Understanding carbon emissions and the voluntary carbon market: A farmer’s guide to a sustainable future

Written by Thomas Gent, UK Market Lead, Agreena

As farmers, you’re not just growers of the crops that provide food for us all; you’re stewards of the land. In today’s evolving agricultural landscape, it’s crucial that farmers understand how sustainable farming practices help reduce agriculture’s impact on the environment and how this understanding can be translated into financial gains.

To help achieve this understanding, farmers need to familiarise themselves with the concept of carbon emissions, particularly Scope 1, Scope 2 and Scope 3 emissions, and see where their business fits within these scopes, the grain supply chain and the importance of participating in the voluntary carbon market (VCM) in order to clearly see the value of their farming practices. 

Scope 1, 2 and 3 emissions: What are they?

It’s essential to grasp the concept of carbon emissions scopes so that farmers understand the role they can play in carbon trading via the VCM and the impact this can have on grain supply chains.

Scope 1 emissions: Direct emissions that originate from sources owned or controlled by your farm. For farmers, Scope 1 emissions can include emissions from tractors, on farm machinery and other equipment, as well as emissions from enteric fermentation in livestock.

Scope 2 emissions: Indirect emissions associated with the consumption of purchased electricity, heat or steam. For many farmers, this primarily involves energy use on the farm, such as electricity for irrigation or heating.

Scope 3 emissions: Indirect emissions that occur as a result of farming activities but are beyond farmers’ direct control. They can include emissions from the production of fertilisers, pesticides and fuel used in transportation of your products to market.

Scope 3 is of significant interest to farmers because they sit within the Scope 3 emissions of the food supply chain. As these companies set ambitious targets for reducing emissions, they’ll have an increasing interest in the activities taking place on farms, leading to both pressure on farmers to reduce emissions while at the same time presenting opportunities for farmers to deliver climate friendly products.

The agricultural sector plays a significant role in greenhouse gas emissions, particularly methane (CH4) from livestock and nitrous oxide (N2O) from fertiliser use. Understanding the carbon emissions associated with farming practices, including within Scope 1, 2 and 3, is crucial to not only mitigate their impact on the environment, but to enable farmers to explore new income opportunities.

The VCM: A sustainable opportunity

The VCM is where individuals and organisations voluntarily compensate for their carbon emissions by investing in projects that reduce or sequester carbon, allowing market participants to take action against climate change and for the planet to move towards net zero.

How the voluntary carbon market can benefit farmers and impact grain supply chains:

Carbon credits for sustainable farming: By adopting sustainable farming practices that reduce carbon emissions, farmers can generate carbon credits which reflect the amount of carbon dioxide equivalent (CO2e) emissions reduced or sequestered. 

Revenue generation: Farmers can sell these carbon credits in the VCM. Companies and individuals buy these credits to compensate for their own unavoidable emissions, making farmers a valuable player in the fight against climate change.

Enhanced grain supply chains: As consumers and companies increasingly prioritise sustainability, organisations within grain supply chains are looking to demonstrate that they’re reducing their carbon footprint. By participating in the VCM, farmers can position themselves as sustainable suppliers, attracting buyers willing to pay more for climate-friendly farmed products.

How to get started

Assess your farm’s carbon emissions:   A recognised carbon calculator will help you determine your baseline and will also identify emissions within Scopes 1, 2, and 3 and allow you to pinpoint areas for improvement.

Implement sustainable practices: Adopt more sustainable farming practices that reduce emissions and increase carbon sequestration. This might include no-till or reduced-till farming, cover cropping and efficient energy use.

Monitor and measure: Using a carbon calculator, continuously monitor and measure the impact of your sustainable farming practices on your carbon emissions. This data is essential for accurately quantifying and verifying your carbon credits.

Decide how to market your sustainable impact: There are many options available to you to decide how to use your new carbon credits. You can keep the credits for as long as you wish, you may trade them yourself or via a broker on the VCM, or you can trade them within the supply chain.

Carbon farming made simple:

The easiest way to follow all of these steps to an auditable and verified standard is to join a carbon programme like AgreenaCarbon. Within a carbon programme, you’ll have the opportunity to gain an understanding of the value of your efforts on the farm. This will give you the opportunity to trade your carbon either within the supply chain or via the VCM.

Joining a carbon programme keeps you in the driving seat of your transition and allows you to understand the value your carbon has on your farm. Good carbon programmes should support and incentivise the use of more soil health-focused farming practices.

The future of farming: Sustainability and profitability

The crossover between farming and carbon accounting is going to become increasingly important. Farmers’ customers are setting ambitious climate goals that will affect what they buy and value. It’s essential that farmers remain in control of this valuable asset and utilise it to finance their transition to a net zero future. The agricultural sector is transforming, offering opportunities for farmers to both contribute to a greener planet and enhance their income.

By understanding and managing Scope 1, 2 and 3 emissions and participating in the VCM, farmers can use this new revenue stream to move towards their own net zero goals and therefore bring value to their products – not only to make their farming practices more sustainable, but also to increase profitability through higher grain prices and new income streams.

The future of farming lies in sustainability. Those farmers who embrace carbon trading, reduce carbon emissions and engage with the VCM will not only play a pivotal role in combating climate change, but also secure a more prosperous and sustainable future for their farming business.