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There’s an increasing number of projects and schemes available to farmers and landowners that pay for carbon reductions or sequestration. Some of these schemes involve carbon offsetting, which can be a contentious topic. With limited independent advice available, it can be difficult to cut through the noise and detail.

Key takeaways

• Farmers will likely receive greater demands from their value chain to decarbonise with payment incentives to undertake new activities or hit targets. They may also receive increased marketing from companies wishing them to engage in carbon offsetting.
• Any practices should align with the farm’s strategic direction – don’t just follow the money.
• Each farm is starting from a different position and through historical work and perhaps the sheer luck of location, some farms may have more opportunities than others to be paid for carbon. 
• Carbon offsetting can have various challenges associated with it: go careful!
• Carbon insetting offers a route for the whole food supply chain to decarbonise. 

1. What’s the context?

a. Increased urgency to act on climate change

There’s an increasing urgency to act on climate change, as it becomes ever more real. Pressure from scientists and concerned citizens has added to the pressure on governments and companies to act. No business or sector is considered exempt.

b. Ambitious company commitments

In the UK, we have ambitious commitments at a national level, and in recent years, many of the world’s biggest food companies, together with other sectors, have committed to a goal of net zero emissions. This includes companies such as Nestle, Tesco, Sainsbury’s, Danone, PepsiCo, to name just a few. While there is sometimes criticism over the realistic nature of some of these goals, it is what the science demands. As such, carbon is becoming increasingly valued as something to manage and invest in – and so landowners and farmers can expect increased support or demands from all the organisations they interact with (banks, insurance companies, landowners, supply chain etc). 

Achieving “net zero” is a monumental challenge for many companies because success often depends on effective collaboration and a willingness to act by others in the value chain, as well as competitors. Presently, carbon offsetting and investment in nature-based solutions is a common way to help companies to achieve their net zero goals. Yet it’s a commonly held principle that carbon offsets should not be a substitute for direct business emissions reduction.

c. An increasing understanding of the role farms can play

Farm businesses are in a unique position, as they can sequester and store carbon. Very few other businesses can do this. The huge potential to reverse declines in soil health and subsequently increase the carbon stored in our soils, as well as in above-ground biomass, is increasingly recognised and understood by wider society. Subsequently, a surge in schemes to pay farmers and landowners for carbon is underway. We provide a free Farm Carbon Calculator tool for farmers to help them understand the carbon position.

2. Don’t just follow the money

The increasing number of schemes for farmers and landowners to improve their carbon footprint can bring many exciting opportunities, supporting changes small and large. 

When facing any new opportunity, it’s important to take time to consider how it aligns with your farm’s direction. Consider the time that will be invested and the various consequences. It’s also always worth speaking to others too, who will help provide different perspectives, especially anyone who already implements similar practices or participates in the same project or scheme. 

Each farm is starting from a different position and through historical work and perhaps the sheer luck of location, some farms may have more opportunities than others to be paid for carbon. 

3. Getting paid for carbon: key concepts and watch-outs

What schemes already exist?

Indirectly paying for carbon, there are various schemes in the UK already that pay farmers and landowners to undertake sustainability measures, which will likely reduce a farms carbon footprint. Some schemes are nationwide, while many are specific to a region or supply chain. For example:

• National government environmental schemes such as the Sustainable Farming Incentive and Local Nature Recovery in England, and Agri-Environment Climate Scheme in Scotland. 
• Water companies schemes paying farmers to enhance soil health and reduce pollution.
• The selling of biodiversity units to developers via Biodiversity Net Gain
• Specific grant funded initiatives such as Farm Net Zero
• Specific supply chain projects

There are fewer schemes that pay specifically for carbon reduction or sequestration. The most well-known are:

• For woodland creation, using the Woodland Carbon Code standard. 
• For peatland restoration, using the Peatland Code standard

Payments for increasing soil carbon stocks is relatively new in the UK. Organisations such as Agreena, Soil Capital and Trinity AgTech have launched payment schemes. And separately, work is underway to launch a Soil Carbon Code which will recommend minimum requirements for high-integrity soil carbon markets. If taken-up and schemes align to this, there will be some much needed clarity and consistency to this burgeoning space, building more trust and rigour. 

There are also projects working to establish a Hedgerow carbon code and Agroforestry Carbon Code, providing more standardised and agreed methodologies, which may unlock new payment schemes. 

With all these schemes, the way payments occur can vary. Some schemes pay for a farmer or landowner to implement specific practices for which an assumed amount of carbon will be sequestered or removed based on models, while other schemes may be outcomes-based, paying for a measured improvement in carbon. 

How carbon is rewarded in farm-based schemes

Farmers and landowners are not being “paid” for (or being ask to trade) all the carbon stored on their land (the “stock”). Typically, projects are interested in the change over a period. For example, the carbon emissions avoided by implementing a new practice or technology. If a farm is being rewarded for increasing its soil carbon stock, it’s for the increase against a baseline over an agreed time period. In some cases, it may alternatively be the improvement compared to a local average or benchmark. 

Carbon offsetting vs carbon insetting

Some payment schemes involve carbon offsetting or carbon insetting:

Carbon insetting refers to investment occurring within the same supply chain to reduce or sequester carbon emissions. A good case study of this is with Nestle and First Milk, where farmers have received a ’sustainability bonus’ for taking practical measures that protect and enhance natural assets on their land, many of which had a carbon benefit which are being quantified. 

The benefit of carbon insetting projects is that all the organisations in the supply chain benefit from the carbon reduction and there’s less complications or confusion over who claims the benefit. 

It should be mentioned that carbon insetting does lack a clear definition and is sometimes used in schemes that can’t guarantee the reduction is taking place within the value chain. This is common for commodity-based supply chains, where traceability of a crop is a challenge. To get around this, projects have applied a concept called supply sheds (more details here). 

Carbon offsetting is a different approach involving organisations outside of the farm’s direct supply chain. Carbon offsetting has existed for decades as a means to help fund environmental projects, particularly in the global South. They have traditionally been for projects involving tree-planting, the provision of clean cookstoves and renewable energy. Their application to agriculture is relatively new. 

A carbon offset refers to a reduction in GHG emissions – or an increase in carbon storage – that is used to compensate for emissions that occur elsewhere. One carbon credit equals one tonne of CO2e avoided or removed. These credits are essentially traded between organisations. So if you’re a farm that’s sold a carbon credit, the buyer of that credit will be claiming this as their emission reduction and as a farm and you may no longer legitimately be able to claim this carbon reduction as your own. It is double-counting for both the buyer and seller of the carbon to claim credit and gives a false impression of our progress to address climate change. 

The quality and trust of carbon offsetting schemes are variable and we suggest taking care when engaging with this space. Over the decades, many schemes have suffered reputational damage for false or inaccurate claims, or lacking permanence (here’s one prominent example). 

It’s also a common principle that companies must do as much as they can to reduce their own emissions first. Offsetting is a last-resort or temporary action.

Permanence

Permanence refers to how long the carbon is kept out of the atmosphere. For reducing climate risk, the longer the better. 

The permanence of carbon is far easier to quantify and verify for woodlands and forestry, than for soils. This is a major reason why carbon offsetting projects are less prevalent in agriculture. 

Improvements to soil organic carbon carries a higher risk of reversal compared to trees and hedgerow, due to the possibilities of short-term changes in management practice. Therefore agricultural carbon offset projects are often considered lower quality in relation to others. 

The standard convention in offset markets has been to guarantee that carbon is kept out of the atmosphere for 100 years. As this is not practical for soil carbon where credit periods are often limited to 10-15 years. In the USA, Nori offer short-term soil carbon credits that expire after 10 years. In Europe, Soil Capital has a 5 year crediting period, in which farmers can earn and generate credits, followed by a 10 year retention period. Carbon Farmers of Australia must choose between 25 and 100 year permanence guarantee.

Additionality

This is pertinent for quality carbon offsetting projects. It’s about whether the payment a farmer or landowner receives plays a decisive role in helping remove carbon from the atmosphere. Additionality is essential for the quality and credibility of the carbon offset market. Yet, especially in farming, its determination is subjective and deceptively difficult. Is this payment providing the make-or-break difference, or was it going to happen anyway?

Carbon leakage

It’s important to ask, could this project result in an increase of emissions elsewhere? Changes in farm management practice might deliver more carbon sequestration in one place, but, if the result is less food being produced, it may have the effect of creating a bigger carbon footprint elsewhere. This is because imported food may have a bigger carbon footprint than home grown produce. This issue is known as “carbon leakage”. 

Taking a global food systems perspective into any project can help consider any unintended consequences and will help shape a better, more impactful project. 

4. Where to find further information

Click here to download the slides from our webinar (PDF): Getting Paid for Carbon, presented on the 27 April 2023 as part of our Farm Net Zero project.

• On our blog: Demystifying farm carbon offsetting: three watch-outs for farmers
• On our blog: Who owns the carbon?
• Water companies schemes paying farmers to enhance soil health and reduce pollution.
• The Taskforce on Scaling Voluntary Carbon Markets: a private sector-led initiative working to scale an effective and efficient voluntary carbon market
• Offset Guide: a guide for organisations seeking to understand carbon offsets. 
• The Oxford Principles for Net Zero Aligned Carbon Offsetting.
• Broekhoff, D., Gillenwater, M., Colbert-Sangree, T. & Cage, P. Securing Climate Benefit : A Guide to Using Carbon Offsets. 59 (2019).
• 10 myths about net zero targets and carbon offsetting: signed by 41 scientists.

1. Measure and record

“You can’t manage what you don’t measure!”

Before looking at possible changes in management, it helps to understand what your environmental impacts and emissions are and where they are coming from on your farm. Each farming system is different and so the best way to know where the emission “hot spots” are in your system is to use a carbon calculator.

FCT has developed a free, easy-to-use Farm Carbon Calculator and we recommend this tool to understand your farm carbon balance. The Calculator generates a report to show where the emissions and sequestration figures have come from.

As with all such exercises, the more accurate the data you put in, the more accurate the figure you get out. We would expect you to take around 1½ hours filling in the calculator, once you have assembled all the input data that you will need.

Once you’ve got your carbon balance figure, decide if your focus is towards actions in the short or long term. If you are planning strategic farm investment consider how you will incorporate emission reduction technology/processes into that investment. There will normally always be short term options to consider.

2. Improve the existing systems

Before making any changes, look at how your farm is currently performing and how you could improve it. Where improvements can be made, think about how they might be measured. Are there any existing discussion or technical groups nearby that you could join where other producers share information? We may be able to point you towards existing groups or opportunities.

Improving the efficiency of what you’re already doing will be the most straightforward action. It will also deliver immediate financial benefits to your business and a reduction in GHG emissions.

3. Making changes

Here are some priorities that are relevant and straightforward to implement. Pick out and use the sections that fit with your farming system:

Soil Management

• Reduce cultivations
• Repair / improve drainage
• Build soil organic matter levels
• Look at carbon sequestration potential

Cropping

• Reduce cultivations
• Target fertiliser applications to soil conditions, crop requirements and weather
• Explore opportunities to bring in organic materials and use legumes to fix N
• Introduce clover into grazing and cutting swards to save on N fertiliser

Livestock – Ruminants

• Manure management and application: store in solid form if possible
• Investigate Anaerobic Digestion for slurry
• Diet – research suggests changes to diet can reduce emissions from enteric fermentation

Livestock – non ruminants

• Sourcing of feeds – look for more sustainable options, avoiding South American soya-based feedstocks
• Feed efficiency – correct protein balance, maximise feed conversion, minimise waste
• Slurry handling and application

Energy efficiency

• Identify draughts and check insulation
• Commission Energy Performance Certificates for each building
• Install energy efficient lighting
• Consider motion sensors for outdoor areas

Energy Generation

• What are your farm’s natural resources? Can you generate your own energy?
• Are there electricity sub-stations or powerlines nearby
• Consider local biomass supplies
• Check your wind speed at the National Database and solar potential
• Consider your waste streams
• Contact a qualified consultant to take any plans further

Buildings and Operations

• Consider vehicle usage – are you making any unnecessary journeys?
• Are there electric vehicles available?
• Send any on-farm drivers on fuel efficient driving courses
• Do you need a new building? Could you adapt existing space, saving money and resources?

Introduction

Soil underpins the entire farm system. Healthy, well-managed soils support productive and healthy crops and pasture, which in turn supports a profitable and resilient farming system. A soil that accumulates organic matter will be sequestering carbon, improved fertility and water holding capacity and increased productivity.

Soil analysis can be a useful tool for understanding overall soil health and identifying areas that may require management or action. Soil analysis doesn’t have to be limited to sending samples to the lab for analysis, it can be as simple as getting out your spade and digging deeper into soil structure.

This page provides an overview of the types of tests that you can do to understand overall soil health. You may also be interested in our free practical guide to Measuring Soil Carbon.

1. Soil Texture

Why is this important?

Soil texture refers to the relative properties of clay, silt and sand in a soil. Soil texture cannot be altered but is important to understand as it impacts on soil structure, aggregate stability, the amount of carbon present and the soil’s ability to sequester more carbon.  Soil texture will help to identify the risk factors that impact on your soil texture, and allow you to develop mitigation options to avoid adverse effects (like compaction, water logging and erosion).

How is it assessed?

To understand soil texture, rub some moist soil between finger and thumb. Sand is a larger particle size so tends to feel gritty, and doesn’t hold its shape when moulded into a ball. Silt feels smooth, silky or floury. Clay feels sticky when wet, looks shiny when smeared and holds together in a ball. This diagram in the RB209 explains how to hand texture your soil.

2. Soil Structure

Why is this important?

Good soil structure is vital for crop productivity and soil health. It supports and regulates biological activity, water movement and storage, soil temperature, gas exchanges and nutrient cycling. The structure of soil should allow for an even distribution of air, water, mineral particles and soil organic matter. 

How is it assessed?

A typical method of assessing soil structure is VESS (Visual Evaluation of Soil Structure). This is a scoring system which rates the soil in terms of its structural condition from 1 (friable and good structure) to 5 (very compact and impacting on plant root growth and function). The VESS test can be completed at the top of the soil profile pit (between 0-10cm) and then lower down (between 10-30cm) to assess condition throughout the soil profile. More detail on the VESS method can be found here.

3. Bulk Density

Why is this important?

Bulk density is the mass of soil in a given volume. Bulk density can be used as an indicator of pore space, soil compaction and will normally increase with soil depth.  Bulk density is also a critical part of being able to calculate the carbon stock within a field.

Bulk density is usually reported as g /cm3 of soil. It can range from between 0.8g/cm3 soil to 1.8g/cm3, and will vary depending on soil type. Lighter, sandier soils will have a higher bulk density than clay soils. If the soil’s bulk density is over 1.6g/cm3 it can  impact on root growth.

How is it measured?

We measure this at three different depths (O-10cm, 10-30cm and 30-50cm) that correspond to the depths that we measure organic matter and organic carbon at. It can be measured in various ways, however at FCT we use the undisturbed core method. This requires using an open ended steel cylinder to extract the known volume of soil from each of the depths down the soil profile. The soil is then removed, processed (stones and roots removed, stones weighed and assessed for volume), dried and weighed. Bulk density is measured in g/cm³.

By taking measurements at three depths, we can obtain a picture of the carbon yield across the soil profile. Carbon yield (reported as t/ha) provides a much more nuanced metric than a simple percentage of organic matter, and allows for a better understanding of where the carbon is held within the soil profile. 

4. Soil Organic Matter (SOM)

Why is this important?

SOM is the organic component of soil, made up of materials such as plant residues, living organisms and decomposing organic matter. Soil organic matter contributes to healthy soil function and crop productivity in many ways including enhancing soil aggregation and the soil’s water holding capacity, allowing optimal nutrient cycling and providing food for the living organisms which inhabit the soil.

Soil organic matter can be broken down into three distinct groups, this includes plant roots and the living microbial biomass; active soil organic matter and stable soil organic matter, often referred to as humus. The average amount of organic matter in UK agricultural soils can vary between 1 – 7%. The soil organic matter fraction also includes the soil organic carbon. Often the soil organic carbon is calculated as 58% of the soil organic matter, although this can vary depending on the soil type.

Analysing SOM at three different depths within the soil provides an understanding of how the carbon is dispersed throughout the soil profile. Generally carbon near the surface will fluctuate more than carbon held at depth due to carbon cycling.

How is it measured?

There are two main methods that are used to test for soil carbon / soil organic matter. It is important to be consistent in your testing approach:

• Loss on Ignition: Most common test for SOM. Tends to be a cheaper test and the best for helping inform on-farm management decisions. This test is not standardised so can vary between labs, so is important to remain consistent with lab choice. The analysis measures soil organic matter content, which can then be converted using a calculation method to determine the relative carbon content. LOI provides a more rounded approach for assessing soil health.

• Dumas: A more accurate and standardized test for analysing soil organic carbon, however it does not assess overall soil health. In alkaline soils, it’s important to ensure that the lab method accounts for inorganic carbon as well as providing the organic carbon content which is reported as a percentage. Both are important parts of the farm carbon cycle but react differently to management practices. The amount of soil which is analysed is very small (often 2g) as such, it is important to take good samples that are representative of the area being tested.

5. Soil Organic Carbon Yield

What is it?

The amount of carbon held within your fields (to the depths measured). It is reported in tonnes per ha, and can provide a more detailed result than just a soil organic carbon percentage.

How is it calculated?

We multiply 1 ha by the depth of soil (0-10cm, 10-30cm or 30-50cm), the bulk density and the soil organic carbon percentage. This gives the amount of carbon in tonnes/ha in your soil at each depth. Soil organic carbon yield can only be calculated when the bulk density is assessed.

6. Nutrient Analysis & pH

Why is nutrient testing important?

Testing soils for their nutrient status provides an indication of the nutrients available to the crop from the soil. Typically these are phosphorus (P), potassium (K) and magnesium (Mg) but more detailed nutrient analysis can be carried out by the lab on request which may include soil mineral nitrogen testing, or the availability of trace elements.

How is it measured?

We send soil samples to labs for analysis. Nutrients typically are measured in mg/l. The indices reported come from the Defra Index scale and depend on the concentration of nutrients within the soil sample. 

Why is understanding pH important?

Soil pH is a measure of the acidity and alkalinity of the soil. The natural soil pH is determined by the chemical composition but this can be altered through natural and agricultural processes. Soil pH affects the availability of nutrients within the soil and therefore crop productivity, and is therefore a key parameter to understand. 

pH can range from strongly acid (less than pH 5.5) to strongly alkaline (more than 8.5). The target pH for grassland is around 6 and for arable soils is 6.5. If the pH results are low, lime can be added. If the pH is low, then any applied nutrients will not be utilised effectively, as such, addressing pH issues will help with fertiliser use efficiency.

7. Aggregate Stability

Why is this important?

Soil aggregates are the building blocks that make up soil. How stable these aggregates are is an important factor in long term soil health and the development of a resilient soil ecosystem that will deliver on-farm benefits. Soil aggregation is also considered a good indicator of soil organic matter levels. 

How is it measured?

A handful of soil from each profile pit is taken away and air dried for 4 days. Once dry, three lumps of soil are submerged in water and assessed for how well they hold together after 5 minutes and then again after two hours. The lumps of soil are scored using a scale of 0-4 with 0 being good and the lump remaining intact and 4 the score when the lump breaks down.

8. Earthworm Counts

Why are earthworms important?

Earthworms are one of the indicators for soil biology and soil health. They are important soil engineers, redistributing and mobilising nutrients, cycling organic matter and carbon throughout the soil profile, and improving water infiltration.

Earthworms in agricultural soils can be grouped into three ecological types:

• Epigeic – litter dwelling earthworms
• Endogeic – topsoil earthworms
• Anecic – deep burrowing earthworms

How are they counted?

To measure earthworm numbers, we dig a soil pit that is 20cm x 20cm x 30cm deep and hand sort the soil to count the number of earthworms present. This can then be broken down into types and numbers of adults and juveniles. The higher the value the more worms were present. More details can be found at GreatSoils.

9. Infiltration 

Why is this important?

Soil water infiltration is a good indicator of soil structure which can highlight areas of compaction. A short infiltration time can indicate that the soil is healthy due to the high number of pore spaces allowing the water to infiltrate. Pore spaces are important for root development, soil aeration and water retention. Where compaction is present, the soil pores are effectively squashed together leading to reduced infiltration and risk of runoff and erosion. 

How is it measured?

To measure soil infiltration a cylinder and a known volume of water is required. The cylinder is inserted into the soil a few inches and the water poured in. A stopwatch is required to measure the time it takes for the soil to infiltrate. A detailed guide on carrying out the infiltration test can be found here.