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.
As a masters student studying carbon markets and an 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
Overview: As the name most recognized name in the farming community, Indigo Carbon 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.
After enrolling, farmers have access to Indigo’s agronomists and support teams to help implement changes and answer questions
Overview: Nori is a blockchain-enabled company whose sole mission is to be 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 1 ton of 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 lots of 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.)
Overview: TruTerra is a subsidiary of Land O’Lakes – the world’s largest farmer owned cooperative. The current state of the program is only available to farmers with data from 2016-2020– i.e. don’t sign up if you don’t have field data from those years.
Overview: Bayer’s recently announced Carbon Initiative is still in its beginning phases with very little public detail. 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 crop or no-till/strip till practices.
Overview: Nutrien’s core businesses are creating seeds, fertilizers, herbicides, and software to optimize farm performance. So in November 2020 when they announced their involvement in the carbon marketplace, I was intrigued. Below is what I’ve been able to gather so far.
The bottom line: Does it make sense for me to pursue carbon marketplaces for my operation?
While these programs vary slightly in stage of development and market mechanisms, they generally seek farmers who:
At FarmRaise, we are monitoring the development of these marketplaces closely so that our customers receive the best, most up-to-date information on their development. As each of these marketplaces develops and government regulation / intervention develops, we will look for ways to plug our farmers into these markets quickly and efficiently.
The USDA often talks about special programs available to “historically underserved” farmers and ranchers. So, who is historically underserved and what could it mean for your operation if you fit in the characteristics?
Why do most farmers who apply for USDA cost-share not get funded? After processing hundreds of EQIP applications, we've learned why it's so hard for small farmers to access USDA farm grants.
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