The USDA on Oct. 23 released a report on carbon markets that provides a comprehensive look at current market activity, barriers to participation, and opportunities to improve access to carbon markets for farmers and forest landowners. The document, in part, addresses opportunities related to biochar and biogas production.
Development of the report, titled “A General Assessment of the Role of Agriculture and Forestry in the U.S. Carbon Markets,” was required under the Growing Climate Solutions Act, which was signed into law in December 2022 as part of the Consolidated Appropriations Act of 2023.
“The Biden-Harris Administration is working aggressively to ensure farmers, ranchers, forest landowners, and tribal communities have opportunities to be part of the solution to climate change, all while cultivating new revenue streams and fostering investment in rural communities,” said Agriculture Secretary Tom Vilsack. “This landmark report demonstrates both the potential and the challenge that carbon markets present for agriculture and forestry.”
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As part of a broader effort to combat climate change, carbon markets offer a promising tool to achieve net-zero emissions. Farmers, ranchers, and forest landowners can generate carbon credits by adopting practices to reduce emissions or sequester carbon on their land, and carbon markets may provide them new income opportunities through carbon credit sales. Purchasing these carbon credits may also help companies achieve voluntary greenhouse gas reduction goals.
The report explains that carbon registries over the past decade have issued more than 326 million carbon credits to projects in the U.S. for a variety of activities in both the compliance market and voluntary market. Forestry projects accounted for 58 percent of those credits, while agricultural and land use projects accounted for only 3 percent.
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According to the report, the USDA reviewed 55 protocols reated to the generation of agricultural and forestry carbon credits as part of its general assessment, including 41 active protocols, five protocols under development, and nine protocols listed as inactive. Those protocols include four focused on biochar, with two active, one under development and one inactive. The agency also identified two active protocols focus on livestock manure digestion.
The report indicates that approximately 9.8 million metric tons of carbon dioxide equivalent (MMtCO2e) worth of carbon credits were generated between 2013 and 2022 for projects implementing livestock protocols that address the capture and destruction of methane from manure management systems. The compliance market, specifically California’s Cap-and-Trade Program, accounted for more than 90 percent of those credits.
Within the report, the USDA identifies a variety of barriers that have hindered the participation of agriculture in carbon markets. Among other things, farmers face limited returnson investment due to high transaction costs in carbon markets, including the costs of greenhouse gas quantification, verification, and reporting. However, a clear assessment of these barriers gives federal agencies, scientists, farmers and other partners valuable insight into what kinds of solutions can facilitate increased and more beneficial participation by farmers, according to the agency.
A full copy of the report is available on the USDA website
