Ohio Farmers Try Out Early Carbon Sequestration Programs
Thursday, March 9, 2023
By Baylee Sweitzer for Kent State News Lab.
Broadcast version by Nadia Ramlagan reporting for the Kent State-Ohio News Connection Collaboration.
Jeff Duling's 1,400-acre farm sits at the end of a long and dusty gravel driveway in Northwest Ohio's Putnam County, about halfway between Lima and Defiance. An aluminum-sided grain elevator towers over his fields, where he grows corn, wheat and soybeans.
Duling recently entered the estimated $84 billion carbon market after he purchased 134 new acres of farmland and enrolled them in a program called RegenConnect, which incentivizes farmers to use regenerative agriculture practices that help capture carbon dioxide in the atmosphere and move it via plants into the soil.
Those 134 acres represent a new revenue stream for Duling: RegenConnect pays him for each acre that helps sequester carbon, using funds from companies seeking to offset their greenhouse gas emissions or declare themselves "net zero."
Carbon sequestration is the process of capturing and storing atmospheric carbon dioxide to help reduce the amount of it in the atmosphere, with the larger goal of reducing global climate change, according to the U.S. Geological Survey.
There are two types: geologic, which is where the carbon is stored in underground geologic formations, and biologic, which refers to the storage of atmospheric carbon dioxide in vegetation, soils, woody products, and aquatic environments.
Until he bought the new land, Duling was skeptical about carbon sequestration as a way to make extra money on his farm. "I think the carbon market is so immature, it's like the Wild West," Duling said.
But he already sells a lot of his grain to Cargill, the company that runs RegenConnect, and has a good relationship with his buyer. So when the company created the sequestration program, it asked him to enroll some of his acres.
Regenerative agriculture practices include cover crops, which cover the soil and help reduce erosion, improve fertility and soil quality, among other effects; no-till, which helps decrease erosion because the soil is undisturbed through tillage; or reduced-till, which means the tillage may be less intense, shallower or cover a smaller area in the field or across the farm.
John Davis is a Delaware County farmer who enrolled more than 100 acres in Nutrien's carbon program last year through the Soil and Water Outcomes Fund. Davis is a fourth-generation farmer and has farmed for 35 of his 54 years. He grows corn, soybeans and wheat.
Davis, like Duling, thinks the carbon market is still young. "I don't have any issue with the thought process or the idea behind it. I think there's a lot of unknowns for the producer, for the grower," he said.
The fledgling carbon market
Programs like Cargill's and Nutrien's are part of the carbon market, a trading system where carbon credits are bought and sold with the intent of reducing pollution overall, according to the United Nations Development Programme.
Agricultural practices can help capture and/or keep carbon dioxide and other pollutants out of the atmosphere. By using certain management practices, farmers can earn money in the carbon market by selling carbon credits to companies looking to offset their own greenhouse gas emissions.
A carbon credit, also called a carbon offset, is a permit that represents the reduction, sequestration or avoidance of one metric ton, or 1,000 kilograms, of carbon dioxide or other greenhouse gases. If a company emits two metric tons of carbon dioxide and purchases one carbon credit, the company overall produces one ton of carbon dioxide for the purposes of a carbon market.
Most of the carbon market worldwide is a mandatory one, where governments require companies to offset their emissions. In the United States, except for California, the carbon market is voluntary-that means companies are not required to participate. In Ohio, the buying and selling of carbon credits are also unregulated.
Many companies in the United States are looking to reduce their greenhouse gas emissions, said Brent Sohngen, a professor of environmental and resource economics at The Ohio State University. But to become net zero, they have to buy carbon credits.
"These large companies are looking at their carbon emissions and finding there is no way to avoid carbon emissions from using greenhouse gas-polluting fuels, so they are shifting gears," he said. "They are looking to reduce emissions through the agricultural and forestry sectors and take those emissions and use them towards their net-zero goals."
Since most of the carbon market in the United States is unregulated, companies were created to develop a methodology to make and sell carbon credits. Measuring, reporting and verifying carbon offsets are key to obtaining a carbon credit.
The process of entering into a carbon farming practice plan
Once a farmer enrolls in a carbon program, a carbon farming practice plan is designed based on an initial assessment of the farm.
Farmers implement changes on their farms, such as not tilling their soil and planting cover crops like alfalfa or clover. Then they measure and record data, which is checked and verified by an independent verification body such as Verra or the Gold Standard.
After the farm's carbon offsets are verified, a carbon credit is issued. The project developer or a broker connects the carbon credit with the end buyer, usually a company that purchases the credit to offset carbon dioxide emissions.
When Duling enrolled his acres, it was an easy process. "The guy that signed me up for the carbon came with his laptop," he said. "He just brought my farms up into aerial view, we picked the fields out with satellite imagery. The total time I was with him was 15 minutes."
Carbon programs must look at the history of the acres to determine how to create high-quality carbon credits. Gathering the history of whether or not the fields were tilled or cover-cropped would have been a tedious process for Duling.
"That's why I lost interest with these other companies. I only got 15 minutes invested," with Cargill, he said. "I made $740 in 15 minutes. That made a lot more sense to me."
Duling signed a one-year contract and will be paid $370 in the fall and $370 in the spring to earn about $5.52 per acre.
Carbon credits are issued based on new practices that are implemented on a farm. "To produce a premium, high-quality carbon credit, it would have to come from an additionality, meaning a new practice," said Clay Edwards, the program lead for Cargill's RegenConnect.
Carbon credits encourage change - but don't reward existing sustainable practices
If farmers are already using practices that capture or avoid carbon emissions, then there is not a measurable carbon dioxide savings to count toward a carbon credit.
"We want farmers that have been doing those practices, like no tillage, to continue doing those practices. The carbon market isn't paying farmers enough to stop doing something that is working for them. It just hasn't evolved that way," Edwards said.
Duling is frustrated he can't benefit from his already carbon-friendly acres.
"The problem with carbon-credit programs is that they want us to be doing things like not tilling and planting cover crops. I am already doing all that, but they will not let me in," Duling said.
By tilling his new acreage, the carbon naturally stored in the soil will be released into the atmosphere-avoiding further tillage and planting cover crops will recapture that released carbon, allowing him to earn carbon credits.
"It wasn't ground that I had in my operation for five, 10, 20 years. The acres that's been in my operation, I am not going to till," Duling said.
Prices for a carbon credit vary, but generally, a farmer could earn from $1 to $5 extra per acre on top of what they make for their crop. For example, according to the Farm Office of the Ohio State University Extension Office, Ohio corn should yield a range of return from $260 to $619 per acre in 2022, depending on land production capabilities.
"A lot of programs are asking farmers to do a lot of practices for very little money. When it came down to it, I figured out I had the carbon they wanted, but I was getting the least amount of money," Duling said.
Carbon programs will eventually have to change, he said, because "they're going to run out of farmers."
Duling and Davis think the money from carbon programs helps offset the extra work they have to put into their fields, but ultimately they will not be "a huge money maker" for farms. Instead, they think the companies selling the credits, like Cargill, will benefit most.
Most farmers are eligible for a carbon credit program, Edwards said. The only way a farmer would not be able to participate is if they used best-management practices on all of their acres.
"That's probably less than 1% of the acres in the U.S. Every farmer's field is different; it has its own unique characteristics. It's really got to be a customized approach," he said.
Companies trying to achieve their net-zero emissions goals in the United States are driving the voluntary carbon market, Sohngen said. "If companies continue to get serious about their net-zero goals, and the price of carbon starts to edge up, then we'll see more people jump into it."
Baylee Sweitzer wrote this article for Kent State News Lab. This collaboration is produced in association with Media in the Public Interest and funded in part by the George Gund Foundation.
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