanent change in the net soil carbon pool.
• Independently Verified: Project methods, data, and reports undergo rigorous third-party auditing prior to issuing credits.
• Uniquely Claimed: Credits are owned by one entity at a time, from creation to retirement.

Because Carbon by Indigo is the ONLY registry-approved ag carbon program at scale, carbon credit buyers are willing to pay premium prices for our premium credits. This is important for farmers who want to generate top dollar for their carbon farming.

Investors, consumers, and employees are all demanding that companies reduce their impact on the environment and climate. Hundreds of companies have set voluntary targets for themselves to reach certain levels of greenhouse gas emissions – for example, achieving “net-zero emissions” status, in which they are emitting no incremental greenhouse gases into the atmosphere from their activities. In cases where a company or organization is unable to reduce their emissions enough to achieve their target (for example, an airline which relies on carbon-based fuels), that organization would buy carbon credits to help reach their overall net emissions goal. 60% of Fortune 500 companies have already set climate action goals and more are doing so every month.

No. Just like buyers of yellow #2 corn, carbon credit buyers place a premium on credits that meet their desired requirements. 

By following a registry-approved methodology and using rigorous data collection and modeling, we produce carbon credits with the greatest certainty and accuracy of measurement. This certainty is what carbon buyers look for in the “quality” of a carbon credit – confidence that the environmental impact is real and long-lasting. 

Carbon by Indigo is the ONLY registry-approved ag carbon program and produces the highest quality carbon credits, which allows us to generate the most carbon revenue for farmers. 

Yes! There are many ways you can grow a carbon crop with Carbon by Indigo. We encourage growers to participate in the right way for their farm, and we are here to support you on that flexible journey. 

There are many ways to create carbon credits, based on what changes you want to make to your farming operation. The current categories of qualifying changes are*: 

• Adding cover crops (for the first time, extending the duration, or diversifying your mix) 
• Diversifying your crop rotation 
• Reducing or eliminating tillage
• Optimizing nitrogen

A 150-cropland acre minimum operation is required to participate, but growers can enroll fields smaller than 150 acres. However, we recommend growers test on enough of their total acreage to be confident in the learnings from their carbon farming. The program is currently only open to cropland acres, not pastureland, forestry, horticulture, orchards, or vineyards. Fields cannot be enrolled in multiple carbon programs at the same time, but your farm can still utilize many government incentive programs. Talk to your local Carbon rep to learn more. 

The current list of eligible states for Carbon by Indigo are: Alabama, Arkansas, Colorado, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, and Wisconsin.

For farmers who have already been implementing carbon farming practices, Indigo offers farmers an approximately 2-year practice change eligibility window from when a field first enters the program, including the current and previous carbon growing periods.

*Please note that these practices are subject to change, and there may be some limitations based on your geography. 

Because carbon is an intangible asset, the only way to produce a carbon credit is by documenting your operation, providing farm management records that show you’ve met the criteria for credit creation, and working with a company like Indigo that can help you identify where to begin, and perform the required soil samples, analysis, and data submission to a carbon registry in accordance with the established methodology. 

When you first start exploring Carbon by Indigo, you can create a free account at carbon.indigoag.com and gain access to a large variety of carbon farming educational resources. When it is time to share the necessary data, you will use your account to map your fields and share the field management information that is needed to calculate credits.

Carbon farming has an annual cycle, just like farming other crops. In terms of information, when you first begin you enter historical data that captures your baseline measurements. You can think of this as “planting carbon.” Then at the end of each growing season, you'll provide this same data for the crop year just completed. You can think of this as the “carbon harvest.” 

When you start, you will provide an initial 3-5 years of historical data about: 

• Planting and harvest dates 
• Fertilizer and organic amendment types, amounts, and application dates 
• Tillage types and dates 
• Cover crop types, dates, planting and termination methods  

Depending on the practice changes you make on your farm, additional data may be needed. 

Then you will provide this same data at the end of each growing season for the crop year just completed.   

We partner with an ever-growing list of ag technology providers to make it easier for you to import data like this from your existing systems into your Carbon by Indigo account. To learn more about farm records used for carbon harvest, click here.

Carbon by Indigo is committed to data use transparency and has been certified by Ag Data Transparent (ADT). You can read more about our Data Integrity Policy here. There are some cases where we work with third-party partners such as universities, auditors, and credit approvers to conduct research in the carbon farming space or generate carbon credits. Every third-party partner must provide the same level of data protection to your data that we do. 

Carbon by Indigo is the ONLY registry-approved ag carbon program, which gives carbon buyers confidence in the certainty and accuracy of the carbon measurement. Our program is approved by Climate Action Reserve and Verra, registries that set rigorous requirements for carbon credit measurement. These standards bodies create requirements for carbon markets globally and across industries (not just for ag carbon). The protocols currently in use by Indigo were developed with the registry standards process of expert collaboration over a course of years.   

Once you have provided data and farm records after the harvest, Carbon by Indigo uses an advanced model to estimate carbon sequestration and emission reductions. This model has been tested and evaluated over decades to ensure accuracy in the geographies where Indigo operates and with the practice changes listed above.  

Carbon by Indigo then submits your data and our model estimation to carbon credit verifiers who are approved by Climate Action Reserve and Verra. The verifiers review this information and confirm that Indigo accurately reflected farmer data, performed the calculations correctly and in accordance with the appropriate protocol, and followed all established operating procedures. 

This ultimately results in the issuance of carbon credits by a registry. 

Carbon farming will create value on your farm from the carbon credit revenue as well as the many other benefits that these practices create on your farm.  

Carbon credit revenue: 

• Credit pricing: Farmers enrolled in the Carbon by Indigo program receive the majority of the carbon credit payment made by credit buyers—at least 75%—and Indigo receives the remainder. At a minimum, farmers are guaranteed a payment of $15 per credit generated. We have already seen the price of our credits rise 35% in just one year and anticipate that prices will continue to climb. As carbon credit prices rise, growers enrolled in our program will be able to capture that market upside. We expect to see this price continue to grow significantly in the years ahead. In fact, some in the industry are predicting prices in the $80-100 range several years down the road. For example, see this GreenBiz article, this BCG press release and this Bloomberg article. Carbon credit payments are made on a 5-year vesting schedule in order to protect both farmers and Indigo against carbon reversals.

• Credits per acre: Our modeling and analysis suggests that growers could sequester or avoid emissions worth up to 2 credits per acre.* At the outset, we expect the average level of credit generation to be 0.3-1.0 credit per acre, which would then ramp up over the years as carbon farming enhances the soil’s ability to sequester carbon and reduce emissions. As a rough example, a farmer earning 1/3 credit per acre at a $20/credit price to buyers would earn roughly $5 per acre ($20 * 75% * 1/3). As the market matures, if credits were worth $40 and a farm were generating 1 credit per acre, the farmer would earn $30 per acre ($40 * 75% * 1).  Payments vest over 5 years to ensure soil carbon and emission levels are maintained over time – with growers receiving 50% in year 1, 20% in year 2, and 10% in each of years 3, 4 and 5. Grower payments continue to stack up over time as new carbon credits are generated each year. 

Additional benefits: 

In addition to the financial value created from the credits themselves, carbon farming creates other value for farmers on each acre. Input and management costs can decrease, while biodiversity and crop yields can increase. You can learn more about how carbon farming has enabled farmer profitability here. 

[LEGAL DISCLAIMER] *This model provides hypothetical estimates only based on generally applicable assumptions that may not be applicable to any individual operation. Payment estimates are not guaranteed. Actual payment amount will be based on outcomes, which may be affected by a large number of variables. All payments under Carbon by Indigo are: (i) on a performance basis based on the number of verified carbon credits generated on enrolled land; (ii) subject to 5-year vesting and payment schedule contingent on continued long-term maintenance of regenerative agricultural practices and soil carbon levels; and (iii) a buffer pool holdback of up to 20% of carbon credits generated to protect against reversals, which credits are not eligible for payment. Each operation should independently consider all risks and benefits of participation. Neither Indigo nor its representatives or affiliates makes any representations, warranties or guarantees as to any specific outcomes. Terms, conditions, limitations and eligibility requirements apply. 

Growers who have begun carbon farming find that the changes they make to their farm can reduce costs and improve farm profitability. For this reason, they tend to continue with the changes they’ve made, and more to support further carbon farming. Indigo’s agronomic support team can help growers develop and implement strategies to combat issues such as resistant weeds while also generating carbon credit revenue. Access to this team is free to Carbon by Indigo growers. 

Decades of farming conventionally have displaced carbon from the soil and into the atmosphere. It will likely take decades of carbon farming practices to reach average soil carbon levels of untouched soil, and there will still be additional capacity to hold and maintain carbon in the soil beyond that. Soil carbon saturation is not a concern even after decades of intensive carbon farming practices.

Growers who participate in Carbon by Indigo sign 5-year contracts that automatically renew each year.* This creates long-term value for growers in their carbon farming journey. 

With demand for carbon credits growing massively and all the additional benefits for your land and plant health, more growers are joining the program every week.  We look forward to sharing more information and supporting your journey! 

*If you cancel your contract, Indigo will not retract any payments for vested credits, but you would forfeit any unvested payments. 

There are several free resources you can access to continue learning more about carbon farming, including Indigo's Carbon College.