FREQUENTLY ASKED QUESTIONS
With carbon programs there is a lot to consider. Whether you are already enrolled, or just looking to get started, take a look at these commonly asked questions and the answers provided by Sarah Sellars, a third-year Ph.D. student studying agriculture and applied economics at the University of Illinois Urbana-Champaign. These can provide helpful general information about carbon programs and provide a base of information you may need to navigate the market successfully.
Data privacy is an important aspect to consider when choosing a carbon market. It is important to receive a clear answer from the marketplace about who owns your data, what can be done with your data, and how your individual or aggregated data can be used or sold.
The payment could be in the form of cash, cryptocurrency, or credits toward purchases.
A portion of the money may be paid upfront or issued at a future date. There may be a payment program to give you a certain percentage of credits or payment gradually over a specified period.
Some companies may allow carbon credits to be banked and sold later in case the market price goes up.
You will have to pay a fee for soil sampling or third-party verification, although some companies may cover these costs. There may be additional fees such as administrative, registration, insurance, and/or transaction fees depending on the agreement.
Please review the contract length for current market opportunities available in this document.
There could be penalties for the contract holder if the land is rented out or sold during the contract and the tenant or purchaser does not follow the agreed-upon sequestration practices.
Some companies limit the number of carbon credits you can receive per acre. For example, if the company limits you to two carbon credits per acre, and you adopt a practice that sequesters more than two metric tons of carbon per acre, you may not receive the full payment from the carbon they are sequestering.
There are often a specific number of times you will have to report the data and provide soils samples. A third-party verifier may have to visit the farm at a specified period as well.
Some companies may require a technology investment from you, such as requiring that you pay for a subscription to the company’s online platform.
Some other questions to consider:
- Who will be visiting my farm to verify the information? How often will someone need to visit my farm?
- What are the penalties if I discontinue the sequestration project before the end of the contract?
- How is the price that my credits sell for set?
- Is there a limit on the total number of acres I can enroll?
If you adopted one of the qualifying practices before joining the carbon market, you may be able to receive payment for those years you implemented those practices before joining the carbon program. Some companies allow you to go back a limited number of years and get paid for a practice you have adopted (usually between two and five years).
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