Farmer Sell Carbon Credit Exchanges
Farmers are used to selling their crops for cash, but now more of them are able to make extra money by planting trees and offering carbon credits to companies that need to offset their carbon footprint. Some are even netting thousands in the process. However, the carbon credit market is still in its infancy, with many farmers unsure of how to get started and what standards are required.
A number of third-party aggregators are enrolling farmers in programs to help them sell their carbon credit exchange to companies looking to meet emissions requirements through carbon trading. However, not all programs have the same requirements for enrollment, including minimum acreage and payment structure. As a result, it’s important for farmers to research their options carefully and seek legal advice before signing up for a program.
Nationally, agriculture accounts for about 10 percent of greenhouse gas emissions. Farmers can reduce their carbon footprint by adopting practices like reducing tillage and planting cover crops that sequester carbon, and by increasing tree canopy in forests on their land. Companies can buy these credits to offset their own emissions or to achieve their corporate sustainability goals, such as becoming carbon neutral.
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How Can a Farmer Sell Carbon Credit Exchanges?
Currently, there are two types of carbon markets driving demand for the sale of these credits. One is a compliance market that requires the emission reductions to be verified by a government-approved body, such as Verified Carbon Standard, which was established in 2007 by environmental and business leaders to improve quality assurance in voluntary carbon markets. The other is an incentive-based market that connects buyers and sellers of carbon credits via third-party-validated, standardized contracts.
Some of these carbon markets are already active, with some more established than others. Bayer’s Carbon Initiative, for example, is in its early stages and will only pay farmers for adoption of specific conservation practices, such as no-till/reduced-till, crop rotation, and buffer strips that are known to sequester carbon. Other programs, such as those run by the Environmental Protection Agency under its acid rain program, require compliance with a set of rules to qualify for carbon offsets.
While there’s still much uncertainty for farmers about whether or not carbon markets will become a viable source of income, some are already making it their primary revenue stream. “It’s a great way to diversify your income,” says Tara Daun, watershed coordinator for the Wisconsin Farmers Union. But she admits that there’s a lot of hesitancy and skepticism about the markets being valuable, as well as the integrity of the verification process.
Nasdaq’s trading technology matches buyers and sellers of carbon credit assets based on multiple parameters to ensure that buyers are acquiring credits that meet their needs and regulatory requirements. The platform is also designed to scale as the marketplace grows and to reduce counterparty risk. This will allow buyers to select their preferred seller and eliminate the need for middlemen. This will save time and resources, while providing transparency and ensuring that all participants are treated fairly.