That’s because truly additional, permanent storage of carbon may be at odds with other financial considerations that govern how farmland is managed. Practice changes like reducing fertilizer inputs and tillage can cut crop yields, for instance.
“You’re making maybe $20 an acre, at the most, and a 20-cent increase in corn will have more impact on your economics than the credits,” said Jim Bunch, a co-founder of Impact Delta, which advises investors on their environmental and social impact.
Chris Lehe, a farmer in Indiana, is working with Indigo to generate carbon credits for the no-till practices he uses on some of his 4,800 acres. Mr. Lehe has been experimenting with cover crops, too, but after three years, he’s weighing whether to continue. Planting them costs him $40 per acre, more than the practice is likely to generate in carbon credits.
“You’re going to have a hard time convincing people to switch to cover cropping for the purpose of the carbon market,” Mr. Lehe said. “Our margins are tight as it is, and I don’t think the amount of income right now is enough to incentivize guys to change the way they’ve been farming for decades.”
Despite all these obstacles, corporate interest in farm-based offsets has remained steady. Boston Consulting Group, which has pledged to reduce its net emissions to zero by 2030, has been among early purchasers. In a statement, the company says it believes that soil-based offsets hold promise and that investment and clear demand signals are necessary for standards and practices to improve.
Mr. Goldberg of Carbon Direct said that he had helped clients buy soil-based offsets, but only from sources where there’s a clear path to improvement in standards and protocols.
“Where we need to be for climate and carbon removal, none of the verticals on their own will be sufficient,” he said. “We don’t have enough forests, and we don’t have enough ability to change soils. All of them need to work, and they all have different trade-offs.”