The Complexities of Carbon Programs

Rhyannon Galea

Monday, February 3, 2025

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Carbon markets are becoming an increasingly vital tool in the fight against climate change, particularly within the agricultural sector. As more companies strive to achieve net-zero emissions, understanding how carbon programs work and how they can contribute to sustainability goals is essential. To shed light on this complex yet crucial subject, we spoke with Rhyannon Galea, the Value Chain Lead at eAgronom. 

With extensive experience in carbon markets and agricultural project development, Rhyannnon provides valuable insights into the complexities of carbon removal, project certification, and the future of carbon markets.

Q: For those unfamiliar with carbon credits, what are they?

A: Carbon Credits are a way of accounting for, transacting on and making claims around climate impacts. Many commercial and industrial processes release greenhouse gases (GHGs)—pollutants that contribute to global warming—resulting in what is known as a carbon footprint of a company. Carbon Projects, on the other hand, are deliberately designed to avoid or remove GHGs from the atmosphere. Since we all share the same atmosphere, we are able to “trade” the impact; so in the last decade or so, companies began to compensate for their carbon footprints by financing reductions and/or removals somewhere else. This trading has led to the development of the Voluntary Carbon Market.

Carbon Credits are measured in terms of tonnes of carbon dioxide equivalent (tCO2e) avoided or removed from the atmosphere. The “equivalent” part is a way of equating different GHGs into a common unit; for example 1t of methane is equivalent to 28 tCO2e. In agriculture projects, we are typically influencing carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) emissions on farms. 

Carbon Credits, depending on how they are generated, are typically considered either reductions (avoiding the release of GHGs) or removals (removing GHGs from the atmosphere). In the case of removals, these need to be sequestered for a long period of time (preventing re-release) to reduce the impact on Earth’s climate. 

Carbon projects take many forms. The major types include nature-based approaches like forestry and agriculture, and technical solutions like renewables and carbon capture and storage. At eAgronom, we develop agricultural carbon projects that both reduce emissions and remove carbon from the air and store it in the soil. 

Q: What criteria are used to determine the validity and credibility of the carbon credits generated by the project?

A:
Accounting for GHGs is a complex and imprecise science, however there are a set of ten, widely accepted criteria that underpin the validity and credibility of carbon credits. 

The big ones are: 

  • No double counting: since carbon credits will be sold to a buyer who wants to offset their emissions, we are actually selling the rights to the claim. Maintaining integrity in the carbon market requires that each carbon credit is accounted for and claimed only once. 

  • Permanence: the reduction or removal needs to be long-term. If a farmer’s management practices result in soil carbon sequestration, we need to ensure this isn’t re-released (known as a reversal) and stays in the soil for decades to come. 

  • Measurable: we have to be able to quantify the impact via robust measurement and quantification. We use techniques like soil sampling, farmer reporting, and field-level modeling to measure and quantify our impact. 

  • Additionality: this is a concept that ensures the project is leading to reductions or removals above and beyond business as usual; meaning that the emission reductions/removals would not have occurred anyway without the project. This can be complex to demonstrate, but in our agricultural projects it means that the practices we promote are not already common by default throughout the region, and that the additional financial incentives of carbon credits are leading to the new sustainable practices.

Of course, the market needs robust governance and oversight. In addition to above criteria, all carbon projects also have to undergo thorough and lengthy certification processes to demonstrate:

  • Effective governance

  • Transparency in reporting

  • Tracking of impacts

  • Independent third-party validation and verification 

  • Social and environmental safeguards

  • Contribution towards the net-zero transition.

Together, these ten criteria ensure the carbon credits represent genuine, long-lasting environmental benefits.

Q: What challenges do organizations face when developing carbon projects?

A: Organizations face several challenges when developing carbon projects, including complex data collection and measurement, ensuring compliance with evolving regulations, and securing funding for long-term monitoring. Obtaining third-party validation and verification can be time-consuming and costly; and ever-increasing scrutiny in the market demands ongoing quality control procedures and improvements. Additionally, market volatility and concerns about credit quality can affect the financial viability of projects. 

Overcoming these hurdles requires careful planning, expertise, and collaboration with stakeholders.

Q: Are all carbon credits created equal? What constitutes a high-quality carbon project?

A: A high-quality carbon project is one that meets the ten criteria I mentioned before, resulting in its real impact on the environment matching or exceeding what it claims to have achieved. Furthermore, it should have environmental and social integrity, avoiding indirect negative impacts and, where possible, providing co-benefits to local communities. 

There are a range of certification standards available; one of the most trusted and widely known is the Verified Carbon Standard (VCS) managed by Verra. Projects certified under the VCS are some of the most trusted in the market, which has a positive impact on the market price the credits are able to command. eAgronom’s projects are pursuing Verra certifications and will be among the first projects in the world certified under the VM0042 agricultural methodology.

That said, each project type faces unique challenges, and the science/technology involved in carbon projects is continuously improving. The certification standards do their best to remain up-to-date and conduct rigorous assessments, but for many reasons there are variations in the real and perceived quality of the carbon credits on the market. As a consequence, many buyers these days perform their own detailed due diligence on the projects they buy from, and even bespoke risk assessment services have emerged to support this. Carbon projects therefore need to continuously prove themselves to be well-designed, conservative and rigorous, demanding ongoing transparency, improvements and quality control. 

Q: Tell us more about the certification process of the carbon project. What is involved?

A:
The certification process for a carbon project involves a series of rigorous steps to ensure its credibility and reliability, which provide detailed guidelines on how to measure, report, and verify carbon reductions.

There are a number of key stages involved:

Project Design: The project developer needs to select an appropriate methodology and design a set of interventions that reduce or remove emissions within a specific project area and local context. A procedure for Measurement, Reporting and Verification (known as MRV) is developed, which might involve the development of new technological solutions and engagement of subject-matter experts. Estimates of the project’s impact are developed, project participants are recruited, and adherence to the 10 quality criteria are demonstrated. All of this gets published in a Project Design Document (PDD).

Stakeholder Engagement & Public Comment Period: No project can occur without an opportunity for impacted stakeholders to weigh in; so each project must host local stakeholder engagement workshops. A month-long public comment period is also made available for every project. 

Project Validation & Registration: An independent, third-party auditor reviews the project for its adherence to the methodology, quality criteria and program rules. Several rounds of review and corrective action requests are made. Then, the standard conducts its own review process, again with multiple rounds. Once a project passes these Validation review processes, it becomes a Registered Project. Validation and Registration happens one time per project. The time between Project Design and Registration is usually 2-3 years. 

Periodic Verification & Issuance: Every project has cyclical Monitoring Periods in which its impacts are quantified. The duration of this depends on the project, but it could be every 1-5 years. A Monitoring Report is produced to quantify the emission reductions and removals that occurred within a Monitoring Period. This report undergoes a Verification audit by an independent third-party auditor, checking that all assumptions and estimates are correct. After the audit, the certification standard reviews this, and carbon credits are Issued on a public registry. 

Credit Sales: Once issued, credits can be sold to a buyer. When they are used to make a claim (such as in a company’s sustainability report or against a corporate emissions target) they are “retired”, meaning they can no longer be traded. The revenue from selling credits can then be distributed to relevant stakeholders.

What are some of the unique challenges that developers face when trying to certify agricultural carbon projects?

Agricultural projects are unique in that they are made up of hundreds of smaller actors; each running his or her own carbon project on their own farm. Each farming context is unique and there is no one-size-fits-all intervention. Depending on the farm’s composition, a farmer’s experience and risk appetite, environmental conditions and financial situation, the interventions need to be carefully designed and supported by tailored agronomic advice. And as all farmers know; there is always inherent uncertainty in growing any crop thanks to weather and markets, which equally applies in the context of carbon farming.

Given that the income from carbon credits is designed to support the transition to regenerative practices, I would argue that the most difficult stage for any agricultural project is the long period between first farmer interventions and first project issuance. The average timeframe for project registration and issuance is 2-3 years (dictated by the lengthy and uncertain review timelines set by standards) which is, frankly, an extremely long time in a farming context—as well as for the project developer who fronts the costs of measurement and development without income. Under the methodology we follow, the very first agricultural projects are reaching issuance in 2025; so there has been a cohort of pioneering farmers who have implemented practices without seeing carbon revenue yet. (The good news is that this will get easier for future cohorts when issuance becomes an annual event.) Maintaining viability of the practices on each farm level as well as within the project developer’s business while they span this long gulf without revenue is a big challenge faced by agricultural carbon projects and their participating farmers. 

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Project is financed by the Republic of Estonia

The project was funded by the Entrepreneurs Support Program for Applied Research and Product Development (RUP).

Project name:

Software Technology and Applications Competence Centre (STACC)

Have any questions?

Project is financed by the Republic of Estonia

The project was funded by the Entrepreneurs Support Program for Applied Research and Product Development (RUP).

Project name:

Software Technology and Applications Competence Centre (STACC)

Have any questions?

Project is financed by the Republic of Estonia

The project was funded by the Entrepreneurs Support Program for Applied Research and Product Development (RUP).

Project name:

Software Technology and Applications Competence Centre (STACC)

Have any questions?

Project is financed by the Republic of Estonia

The project was funded by the Entrepreneurs Support Program for Applied Research and Product Development (RUP).

Project name:

Software Technology and Applications Competence Centre (STACC)