From selling carbon credits to receiving premiums for commodities grown in a climate-friendly way, the potential upside to farming carbon is becoming clearer.

But only one of Farmers Weekly’s Arable Insights farmer panel is currently receiving income in that form.

And there’s plenty of unease about carbon markets among the group, albeit with a recognition of the potential value.

See also: Meet Farmers Weekly’s new Arable Insights farmers for 2024

Six of the panel have undertaken some form of carbon audit, with the other two likely to calculate their farm’s footprint when time allows.

Between them they will have used the four most common carbon calculators, with about half of the audits resulting from a request by a customer.

But while that data has been a useful indicator of where farms lie on their carbon journey, it is not being used much as a primary reason to change practice on farm.

Scottish farmer David Fuller-Shapcott’s initial foray into carbon auditing used Agrecalc to calculate his carbon balance for 2018, and then again using 2021 figures.

“We saw some improvements, but not a huge amount,” he reports. “But the software had been developed since the first calculation so I’m not sure it was truly a fair comparison.”

Subsequent changes on the farm include the installation of a ground-source heat pump to dry grain, a reduction in fertiliser levels and direct drilling where possible. Those, along with the inclusion of 14km of hedges into the calculation which previously were ignored, should improve any future Agrecalc audit, he suggests.

Those changes are also producing carbon certificates and earning him income from Soil Capital’s carbon trading scheme. “I generate carbon certificates for trading purposes by change of practice compared with the baseline taken in 2022 when I joined the scheme.”

The certificates are sold to food processing or purchasing companies by Soil Capital to reduce the carbon footprint of the food produced in the supply chain, a process called insetting. David is in favour of that approach rather than offsetting an external company’s unavoidable carbon emissions.

“I don’t want to generate carbon offsets that can be used for an airline, for example, to continue to burn their way across the sky and then hear farmers being blamed for global warming,” he says.

Soil Capital uses a combination of Cool Farm Tool and Regrow for calculating carbon emissions and sequestration. He has also had to do a Cool Farm Tool assessment to access a Chivas Brothers whisky contract through Simpsons Malt.

“It’s worth the effort as there is a financial incentive to do it,” he says.

“For every tonne of wheat that goes for distilling I get around a £20/t premium over the soft wheat for distilling market.

“On top, if I do the biodiversity audit I get another £10/t. For the 348t commitment we’ve made it starts to be significant money.”

Access to that market has resulted from a long-term supplier and business relationship with Simpsons Malt, he says.

“We all collectively have a responsibility to decarbonise the system, and sticking your head in the ground isn’t the way to do it. If I can grab opportunities and get extra income then I’m happy,” he says.

A more cautious approach

Others in the group are more cautious. Heather Oldfield, who farms in Lincolnshire, would like to see a more established marketplace for carbon.

“I think with the changes in ESG [environmental, social and governance] law, meaning companies further up the supply chain reporting on their environmental credentials, it will come, but before we get involved on the farm I would like to see some kind of safety net or framework,” she says.

That could be a similar scheme to the Woodland Carbon Code, she suggests.

“It’s a voluntary scheme, you sign up, do certain things for five years and at the end the government either pays you or you are free to go to the open market, if you can get a better price.”

Without an independent framework in place, she envisages a future with a multitude of apps for different merchants and a requirement to report certain data to them to help those further up the supply chain account for the chain’s emissions.

“That was why there was a big backlash to Red Tractor’s Greener Farms Commitment because effectively we were going to give away our environmental data and potential farm income at a time when we are going to really need it.”

While her family’s farm hasn’t done a carbon audit, it is implementing practices that should reduce carbon emissions, such as direct drilling and reducing fertiliser.

“They go hand-in-hand with cost saving,” she points out.

Understanding carbon balance

Despite having no intention currently to sell carbon, Dorset farmer Dougal Hosford is planning to use the Farm Carbon Calculator to understand his carbon balance.

“I’d like to do a comparison between where we were still using 230 kg N/ha and weren’t direct drilling and growing cover crops, and now, to see the difference.”

But he is concerned that at some point in future he will need the carbon benefits from the big changes his farm has implemented over the past few years to get his own business in shape.

“What happens when we need to be carbon neutral?” he asks. “I just think there is too much risk until we have a robust [trading] system in place.”

He is finding regenerative farming, growing for Wildfarmed and environmental stewardship schemes complicated enough, without adding further protocols from selling carbon.

“It’s another commitment, another noose around the neck,” he says.

“Obviously if there is a compelling financial justification we’ll think differently, but currently everyone is wanting to trade your carbon and I wonder who’s going to make the most out of it – us or them?”

Another risk is being a tenant farmer. “I don’t know what our landlord would think and there’s nothing in our tenancy agreement – it wasn’t invented when the agreement was written – so I think we have to be careful.”

More questions than answers

In East Anglia, Jack Smith used Trinity Agtech’s Sandy platform to calculate the farm’s carbon footprint after a request from its potato packer. “We ended up with more questions than answers,” he says.

They include understanding the impact on carbon dynamics of growing potatoes and other crops on organic soils, which an ongoing Fenland Soil group project is attempting to answer.

“It would be remiss of us on one hand to try and reduce carbon losses when farming organic soils, and then be trading carbon.

“But at this stage I don’t think I have a lot of carbon to trade anyway – I think we will probably need it to offset our own business.”

Jack is keen to become a better user of carbon. “We all need to use less in our day-to-day activities, and it has helped focus the mind on what we can do to reduce carbon emissions or increase sequestration.”

Risk and profitability are never far from his mind, though. “We’re assessing various strategies, but they’re only an option if they don’t reduce margin,” he says.

“The single worst thing we can do is reduce yield, because then carbon per tonne increases.

“In the potato world, if I cut my inputs and reduce yield by 10%, I might have decreased my carbon impact by area, but I will have increased my carbon per tonne.”

Northern Irish farmer Neill Patterson says growing higher yielding crops must help sequester more carbon into soils.

“I think the calculators need to take into account yield per hectare – surely growing a 12t/ha crop of wheat is more carbon efficient than growing 8t/ha.”

The farm used Agrecalc for its carbon footprint calculation, which – after taking into account 17ha of woodland and hedgerows around most fields, and the use of organic manures from the chicken enterprise in place of bought-in fertiliser – came back “all good”, he says.

Northern Ireland

With the Department of Agriculture, Environment and Rural Affairs (Daera) in Northern Ireland putting out a tender recently for a single company to do carbon footprints, Neill is also hopeful it will be easier for the country’s farms to be accurately compared.

The information will then be used by Daera to assist farmers in reducing net greenhouse gas emissions on farm.

It is a similar plan to Scotland’s Preparing for Sustainable Farming, where, while no single provider is recommended, up to £500 can be claimed for carrying out a carbon audit, plus funding for soil sampling and analysis.

Interestingly, the data from such audits doesn’t belong to the farmer, David Fuller-Shapcott says.

“In the T&Cs it says the data belongs to the Scottish government, which I didn’t find out until after I’d put my submission in for funding and I’m not entirely happy about,” he says.

“My slightly cynical view is the government, knowing it won’t hit its net-zero targets, will want to access the carbon under our feet to claim to be net zero.”

Tom Carr is also wary of cashing in on carbon from the farming enterprises on Southwick Estate in Hampshire.

“We sit alongside a wider set of businesses in the estate’s portfolio,” he notes.

“So while we’ve had offers for the carbon we’ve sequestered in woodland, I think we need to bank that carbon to offset some of our other businesses.”

He is also concerned about accurate measurement.

“Until there is a hard-and-fast singular way of measuring carbon – an accepted standard – there’s a risk that at some point in the future the government says this is the only way to measure it, and the way you measured it is different, and suddenly your carbon isn’t as much as you thought.”

That’s part of the reason why currently only the dairy side of the farming enterprise has been carbon footprinted through a request from his milk buyer.

“We’d like to do a whole-farm footprint, and I’ve discussed it with various people in the past 18 months.

“But I’m so undecided on what we do with carbon I haven’t got around to it,” he admits. “I’m a little wary of the whole subject.”

Standard tool needed

An NFU- and government-backed standard tool is also on the wish list of Staffordshire farmer Rob Atkin.

“It would be good to have one where everybody agreed about what info to put in, what it calculates, and how,” he says.

With 250 head of Belgian Blue beef cattle as well as arable, Rob did a rough exercise in 2021 using approximate figures, to see where the farm stood.

Farm Carbon Toolkit’s calculator suggested emissions of about 1,700t CO2e/year, offset by about 150t of sequestration.

“The biggest contributor were the cattle, as we are a 24-month, rather than 12- or 18-month, type business,” he says.

“But it encouraged us to continue down the route of reducing tillage, planting more cover crops, and we started a policy of planting trees.

“On the beef side, we’ve tried to use more home-grown produce in feed.

“Some of that has been perhaps undone by this season’s weather, as we’ve had to plough just to get crops in the ground.”

In Yorkshire, Tamara Hall didn’t find the result of an initial carbon footprint analysis from 10 years ago particularly interesting.

Nitrogen use

“I thought there would be lots of things I would be able to do as a result, but it was mostly nitrogen use, and I didn’t really know how to reduce that at the time,” she says.

Reducing N is still a challenge, although using an N-tester has helped her cut back from 230kg N/ha to 170kg N/ha, she thinks without affecting yields.

“We’re repeating those trials with more comparisons this year.”

In the long term she is interested in trading carbon and, because of the increasing area of stewardship on the farm, also biodiversity credits.

That has prompted her to sign up with Trinity AgTech.

She is also exploring opportunities to gain premiums on contracts for undertaking climate-friendly activities.

That includes one with ADM for oilseed rape, where there are payments for things like direct drilling, doing a nutrient management plan and other aspects of regenerative farming.

The Green Farm Collective is also offering a milling wheat contract with lower use rates of nitrogen, she says.

“The target grain protein was lower too, but at that reduced rate of N we still wouldn’t hit it, as we get massive grain dilution.”

She is keen on these types of contracts, however, as they help fund her transition to regenerative practices.

“It takes some of the risk away,” she says. “Even without accounting for carbon opportunities, our soils are improved by doing less and giving nature the space to do its thing.”