Newtrient serves farmers looking for carbon credits
DE FOREST ‒ For farmers, getting paid for carbon credits may be an opportunity, but it’s not going to be a silver bullet. As these carbon markets develop, they can be complex for an individual farmer to navigate and various pieces may need to be put together to make it a viable part of a farm’s cash flow.
One organization that hopes to help farms navigate that complicated field of carbon credits is Newtrient.
Chris Kopman, is general manager of Newtrient, which was founded in 2015 by leading dairy cooperatives and companies. Their mission: reducing the environmental footprint of dairy and making it economically viable to do so. Kopman spoke at the annual watershed conference of Yahara Pride Farms on March 2, in De Forest.
In Newtrient’s earlier efforts, water quality improvements had been the goal – but now “it’s all about carbon credits,” he said. “Capturing carbon and avoiding emissions add up to carbon credits.” The conversations about carbon, and carbon credits, have “just exploded” he said, as concern about climate has escalated.
The challenge for farmers is how to “navigate that space”, he said. Newtrient hopes to help pull all the aspects of carbon credits together to help farmers get the best advice they can.
Sometimes a dairy co-op or other business will talk about carbon “insets” and he explained that the term means that someone along that business’s supply chain will pay for a carbon credit. Carbon “offsets” means carbon credits are sold from outside of a supply chain.
One example of that is Microsoft, which plans to purchase $2 million in carbon credits from Land O’Lakes. “This is one example of a company looking outside their supply chain to agriculture to offset their carbon footprint,” he said. “There are huge amounts of money being allocated for carbon footprints.”
One of the things driving these markets is that companies have set aggressive carbon reduction goals in an effort to “green” their portfolios. “Companies were almost tripping over themselves to lower their carbon footprint, even before they knew what it meant,” he said. Another factor driving the carbon markets is transportation regulations.
A third – and possibly the largest factor – is increased support from the government for adoption of climate-smart practices. Kopman said that there has been $3.5 billion for these so-called “climate-smart” practices in agriculture and there will likely be more money allocated in the upcoming Farm Bill. In addition there is $18 billion included in the Inflation Reduction Act over the next four years to improve carbon emissions.
Kopman said California created its own program for renewable fuels and electric pathways. “Transportation is a big push, a big market, a big driver in this area.”
Dairy funding, dairy focus
Dairy is a big focus for Newtrient because one-third of its funding comes from dairy farmers’ checkoff money. Other funding comes from dairy cooperatives and companies ranging from Dairy Farmers of America to Wisconsin-based Foremost Farms, from Michigan Milk Producers Association to Tillamook Co-op in California.
On dairy farms there can be various areas to focus on -- from feed production or cropping improvements like cover crops and no-till practices, to manure management, enteric methane improvements – cows’ expelling gas from burping and at the other end. In manure management, digesters are a general focus. Kopman said 350 U.S. dairy farms have digesters or are in the process of building them. Nearly all of them are monetizing them by producing renewable natural gas.
Kopman said that any farmer who is considering getting into a carbon credit program should have advice from a trusted advisor and should be aware that there’s a lot of paperwork involved and documentation that will be required. Farmers may need to piece together various programs to make it financially feasible. “It’s complex to navigate and there are various programs to work with. You will need to stack together multiple benefits on the farm. There are a lot of carbon markets out there.”
What he called the environmental justice groups are “not happy with this whole conversation,” he said, as they view this through the perspective that farmers are doing these things or should be doing these things and should not get paid for them.
There is no consistency in the approach to carbon markets at this stage and there is no universal, precise measure of carbon reduction.
Farmers who have been polled on carbon credits have told his organization that the control of their farm’s data and the question of who will have access to that data are of paramount importance. Farmers will need to know what the payment periods are and what the amounts are, he said, as well as the start date and end date. Third party verification will be part of this and farmers should ask who will pay for that verification and who will be responsible for doing it.
He urged farmers to keep their options open, knowing that more opportunities in this area will be coming. Farmers should also keep copious records about what they do on the farm because data will be a huge part of this and results will need to be substantiated.
“Athian, a company that Newtrient has recently invested in focuses on the livestock industry related to methane avoidance and carbon insets, he said.
“What’s being sorted out now is what those reductions are worth in a carbon market. The price piece is still being sorted out.” Carbon markets will be an indirect relationship between those companies that want to buy credits and farmers who are getting paid for them. Newtrient is trying to be an intermediary between the two. Each farm’s project is negotiated differently, he said.
One of the biggest reasons companies want to pay for carbon credits is that consumers are driving it. They want companies they buy goods and services from to be concerned about climate change and carbon footprints. “Consumers want to feel good about the products they buy.” It remains to be seen if consumers will pay more for products because they have a “greener” footprint, he added.