The intersection of agriculture and climate action has created promising new opportunities for farmers worldwide. As carbon markets mature and demand for climate solutions grows, agricultural carbon sequestration—capturing and storing carbon in soil—has emerged as a win-win strategy. For farmers, soil carbon schemes offer potential new revenue streams while simultaneously improving soil health, water retention, and long-term productivity.
This article explores six distinct soil carbon schemes that farmers should consider as they navigate the evolving landscape of climate-smart agriculture.
1. Voluntary Carbon Markets
Voluntary carbon markets represent the most direct way for farmers to monetize carbon sequestration efforts.
How it works: Farmers implement specific practices that increase soil carbon storage, such as cover cropping, reduced tillage, or agroforestry. Independent verifiers quantify the resulting carbon sequestration using established protocols. This sequestered carbon generates carbon credits, which are then sold to corporations, organizations, or individuals looking to offset their emissions.
Key players:
- Indigo Ag: Partners with farmers to implement regenerative practices and connects them with carbon credit buyers
- Nori: Uses blockchain technology to create transparent carbon removal certificates
- Soil and Water Outcomes Fund: Pays farmers for both carbon sequestration and water quality improvements
Potential returns: $15-45 per metric ton of CO₂ equivalent sequestered, with typical payments ranging from $10-30 per acre annually depending on practices implemented and baseline soil conditions.
Considerations: Most programs require multi-year commitments (typically 5-10 years) to ensure permanence of sequestration. Payment structures vary significantly, with some offering upfront payments and others paying only after verification. Measurement, reporting, and verification costs can be substantial but are increasingly absorbed by program administrators.
2. Supply Chain Programs
Many food and beverage companies are developing programs to reduce the carbon footprint of their agricultural supply chains.
How it works: Rather than generating tradable carbon credits, these programs focus on helping companies meet their scope 3 emission reduction targets (emissions from their supply chain). Participating farmers implement carbon-sequestering practices and receive premiums, guaranteed purchase agreements, or other financial incentives directly from their buyers.
Key players:
- General Mills’ regenerative agriculture program: Provides technical assistance and incentives to farmers in their supply chain
- Danone’s soil health initiative: Offers long-term contracts and price premiums for dairy farmers implementing carbon-sequestering practices
- Cargill RegenConnect: Links farmers implementing soil health practices with food company partners
Potential returns: These programs typically offer $5-20 per acre in direct payments, plus potential market premiums for products grown using regenerative practices.
Considerations: These programs often have lower measurement burdens than voluntary carbon markets but may require specific production practices or certifications. The stability of a corporate partner relationship can provide more predictable returns than volatile carbon markets.
3. Government Payment Programs
Public funding for agricultural climate mitigation is expanding rapidly across many countries.
How it works: Government agencies provide direct payments, cost-sharing, technical assistance, or tax incentives to farmers implementing carbon-sequestering practices. These programs vary widely by country and region but typically focus on known carbon-beneficial practices rather than measured outcomes.
Key players:
- USDA Conservation Stewardship Program and Environmental Quality Incentives Program: Provide financial and technical assistance for conservation practices in the United States
- European Union’s Common Agricultural Policy eco-schemes: New climate-focused payment programs being implemented across EU member states
- Australia’s Emissions Reduction Fund: Government-administered carbon farming initiative that purchases carbon credits from farmers
Potential returns: Highly variable depending on location and specific program, but typically range from partial cost-sharing to $40+ per acre for implementation of specific practices.
Considerations: Government programs often have complex application processes but may have more stable funding than market-based approaches. They frequently focus on practice adoption rather than measured carbon outcomes, which can simplify participation but may limit payments to actual carbon sequestration potential.
4. Ecosystem Service Marketplaces
These emerging platforms bundle multiple environmental benefits beyond carbon.
How it works: Farmers generate not just carbon credits but also water quality credits, biodiversity credits, or other ecosystem service units that can be sold to different buyers with various environmental interests. This approach recognizes that carbon-sequestering practices typically provide multiple ecological benefits.
Key players:
- Ecosystem Services Market Consortium: Developing protocols for soil carbon, water quality, and water quantity credits
- BCarbon: Texas-based soil carbon registry that also accounts for water and wildlife benefits
- Land to Market program: Verifies ecological outcomes including soil health, biodiversity, and ecosystem function
Potential returns: Potentially higher than single-focus carbon programs, with stacked payments for different environmental services that could reach $50+ per acre annually in optimal scenarios.
Considerations: These marketplaces are generally less mature than pure carbon markets, which means both opportunity and risk. Measurement protocols for non-carbon benefits are still evolving, and market demand is less established but growing rapidly.
5. Climate-Smart Certification Programs
These programs combine market premiums with climate benefits.
How it works: Farmers implement and document specific carbon-beneficial practices to receive certification, which allows them to market their products at a premium to environmentally conscious consumers and buyers.
Key players:
- Regenerative Organic Certified: Premium certification that includes soil health and carbon sequestration criteria
- Land to Market Ecological Outcome Verification: Focuses on verified outcomes rather than specific practices
- Climate Friendly Farming certification programs: Various emerging labels that focus specifically on climate benefits
Potential returns: Rather than direct payments, these programs typically generate 5-30% price premiums on certified products, with returns varying dramatically based on market access and product type.
Considerations: Certification costs and requirements can be substantial, but these programs may integrate well with existing premium market strategies (such as organic). Success depends heavily on market access and consumer willingness to pay for climate benefits.
6. Biochar and Carbon Removal Technologies
These approaches focus on specific technologies that enhance carbon sequestration.
How it works: Farmers adopt specific carbon removal technologies—most commonly biochar application but also including enhanced rock weathering or other emerging approaches—that can rapidly increase soil carbon levels beyond what is possible with management changes alone.
Key players:
- Pacific Biochar: Works with farmers to apply and monitor biochar for carbon sequestration
- Carbonfuture: Provides tracking and certification for biochar carbon removal
- Charm Industrial: Partners with farmers to produce bio-oil for permanent carbon storage
Potential returns: Potentially higher per-acre payments than other approaches, ranging from $40-100+ per acre, but with significant upfront investment costs.
Considerations: These approaches often require substantial initial investment in equipment or materials but can produce larger and more permanent carbon sequestration than practice changes alone. The scientific validation and market recognition for these approaches are still developing, creating both opportunity and risk.
Making the Right Choice: Key Factors to Consider
When evaluating these soil carbon schemes, farmers should consider several factors:
1. Baseline soil conditions: Current soil carbon levels and management practices dramatically affect potential returns. Depleted soils often have greater sequestration potential, while already-optimized systems may see lower additional gains.
2. Geographic relevance: Not all programs operate in all regions, and climate, soil type, and local agricultural systems affect carbon sequestration potential.
3. Contract length and requirements: Commitments range from annual enrollments to decade-long obligations with significant practice requirements.
4. Upfront costs vs. returns: Many carbon-sequestering practices require initial investments in equipment, seeds, or management changes that should be factored against potential returns.
5. Additionality requirements: Most programs only pay for new practices or improvements beyond business-as-usual, potentially limiting eligibility for early adopters.
6. Measurement and verification burden: Programs vary widely in documentation requirements, from simple practice verification to intensive soil sampling and monitoring.
The Future of Agricultural Carbon Markets
The soil carbon marketplace is evolving rapidly, with several important trends likely to shape opportunities in coming years:
- Improving measurement technologies: Remote sensing, modeling, and sensor technologies are reducing verification costs and increasing payment accuracy
- Policy support expansion: Government incentives and regulations supporting agricultural carbon sequestration are increasing globally
- Market maturation: Standards are becoming more consistent, potentially reducing entry barriers for farmers
- Growing corporate commitments: More companies are making net-zero pledges that include agricultural supply chain emissions
- Increasing carbon prices: Many analysts project rising carbon prices as climate commitments intensify
Conclusion: Beyond the Carbon Payments
While direct financial returns are important, farmers should consider the broader benefits of participating in soil carbon schemes. Improved soil health typically delivers:
- Enhanced resilience to drought and flooding
- Reduced input costs over time
- Improved yields in many systems
- Better long-term land values
- Reduced erosion and nutrient loss
For many farmers, these production benefits actually exceed the direct carbon payments, making soil carbon schemes attractive even when immediate financial returns seem modest.
By carefully evaluating the options and aligning carbon programs with overall farm management goals, farmers can position themselves to benefit from the growing demand for agricultural climate solutions while building more resilient and productive operations for the future.
Are you a farmer who has participated in a soil carbon program? What has your experience been? Share your insights in the comments below!
