How to make money from carbon soil sequestration?

As greenhouse gas emissions become an increasingly urgent issue around the world, eyes turn to farmers and their ability to store carbon in the soil (and cut emissions on-farm as well). There are already fledgling ag carbon markets in Australia, the US and Canada, with the EU market expected in five to ten years, but what’s holding them back from gaining big ground?

Soil organic carbon

First we need an understanding of soil organic carbon (SOC) itself. It’s found in soil organic matter (SOM), which comes from plant residues in the soil (roots) and on the soil (stem and leaves), and from the incorporation of manure. Carbon in the soil is also found in calcium carbonate, but that’s an inorganic form and not relevant.

How much carbon can be held in soil?

It’s good news for the environment – and farmers in terms of carbon credits – that SOC can be increased over time, but just how much carbon can be held in soil? According to Nick Reinke, downstream sustainability manager at Truterra (the sustainability business of Land O’Lakes, a large farmer-owned cooperative in the US), it’s generally two to three times the amount of carbon present in the air.

Also read: Pilot project translates farm data to carbon credits

“Research shows that farmland around the world,” he says, “has generally lost about half the carbon it held fifty years ago,” mostly from tillage. Explaining further, Dan Heaney, senior research agronomist at US-based digital ag firm Farmers Edge, notes that intensive tillage over the years has resulted in more SOC being lost annually than was put back in through crop residues and manure.

It could take a farmer 13 to 26 years at an absolute minimum of adding carbon to the soil for it to reach the maximum it can hold

“In addition to farming practices,” adds Reinke, “this loss of SOC – and its potential replacement – varies by climate region and soil type. With regard to replacement rate, researchers have determined that on average in the US for example, 13 to 26 tonnes of carbon could be added back to each acre of farmland, with the fastest rate of replacement farmers could achieve about 0.5 to 1 tonne/ac/year. Therefore, it could take a farmer 13 to 26 years at an absolute minimum of adding carbon to the soil for it to reach the maximum it can hold.”

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Wade Barnes, CEO of Farmers Edge, in the field. According to Farmers Edge, intensive tillage over the years has resulted in more soil organic carbon being lost annually than was put back in through crop residues and manure. – Photo: Farmers Edge

Reduced/no-tillage cropping systems

Heaney explains that over the past three decades, SOC has been permitted to accumulate mostly through the adoption of reduced/no-tillage cropping systems, but also through replacing crop-fallow systems with continuous cropping, and adding more manure. With reduced or no tillage, he explains “the soil is less disturbed, resulting in less SOC being oxidized and released as CO2 through soil respiration. Also, reduced tillage can significantly reduce SOM loss through erosion in areas where it’s a problem.”

Dr. Mario Tenuta, professor of soil ecology at the University of Manitoba in Canada, says the largest contributor to buildup of SOC is the reduction in fallow followed by direct seeding. In addition, increases of SOC have resulted on the Canadian Prairies through diversifying the crops grown.

Determining soil carbon sequestration

To measure anything over time, a baseline is needed followed by new measurements at desired intervals. As explained by Carbon Farmers of Australia (CFA), for SOC, “an independent person must extract soil cores and measure SOC using lab measurements or lab-calibrated in-field sensors. Then, a consistent SOC estimation technology (for example, combustion or sensors) must be used.”

The most common estimation method is combustion (or ‘loss on ignition’). Heaney explains that it involves collecting a soil sample at the surface which is then dried, ground, weighed and heated. “The high temperature burns off the SOM and the ‘loss on ignition’ provides a measure of SOM,” he says. “SOM is typically around 58% carbon.” Other methods used for measuring SOC include dry combustion, wet oxidation and near-infrared.

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Truterra’s Insights Engine is to help farmers quantify sustainability progress and ROI in real time. – Photo: Truterra

Sampling in the field

While the accuracy of methods may differ somewhat, Heaney says the main issue with SOC measurement accuracy is sampling in the field, not analysis in the lab. “SOC can be quite variable across a field, making it difficult to detect small year-to-year changes in SOC ,” he says, “due to improved soil and crop management from the noise of background variability.”

Tenuta adds that SOC estimations are most frequently not accurate because changes in soil bulk density over time and depth are not accounted for. “The depth of the sample,” he adds, “also must also be as deep as the crop reaches.”

Reinke says there is a huge amount of difference around the world in how SOC is calculated. He believes the mid-infrared (MIR) method is more economical and can be as accurate; Truterra is currently having the combustion and MIR methods evaluated and compared.

Use of MIR methods growing

CFA Director Louisa Kiely says most SOC measurement there in Australia is done by combustion, but use of MIR and other similar methods is growing as the tech becomes more sophisticated, accurate and cost-effective. CFA currently uses versions of the well-known methods such as combustion that are verified under the Australian Sustainable Agriculture Initiative but is also looking at how VERRA measures under its ‘Verified Carbon Standard.’

VERRA, a carbon measurement verification firm becoming well-known globally, uses various methods to estimate SOC, all of them following “scientifically-established procedures described in peer-reviewed journals or nationally-approved soil testing standards.”

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A seeder plants a mixture of maize and grass as the vegetable material from previous crops remain on the ground. – Photo: ANP

Challenges to market

Measurement of SOC is the first step, but for farmers to actually get paid in a carbon market, Reinke stresses that current inefficiencies and costs relating to sampling, measuring and verification need to be reduced.

Tenuta agrees, noting that the issue of everyone taking their cut, from the verification/measurement firm to the credit aggregator to the trader, has always been a concern. He thinks farmers will start to get excited when price is about $ 40 USD per tonne CO2.

Demand is about to explode for ag carbon credits in the US and supply will be the issue, which should drive up price but it takes farmers time to make changes on their farms

Right now in the US, Reinke reports that there have only been a few sales over the last year or so of agricultural carbon credits, in the hundreds of thousands of tonnes, and farmers have received only roughly $ 15 USD a tonne. “Demand is about to explode for ag carbon credits in the US and supply will be the issue, which should drive up price but it takes farmers time to make changes on their farms,” he says.

Also read: Farmers Edge and Radicle offer hi-tech carbon credit program

“The good news is that only about 15% of acreage in US right now is under cover crops and rates of reduced tilling usage are low, so there is lots of opportunity for SOC sequestration. Farmers who already use cover crops can shift to longer-growing ones or different mixes that leave more biomass behind. The benefits of reduced till and cover crops are already known and farmers just need advice and reassurance from peers. I think the perceived risk of yield loss with these practices is bigger than the actual risk.”

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Over the past three decades, SOC has been permitted to accumulate mostly through the adoption of reduced/no-tillage cropping systems. – Photo: ANP

Direct seeding perfected

Tenuta agrees, noting that farmers and manufacturers have perfected direct seeding resulting in no yield reductions on the Canadian Prairies. “The seeders are purchased when it’s time for planting equipment replacement,” he explains. “The yield improvements from no-till, cover cropping and so on will come over a number of years and that’s an incentive itself.”

He adds that more and more farmers are using the ‘4R’ practices to improve efficiency of nitrogen fertiliser application; this comes with a reduction in N2O (nitrous oxide) emissions, which have a carbon market value as they are greenhouse gases.

Collecting and entering data

Heaney believes the biggest challenge to farmers getting adequate carbon credit payment is collecting and entering data. It’s time-consuming and can involve the introduction of errors. This is where, Heaney says, “digital agriculture plays a key role.” Farms already plugged into some digital farm management platforms already capture most of the data required for carbon credit attainment.

Watch for an upcoming article comparing new digital platforms related to the ag carbon market.