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Use carbon credits to add a revenue streamUse carbon credits to add a revenue stream

Compare options for sequestration payments to figure out which offers the most profitable option for your operation, then follow an Iowa farmer’s advice: start small.

Ben Potter, Senior editor

January 31, 2025

4 Min Read
Hands holding soil and money
Getty images/VBaleha

Carbon credit programs are certainly nothing new, but they are gaining unprecedented popularity as consumer sentiment prompts companies like Disney, Microsoft, Google and many others to use credits to offset some of their carbon emissions.

What that means for farmers is they have more opportunities to get into the game of folding in additional conservation practices (or simply documenting what they already are doing) to generate a new revenue stream.

In some cases, the barrier to entry is quite low – you don’t necessarily have to lock in your entire farm to a multiyear contract. Bayer’s ForGround program, now in its third year, has a minimum enrollment of just 10 acres, for example.

“Someone who’s never done it before, I wouldn’t tell them to just jump in and do no-till cover crops on everything right away,” says Bayer agronomist Tyler Williams. “Start with your worst field. If you fail, you’re failing small. And the lower production ground is a lot of times just because you need to build up more organic matter there.”

Iowa farmer Al Laubenthal, echoes Williams’ advice to start slow and gain comfort and confidence with carbon credit programs and the conservation requirements attached to them.

“Start out slow, you don’t have to do the whole farm at once,” he says. “You have to get your mind around the program.”

While many carbon credit programs help outside organizations offset their emissions, RegenConnect , a Cargill offering, is an “inset” that only uses its credits internally, according to Emelia Melson, sustainability sales specialist at Cargill.

“We use carbon credits against our own environmental outcome claims and then our downstream customers,” she says. “We’re not going and selling the credits to just a random company. We’re buying them into our supply chain.”

Compare carbon programs

The difference between the Bayer and Cargill programs reinforces a basic need to study up on each offering before choosing who to partner with. For example, Bayer’s payment structure is on a per-acre basis based on various eligible practices. Cargill’s is calculated by how many tons of soil carbon are sequestered on participating acres.

And then there’s the Agoro Carbon Alliance, which also has a different model of operation. Agoro started in 2021 and is owned by Yara Fertilizer. The program requires a longer commitment, but it’s also paired with more intensive assistance from local agronomists.

“We’re going to have boots on the ground – usually a minimum of once or twice a year – or as much or as little as the farmer wants to see us,” according to Steve Hasselman, CCA with Agoro.

As with Cargill’s program, Agoro pays participants based on how much carbon they capture through conservation practices. This number can vary widely from field to field, so Hasselman encourages curious farmers to use this online calculator to estimate the potential on their operation.

What sometimes gets lost in reporting about carbon credit programs is that the practices themselves were promoted as improving soil health and yield potential long before additional incentives were attached, according to Sky Hoffman, Corn Belt sustainable ag manager with Nutrien Ag Solutions.

Nutrien’s FARMSMART program qualifies growers who reduce applied nitrogen by at least 5%, and it has an average payout of nearly $5 per acre in corn. Four other crops also qualify – cotton, sorghum, winter wheat and barley. The payout is calculated by how much nitrous oxide (a greenhouse gas) emissions are reduced, following protocols from the Climate Action Reserve to generate carbon credits.

“I see sustainability as good agronomy and stewardship that is backed by verified data,” Hoffman says. “It’s based on practices we’ve been recommending all along.”

Lisa Schulte Moore, co-director of Iowa State University’s Bioeconomy Institute, says she’s not surprised that some farmers find the whole process overwhelming.

“I think the first message is to really do your research to figure out what the best option is for you and your farm,” she says. “I would definitely run any contract by an attorney.”

Also be aware that USDA passed the Growing Climate Solutions act in 2022 and is trying to help provide guidance around what are called Payments for Ecosystem Service, which could potentially affect the structure of some carbon credit programs in the future, Schulte Moore adds.

About the Author

Ben Potter

Senior editor, Farm Futures

Senior Editor Ben Potter brings two decades of professional agricultural communications and journalism experience to Farm Futures. He began working in the industry in the highly specific world of southern row crop production. Since that time, he has expanded his knowledge to cover a broad range of topics relevant to agriculture, including agronomy, machinery, technology, business, marketing, politics and weather. He has won several writing awards from the American Agricultural Editors Association, most recently on two features about drones and farmers who operate distilleries as a side business. Ben is a graduate of the University of Missouri School of Journalism.

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