CHICAGO (DTN) -- Companies continue looking for ways to refine their carbon programs as more ways to bring farmers into their programs and other companies jump into the market nearly every week it seems.
At the DTN Ag Summit this week in Chicago, representatives from Bayer, Indigo, Winfield United and Yara/Agoro each highlighted how their respective carbon programs work with farmers. Each said their program is meant to be farmer friendly, but they acknowledged confusion within carbon markets with so many companies now getting into the arena.
Lisa Streck, carbon program lead for Bayer CropScience, said Bayer has done a lot of market research and sees that consumers are more focused on sustainably produced products. "We no longer think it's a trend, but a way of doing business," Streck said.
"As we've structured the Bayer carbon program, the farmer is really at the center of it, and our role at Bayer carbon is to connect farmers to those additional revenue streams."
Iowa farmer Ben Riensche, a customer and adviser for Indigo Ag, said he likes to see all the companies and new players getting into the carbon market. Riensche noted there were more than $1 billion worth of carbon credits traded last year -- most outside of agriculture -- but the market continues to grow for farmers as well. That also requires farmers to research the benefits of individual programs.
"As a farmer, when you sell your crops or livestock, there's a lot of analysis and investigation into that process and functionality. So, I want to sign up for a program that is going to stay with the future. I think the market for carbon ... is going higher and higher. So, I want to be on the train when it leaves the station."
Riensche added he was one of 267 growers enrolled with Indigo who were paid to implement farm practices and provide measurement data to Indigo this year. Riensche and his farm enrolled about 1,200 acres and received an initial payment of about $5,500.
"Right now, as a farmer, we're going to get paid. There are some of these out there, you get paid in some sort of cryptocurrency or future value of the contract," Riensche said. "Unfortunately, our banker accepts cash, and I will stick up for Indigo; they made their first cash payment ... I thought that was better than a free cap."
Anastasia Pavlovic, managing director for Yara's Agoro Carbon Alliance in North America, said the companies buying carbon credits include airlines, oil and gas companies and a few other major industries that are having a hard time reducing emissions at the moment.
"And that will be a big driver for pushing that price up," Pavlovic said. "You also see food companies, other types of manufacturing companies across all kinds of segments depending on the kind of company they are running and what footprint they have."
Pavlovic and others on the panel also stressed the importance of the government to look at standardizing carbon credits. A bill that passed the Senate last summer, the Growing Climate Solutions Act, would authorize USDA to do just that, but that bill has been held up in the House where there is less consensus on exactly what USDA's role should be for creating a market standard.
"As long as it's science based and it's standardized, we all need to come together and form something so that you have a standard base that's measured in the same way for every grower and every company that's in this market space," said Jim Hedges, vice president of seed marketing at WinField United. "That being said, I think that's going to continue to evolve rapidly because we're in the infancy of this, and to meet the true demand across all industries, whether it's industrial, CPGs (consumer packaged goods companies) or fiber, or biodiesel, there's got to be a standardized methodology to look at not only what we're doing now, but what we're going to do in the future."
Hedges added that areas such as reducing nitrous oxide from fertilizer are going to become a component of lowering emissions, as well as improving soil health and water quality.
The space continues to evolve. Here are just a few recent announcements:
LAND O'LAKES TRUTERRA PAYS OUT
Truterra announced earlier this week that it was paying more than $4 million in upfront payments to farmers who enrolled in its carbon program, TruCarbon, with its producers sequestering more than 200,000 metric tons. That breaks down to an average payment of $20 per ton. Truterra stated its program had paid an average payment of $20,000 to farmers with some payments hitting more than $100,000.
For 2022, Truterra stated it "will offer two distinct approaches to encourage climate-smart practices and carbon storage in agricultural soils." The first program will structured similar to Truterra's 2021 program to generate carbon "assets" with farmers who have recently adopted soil-health practices that would build more carbon in the soil. For farmers just getting started with climate-smart practices and exploring their options, Truterra will have another program to help them implement new practices. These farmers would receive one-time payments of up to $2 an acre for developing new conservation practices. Under this approach, farmers will maintain ownership options to market carbon credits down the line.
For more details on Truterra's 2022 program, visit https://www.truterraag.com/….
BAYER CREATES PROJECT CARBONVIEW
On Wednesday, Bayer announced that it will launch a carbon footprint measurement platform called Project Carbonview. The platform was developed with Amazon Web Services and an ag software developer company called Bushel.
Project Carbonview will start as a pilot program aimed at U.S. farmers growing corn for ethanol, Bayer said in a news release on the announcement. The company will initially compensate farmers for their participation in the program, which helps growers track carbon emissions from planting through production. Data will be collected on their farming practices via Bayer's Climate FieldView application and connected to delivery and transportation data through Bushel's platforms, to measure the carbon impact of their sourcing and purchasing decisions.
Ultimately, Bayer expects growers participating in the program to be compensated by low-carbon fuel markets of the future.
"Project Carbonview is focused on creating awareness and acceptance for low-carbon fuel markets," the news release explained. "Ultimately, once these markets are broadly established, we anticipate growers will be compensated based on the implementation of sustainable farming practices and will share in the financial incentives created by low-carbon fuel markets."
More details on Bayer's Project Carbonview can be found at https://media.bayer.com/….
BASF LAUNCHES CARBON PROGRAM
BASF also launched its Global Carbon Farming program to help farmers reduce their greenhouse gas emissions. BASF's program will allow farmers to track practices that reduce carbon emissions through BASF's suite of seeds, traits, chemicals, biological crop protection, digital farming and fertilizer management. The program will help farmers sequester more carbon in the soil as BASF builds a framework to allow farmers to generate carbon credits. BASF Agricultural Solutions also recently started multi-year field trials focused on sustainable agricultural practices, carbon sequestration and emission reductions on the farm. BASF Agricultural Solutions has a commitment to reduce the carbon footprint 30% by 2030 for every ton in production of canola, corn, rice, soy and wheat. The BASF program will start in 2022.
For more details on BASF's program, visit https://www.basf.com/….
DTN Staff Reporter Emily Unglesbee contributed to this report.
Chris Clayton can be reached at Chris.Clayton@dtn.com
Follow him on Twitter @ChrisClaytonDTN
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