Agricultural credits increase in the voluntary carbon market

Agriculture is a vital source of climate solutions. However, farmers and ranchers face significant financial barriers to implementing farming practices that mitigate emissions, such as cover crops, efficient nitrogen management and anaerobic digesters. Voluntary carbon credits offer a market-based pathway to unlocking critical funding for farmers and ranchers looking to adopt these sustainable practices. 

There has been considerable growth in the issuance of agricultural carbon credits in recent years. Given this increased demand, EDF and Boston Consulting Group’s report, Mitigating agricultural emissions through carbon credits: Current status of the voluntary carbon offset market and the path ahead assesses current agricultural carbon market trends and their alignment with scientific evidence for climate impact, as well as offers recommendations to expand the availability of high-quality, science-based credits. 

Key findings of the report include:

• Agricultural credit issuances grew by 125% between 2019 and 2022, yet they represented only 5% of total credits in 2022.
• The majority of credits issued supported increased carbon stocks in grasslands and anaerobic digester projects. 
• The types of agricultural credits being sold are not fully aligned with the best scientific evidence on emissions mitigation and impact quantification methods.

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Presently, several challenges hinder voluntary carbon market opportunities for the agriculture sector, including onerous carbon credit requirements and distrust of carbon offsets. Despite these challenges, the report finds that collective action and stronger infrastructure can improve market opportunities for the agriculture sector.

Key recommendations

• Rebuild stakeholder trust in the voluntary carbon market by improving market infrastructure and refining agricultural credit methodologies. The voluntary carbon market needs stronger, standardized governance. Clearer and more consistent rules for credit issuance will lay the groundwork for more agricultural carbon crediting projects with real, verifiable climate impact. This, in turn, will increase trust and attract more funding to the market.
• Expand demand for high-quality agricultural credits. Companies and governments can play key roles in increasing demand for high-quality credits. Companies can do so by including agricultural credits in their broader mitigation strategy, focusing on science-backed solutions with mature measurement, monitoring, reporting and verification toolkits. Government carbon pricing schemes can also include agricultural methodologies as eligible credit types for compliance. Both actions have the potential to spur demand for high-quality agricultural credits.
• Improve guidance on facilitating co-funding for agricultural climate solutions from multiple sources. Mitigating agriculture’s climate impact requires multiple sources of funding to drive the adoption of sustainable practices, yet stakeholders face uncertainty due to varying guidelines for different sources of funding. Collaboration across sectors will be vital to establishing a framework that guides the overlap of various funding mechanisms, ensuring adequate transparency and accountability for the resulting mitigation claims.

By leveraging voluntary carbon markets, the agriculture sector can accelerate emissions mitigation efforts while continuing to meet global nutritional needs. To achieve this, the market must increase the availability of high-quality agricultural credits. This will require collaboration among voluntary standards bodies, governments, the private sector and other stakeholders to improve the credibility of agricultural credits.

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