PEORIA, Ill. — A primer on entering the emerging carbon sequestration market was offered to farmers and industry representatives attending the Illinois Fertilizer and Chemical Association’s (IFCA) annual convention on Jan. 18 in Peoria. Nick Goeser, an agricultural sustainability change agent who has served as CEO for the American Society of Agronomy, Crop Science Society of America and Soil Science Society of America, talked about current trends in the carbon capture market, along with what to expect in a program, who the major players are and what questions farmers will want to ask before signing on the dotted line. 

First, however, Goeser acquainted his audience with a glossary of terms and acronyms related to carbon sequestration and carbon markets. He discussed terms such as “additionality” (emission reductions or sequestration efforts by farmers must be additional to any that would occur without the carbon capture project to qualify for payments), “permanence” (when accounting for credits, the length of the carbon storage and the risk of loss), and “leakage.”

“Leakage is a term that’s used for carbon losses or other greenhouse gas losses resulting from project activities,” explained Goeser, who has also served in vice presidency roles for the National Corn Growers Association and U.S. Farmers and Ranchers Alliance. 

He also offered definitions of terms such as “monitoring period” (the time under which a credit is tracked to ensure permanence and protocol requirements), “offset” (companies, international financial or governmental institutions can account for their own emissions by financing sequestrations or emission-saving projects with surplus), “inset” (an approach to reducing carbon directly and reporting those reductions within a company’s own carbon footprint), and certified emission reductions (CER). 

“CERs are carbon credits from Clean Development Mechanism projects, which are associated with United Nations commitments. These credits are pretty rigorous in nature and carry a certain amount of credibility at the governmental level,” said Goeser. “Verified emission reductions (VER) are associated with the voluntary carbon market space, are a little less rigorous and have a little bit different protocols. It is good to be aware of the differences in these terms.”

Drivers behind the carbon sequestration movement in agriculture include governmental incentives, evolving consumer preferences, environmental, social and governance investment, and climate impact on risk, according to Goeser. Corporate social responsibility commitments (CSRs) are the primary driver of the private carbon capture market, with an impact of around $8 trillion dollars in the investment space since 2006.

“We’ve gone from very few of these corporations making CSR commitments to just about everyone, but we could use more participation from the farming community and more participation from the science community here in America,” Goeser said. 

“There is a lot of confusion and there are a lot of moving parts right now,” he added. “We’re seeing more action now than we have seen during my entire career. There is a focus on this on the global level, the national level, and at regional and state levels. We are seeing more and more pressure from a congressional level and at a state level to standardize this marketplace.”

One forecast for carbon market futures suggests that the carbon offset market will be valued at more than $50 billion by the year 2030. “We will be going from a gigaton now in the U.S. to about 7-to-13 gigatons per year.  The forecast is for demand to be there year after year,” Goeser said. 

The agronomist went on to explain the five stages of enrolling a farm in a carbon market program and earning a payment: qualification (determining whether a field qualifies for a carbon farming project, choosing a program and estimating carbon potential), validation (following protocol to initiate projects), monitoring period (report on required data using required methodology), verification (third-party assessment) and payment (carbon assets sold over the counter, in third party exchanges or through a broker).

Key players in the five stages include landowners, market operators, project developers, verifiers, brokers, corporations and consumers. Farmers can expect to have interaction with all of the key players during the duration of their carbon farming project. 

In addition, Goeser offered a lengthy sampling of key questions farmers should ask when negotiating with carbon companies and buyers.