If farmers are adding strip tillage, cover crops, or perennial crops to their operation, there could be the potential to receive a carbon credit payment per acre, too.
The carbon market is still new, though, so early adapter farmers will need to study and prepare.
The subject of carbon markets was recently discussed at the “Strategic Farming: Let’s Talk Crops!” webinar on March 16.
“I’m always the person who says, ‘Just put your toe in – don’t jump in.’ Start with your worst field, the sandiest with the lowest organic matter content,” said Jodi DeJong-Hughes, University of Minnesota Regional Extension educator.
“Even if the carbon markets don’t pay out, you’ll see other benefits in crop yield and water management.”
DeJong-Hughes reminds farmers to check with their lawyer before signing any contracts for providing carbon credits.
Many contracts are 5-10 years, so farmers need to know what will happen if they can’t store as much carbon as they said they could. Contracts should also have a clause that allows for higher carbon payments as the market matures.
Practices that qualify for carbon credits should be practices that help your farmland.
“It’s supposed to be practices you want to do, and then you get an extra $5 per acre,” said Anna Cates, Ph.D., Minnesota soil health specialist.
Carbon info
DeJong-Hughes and Cates are working with the Minnesota Corn Growers to help farmers understand the carbon credit market better.
Farmers always strive to improve farmland through good production practices. Now, some of these practices may provide an extra payment through carbon credits – but mostly likely only if they are newly-added practices.
The three most important elements are hydrogen, oxygen, and carbon. Most soil organic matter is carbon, and it serves to build resiliency in farm fields.
Carbon is the “glue” that holds life together.
“When you incorporate practices that leave more carbon in your field, and good organic matter, your field can better capture the rainfall, be able to move the water into the soil, that helps the farmer to be able to get into the field quickly after a rainfall event. Also, you can bang up the soil a little bit and it bounces back,” DeJong-Hughes said.
Carbon – as carbon dioxide – is a greenhouse gas. It keeps heat in the atmosphere. We need carbon dioxide, but the numbers are too high, so we want to reduce carbon dioxide levels through storing carbon.
As a visual, DeJong-Hughes suggests farmers think of an inflated hot air balloon. The amount of space inside that hot air balloon is comparable to the size of a ton of carbon dioxide.
You might hear the term “carbon dioxide equivalent.” This is because there are multiple greenhouse gases – methane, nitrous oxide, carbon dioxide and more.
“They put it all on the scale of ‘How does it compare to carbon dioxide in the atmosphere for holding down heat?’ Carbon dioxide is 1, and if you look at methane it is about 25 carbon dioxide equivalents. It is more potent than carbon dioxide by 25-30 times. Nitrous oxide is about 265 times more potent,” she said.
Using nitrogen fertilizer efficiently, helps nitrogen to stay in the field to be used by the crop and keeps nitrous oxide out of the atmosphere, she added.
According to the EPA’s Inventory of U.S. Greenhouse Gas Emissions and Sinks, 29 percent of U.S. emitted greenhouse gas comes from transportation. Electricity is 25 percent, industry is 23 percent, commercial and residential is 13 percent, and agriculture is about 10.5 percent.
Breaking down agriculture’s greenhouse gas emissions, 55 percent is created from ag soil management, with another 28 percent from cow “burps.” Manure management and other practices make up the remaining portion of ag greenhouse gas emissions.
Cates and DeJong-Hughes are focused on ag soil management. It’s common to think of soil organic carbon as interchangeable with soil organic matter, as organic matter is about 58 percent carbon. One percent of organic matter has about 11,600 pounds of carbon in the top 6 inches of soil per acre.
“The neat thing about carbon is it is dark in color – black – so you can actually see it in your soil if you have more carbon or less carbon,” DeJong-Hughes said. In Minnesota, soils that are tan in color are generally less than 1 percent organic matter.
When it comes to carbon credits – the more carbon in your soil, the more difficult it is to see a significant change.
If getting a carbon credit contract is something a farmer wants to try, signing up a poor quality, light-colored field with soil health problems is likely the field to start with.
Increasing carbon in the soil include practices like leaving more crop residue, growing long roots, adding manure to the soil, or growing cover crops.
Practices that take carbon away include tillage, baling/burning, or harvesting crops. Removing carbon is sometimes a good thing, as in harvesting crops. On the negatives side, erosion removes carbon from the field.
When companies pledge to reduce their carbon footprint, they have two ways to do so.
They can remove carbon through various practices, and these are called “insets.” A company reduces its emissions within its own value chain.
A company can also purchase “offsets” – carbon and/or greenhouse gases are removed from the atmosphere or kept from being released – from other places. Purchasing offsets could include paying someone to restore a forest or paying a farmer to adopt certain production practices that increase carbon in the soil.
“You really have to check into the company that is buying the credit,” she said. Companies that refine fossil fuels, for example, will most likely need to purchase carbon credits to meet their pledges for reduced carbon.
“If you want to sell your credits, make sure it’s to a company that you think shares your ideals,” she said. “This is one of the reasons that it’s not going to be one size fits all.”
For most farmers and landowners, the primary goal of adopting new farming techniques is to improve the farmland and soil health. Obtaining a carbon credit payment of a few dollars per acre may be a nice perk for some farmers, but the greater benefit comes from a more productive soil and a healthier environment – such as reduced erosion and better water quality.
“There are many benefits,” Cates said. “Cover crops and good soil structure can help mitigate the effects of very wet years. Cover crops and good soil structure can help mitigate the effects of very dry years. That’s where you get the intersection of the environmental issues that society is interested in and on-farm logistical help.”