6 soil carbon schemes for farmers to consider

Selling excess stored carbon or carbon associated with emission reductions as carbon credits could be a lucrative new income stream for farmers. In theory, at least.

It will help other firms offset their unavoidable carbon emissions after that firm has taken all steps to reduce its emissions and achieve net-zero targets.

But the practice is fraught with controversy.

See also: Farm soil carbon: Is the focus on sequestration right?

Concerns, especially with soil carbon schemes, include whether selling carbon, particularly upfront, will harm a farmer’s own decarbonisation efforts, and around whether schemes measurement, reporting and verification (MRV) practices are robust and accurate.

How do schemes ensure such sold carbon is additional and stored permanently? And do purchases of these credits, as the recent report from the Committee on Climate Change asked, slow down emissions reductions by businesses, which clearly needs to be the priority?

A proposed set of minimum requirements for soil carbon codes (see “Why soil carbon codes need accreditation”) should help bring some regulation to these voluntary markets, but any farmer should read the terms and conditions closely before entering a contract.

Recently, there are at least six soil carbon schemes active in the UK for farmers to consider. There are also others researching opportunities, such as Sward, or developing versions, including Regenerate Outcomes and various input manufacturers.

Bayer’s programme, for example, will connect growers with food chain companies downstream that are committed to greenhouse gas emissions reductions and want to reward farmers for climate-smart practices in a value-chain intervention.

There’s Yara’s Agoro carbon alliance, too, and Corteva and BASF, have similar types of programmes globally – if not yet in the UK – while Arla has recently announced a plan to reward milk producers for meeting sustainability targets.

Soil Capital carbon

Aimed primarily at arable farmers, Soil Capital’s scheme paid out just under €1m (£869,000) to its first 100 farmers earlier this summer for verified carbon improvements. The buyers of the certificates are mostly within the supply chain.

Entrants enrol the entire arable operation, inputting operation and management data post-harvest every cropping year on a crop and field level into the Soil Capital platform, which calculates carbon footprints annually using the Cool Farm Tool.

There are no compulsory practices, but advice is available through the platform. Certificates are issued for both carbon removals and emissions reductions. Farmers do not need to be net zero to participate.

After verification, farmers are paid on an annual basis.

There are two pricing plans – Standard, where farmers pay £980/year and receive 70% of the final certificate sales value, and Basic, where farmers pay nothing up front, but Soil Capital takes a larger share of the final sales price.

In this plan, farmers get 70% of the Standard plan sales price.

Terms and conditions cover a five-year certificate generation, with a 10-year retention period verified by satellite monitoring of maintenance of practices to satisfy permanence requirements.

A 20% buffer pool of certificates is retained each year to cover if carbon is released from the soil due to more intensive cultivation. These are released and sold after 10 years if losses are prevented.

Soil Capital has a minimum floor price for certificates currently of £23/t carbon dioxide equivalent (CO2e).

Soil Heroes

Dutch firm Soil Heroes’ programme has a strong focus on improving soil health, with additional payments for biodiversity, water holding capacity and, from next year, nutrient density.

There are two ways it works with farmers. One route is to incentivise farmers to implement regenerative practices on a hectare level.

At a bare minimum, the farm must implement shallow or zero-till, and three to four other regenerative practices for the “Regen AG entry” level.

This pays £260/ha to farmers. Greater implementation of regenerative practices in “Advanced Regen Ag” and “Regenerative Organic” levels pay £280/ha and £320/ha respectively.

Payments are made 50% up front and 50% after the cropping year and evidence is submitted. Partnerships are for five years with a yearly evaluation and a social, rather than legal, contract. The scheme is mostly targeted at companies within the supply or value chain.

The second route is a payment model for outcomes. Evidence of farm practices for each year are also uploaded to Soil Heroes, and the Rothamsted “RothC” model used to predict carbon sequestration on an annual basis, drawing on information from the soil analysis and practices.

Payments are made annually, with Soil Heroes taking 30% commission. In the Netherlands, latest payments were €50/t CO2e (£43/t CO2e).

In both routes, a soil analysis “timestamp-zero” is taken at the beginning of the contract at a €600 (£521) cost to the farmer, which provides actionable insights, the firm says. This is repeated after three to five years.

The firm says additionality is through the incentivisation of regenerative practices that wouldn’t have ordinarily occurred, with the additional impact measured by the soil tests.

There are no permanence clauses in place; agreements are based on one-year growing cycles to give farmers flexibility.

However, it believes farmers who adopt regenerative practices are unlikely to revert to previous practices once they begin restoring soil health and see the benefits in better margins, more resilient and healthy crops.

Currently there is not any independent third-party validation, but it is working towards verification based on international verification company’s Verra standard.

Trinity Natural Capital Markets

Trinity Natural Capital Markets (NCM) scheme uses its in-house carbon and natural capital assessment tool, Sandy, to calculate the potential for generating what it says are high-quality carbon certificates, which can also be associated with biodiversity and water protection benefits.

It is open to all types of farms and follows 2019 Intergovernmental Panel on Climate Change (IPCC) tier 2 and 3 models.

Sandy, which costs from £588/year, calculates the baseline from current farm practices and historical management records.

You can then use the tool to help develop your own plan or use its recommendations for reducing emissions or sequestering additional carbon. It will show the cost, efficiency and projected yield of the chosen plan, as well as the likely carbon credit potential.

These plans are not prescriptive, with more than a handful of practices offered. While the firm recommends practices should be followed once a contract is signed, other mitigation practices are also allowed.

Trinity NCM offers a wide range of contracts once these initial steps are completed, including forward contracts for future benefits from verified mitigation practices and spot contracts for carbon emissions reductions generated in a harvest year.

The firm has invested considerably in making sure these contracts protect farmers and mitigate the risk of future disputes.

There is also an early action contract, backdated to reward farmers who adopted sustainable practices in the past five years and to avoid perverse incentives, such as benefiting from ploughing up previously long-term no-till land to gain extra carbon credits in future.

Carbon credits are calculated on an annual basis, verified by third-party auditors, and then can be sold on an open NCM marketplace by setting a minimum price, or to corporate buyers who usually set the price and criteria. It’s also possible to sell credits to businesses you already deal with.

Trinity NCM takes 5% commission – a low percentage it says, due to removing unnecessary brokers, modelling companies and project developers involved in other schemes.

There is a 20% buffer pool to protect against carbon reversal and Trinity offers up to 30 years durability based on a rolling 10-year retention period.

Financial additionality is checked by running a breakeven assessment based on the estimated costs to implement mitigation practices, including income foregone, and the revenue associated with the sale of carbon credits and potential savings due to the mitigation practices.

Credits are only generated if you’d be making a loss without selling them.

Agreena

Danish company Agreena’s Carbon programme works with farmers on a field level, currently.

It’s aimed mostly at arable farmers, with a list of eligible crops that includes most combinable crops and non-permanent grazing.

Farmers enter past practices on Agreena’s platform to create a baseline, and a plan for the following year each year.

There is full flexibility on how the land is farmed; the more regenerative practices adopted, the more the farmer can earn.

The programme calculates estimated emissions reductions and carbon removals using the various models, including the Cool Farm Tool.

Agreena uses satellite imagery and remote sensing from recently acquired Hummingbird Technologies to monitor and verify transition practices, coupled with a soil sampling protocol. There is annual third-party verification prior to the issuing of certificates.

A 20% non-permanence buffer acts as a reserve pool in the event of carbon reversals, while there is also a 15% issuance fee to cover costs of data capture, quantification and certification.

The issued certificates can then be kept, traded privately, or sold via Agreena’s services in exchange for a 15% brokerage fee on the earnings when the certificates are sold.

The non-permanence buffer certificates are collated from all users to reimburse of breaches of contract. Agreena says these will never be used as revenue for either Agreena or paid back to individual farmers.

The firm has moved to one rolling 10-year contract, which farmers can opt out of at any time.

But after the certificate issuance fees have been subtracted, a further 10% of the certificates are held back in the first three years.

These are then paid in years five to 10, with all the eligible issued certificates being paid out by year-10 end.

This, the firm suggests, incentivises the farmer to keep following the practices they have committed to.

Buyers of the certificates must have a communicated emissions reduction target, a plan for how they are reducing emissions and a net-zero target.

Green Farm Collective

Led by six well-known regenerative farmers, the Green Farm Collective is using the Trinity platform to sell carbon and other natural capital benefits.

They aim to find their own buyers, potentially outside of the current options offered by Trinity NCM.

They hope these will buy carbon and natural capital certificates for a premium from farmers who are striving to achieve net zero, improve farmland biodiversity and help fund environmentally beneficial work on their farms.

To join the Green Farm Collective scheme, prospective farmers must be using Trinity AgTech’s Sandy to calculate carbon use and biodiversity areas.

They must be farming in a way that enhances nature and the environment, have a minimum of 5% of farmed area for nature, be using minimal soil disturbance nine out of 10 years for crop establishment, and following the five key principles of regenerative agriculture.

The collective will be selling carbon certificates created from both emissions reductions and carbon removals.

Future Foods

Yorkshire-based Future Food Solutions is using its experience from almost a decade of incentivising arable farmers through food businesses – including Heineken, Coca-Cola and William Jackson Food Group – to adopt regenerative practices, such as growing cover crops and switching to zero-till.

Each cover or catch crop within the project is measured for both above-ground biomass and impact on soils through analysis, with the extensive database now the basis of its calculation for prospective carbon sequestration for its Sustainable Futures Carbon Bank programme.

Aimed primarily at arable farmers, the programme only pays for carbon removals – for example, carbon being sequestered into soils – not for emissions reductions.

The carbon credits are measurement-based on a field level – baseline soil organic carbon levels are set via soil analyses taken by following a thorough sampling protocol at the start and then after five and 10 years.

Growers entering the programme sign up to a flexible, discretionary land management agreement for 10 years.

Which gives advice on what to change to increase carbon sequestration and maintain or increase production.

Certificates are independently verified, and then issued by US company BCarbon.

Annual interim payments are made based on a conservative estimate of the carbon sequestered using the results of the nine years of cover crop trials and the Cool Farm Tool modelling of production emissions.

About 50% of carbon drawdown is retained as a buffer to cover seasonality, unforeseen rotation changes and lower than expected sequestration.

After five and 10 years, a repeat soil test is used to “true-up” soil carbon changes, which can potentially release extra payments from the buffer account.

Carbon certificates are sold to both offset buyers – the first were bought by data company RELX this summer – and, in future, to companies in the supply chain.

Farmers receive 70% of the certificate selling price, with the other 30% covering the cost of soil testing, certification fees and the remote sensing required for validation, as well as Future Food Solutions commission.

There’s no upfront cost to entering the programme.