In our recent webinar focussing on increasing farm profitability by leveraging schemes such as the Sustainable Farming Incentive (SFI) and carbon markets, speaker Thomas Gent explained how the carbon market works, the value of carbon in farmland soils and how you can stack these to boost farm income.
Thomas is a third generation regenerative farmer on his family’s 800ha farm in south Lincolnshire, which started turning to regenerative techniques 16 years ago. He is also UK Market Lead for Agreena – home of AgreenaCarbon – the largest soil carbon programme in Europe.
During the webinar, which you can view on demand here, Thomas explained that you should think of your farm carbon balance as an asset which you should at least get valued, even if you don’t choose to sell, because there is a cut off point for generating certificates each year and you should at least harvest them, even if you don’t sell them.
He also demonstrated how carbon farming can provide a further income stream which can be stacked with SFI payments.
The carbon market and carbon credits
On farms which are transitioning away from a ploughing-based arable rotation to a regenerative approach, carbon is being sequestered in the soil. Carbon programmes like Agreena’s compensate farmers for doing actions which build soil carbon and reduce emissions by issuing carbon credits. These credits have a monetary value on the carbon market, in the same way a tonne of wheat has a value in the grain market.
The amount of carbon credits received per hectare (the ‘yield’) depends on the practices done on the land – the more regenerative actions, the more carbon credits awarded. The four key actions are:
- Reduced/ no tillage
- Managing residue
- Cover cropping
- Using organic fertilisers
The AgreenaCarbon programme works on an annual basis – new credits are issued each year depending on what has been done in each field over the previous 12 months. You then have the opportunity to sell the carbon credits awarded on the carbon market.
At the moment, Agreena only has options for rotational, arable farms. However the team are looking into options they can offer in the future for farms with permanent pasture systems.
What are the benefits of carbon farming?
Many farms will already be building soil carbon in some capacity, so taking part in a carbon programme means you’d be getting paid for existing actions. During the webinar, Thomas explained “by not trading carbon, it’s like growing a crop of wheat and then just not harvesting it”.
With BPS payments set to go by 2027, farm income is going to take a big hit. As carbon is traded privately, the income is stackable with schemes such as SFI and Countryside Stewardship.
In order to calculate the carbon credits awarded for each field, the AgreenaCarbon programme uses a mixture of their model-based system and soil sampling to ensure the highest level of accuracy.
How do I start carbon farming?
If you are already doing some of the regenerative farming practices listed above, then you have already made a start to carbon farming. In order to get paid for this, you need to be recording your farm practices. You cannot quantify the amount of carbon sequestered without the records to show how each field has been managed.
If you would like to learn more about farming carbon simply fill in this form to request for someone from the Agreena team to get in touch.
How do you trade carbon?
To start trading carbon, you need to record, monitor and verify the practices you do across your farm. Depending on how you farm, up to 3 carbon credits per hectare may be awarded. For example, if you put a cover crop in before a spring crop, the carbon yield will be higher so more credits could be awarded.
The credits awarded are tradable on the carbon market, just like a crop of wheat, and just like wheat, carbon credits can be stored and traded at a later date.
The value of carbon
The value of one carbon credit is generally between £30 and £50 on the carbon market. See the worked example below to see the potential income from selling carbon credits:
Worked example: 250ha farm averaging 1.4 carbon credits per hectare
Low credit value (£30 per credit) generates £10,500 worth of carbon credits
High credit value (£50 per credit) generates £17,500 worth of carbon credits
There are no upfront costs or fees with Agreena, but they will take 15% of credits traded through their programme.
How do I get started with Agreena?
If you’re a fieldmargin user, simply fill in this form to express your interest or send us an email. A member of the Agreena team will then get in touch and we can transfer the data stored in your fieldmargin account.
The overarching takeaway from the webinar was that farmers shouldn’t delay in getting the ball rolling with schemes paying you to farm in a regenerative way. If you miss the boat for generating credits for this season you won’t ever be able to sell them. With regards to carbon farming, the sooner the baseline data is captured, the sooner you can get paid to be doing exactly what you’re already doing.
Interested in the AgreenaCarbon programme? Fill in this online form and we’ll put someone from the Agreena team in contact to discuss your farm’s potential earnings.