By Megan Miller, Illinois Soybean Association (ISA) Agronomy Programs Manager, and Deanna Burkhart, ISA Agronomic Programs Coordinator

Welcome to ISA’s carbon market Q&A where Deanna Burkhart asks Megan Miller about today’s Illinois carbon marketplace! Deanna started with the Illinois Soybean Association as an Agronomic Programs Coordinator in 2022 working with Megan, ISA’s Agronomic Program Manager. Megan has been with ISA for over two and a half years and is an expert in carbon programs and incentives being offered to Illinois farmers.

DB: Tell our readers a little about yourself. What is it that sparked your interest in Illinois agriculture and carbon programs?

MM: I first started working with carbon markets and conservation funding for farmers in a previous role working as a consultant for a farm management firm in Central Illinois. One of my responsibilities was finding conservation programs that worked for farmers and landowners.

DB: For growers new to the carbon marketplace, where’s the best place to start? Is there somewhere that summarizes the programs that are available?

MM: For information on how carbon markets work and what conservation practices qualify you for enrollment, visit www.ilsoyadvisor.com/carbonsense.

The Illinois Sustainable Ag Partnership (ISAP) recently released an updated Ecosystem Service Market table, which contains information about all the markets currently available to farmers in Illinois.  https://ilsustainableag.org/programs/ecomarkets/

DB: Are carbon insetting and offsetting markets the only types of markets available and what is the difference?

MM: Row crop farmers are able to generate two different types of carbon credits 1) insetting or Scope 3 credits and 2 )offsetting or Scope 1 credits. Insetting credits are used to reduce emissions within a value chain. For farmers, this means that they are reducing the emissions associated with the production of a food, fuel, or fiber product. Offsetting credits are utilized to reduce credits outside of the agricultural value chain. In offsetting markets, farmers start a new conservation practice such as tillage reduction and cover cropping. The carbon dioxide sequestered by those practices is quantified using a model, generating a carbon credit. The credit is then sold to someone outside of the food, fuel, or fiber value chains such as Microsoft or Delta Airlines.

Growers can also participate in ecosystem service markets which generate multiple types of credits from conservation practice changes. For example, farmers participating in the Soil and Water Outcomes fund use the same practices to generate a carbon credit by sequestering carbon while simultaneously generating a water quality credit by preventing N and P runoff.

To learn more about the different market types visit – https://www.ilsoyadvisor.com/carbonsense/carbon-infographic/

DB: How are payments calculated?

MM: In general, payments are calculated by inputting yield, management practice, and conservation practice data into carbon sequestration models. These models use your farm data to estimate the amount of carbon dioxide trapped in the soil when you use a conservation practice on your farm. Check out the Carbon Data Guidebook https://www.ilsoyadvisor.com/carbon-data-guidebook/ for a list of the data you will need to provide carbon markets and conservation programs as part of the enrollment and verification processes. There is a farm data checklist also available for you to download and use as a resource – click here to access. 

Additionally, carbon markets may verify practice changes with satellite data, receipt audits, and by soil sampling a portion of farms enrolled in their programs.

DB: What excites you most about today’s carbon markets?

MM: I’m excited about two things when it comes to these markets.  First, I’m always happy to see conservation funding for farmers. While most of the current carbon offerings won’t cover the full price of a practice change, the funding does reduce the financial risk of trying a practice for the first time. Second, I’m happy to see the collaboration of soybean end users and farmers as these marketplaces are developed.

DB: Are there any watchouts that you would advise growers to keep in mind if they decide to enroll?

 MM:

• Contract length v land rental agreements – Will you be farming that field for the length of your contract?
• Inset v Offset – Are you enrolling in an inset market or an offset market?
• Contract fine print – Understand the full terms of your agreement.
• Data usage – How will the carbon market use your data?
• Verification methods – Receipt audits, field visits, modeling, and satellites are all common.
• Program Exclusion – Whether enrollment excludes the grower from participating in other markets or government programs.
• Cost-share programs – Many non-governmental cost share programs are now associated with a carbon asset.

DB: The USDA announced $3.1 billion in funding for the Partnerships for Climate-Smart Commodities; what is that and how can growers access that funding?

MM: This past fall, the USDA announced that they were funding $3.1 billion dollars’ worth of projects providing funding for growers to implement “climate-smart” practices across the country. The USDA projects that this initiative will reach 60,000 farms, encompassing more than 25 million acres of working land, and will result in the removal of 60 million metric tons of carbon dioxide. This metric tonnage is equivalent to removing 12 million gasoline-powered vehicles from the road for one year. Of the 141 projects that were funded nationally, 23 will be available in Illinois to incentivize climate-smart row crop production, animal agriculture and forestry. These programs are just beginning, so stay tuned to the Illinois Sustainable Ag Partnership and ILSoyAdvisor for more information.

DB: Lastly, how can the Illinois Soybean Association help navigate Illinois Carbon Programs?

 MM: If you would like to learn more about how carbon markets work and with advice on how to implement a conservation practice change for the first time, visit www.ilsoyadvisor.com/carbonsense. You can also check out a recent presentation on carbon from the Soybean Summit on YouTube.