Can farms focused on soil health profit on the voluntary carbon market?

Rere ki Uta, Rere ki Tai

March 30, 2023

Since every hectare of agricultural land has the potential to reduce greenhouse gas emissions, farmers hold one of the keys to fighting climate change.
Among the farms that are being put under the microscope in a trial of farming practices that assist with carbon storage in soil is Scylla Farms in the Bay of Plenty, which has already been working with a New Zealand company, Verdi, to capture data on its soil carbon.

Scylla has had seaweed applied as a biostimulant to feed the soil and been planted out with diverse species, that keep the cows full and nourished whilst also being good for the microbiomes and other life in the soil.

But what do these sort of land management practices mean for soil carbon storage? This is just one of the things being measured through a two-year project, called Rere ki Uta, Rere ki Tai, as researchers and scientists gather data on soil, putting research into action with a ‘how to’ and a ‘why’ for farmers. Available data indicates carbon in New Zealand’s agricultural topsoil is high – almost 100 tonnes per hectare in the top 30cm – when compared to the global average (around 62 tonnes per hectare in the top 30cm).

Late last year, the Government’s draft Soil Carbon Science Strategy 2022 – 2025 was released, highlighting the essential work of farmers minimising losses of soil carbon, which leads to the release of carbon dioxide to the atmosphere. Although our farmers are already doing vital work storing carbon through our soils, emissions from the agricultural sector make up nearly half of the total emissions from New Zealand and are part of the country’s domestic and international climate change targets.

These will be priced in New Zealand from 2025 as part of the Government’s Emissions Reduction Plan. New Zealand has an internationally unique emissions trading scheme (ETS) where individual emitter liabilities are calculated, and carbon units traded to meet liabilities.  This means an emitter must reduce their emissions personally. If not mitigated at source, then someone further down the track is liable for them. If a New Zealand product goes to Europe and the party selling our goods must offset it, each tonne of carbon will add to the cost for those receiving the goods.

Read how Danone plans to reduce methane 30 percent by 2030.

Verdi NZ is among companies helping farmers manage their carbon sequestration and provide a trustworthy and measurable way to neutralise their carbon emissions. Verdi founder Jason Cruse is a farmer himself, and turned to non-mainstream principles for his farm at Rerewhakaaitu near Rotorua in exasperation at what wasn’t working. He wants farmers to see beyond the regulation and emissions accounting, and view soil carbon as an opportunity.

The New Zealand Government could include soil carbon into the ETS, or any of the other sources of carbon, at any time. Verdi director Nic Conland says a change is essential to provide a critical pathway for emissions reductions to our largest emission source.

The Australian Government includes soil carbon in its national inventory as a credit for farmers where a method is followed, and their Government then owns the data and the carbon offsets against its national account.

Verdi has been approached several times by voluntary market agents but is likely to create its own trading platform, with soil carbon data owned by the farmers that they are working with.

In New Zealand, the regulatory market under the Emissions Trading Scheme allows people to obtain carbon credits – from plantation forestry and native forests in special circumstances. Trees must be post 1990 and meet rules for density and height.

However the non-regulatory market allows for parties to sell carbon in an open voluntary market – where proof of carbon stored above the existing baseline is provided for a farm system, soil type/capacity in a specific location, the value is based on verification, provenance and selling agency. Parties can create credits from carbon-based sources including soil carbon, biochar, seaweeds and riparian.

There are many benefits from storing carbon in the soil, regardless of the potential for earning from carbon credits. Losses of soil carbon significantly reduce the productive potential of the land, and changing farm management systems to keep carbon in the soil can significantly reduce supplementary feed costs, reduce drought impacts, fertiliser use, fuel consumption and water pollution.

Through the 10-farm trial Rere ki uta Rere ki tai, which is being hosted by AgriSea NZ Ltd, all of this is being measured by researchers and scientists.

Carbon is inherently part of a natural cycle which exchanges carbon in and out of the soil continuously – and all natural systems reach equilibrium, including farm carbon cycles. “The expectation is that any soil carbon exceeding existing baseline criteria for the farm will not all be additional or permanent so only a fraction can be entered on a ‘ledger’ which is able to be verified as a ‘certificate’ or proof of its existence,” he explains.

The provenance of these certificates will all have a different identity, depending on the farm systems, locations and verifiers. A farmer who can demonstrate soil carbon sequestration as verified certificates has many options, depending on the status of the credits.  The key principle is that they can only be used once:

They can leave them in the ground to increase in value or off-set any future farm system changes
They can sell on the market and spend the money
They could sell/exchange with their processor (Fonterra, Silver fern, Synlait, Miraka etc)
They could off-set their ETS liabilities – if provided for in the Government scheme.

Conland says there are issues related to permanence and additionality of the carbon to existing carbon stocks, but this isn’t unique to New Zealand.

The market is volatile and it’s complex, which Conland sees as a good thing. “It reduces the risk to farmers and the overall intent of climate impacts and emission reductions.  “If it was too easy then many parties would enter and reduce the integrity and value of the carbon sequestered.”

Leading Australian pasture ecologist and carbon farming advocate Dr Christine Jones tours New Zealand in April and May, offering insights for farmers, into the role of soil biology for fixing nitrogen, preventing leaching and raising farm profitability.

Nic Conland and Dr Christine Jones are both speaking in New Zealand in April and May, at the Loyal to Soil Tour with Dr Christine Jones and at the Organic Two-Day Organic Farming Conference.

Follow the Rere ki Uta Rere ki Tai work at www.agrisea.co.nz/rere-ki-uta-rere-ki-tai.

Permanence = Where soil carbon is stored in such a way as to avoid the risk of reversals which might occur when:

  • A farmer has to plough through pasture to grow maize to get urgent food or earnings. Carbon is lost to the atmosphere through bare soils
  • A severe drought causes the grass and cover to die off, the soil dries out and the carbon evaporates off into the atmosphere
  • A hillside is heavily eroded and bare patches and terracettes, these areas are dry and emit to the atmosphere.
  • Heavy rain washes topsoil into the rivers/streams and carries carbon in topsoil

Additionality = Carbon that can be estimated to have been sequestered in addition to the status quo or business as usual.  It is not additional sequestration if you continue to do your current farm practices and your soil carbon numbers increase, as it won’t increase the net carbon sequestered from the atmosphere – because it’s already accounted for.

NOTE: The Soil Carbon Science Strategy draft is closely aligned with the NZAGRC’s Māori Research Strategy, developed by the NZAGRC’s Toihau with input from experts from the Māori agribusiness and research communities during 2021/22.

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Rere ki Uta, Rere ki Tai

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Rather than getting despondent, there are good stories to share that attract positive change in our farming community. Multiple benefits including the potential for carbon credit earnings come from creating a farm ecosystem using diverse pasture, trees, reduced synthetic inputs, and seaweed as a biostimulant in pasture and soils. Here’s our story… #ourlandandwater #regenerativeagriculture #soilhealthmatters #rerekiutarerekitai #agrisea #soilcarbon

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