What makes a true high-quality carbon credit?

Farming is a business that’s strongly tied to managing natural resources. This makes harvest outcomes always tricky to forecast due to factors beyond the farmer’s control, including temperature and precipitation rates. The unpredictability is only getting worse with extreme shifts in climate patterns.

Farmers everywhere are confronted by this reality — both in the field and within the industry. At the same time, solutions are being offered left and right. A recognised opportunity is creating carbon credits for farmers.

Consider this first: not all carbon credits are created equal.

If you’re a farmer seeking to engage in carbon farming practices to create carbon credits, it’s important to generate high-quality carbon credits for your farm. But what makes a high-quality carbon credit? And how do you spot a true carbon credit program from misleading ones?

In this article, farmers can learn to recognise what attributes are key when considering a carbon program. So, keep reading.

What is a carbon credit? 

A carbon credit represents successful emission reductions through practices that enable carbon storage. This means that there is a measured reduction in greenhouse gas emissions, increasing carbon storage.

Moreover, a carbon credit is also described as follows:

• One carbon credit corresponds to one metric ton of carbon dioxide.

• Importantly, carbon credits are generated effectively when in-farm carbon levels are measured, reported, and verified.

• Verified carbon credits can be traded at a set price to a buyer looking to offset residual emissions.

In agriculture, generating true carbon credits entails that the farmer or land manager turn to carbon farming. Carbon farming comprises various agronomic techniques that facilitate the storage of carbon in the soil or trees of agricultural lands.

Within the European Union, carbon farming is recognised as a win-win for environmental benefits and a new business model for farmers.

What is a real carbon credit?

The first and third points mentioned in the previous section are standards that are generally true for any carbon credits program. The point about measuring, reporting, and verifying carbon credits (MRV) — these are areas where many carbon programs fall short.

For a carbon credit to be real, it must be:

• measured to account for quantified soil carbon (or above-ground trees biomass) changes over time

• farm data must be consistently collected and reported

• results must be verified against unique farm baselines, certified by a leading certifying third-party (to avoid bias)

Assessing a high-quality carbon credit

Participation in a carbon program means that a farm must be held against standards that legitimises the creation of a high-quality carbon credit.

There are five qualities to be considered when measuring a high-quality carbon credit.

Simply put, the authenticity of carbon credits relies on how much emission reductions are made and how well the emission reductions are measured. These reductions must be based on robust methods with rigorous monitoring, reporting and verification (MRV) of a farm’s activities.

Effective measurements must avoid over- and under-estimation of carbon levels. Recording historical data before the carbon farming project began, with regular reporting of farm information throughout the process makes the data for verification more robust and reliable.

eAgronom confirms real impacts are generated by a farm over time by setting baseline measurements and tracking changes, accordingly. Some important metrics for climate impact assessment such as measuring the change in soil carbon, conducting soil audits, and 3-year historical data of participating fields (including field rotations, crop yields, fuel use and fertiliser use) are assessed and monitored before and throughout the project lifespan.

Additionality

Additional or newly created carbon savings on top of baselines, that would otherwise not have happened without incentives, can be credited. Carbon farming projects are considered additional if:

• it is expected to generate additional benefits over the baseline measurements

• not required by law

• it incentivises farmers to make change

• it would not continue without carbon income

• it is expected to respond to carbon generated income — that is the project would alter its practices if carbon income ceases during the project lifespan

• generates significant economic benefit, including asset valuation

Together with farmers, eAgronom will develop and support farm practice plans that generate carbon benefits intending to generate carbon credits and increase farm profitability through adoption of sustainable practices.

Permanence

Carbon sequestration means lasting carbon storage —otherwise, no real emission reduction is created. Sequestered carbon must stay intact in soils or trees. And all avoided emissions are considered permanent (e.g., emissions associated with fossil fuel and fertiliser use). Otherwise, permanence reversal, or the loss of verified soil carbon sequestration must be managed to ensure all credits sold have a permanent impact.

In eAgronom, the risk of potential permanence reversals from soil organic carbon will be managed via risk assessments to determine an appropriate permanence buffer pool.

Non-Leakage

Carbon leakage occurs when a farm causes an increase in greenhouse gas emissions outside the project boundary. For example, increasing the use of organic fertiliser on one farm may reduce the application of organic fertiliser on another farm (which is outside the carbon project area). One farm gains soil carbon, while the other farm loses soil carbon. The net result is zero. (An exception to this scenario is if organic fertiliser is sourced from systems that don’t apply the organic material to soils).

eAgronom follows strict and high-quality standards where leakage is avoided, such as disallowing certain practices with high risk of leakage (e.g., organic manure must not be imported from outside a participating farm).

Verified

Verification ensures that a farm measures up to standard for carbon credits to be awarded. Usually, a third-party organisation takes the data from a farm to accurately assess whether changes have occurred in soil carbon levels overtime. The verification process determines if an emissions reduction and carbon sequestration has truly taken place as evidenced by a verification report.

For external auditing, eAgronom works together with Verra, a leading organisation for certifying carbon emissions reductions. Carbon credits from eAgronom are verified under guidelines and methodologies approved by Verra.

Additional benefits

• Robust measurement, reporting and verification (MRV) system: Measurements made in the eAgronom carbon program are reinforced by custom tech such as farm management software and satellite remote sensing for a comprehensive overview of field changes.

• Knowledge co-creation and development: Our carbon program ensures that local agronomists are on the ground helping farmers create thoughtful and balanced long term plans, while also offering holistic carbon consulting advice on the ground.

• Co-benefits: Farming methods that promote carbon storage provide potential to increase farm productivity, nutrient-use and water-use efficiency, and biodiversity benefits.

Ask these basic questions to know if credits are real or not

It’s important to note that there are several ways soil carbon levels are assessed, analysed, and certified for authentic carbon storage in different carbon programs. And given that most carbon programs for farmers measure, report, and verify credits, asking these basic questions will help set apart the right carbon program for your farm from the get-go.

• What measurements do you take to generate a carbon credit?

• When are measurements taken for carbon credits?

• What data needs to be reported for carbon credits?

• Who verifies the carbon credits?

• How do you measure soil carbon?

The basic questions above can help determine how robust a carbon program is and how strong are the processes of the crediting program to enable verifiable changes in soil carbon.

For example, measuring actual soil carbon changes as opposed to relying only on basic models to forecast changes is a strong indicator that only meaningful carbon credits are generated. Similarly, generating carbon credits that are real means creating additional changes to store more carbon in the field. Be suspicious when credits are still awarded by a crediting program even when no improvements take place on a farm.

Sources:

• WWF, EDF, Oeko-Institut. (June 2020). What makes a high-quality carbon credit? https://www.greengrowthknowledge.org/sites/default/files/downloads/resource/What_Makes_a_High-quality_Carbon_Credit.pdf

• Oldfield, E.E., A.J. Eagle, R.L Rubin, J. Rudek, J. Sanderman, D.R. Gordon. (2021). Agricultural soil carbon credits: Making sense of protocols for carbon sequestration and net greenhouse gas removals. Environmental Defense Fund, New York, New York. edf.org/sites/default/files/content/agricultural-soil-carbon-credits-protocolsynthesis.pdf

• European Commission (2021). Communication from the commission to the European parliament and the council. Sustainable Carbon Cycles. https://ec.europa.eu/clima/system/files/2021-12/com_2021_800_en_0.pdf