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Soil carbon credits and agricultural carbon markets

How farmers are paid for storing carbon in soil, how a credit is measured and verified, a worked example, and the problems of additionality and permanence.

Current topic7 min readUpdated
On this page
  1. Soil carbon in brief
  2. How a credit is made
  3. The hard questions
  4. What it means for farmers
  5. Key points
  6. What the exams ask
  7. Questions people ask
  8. Sources
  9. Related on Laisha
  10. Discussion

Soil holds more carbon than the atmosphere and all the world's vegetation combined. Farming practices that add organic matter to soil, or stop losing it, can pull carbon dioxide out of the air and store it underground. Soil carbon credits pay farmers for that service: a company buys credits to offset its own emissions, and the money reaches the farm through a project developer.

The idea is attractive and widely promoted, but it is also among the most contested parts of the carbon market, because soil carbon is slow to build, hard to measure and easy to lose. This article explains how a credit is made, works through the numbers, and sets out the questions anyone should ask.

Soil carbon in brief

Soil organic carbon (SOC) comes from roots, residues, manure and microbes, and is lost when organic matter decomposes. Its level reflects a balance between inputs and decomposition. Practices that raise inputs or slow decomposition can increase it:

  • Cover crops and keeping living roots in the soil for more of the year.
  • Retaining residues instead of burning or removing them.
  • Reduced or no tillage, though its benefit is debated (see below).
  • Adding organic amendments: manure, compost, biochar.
  • Better grazing management and restoring degraded grasslands.
  • Agroforestry and perennial crops.
  • Converting cropland to grassland or forest, the largest change, but one that removes land from food production.

Three properties make soil carbon different from many other carbon stores:

  • It saturates. A soil under a new practice gains carbon quickly at first, then more slowly, until it approaches a new equilibrium, often after 20 to 50 years. Gains do not continue for ever.
  • It is reversible. Plough a no-till field or stop the cover crops, and much of the gain can be lost within years.
  • It is variable. SOC differs greatly across a field and with depth, so small changes are hard to detect against natural variation.

The French-led "4 per 1000" initiative, launched at the 2015 Paris climate conference, popularised the idea that increasing global soil carbon stocks by 0.4 per cent a year would significantly offset emissions. Its practical potential is debated, but it put soil carbon on the policy agenda.

How a credit is made

How a soil carbon credit is made: a farmer changes practice; the extra soil carbon compared with a baseline is measured or modelled; an independent verifier checks it; deductions are made for uncertainty, leakage and a buffer against reversal; only then are credits issued and sold, one credit per tonne of carbon dioxide equivalent 1 Practice cover crops, reduced tillage, grazing, trees, organic inputs 2 Measure baseline vs project; soil samples plus models 3 Verify independent auditor checks against the standard 4 Deduct uncertainty, extra emissions, leakage, buffer pool 5 Issue credits on a registry; 1 credit = 1 t CO₂e The tests a credible credit must pass Additional would not have happened without the carbon payment Measurable a real change, larger than the error of measuring it Permanent carbon stays put for decades; reversal covered by a buffer No leakage emissions not just moved elsewhere; no double counting
The five steps from a change in farm practice to a sellable carbon credit, and the four tests a credible credit must pass. Each step adds cost, which is why most soil carbon projects aggregate many farms.Diagram: Laisha, original.
  1. A practice change, enrolled in a project that follows a published methodology (standards include Verra's VM0042, the Climate Action Reserve's Soil Enrichment Protocol, and Gold Standard methods; some government schemes, such as Australia's, have their own soil carbon methods).
  2. Quantification of the change compared with a baseline: what would have happened without the project. Most methods combine soil sampling at the start and at intervals with biogeochemical models calibrated for the region, and require sampling to a stated depth (often 30 cm).
  3. Verification by an independent auditor.
  4. Deductions for uncertainty, for any increase in other emissions (such as extra fertiliser or fuel), for leakage, and for a buffer pool of credits held back to cover future reversals.
  5. Issuance of credits on a registry, each representing one tonne of carbon dioxide equivalent (t CO2e), which can be sold and later retired by the buyer who claims the offset.
Worked example

From a soil test to carbon credits

A farm adopts cover crops and reduced tillage. Over five years, the organic carbon in the top 30 cm rises from 1.20 to 1.32 per cent by weight, measured on the same soil mass. Bulk density is 1.30 t/m3.

  1. Soil mass in the top 30 cm of one hectare: 10,000 m2 × 0.30 m × 1.30 t/m3 = 3,900 t.
  2. Increase in carbon: 3,900 t × (1.32 − 1.20) ⁄ 100 = 3,900 × 0.0012 = 4.68 t C per hectare.
  3. Convert carbon to carbon dioxide (×44⁄12): 4.68 × 3.667 = 17.2 t CO2 per hectare over five years, or 3.43 t CO2 per hectare per year.
  4. Deduct 20 per cent for measurement uncertainty and 15 per cent for the buffer pool: 3.43 × 0.80 × 0.85 = 2.33 credits per hectare per year.
  5. Subtract any extra emissions: if the system uses more nitrogen fertiliser, adding 0.3 t CO2e of nitrous oxide per hectare a year, net credits are about 2.0 per hectare per year.

At an illustrative price of 20 currency units per credit, that is about 40 currency units per hectare a year, before the project developer's share and the costs of sampling and verification. Many real projects find rates of change lower than this example; typical reported gains from single practice changes are in the range of about 0.1 to 1 t C per hectare per year.

The calculation must compare equivalent soil masses: if a practice changes bulk density, comparing a fixed depth can create apparent gains or losses that are not real.

The hard questions

Credible carbon credits must be additional, measurable, permanent and free of leakage, and soil carbon struggles with each.

  • Additionality. Would the farmer have adopted the practice anyway? Paying for practices already in use, or already profitable, buys no extra climate benefit. Many methodologies exclude farms that had already adopted the practice.
  • Measurement. Detecting a change of a few tonnes of carbon per hectare in a soil holding 40 to 80 tonnes requires many samples; models reduce cost but add their own uncertainty. Studies have found that sampling only the top few centimetres can mistake redistribution for gain: no-till, for example, often concentrates carbon near the surface while total stocks to depth change little.
  • Permanence. Carbon stored for a decade and then released has little climate value. Projects commit for periods such as 20 to 100 years and keep buffer pools, but long contracts are a real burden on farmers and on land sales.
  • Leakage and displacement. If a practice cuts yields and food production moves elsewhere, emissions may simply relocate.
  • Saturation. Payments based on early high rates of gain fall as soils approach equilibrium.
  • Claims. A tonne of soil carbon stored does not undo a tonne of fossil carbon released permanently; many climate scientists and buyers' guidelines now urge companies to cut their own emissions first and treat removals as a supplement.

International efforts to raise credit quality, such as the Integrity Council for the Voluntary Carbon Market's Core Carbon Principles, and rules under Article 6 of the Paris Agreement, are tightening standards for all credits, including agricultural ones.

What it means for farmers

Soil carbon payments are best seen as a bonus for practices that make agronomic sense on their own: better soil structure, water holding, nutrient cycling and resilience. Before signing a contract, farmers and advisers should check:

  • the price per credit and the share the farmer receives;
  • who pays for sampling and verification;
  • the contract length and what happens if the land is sold or the practice stops;
  • data ownership and use;
  • whether the farmer can still claim the same carbon in a supply-chain ("insetting") programme, to avoid double counting.

Key points

  • Soil organic carbon rises when inputs exceed decomposition: cover crops, residues, organic amendments, grazing management, agroforestry and perennials.
  • Soil carbon saturates, is reversible and is spatially variable.
  • A credit = 1 t CO2e of additional, verified removal, after deductions for uncertainty, extra emissions, leakage and a buffer pool.
  • Converting soil carbon to CO2: multiply by 44 ⁄ 12 (about 3.67); compute stocks on an equivalent soil mass.
  • Key tests: additionality, measurability, permanence and leakage.
  • For farmers, carbon payments are a bonus to practices that should pay agronomically on their own.

What the exams ask

  • Sustainability and soil science courses: soil carbon dynamics, practices that sequester carbon, saturation and permanence, and the 4 per 1000 idea.
  • Postgraduate and professional examinations in environmental management and agribusiness: the structure of carbon markets, MRV, additionality, leakage, buffer pools, and calculating credits from soil data.
  • Civil-service and policy essays: carbon markets for farmers, their benefits and risks, and agriculture's place in national climate commitments.

Described in general terms: the kind of examination, not a past paper. Laisha never reproduces exam questions.

Questions people ask

Can every farm earn soil carbon credits?

Not easily. Farms with already high soil carbon, or that already use the practices, may not qualify as additional. Small farms usually need to join aggregation programmes to spread the cost of measurement and verification.

Is biochar the same as soil carbon from cover crops?

No. Biochar is a stable charcoal made by heating biomass with little oxygen; it lasts much longer in soil than ordinary organic matter and is usually credited under separate methodologies with higher permanence.

Why are soil carbon credits cheaper than some other credits?

Partly because of the uncertainties over permanence and measurement, and partly because supply is large and standards vary. Higher-quality credits with stronger measurement and longer commitments tend to sell for more.

Sources

  1. IPCC. Climate Change and Land. Special Report, 2019. Chapter 6 (interlinkages and response options).
  2. Powlson, D. S. et al. "Limited potential of no-till agriculture for climate change mitigation." Nature Climate Change 4, 678–683 (2014).
  3. Smith, P. et al. "How to measure, report and verify soil carbon change to realize the potential of soil carbon sequestration for atmospheric greenhouse gas removal." Global Change Biology 26, 219–241 (2020).
  4. Minasny, B. et al. "Soil carbon 4 per mille." Geoderma 292, 59–86 (2017).
  5. FAO. A Protocol for Measurement, Monitoring, Reporting and Verification of Soil Organic Carbon in Agricultural Landscapes (GSOC-MRV Protocol). FAO, 2020.
  6. Integrity Council for the Voluntary Carbon Market. Core Carbon Principles. ICVCM, 2023.

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