FAQ

Agricultural carbon market programs provide payments and incentives to farmers for the carbon they sequester and the emissions they prevent by selling carbon credits to buyers who want to offset their carbon footprint. Some practices that enable participation include conservation tillage, cover crops, nitrogen management and others.

A carbon market is where the supply of carbon offset credits is sold to companies that use them to meet their voluntary or regulatory greenhouse gas emissions goals or requirements. Below are the different roles in the market:

In most cases, players will perform multiple roles to facilitate the generation and sale of carbon credits. The interaction of registries, verifiers, calculators/modelers, and regulators influences how a market functions, and establishes the rules by which implementers can generate and sell carbon credits to intermediaries or buyers.

For leased land, the producer typically receives credit for implementing a new practice. Some programs will require producers to show an agreement with the landowner attesting the right to market carbon on the property.

Most programs will take one of two approaches:

1. The program requires ‘additionality’; in other words, does not grandfather practices and producers are required to implement at least one new practice to enroll.
2. The program has a ‘look back’ period; in other words, previously implemented practices can be included in the program if they were new within a specified time, typically five years.

More than one method may be used for verification, depending on the program. There are four main ways practices are verified:

1. Site visit – a program representative visits the farm to perform interviews, review records and make observations.
2. Soil sampling – soil samples are collected for testing, usually performed by a program representative. Programs use different soil sampling methods and procedures, which can determine how many fields are sampled and how.
3. Satellite imagery – remote sensing technology is used to confirm practice adoption.
4. Desktop review – programs will use producer data and other records, such as photos or invoices verifying practice implementation, submitted via their digital tools or farm management systems.

Current programs pay farmers during the contract period in one of the following ways:

1. Pay per acre – These programs pay for practice implementation on a per acre basis.
2. Pay per metric ton – These programs pay farmers based on the number of carbon credits generated. The amount of soil carbon sequestered is calculated using models only or a combination of soil sampling and models.

Payment depends on the program. Some will pay a percentage in advance; some programs will pay some portion to implement practices; most programs will pay once credits have been verified and issued by the carbon registry.

The ability for the company to meet their carbon commitment does not impact the value of the carbon you have sold. This is a similar process as selling a commodity, where once the commodity/carbon is sold, you do not need to be concerned with what occurs to the commodity/carbon after the sale.

For every metric ton of carbon sequestered or emissions reduced, one carbon credit is generated. Most carbon credits are calculated by data-driven models that predict soil carbon sequestration or emissions reduction in addition to insights generated by soil sampling. Other factors like location, soil type or condition, weather data can also be incorporated into the models to better predict sequestration rates.

All programs require the involvement of some third party in order to sell the credits. In some cases that is the registry that creates the methodology to calculate the reductions and helps to market the credits. In other cases, there are organizations that manage the quantification, reporting and verification with the registry.

A reputable project developer may reduce the burden of monitoring, reporting and verification and may maximize farmer revenue.

The current programs do not recognize fuel efficiency improvements as a practice that can generate carbon credits. For more information on fuel efficiency in relation to carbon, please visit COMET Energy Tool.