Carbon credits on the farm: how to join and how much income to expect?

Old farming methods have degraded Lithuania’s soil, and more and more farmers are making changes. Carbon farming, which is rapidly gaining popularity, follows the natural cycle of nature: you to me, me to you.

We talk to Agnė Jonelytė, Agronomist at HeavyFinance’s Carbon Farming Programme, about how to take care of the soil to ensure a bumper harvest (photo).

Good soil - is a farmer's greatest asset. But agronomists are increasingly pointing to its deteriorating quality. What do you suggest farmers do to regain the humus and micro-organism diversity that has been lost in their soils?

Soil is affected by air, water, different organisms, plants and farming practices. First of all, we invite you to talk about every farmer’s fields by offering to join the free HeavyFinance Carbon Farming Programme. We test the soil in the fields of those who join, discuss with the farmers which changes will have the most positive impact and take actions that ultimately help to increase the farm’s income, both in terms of the crops it produces and in terms of certifying the results of the positive changes.

How much does it cost to join the Carbon Farming Programme and how does it change the profitability of a farm?

We don’t charge a joining fee and we do soil testing completely free of charge. By helping farmers improve their soil, we make money at the end of the process – by taking an administration fee from the carbon certificates already issued. So farmers who join the programme take no financial risk and have a great opportunity to improve their soil and earn extra income from the sale of the carbon emission certificates they generate on their farm.

We have done the research: on average, around 2 carbon credits can be generated per hectare per year. There are farms that can achieve 3.5 and even 5 carbon credits per hectare per year. This depends on the location, soil structure, etc.

"HeavyFinance" offers several practices to be applied in its carbon farming programme. What are they?

Caring for the soil starts with not disturbing its natural processes. That’s why we’re talking first about replacing the plough with a disc, coulter or band drill. Of course, there are situations where ploughing is necessary, but when the soil is immediately sown with plants, this one-off ploughing removes a small amount of the organic carbon stored in the soil.

There are a few key principles that we recommend and that some farmers are successfully applying: reducing the use of chemical fertilisers and replacing them with organic fertilisers; rotating crops to improve soil health (crop rotation); growing intercrops to maintain soil cover; and optimising the use of fuels to reduce emissions.

There are a number of questions that arise when joining the programme. How does "HeavyFinance" help farmers on their sustainability journey?

It all starts with a conversation with our agronomists, who try to find out as much as possible about how you farm. We find out what the farmer’s priorities and aspirations are, discuss current profitability and future prospects. We organise regular webinars, newsletters and farm visits with a consultant agronomist to ensure ongoing support and assistance.

In addition, we carry out soil tests at the start of the carbon farming journey and repeat them every two years. The more organic carbon the soil accumulates, the more carbon emission certificates you get. These are sold, giving the farm extra income.

What documents are needed to join the Carbon Credit Programme?

After the first interview, a list of the necessary documents is sent to the farmer. The contract requires a copy of the farmer’s certificate; a copy of the identity document; a PDF copy of the holding statement showing the unique plot numbers and areas of the field; and crop declarations for several years; VMI fuel declarations, as well as an agronomic table, which HeavyFinance colleagues can help with if necessary. Once the paperwork is in place, we sign the contract and start working side by side.

How is carbon measured and what technologies are used in this process?

A baseline soil sample is taken after the contract is signed. This is the starting point. After a couple or a few years, we go back to the field and take a sample again. The soil is assessed to see how much organic carbon it has accumulated. From the accumulated carbon, carbon emission certificates are generated.

In addition, information is collected on practices (crop rotation, intercropping, tillage method, manure application), nitrogen fertiliser use, fuel consumption, yield (biomass), soil type and climate (temperature, rainfall, number of days of sunshine, wind speed, etc). All this information is fed into the model, then the organic carbon content of the soil is calculated and converted into CO2.

But once you test the soil, you can't see the real situation. Today's nitrogen is this and tomorrow's is that. How is a soil treatment programme designed?

It certainly is. After all, one field is not equal to another. By analysing all the historical information gathered, talking to the farmer and finding out about his farming system, our specialists can make individual recommendations. Once we have assessed the overall situation of the farm, our team of agronomists then step in to further advise the farmer. The discussions reveal good practices already in place and what would be worth changing. There is room for improvement on all farms. Then we draw up an action plan and discuss the measures that could bring more benefits.

What are the main obstacles that farmers may face in implementing a carbon storage programme? How to avoid them?

Everyone’s situation is different. Maybe a farmer is just starting to adopt sustainable farming methods and needs an interest-free Green loan to change implements, while another might just need more knowledge or encouragement. It’s about making up your mind and trying new ideas, making a plan and sticking to it. If you are timid, you can apply the new practices on only part of the farm and compare the results.

How can farmers maximise the amount of carbon credits in their soil?

More sustainable farming practices are needed to maximise soil organic carbon storage. Keep fields green for as long as possible to allow photosynthesis to take place. This is the process by which the plant takes up CO2 from the atmosphere. Growing intercrops with higher biomass, using organic fertilisers, good crop rotation and other good practices will help to build up more organic carbon, thus improving soil quality and increasing farm profitability.

How does the process of certifying and selling carbon credits work? When is the farmer paid?

Everything that happens on the farm must be documented and correctly described in accordance with the greenhouse gas (GHG) standard. This is where our experts come in. This is followed by an international independent audit: foreign auditors check all the documents, the results of the tests carried out and visit a few randomly selected farms.

After the audit, all data is submitted to VERRA, an international CO2 credit certification organisation based in the USA. After its final assessment, certificates for the carbon emissions removed are issued and sold to the buyer at a price and on terms agreed with the customer.

The price of a carbon certificate depends on many factors. For example, market dynamics: how many credits are available on demand and supply. If there are more buyers than sellers, the price rises. The type of certificate and the certification body are also important. “HeavyFinance” has chosen a methodology that meets the highest standards, works with world-class scientists and laboratory testing to produce high quality carbon certificates.

When a farmer wants to adopt a new practice, he thinks ten times. What advice would you give to those still hesitating?

Join and participate because it costs the farmer nothing. There is no initial contribution. We conduct all research at the company’s expense, and the farmer can benefit from scientifically grounded recommendations and expertise from agronomists.

In this project, we are partners with farmers, so the main task of “HeavyFinance” is to improve farm performance, strengthen its resilience to climate change factors, and conserve and enhance the soil—this is the foundation of our recommendations. Sustainable practices promote crop productivity and the farm’s economic viability.

Participation in the program starts with a minimum of 40 hectares. Farmers can increase their area if they purchase additional land or lease it under a long-term contract. There are also opportunities to participate in the program through cooperation, which is especially advantageous for small farms—we have examples of farmers accumulating carbon even if they don’t individually have 40 hectares. There is also an option to withdraw: if a farmer decides to leave the program, they must notify us 90 days before the first soil tests. Again, this comes at no cost.

Even without considering climate aspects, farming that sequesters carbon rejuvenates the soil each year—making it stronger, more productive, and more resilient to droughts and heavy rains. The organic carbon stored in the soil essentially creates more humus, which means greater yields, reduced need for fertilizers, and so on. Soil is a complex, living organism that requires individual care, but it rewards those who are patient.

After all, farming is a business. There is no room for compromise. Those who understand this begin to apply best farming practices.

Thank you for the conversation.

Article written by: Ramunė Sutkevičienė, Editor-in-Chief of agroakademija.lt