Carbon Credits Farming

According to research, 25% of global greenhouse gases are produced due to food and agriculture, which includes deforestation to create farmland, methane produced by cattle and rice fields, fertilizers, etc. Carbon Farming practices such as cover cropping, no-till cultivation, rotational cattle grazing, and usage of less synthetic fertilizers, help to sequestrate carbon in the soil, provide savings, cuts down pollution, and keep the soil healthy.

Driven by climate-conscious consumers, massive agricultural corporations like ‘General Mills’, and ‘PepsiCo’, are commencing the practice of regenerative agriculture/ carbon farming across millions of acres of farmland.

Ploughing and tilling are common agricultural operations that release carbon dioxide from the soil by exposing organic materials to the surface and stimulating oxidation. Since the introduction of tillage-based farming, an estimated 30–75 percent of worldwide soil organic matter has been lost, and traditional farming operations are responsible for 13.7 percent of all anthropogenic greenhouse gas emissions.

According to the National Academies report, by 2050, the world may need to remove as much as 10 billion metric tons of carbon dioxide from the atmosphere each year to keep the globe from warming by 2 degrees Celsius. As a result, we must investigate all alternatives, whether they be farms, trees, or other carbon removal technologies.

Carbon farming is the process of altering agricultural techniques to enhance carbon sequestration in the soil to lower GHG emissions. The main carbon farming techniques are: –

  1. Cover cropping

Cover crops are cultivated between the rows of certain crops or during the season when cash crops are not produced with the aim of covering the soil, rather than for the purpose of being harvested. Cover crops, such as rye, buckwheat, or vetch, are fast-growing crops that are planted to minimize soil erosion, boost nutrients in the soil, produce organic matter and retain nutrients from manure, mineralized organic nitrogen, and underused fertilizer until the next crop utilizes them, decreasing nutrient runoff. Crop rotation when combined with cover cropping can result in carbon sequestration.

2. Reduced/ No-tillage

Because crop wastes are crushed down while seeding, no-till farming re-introduces carbon back into the soil. According to some research, no-till farming may triple soil carbon content in less than 15 years. On a worldwide scale, agricultural conversion to no-till systems might absorb around a fourth to a third of anthropogenic CO2 emissions.

According to research conducted by the Rodale Institute, a global transition to carbon farming could absorb more than 100% of the CO2 currently emitted by humans and can also maximize carbon sequestration to reverse global warming.


It is relatively inexpensive to increase soil carbon using practices like no-till. Carbon farming is estimated to cost $10-$100 per ton of CO2 removed, compared to $100-$1,000 per ton for systems that mechanically extract carbon from the air.

Farmers may sell the credits they earn in carbon markets, making carbon farming a viable cash source. To offset their emissions, large-scale greenhouse gas emitters, such as manufacturing industries, buy credits from farmers who have sequestered carbon dioxide.

  • A carbon credit is a marketable permit or certificate that entitles the holder to emit one ton of carbon dioxide or a greenhouse gas equivalent.
  • Farmers may claim carbon credits for a variety of carbon farming measures, including not burning paddy straw, conserving land by not ploughing it, and laser levelling soil. There will be some credits created for each such exercise that may be tracked. They will subsequently be appraised according to accepted international standards.
  • Companies who wish to reduce their carbon footprints, such as fertilizer manufacturers or airlines, but are unable to do so due to the nature of their company, can purchase carbon farming credits.
  • Farmers may also profit in terms of reduced fuel costs, less labor, fewer chemical cost, and sustainability.’, India’s first agricultural company, has successfully generated 20,000 carbon credits for methane reduction and aims to assist Indian farmers in earning one million carbon credits by 2023.



  • Purchasers of sequestration services go through stringent assessment procedures to earn carbon credits that they may sell on the market. Setting up a carbon market is challenging due to the difficulty of auditing the quantity of carbon sequestered while third-party audits are expensive.
  • If the level of emissions extracted from the atmosphere and sequestered is not accurately monitored, carbon farming will enable corporations to buy certificates that allow them to continue polluting the earth on the false promise that emissions would fall by the same amount elsewhere in the globe.
  • According to a National Academies assessment released last year, the world’s farmlands can store billions of tons of carbon dioxide in the soil each year. However, which agricultural practices work, and to what extent, across various soil types, depths, topographies, crop kinds, climate conditions, and time periods remains unclear.
  • It’s uncertain if the procedures can be implemented over a long period and on a large scale without compromising food output. Furthermore, there are major differences of opinion about what it will take to reliably monitor and verify that farms are truly removing and storing more carbon dioxide.


These credits can be traded between firms or purchased and sold in international markets at market prices at two exchanges: the Chicago Climate Exchange and the European Climate Exchange. The Multi-Commodity Exchange of India (MCX) became the world’s third exchange to trade carbon credits. Carbon credits, like any other monetary instrument, can be purchased from several companies since they are exchanged in an open market.

The US Senate passed the Growing Climate Solutions Act of 2021, a measure which would allow the US Department of Agriculture to assist farmers, ranchers, and private landowners with carbon market participation. Because of the rising demand for high-quality agricultural carbon credits, soil carbon sequestration operations are scaling up, resulting in more productive, resilient soils and lower emissions. Farmers are already being paid for carbon credits by companies like IndigoAg, Bayer, Nori, etc. Companies can thus claim credit for carbon dioxide absorbed from the atmosphere without reducing emissions from their operations.

Trey Hill of HarbourView Farms claims to have made $210,000 for sequestering 14,000 metric tons of carbon over the course of five years.

One of the reasons that made carbon neutral certifications more exciting was the possibility of having agricultural offsets for carbon credits and when we are investing in these projects, we want to do what we can to invest back into our supply chain with our old business partners, who are farmers. So, any chance we get that’s good for marketing and customer demand and bringing that back to our partners, we try to connect those dots, because we are part of the same chain of livelihood” ~ Katie Wallace [Carbon Credits Buyer], New Belgium Brewing

In the current situation, the carbon credit market has a direct influence on the firm’s financial analysis. As a result, businesses are actively seeking methods to reduce emissions and implement greener business practices. As a result, the entire system encourages businesses and governments to adopt environmentally beneficial procedures that minimize greenhouse gas emissions.

Furthermore, several venture capital-backed firms have developed soil offset markets, allowing businesses and non-governmental organizations to purchase credits from farmers. For example, Indigo Agriculture has raised over $850 million to build its soil carbon business.


The Chicago Climate Exchange attempted to transfer carbon credits from farmers to businesses in 1990, but the market collapsed due to greenwashing. The agricultural carbon credits market has now reopened, thanks to improved environmental data, auditing methodologies, and technology, and maybe worth $50 billion or more by 2030.

According to the Intergovernmental Panel on Climate Change (IPCC), agriculture accounts for 14 percent of India’s yearly GHG emissions, with CO2 emissions totaling 2.6 billion tons in 2019. To support India’s recent COP26 promises, the Indian Agricultural Research Institute (IARI) also has decided to collaborate for the first time with a commercial enterprise, “GrowIndigo India Ltd,” to build a marketplace for farmers to sell carbon credits.

In the United States, carbon farming is practiced only on 1% of cropland. The Biden administration now intends to redirect $30 billion in agriculture assistance money from the USDA’s Commodity Credit Corporation to compensate farmers who use sustainable techniques and absorb carbon in their soil to increase the adoption of sustainable farming practices.

Source: Colorado State University, Soil Carbon Solutions Centre

The federal carbon market is still in its early stages, and it requires a large quantity of data to make it rational, transparent, and verifiable. High-quality data collection from satellite agencies is one of the viable solutions to gather and save an abundance of environmental data.

Agricultural carbon credits should not be used as an excuse to keep polluting the planet with GHGs. Climate change can only be handled via continual and comprehensive efforts from all industries since carbon farming has its limits in terms of how fast and how much carbon can be sequestered. However, carbon farming has the potential to improve ecosystems and be a climate change mitigation strategy when backed by awareness, technology, and legislation.


  1. ‘Regenerative Organic Agriculture and Climate Change’. Rodale institute.
  2. ‘Carbon sequestration through carbon farming to earn carbon credit’, Shaon Kumar Das; ICAR Research Complex for NEH Region, Sikkim Centre, Tadong, Gangtok, Sikkim-737102.
  9. Multi Commodity Exchange

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