Sustainability and climate change are hot topics today. Along with the refocus to climate, the carbon credit marketplace is heating up but clear information on the key players and their relative benefits is sparse and convoluted. As many of you have likely learned – Google searches won’t get you very far here.
I’ve studied carbon markets as a Masters student and Farmer Engagement Intern at FarmRaise, I’ve tracked these players closely over the last several months. In this blog post, I hope to share what I’ve observed and shed light on the five most-watched carbon credit companies.
Are you a fund, agribusiness, or carbon credit company? If yes, we want to partner with you to get your funding opportunities in front of regenerative farmers!
First off, what even is carbon credit trading? In a few words, when a person - or more likely a business - wants to achieve net-zero greenhouse gas emissions (GHG emissions), they can buy carbon credits that equal the amount of carbon they’ve emitted or estimate they will emit into the environment. If the buyer of carbon credits buys too many credits, meaning they bought more carbon offsets than they wind up emitting into the environment, then they can sell them to someone else.
Nowadays, U.S. farmers can get in on the trend of people, governments and industries trying to address their carbon footprints. By implementing regenerative agriculture practices, growers can practice carbon sequestration through carbon farming - trapping carbon dioxide in the soil. Then they can sell carbon credits for a set price based on how much carbon they’ve trapped in the soil compared to current market prices.
Carbon sequestration in agriculture occurs when plants photosynthesize, turning carbon dioxide into oxygen. Carbon sequestration improves both soil health and water quality. Here are three example methods of sequestration:
You may be eligible for USDA funding to plant cover crops, sow certain companion crops and practice low or no-till farming on your land through the Environmental Quality Incentives Program (EQIP).
Did you know that FarmRaise helps farmers easily apply for EQIP?
You can be more competitive for funding opportunities by tracking your farm expenses. Sign up for FarmRaise Tracks to get started!
As the most recognized name in the farming community, Indigo Ag has an impressive list of well-known corporate buyers like The North Face, Blue Bottle Coffee, and JP Morgan Chase. While Indigo is touted as a leader in the emerging industry, it may not be the best option for all.
Nori is a blockchain-enabled startup company whose sole mission is to offer climate solutions by creating a leading carbon marketplace. Unique to the carbon-removal industry, they are powered by cryptocurrency. Through this pioneering approach, they hope to create efficient and transparent carbon removal transactions.
Companies can purchase NORI tokens (whose price depends on the market price of a carbon removal credit at time of purchase). Once it has a NORI token, the company can exchange it for an NRT or Nori Removal Token.
Farmers create NRTs when they sequester one ton of carbon dioxide (CO2). That NRT translates into a NORI token which is priced at market value and can be sold whenever you feel is right. The exchange rate between a NORI token and an NRT will always be 1:1.
Companies like this model because they can buy tons of carbon in NORI tokens and bank them, then eventually exchange the NORI tokens for NRTs which count towards carbon removal. Farmers like this model because they get the power to sell their banked carbon when it’s most beneficial to them. (Hello, invisible hand of the market.)
Truterra is a subsidiary of Land O’Lakes – the world’s largest farmer owned cooperative.* The current state of the Truterra Carbon Program is only available to farmers with data from 2016-2020, so don’t sign up if you don’t have agricultural carbon data from those years.
Bayer’s Carbon Initiative is one of the newest ones on this list, so it’s still in its beginning phases. That said, we do know that they, like many of the other carbon credit companies on this list, will only pay farmers for adopting new cover crops or no-till and strip till practices.
Nutrien’s core businesses are creating seeds, fertilizers, herbicides and software to optimize farm performance. Since they announced their involvement in addressing carbon emissions November 2020, I was intrigued - and so were many others. Nutrien Ag started its two year pilot period in 2021 and exceeded their anticipated farmer participation. Below is what I’ve been able to gather so far.
I’ve done a deep dive into a few carbon credit companies, but there are many more that are focusing on GHG emission mitigation as well.
While these programs vary slightly in stage of development and market mechanisms, they generally seek farmers who:
Bottom line, if you think carbon markets are right for your farm, you may find that both private, state and federal funding options can help you try out carbon sequestering tactics. FarmRaise specializes in matching farmers with farm funding opportunities and we’ll even help you apply to some of them like EQIP.
At FarmRaise, we are monitoring the development of these marketplaces closely so that our farmers receive the most up-to-date information on their development. As each of these marketplaces and government regulation develop, we will look for ways to plug our farmers into these markets quickly and efficiently. To stay in the loop about carbon markets and other farm prosperity news and tips, signup for our free newsletter through our free plan!
This article is written by Sarah T. Sarah has earned her Master’s Degree in Agronomy and Agriculture Technology from Stanford University. She supports American producers by dedicating herself to finding solutions that lead to more sustainable, healthier and tastier food systems.
*Truterra is a FarmRaise partner - partnering to help farmers in Iowa adopt regenerative farming practices.
EQIP grants an average of $30,000 to producers to try out conservation practices on the farm or ranch. Read these FarmRaise tips so you can be a competitive applicant for the EQIP cost-share program.
The emerging field of “agrivoltaics” is a new type of solar energy system that promotes both crop cultivation and energy production. See how to get solar panel funding for your operation.