Different types of carbon offsets in farming you need to know

The rising threat of climate change presents daunting challenges as well as growth opportunities for a sustainable transition. Farmers participating to address greenhouse gas emissions stand to benefit from increasing financing efforts through various types of carbon offsets in agriculture.

On top of financial incentives, pursuing carbon offset projects in farming nourishes and restores farmland conditions that impact yield, productivity, and soil health. This article covers some of the most important impacts agricultural carbon offsets can have on a farm. But first, it’s important to know some fundamental concepts and the various types of carbon offsets to establish the basics.

What are carbon offsets and how do they work?

Carbon offsetting within the farming industry is driven by a deep sense to secure agriculture’s survival from the damaging effects of climate change as well as making sure that the problem isn’t getting worse through excess greenhouse gas emissions and continued soil degradation.

By definition, carbon offset means:

Carbon offset: are various activities, which generate carbon credits for trading in carbon markets, to counteract increasing greenhouse gas emissions globally. Carbon offsets require the implementation of methods that remove or reduce emissions.

Offset projects can further be classified into carbon avoidance or removal. Generating carbon credits may require that a project focuses on carbon avoidance or removals only, or a combination of both, depending on the carbon program. But in a nutshell, these kinds of offsets are can be defined as:

• Carbon avoidance: reducing the amount of emissions that enter the atmosphere by avoiding or limiting activities that would have otherwise released greenhouse gasses. An example of this in farming is limiting the use of heavy machinery which run on fossil fuels.

• Carbon removal: using technology or nature-based solutions to draw existing emissions in the atmosphere into storage. To take out large quantities of emissions, Carbon Capture and Storage or Direct Air Capture technologies are utilized in conjunction with other solutions based on natural systems such as carbon farming and reforestation projects which store carbon in soils or trees.

Different types of carbon offset projects have their sets of pros and cons. Direct Air Capture technology, for example, can be very costly and energy-intensive. Compared with agriculture-based carbon sequestration, where the benefits also include soil and biodiversity improvements with income support for farmers and potential cost reductions.

Types of carbon offsets from agriculture

Carbon credits for farmers are positioned to enhance the transition to sustainable industries possible with income by participating in markets to trade carbon credits.

Farmers who opt-in carbon offset programs develop new income streams by selling carbon offset credits to other businesses or organizations. The growing requirement for greener industries means that all businesses are under pressure to keep their gas emissions as low as possible. And the demand for carbon farming credits is growing stronger, with market prices currently hovering between €30-80 per metric ton of sequestered CO2 equivalent.

To achieve this, the goal is to have measured changes in carbon levels verified, resulting in certified carbon credits through different types of carbon offsets. There are various ways to do this depending on the type of land being managed.

In the EU, there are 5 carbon farming options:

• Managing peatlands

• Agroforestry

• Maintain and enhance soil organic carbon on mineral soils

• Livestock and manure management

• Nutrient management on cropland and grasslands

Generating carbon farming offsets from croplands

Focusing on carbon farming credits for crop producers, there are 2 categories where farm management activities for carbon farming fall on:

• Soil carbon sequestration: A carbon removal strategy that utilizes farming methods that focus on leveraging the soil to capture and store carbon. For agricultural lands, activities that focus on sequestering carbon in the soil are rooted in regenerative farming practices that increase organic material that boost soil structure, water retention, nutrient management, and biodiversity.

• Reduced or Avoided GHG Emissions: The implementation of agricultural practices that decrease or prevent greenhouse gas emissions in farming by changing farming practices that generate emissions to ones that cut back farm emissions.

Farm management activities must yield changes from baseline measurements to determine the sequestration and reduction levels the farm was able to create. A practice plan established at the beginning of the carbon program engagement will help keep track of farm activities that produce results.

These 10 carbon farming practices are known to help manage soil carbon sequestration, reduce emissions, or accomplish both in croplands.

• Reduced fertilizer application

• Reduced tillage

• Improved residue management

• Eliminating bare fallows

• Increased production of cover crops

• Sowing companion crops

• Agroforestry

• Improved task efficiency

• Improved water management

• Fuel-use efficiency

→ Read this guide to get an in-depth overview of the 10 recommended carbon farming practices

Do carbon offsets work and are they effective?

In 2019, the US Environmental Protection Agency estimated that US croplands in the US has the potential to sequester carbon in the soil at 15 million metric tons of CO2 equivalent. Key studies in other parts of the world produce promising figures just on agricultural land carbon sequestration.

Known carbon farming practices have also garnered great potential from various research studies. The research found that cover crops have the potential to sequester soil carbon globally at a rate of 0.22 PgC yr-1 in the top 30 cm. The rate increases to 1.4 PgC annually when cover cropping is utilized in conjunction with no-tillage farming. Similarly, a rice farm that converted to a no-tillage system increased soil organic carbon by 23% over a 20-year period.

There is great evidence both from research and firsthand farmer experience that regenerative agriculture impacts farm soils positively. But there are still limiting factors that must be addressed to manage risks to both the environment and farmers.

Tackling growth challenges

The carbon offset markets are experiencing significant development. It’s a powerful tool to mobilize climate commitments and as such, is experiencing growing pains on its road to becoming more widespread.

Measurement and verification

There are ongoing efforts to have a consistent measurement standard for carbon sequestration for soil management. In the European Union, the framework is slated for release in 2022. While there are many measurement standards both in research applications and private organizations such as Verra, a standard measurement framework will make carbon accounting and reporting much more robust and accurate. This benefits the farmers as well as businesses who are looking for true high-quality carbon credits.

Additionality and prevention of leakage

Because the goal is to remove carbon from the atmosphere, carbon offset credits must include assurances on how reliable the storage of carbon in the soil is. Similarly, there should also be safeguards in place to determine if the carbon offset project creates additional carbon removals. These are important qualities that must be accounted for when a farmer engages in a carbon program with genuine commitments to climate action and generating real credits.

Financing

Changes in farming practices require planning and management considerations. They may require new costs to implement on top of learning new skills. Payments through carbon credits reward farmers for successful soil carbon sequestration after a certain period has passed. Pre-payments issued at the onset of carbon farming projects benefit farmers’ immediate financial needs that also serve to ease the transition to regenerative farming.

What is the right way to get started in carbon sequestration?

Carbon offsets in agriculture create opportunities to increase soil carbon stocks in agricultural soils that deliver financial incentives to farmers. Transitioning to carbon farming practices bolsters global commitment to carbon reductions while strengthening the longevity of farms that are under direct threats from climate change and extreme weather. Frameworks to accurately measure and verify credits arm the farmer with better tools to guarantee that authentic credits are made. While better access to initial financing can help accelerate the transition to sustainable farming that puts the needs of the farmers at its core.

Sources

• Abdalla, M., Osborne, B., Lanigan, G., Forristal, D., Williams, M., Smith, P. and Jones, M.B. (2013), Conservation tillage systems: a review of its consequences for greenhouse gas emissions. Soil Use Manage, 29: 199-209. https://doi.org/10.1111/sum.12030. https://bsssjournals.onlinelibrary.wiley.com/doi/abs/10.1111/sum.12030

• Dou, F., Wright, A.L. & Hons, F.M. 2008. Dissolved and soil organic carbon after long-term conventional and no-tillage sorghum cropping. Communications in Soil Science & Plant Analysis, 39, 667–679. https://doi.org/10.1080/00103620701879117

• 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

• European Commission, Directorate-General for Climate Action, Radley, G., Keenleyside, C., Frelih-Larsen, A., et al., Setting up and implementing result-based carbon farming mechanisms in the EU : technical guidance handbook, Publications Office, 2021, https://data.europa.eu/doi/10.2834/056153

• Congressional Research Service. (2021). Agriculture and Forestry Offsets in Carbon Markets: Background and Selected Issues. https://www.everycrsreport.com/files/2021-11-03_R46956_4842811ae10e4c19730c05738b68ece9cd69f768.pdf