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How dairy farms can participate in carbon markets

Patrick Wood with Ag Methane Advisors believes dairy farms can profit from reducing carbon emissions.

Fran O'Leary

May 26, 2022

3 Min Read
manure digesters
ANEROBIC DIGESTERS: One way dairy farms can reduce greenhouse gas emissions is by installing a manure digester. Community digesters involve three or four neighboring dairy farms sharing one digester. fermate/Getty Images

Patrick Wood, general manager of Ag Methane Advisors, believes financial incentives are necessary for dairy farms to implement new advanced technologies and best management practices to reduce greenhouse gas emissions.

“Our mission is to help farmers get paid for reducing their greenhouse gas emissions and improving their environmental performance,” Wood said during a Professional Dairy Producers webinar about participating in carbon markets. “We think carbon markets have been and will continue to be a great way to do that.”

Wood said he is concerned about climate change. “I think one of the most viable solutions to mitigating the worst impacts of climate change is using markets to do that,” he explained. “Companies haven’t had to pay for their pollution over the years. By creating carbon markets, it creates a financial mechanism to reduce the impacts of climate change.”

Wood said dairy farms produce a lot of carbon emissions, but they can reduce a lot of emissions.

“So, it can be a win-win for them,” he said.

He said he likes to use carbon markets to help farms diversify their revenue stream and their business, improve their environmental performance, and often, create benefits for their operation, as well.

What are carbon credits?

Wood explained that dairy farms, and animal agriculture in general, produce a lot of greenhouse gas emissions that contribute to climate change.

There are three primary types of gas emissions: methane, carbon dioxide and nitrous oxide. “Methane is the main one involving animals,” he said.

According to Wood, lots of companies, farms, governments and individuals around the world want to reduce their carbon emissions because they see climate change as an urgent threat.

“Nestle and Starbucks, for example, want to reduce their carbon emissions,” Wood explained. “I chose those companies because milk is a big part of their supply chains. Working with farms in their supply chains can be part of the solution. If dairy farms can reduce emissions associated with producing milk, then that carbon credit can be sold to a company like Nestle or Starbucks, or to somebody outside the supply chain. The production of milk is a huge part of Nestle’s and Starbucks’ carbon footprint.”

Wood said one carbon credit is equivalent to 1 metric ton of carbon dioxide that can be sold to someone who is reducing their carbon emissions. He noted that methane is about 80 times more potent than carbon dioxide.

Reduce carbon emissions

According to Wood, there are three main things a lot of dairy farms are doing to reduce carbon emissions:

  1. installing anaerobic manure digesters and producing renewable energy

  2. reducing the methane that cows burp

  3. reducing emissions through crop management

“Companies are working on feed additives and breeding technologies that reduce methane emissions and boost feed efficiency,” Wood said, referring to cows burping methane.

Crop management practices such as no-till, for example, help store carbon in the soil or create a net reduction in nitrogen fertilizer, he explained.

Wood said a lot of work during the past 30 years has aimed to build integrity into carbon markets. This has been done by:

  1. selling carbon offsets

  2. reducing emissions in supply chains and offering farmers incentives to reduce emissions

  3. creating renewable natural gas, which is popular with a lot of dairies

“I think there are a lot of dairies that need information about manure digesters,” he said. “Many are not sure who to work with.”

Wood acknowledged that digesters are primarily a technology for large dairies with more than 1,500 cows. But he said community digesters, which are shared by three or four neighboring dairies, are becoming increasingly popular.

“I suspect we will see many more community digesters going forward,” he said. “But they are more difficult to work with because there are more people involved.”

Read more about:

Carbon Market

About the Author(s)

Fran O'Leary

Wisconsin Agriculturist Editor

Even though Fran was born and raised on a farm in Illinois, she has spent most of her life in Wisconsin. She moved to the state when she was 18 years old and later graduated from the University of Wisconsin-Whitewater with a bachelor's degree in journalism.

Fran has 25 years of experience writing, editing and taking pictures. Before becoming editor of the Wisconsin Agriculturist in 2003, she worked at Johnson Hill Press in Fort Atkinson as a writer and editor of farm business publications and at the Janesville Gazette in Janesville as farm editor and feature writer. Later, she signed on as a public relations associate at Bader Rutter in Brookfield, and served as managing editor and farm editor at The Reporter, a daily newspaper in Fond du Lac.

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