Carbon banking hangs in balance in agriculture-heavy states
MOORHEAD, Minn. (AP) – The United States is making a big bet on the role that farmers can play in mitigating climate change.
President Joe Biden said he wants American farmers to be the first in the world with net-zero greenhouse gas emissions. How they might achieve that goal is still unclear — but one idea getting a lot of attention involves paying farmers to store carbon in the soil.
It's called carbon banking, and some see it as one way to reduce the level of carbon dioxide in the atmosphere. While the concept has been around for decades, it's still finding a foothold in ag-heavy states like Minnesota.
"It's definitely a change in management. And it definitely requires more management," said A.J. Krusemark, who farms with his wife and parents near the southern Minnesota town of Trimont, about an hour southwest of Mankato.
The idea is that by changing farming practices, carbon dioxide can be removed from the atmosphere, converted and stored as soil carbon. Farmers can then earn credits for the carbon that they store, and companies can offset the pollution that they cause by buying those credits.
Krusemark's family was already committed to the type of agriculture that's focused on developing healthier soil — including many of the same practices that make them eligible to sell carbon credits.
"Our goal is to be as regenerative as possible in our farming practices," he said.
Krusemark is an engineer by training. He moved back to the farm eight years ago and started learning about regenerative agriculture, a set of practices that, in part, increases the amount of carbon in the soil, Minnesota Public Radio News reported.
"I spend a lot of time reading, especially in the winter when we are a little bit slower," he said.
Four primary principles
Regenerative agriculture involves four primary principles: Limiting disturbance of the soil; keeping the soil covered throughout the growing season by planting cover crops; grazing livestock on the land; and planting a more diverse mix of crops.
Krusemark plants cover crops to keep roots in the soil after the cash crops are harvested. He doesn't till the soil as much. Cattle graze on his fields periodically, and he's added peas to the traditional crop rotation of corn and soybeans.
Those changes qualified the Krusemarks to be paid for carbon credits through Truterra, a subsidiary of the Minnesota-based agriculture giant Land O'Lakes.
Companies that pay farmers to bank carbon take several different approaches in calculating a farm operation's carbon storage. Some look back, some look ahead. Either way, it's an imprecise science, based on calculations and estimates.
Truterra currently bases the price of its credits on the past five years of a farm's practices. It calculates the projected impacts of certain farming practices on the land and pays farmers accordingly.
The company contends this "look-back" approach will result in a higher quality carbon storage program, because the essential farming practices — which often require a costly conversion when farmers move from more traditional practices — are already established, and farmers are more likely to maintain the practices.
Truterra is one of several carbon bank startups. Other carbon banking companies pay farmers for future farming practices, asking them to commit to regenerative approaches over a period of time.
Truterra President Jason Weller said he's seeing a lot of interest in his company's program.
Microsoft was the first buyer of Truterra credits, purchasing 100,000 tons of carbon earlier this year. Truterra won't say how many farmers or how many acres of land are enrolled in the program.
How to sell program to farmers
But, Weller said, farmers aren't going to participate just for the money. It's not enough.
"What we're offering today is $20 a ton for carbon," he said. "When you put that on a per-acre basis, maybe you're looking at half a ton per acre, per year. So you kind of do the simple math, that works out to be 10 bucks an acre."
That per-acre payment alone won't sell farmers on storing carbon, Weller said. It might cost a farmer $40 or $50 an acre to buy the necessary equipment and make the changes needed to convert to no-till regenerative farming.
"Once the farmers kind of pencil it out, you know, scratch their head a little bit, they're like, 'That actually doesn't really make a lot of sense, because it's a lot of expense in order to get a low return,'" he said.
Potential abuse of credits
So instead, Truterra focuses on convincing farmers that there is value in the healthier soil and other effects of changing how they farm.
The carbon credit money is then simply an incentive to stick with those practices for the long term — and that's an essential element for storing carbon in the soil.
"Once the farmer is really locked in and has a functioning soil carbon sequestration system, they're more likely not to drop out of the system," said Weller. "We need these farmers to maintain the soil-health systems for 10, 20, 50 years — over multiple generations."
Even carbon banking skeptics like Ben Lilliston, the director of climate strategies at the Minneapolis-based Institute for Agriculture and Trade Policy, like the idea of encouraging farmers to make a long-term commitment to improving soil health.
But they say it lets companies off the hook for their own pollution. If they can offset harmful practices by buying carbon credits, they no longer have an incentive to lessen their impact on the environment.
"We do know some carbon is being sequestered under certain practices and certain farming systems. That's good. Let's support that," said Lilliston. "But let's not use that as an excuse for companies (not) reducing their own emissions."
Lilliston agrees that the work and money farmers like A.J. Krusemark invest to store carbon will have long-term benefits for the environment. But he argues that all that work won't do much to help mitigate climate change if big companies are then allowed to buy those carbon credits to offset their own pollution.
"One of the things that we're concerned about is a company saying, 'Hey, look, we've paid for some carbon (to) be sequestered over here. So we don't have to reduce our own emissions over here, our own pollution,'" Lilliston said. "And that kind of trading, that kind of offset of pollution, is what that is called, is a real problem."
Skeptics of carbon banking
Skeptics of carbon banking practices say that, in order for it to have real climate impact, the carbon storage must come in tandem with reductions in greenhouse gas emissions — not as a replacement for that pollution.
And then there is the complication of how to accurately measure the amount of carbon stored in a particular plot of land.
Weller said the science and practice of carbon soil storage is still an evolving process, but it's important for regenerative agricultural practices to take hold, even if the process of carbon banking and measuring isn't perfect.
"Climatologists tell us we're running out of time," he said. "And we need every tool in the toolbox to be tackling the climate challenge."
Krusemark knows that some farmers are skeptical about regenerative agriculture, thinking perhaps it's just a passing fad.
But he's committed, and he wants others to think about what he's seeing on his farm: Healthier soils, less pollution and long-term cost savings from using less fertilizer and pesticides.
"This is not a one-size-fits-all solution," he said. "You need to figure out what works for you. Because, I think, if you want to make a very simple definition of sustainability, it has to be something you're able to continue to do."
Truterra is betting its business model that farmers will adopt regenerative practices.
And thousands of farmers will need to find the solution that works for them, if regenerative agriculture and carbon farming are going to make a difference in climate change.