CHICAGO, Ill. - Executives from carbon market Indigo Agriculture met with carbon buyers, farmers and business leaders at the Chicago Board of Trade to announce and celebrate the issuance of the company’s first carbon credit crop.

During the June 29 event, the Climate Action Reserve (CAR) issued nearly 19,000 credits, while Indigo announced a significant increase in the price for carbon credits. The announcement marked the first scaled production of verified, registry-issued ag carbon credits for the industry.

“This issuance validates the role of agriculture in meeting the world’s urgent need for the kind of sustainability and climate solutions that Indigo’s network of farmers, soil scientists, buyers and partners have worked tirelessly to realize,” said Indigo CEO Ron Hovsepian, who announced that the company would increase buyer commitments to purchase credits at $40, which is a $13 improvement over prior pricing.

Hovsepian was joined at the event by Chris Harbourt, Indigo CSO, Heather Gieseke, Indigo VP, scientists, agronomists and carbon growers including Chris Lehe, of Indiana, who switched to no-till in 2018 at the request of one of his landlords. Lehe, who learned about Indigo Ag and carbon farming shortly thereafter, said he found that the economic benefits of carbon farming far exceed any financial gain provided by programs which pay farmers simply for switching practices.

Another Indiana farmer, Lance Unger, noted that his commitment to carbon sequestration with Indigo had made his operation more profitable. “Our goal as a farming family is to move a profitable operation on to the next generation,” said Unger, a corn, soybean and wheat farmer who said he earned more than $26,000 in additional carbon credit revenue through the program by adopting reduced tillage and nitrogen and adding cover crops.

“The farm doesn’t look the same as it did when my grandpa started it, and I see carbon credits as a new valuable option for us long term. Our ground can produce carbon credits every year. And the more that companies focus on being carbon neutral, the more valuable those carbon credits are – it’s basic supply and demand. When you add to that the agronomic and environmental benefits for us, including soil and plant health, it’s a win-win for everyone.”

Committed credit buyers, including The North Face, Cool Effect and Chartner Next Generation, spoke to why their companies are turning to agriculture for help with their sustainability strategies. In addition, Indigo partners Corteva, Landus and Midwestern Bioag spoke of their support for farmers navigating an increasingly complex carbon farming landscape.

“This event was a great proof point overall that with these programs high standards are possible, and that we can do it to scale,” said Harbourt, who spoke to Farm World about how carbon credits are generated and payments are triggered.

“We’re able to accurately quantify the amount of carbon that is coming off of crop rotations. If you add a cover crop, we’re able to determine the actual carbon that would add to the existing crop rotation,” he said. “There are three criteria that need to be met in order for a farmer to receive top dollar for a credit. Seventy five percent of the sale price of the credit goes to the farmer, 25 percent comes back to Indigo and its partners, such as GROWMARK or Corteva. In order for payments to happen, you must prove realness, additionality and permanence.”

“Realness” equates to the ability for Indigo to prove that the carbon credits customers purchase are real through third-party confirmation. “This is what the CBOT event was all about: to show that we can prove we can do this and that the buyers have approved that we can externally verify with individual quality assurance that what the growers produce is real, and that the greenhouse gas sequestered is in the soil,” Harbourt said.

“Additionality” means that a farmer is undertaking a conservation practice that was not present on their farm in the previous four years. “We’re looking back at two crop rotations. Adding cover crops to a field that never had them is additionality. Customers are trying to reduce the footprint of their product, but until they get there they have to purchase offset credits, which is what the farmers are producing,” Harbourt explained.

“Permanence” refers to a farmer’s commitment to continuing the conservation practices they have agreed to undertake in order to receive payments from carbon buyers.

Farmers throughout the Farm World readership area are eligible to enroll in Indigo’s carbon program. “We’re basically in every state west of the Rockies, around 31 states in all,” Harbourt said. “Our belief is that if farmers are going to do the work to sequester carbon, they should get the highest payments possible from that. We have the most rigorous program in place to ensure buyers that we are delivering top quality, and that’s primarily what is driving the payment price up,” he said.

“The other factor is availability. Companies are after these credits in an effort to get to zero emissions. There aren’t a lot of these credits available, so scarcity is driving the price. Also, we are trying to help drive that price as a benefit to our farmers. This is a perfect opportunity for the Chicago Mercantile Exchange or somebody to come in and make a liquid market, much as you have for commodity crops. This will happen. It’s only a matter of when,” Harbourt added.

Indigo Ag’s second credit issuance will be calculated based on farmers’ carbon sequestration efforts through 2021, and is expected early next year.