A comprehensive guide to selling carbon credits: Unlocking opportunities for cattle ranchers - Grassroots Carbon

A comprehensive guide to selling carbon credits: Unlocking opportunities for cattle ranchers

June 27, 2023
Ranchers can sell carbon credits

Working to maintain healthy soil on your ranch? That can pay off. 

Regenerative land practices that nurture healthy soil can not only benefit your ranch with improved forage growth, livestock health, reduced input costs, and better drought resistance —they foster the storage of atmospheric carbon in soil. 

When that stored soil carbon is measured and certified, it can become carbon offset credits.

However, selling carbon credits is different than selling livestock. To earn income from the carbon stored in your soil, you need to understand how voluntary carbon markets work, how to measure and certify your soil carbon levels, and learn how to find a market for carbon credits. 

In this comprehensive guide, we will delve into the realm of carbon credits, explaining how you can implement regenerative grazing practices to leverage the power of carbon storage in your soil and generate  additional income. While the nature-based carbon credit marketplace was once aimed towards forestry, new opportunities allow ranchers to be an agent of positive change for our environment while maintaining the viability of your livestock operations. Implementing regenerative ranching practices significantly increases soil carbon levels. 

Understanding carbon credits and the carbon marketplace

Carbon drawdown credits represent a certified amount of carbon dioxide (CO2) that has been removed from the atmosphere and stored or “sequestered” in the soil. Each carbon drawdown credit represents 1 metric ton of atmospheric CO2 captured and stored.

To quantify carbon storage and the related credits, you must consider various factors, such as the amount of carbon stored, the duration of the storage, and the specific methodology used to determine this. This measurement typically involves taking soil samples, analyzing these soil samples and calculating the increase in soil organic carbon content. 

The carbon storage must not only be measured, it must also be certified. Certification of carbon credits involves a rigorous process that ensures transparency and credibility. Independent third-party organizations assess and verify the carbon storage practices and their impact. These organizations then evaluate the methodologies, data collection, and monitoring systems used to calculate the amount of carbon stored. Once certified, carbon credits can be traded on carbon markets.

In the United States, the carbon marketplace is private. This means you can’t easily check the standard market price of a carbon credit. Selling credits without an established relationship between ranchers and  buyers can therefore be difficult, since most carbon credit buyers are large corporations. 

How do you measure soil carbon storage?

Quantifying carbon storage involves measuring the amount of carbon in soil. Here’s how it is typically done:

  1. Carbon Storage: To quantify carbon sequestration, soil samples are taken and analyzed in a laboratory to determine the amount of carbon that is stored in a specific area. This is usually done through soil sampling, whereafter the organic carbon content is analyzed..
  2. Emission Reduction: To quantify emission reduction, data is collected on the amount of greenhouse gas emissions that would have occurred under a business-as-usual scenario. This serves as a baseline for comparison. By implementing sustainable practices, such as improving energy efficiency or adopting renewable energy sources, the actual emissions can be measured and compared to the baseline. The reduction in emissions represents the quantified emission reduction achieved.

In both cases, precise measurements and data collection are crucial. Scientific methodologies and protocols are used to ensure accuracy and consistency. These methodologies may vary depending on the specific context, but they are designed to provide reliable and standardized measurements.

Carbon credit buyers need firm guarantees that when they buy a credit,  it represents 1 metric ton of CO2 removal.  Certification and verification by independent third-party organizations play a crucial role in the quantification process. These organizations assess the methodologies, data collection methods, and monitoring systems used to calculate carbon storage. Their involvement ensures transparency, credibility, and adherence to internationally recognized standards.

Quantifying carbon storage is essential for the creation and trading of carbon credits. It allows businesses, organizations, and individuals to track their environmental impact, demonstrate their contributions to mitigating climate change, and participate in carbon markets to promote sustainability and financial incentives.

Implementing regenerative ranching practices to maximize carbon capture

Grazing lands have the potential to play a critical role in climate change solutions. In the United States, likely more than 40% of the country’s surface area is used for grazing. This land has the capacity to sequester way over over 500 million tons of carbon dioxide a year. However, estimates indicate that 95% of that grassland is managed conventionally, depleting its soil carbon content.

Through studies and soil sampling, scientists have determined effective practices which increase soil health, vegetation health, and also increase soil carbon storage.

To maximize carbon storage on your ranch, you can implement various regenerative ranching practices. 

Here are some key practices that can contribute to carbon storage:

Regenerative Rotational Grazing

While many ranchers implement a form of rotational grazing, taking a regenerative approach to your rotational grazing cycle can have a profound impact on carbon storage. Regenerative rotational grazing systems involve strategically moving livestock across different pasture areas. This is also known as adaptive multi paddock (AMP) grazing, and requires frequent rotations on small paddocks, with adequate stocking rate. Once correctly implemented, it will give the soil and ecological health regeneration needed to store atmospheric carbon.

This practice allows for better forage growth, promotes grassland health, and enhances carbon storage in the soil. By giving pastures ample time to recover, regenerative grazing encourages plant growth and the accumulation of organic matter, therefore increasing carbon storage.

Cover cropping

Planting cover crops, such as legumes or grasses, during periods of low forage demand can enhance soil health and carbon storage. Cover crops protect the soil from erosion, improve nutrient cycling, improve soil microorganisms, and increase organic matter content and soil structure. These factors contribute to long-term carbon storage in the soil.

Minimized soil disturbances

Reducing soil disturbances, such as tillage or excessive mechanical or chemical (e.g. synthetic fertilizer, pesticides, herbicides) intervention, helps preserve organic soil structure and organic matter. By minimizing disturbances, you can maintain the integrity of the soil ecosystem, retain carbon in the soil, and enhance overall soil health and fertility.

Composting and manure management

Proper management of manure and organic waste through composting can increase carbon storage potential. Composting not only converts waste into a valuable soil amendment but also helps to retain carbon in stable organic forms; improving soil fertility and structure.

Native grassland restoration

Restoring native grasslands by reintroducing native grass species and controlling invasive plants can promote carbon storage. Native grasses have deep root systems which enhance carbon storage in the soil, increase biodiversity, and improve ecosystem resilience.

Implementing a combination of these regenerative ranching practices tailored to the specific ecosystem and climate conditions of your lands can maximize its carbon storage potential. It is important for you to assess your land, seek expert advice or resources, and develop a holistic approach to sustainable land management which aligns with your individual goals, as well as the principles of regenerative agriculture.

How you can venture into carbon credit sales

The best time to begin exploring carbon credit sales is in the early years of implementing regenerative ranching practices. This is because you’ll be able to generate revenue from the added carbon sequestered in the soil from the moment you start these practices, and use the income from carbon credit sales to help offset any costs associated with implementing regenerative practices. 

Working with a trusted partner that understands carbon credits and has strong relationships with carbon buyers can be valuable

Ranchers should consider working with reputable experts or organizations that can make it easy to participate in the carbon credit market. The right organizations can provide guidance and completely handle proper measurement methodologies and help verify the amount of carbon sequestered. Rigorous data collection and monitoring systems are essential to ensure credibility and compliance with certification requirements. Selecting the right partner allows you to focus on your land, while they handle the process of getting carbon credits for the carbon your store.

Carbon credits need to be certified by recognized registries, according to well accepted standards and third-party verification bodies to be eligible for sale. Therefore, ranchers should research and identify the certification programs that align with their goals and target markets. Understanding the requirements and ensuring compliance with certification standards is necessary to access carbon markets and attract buyers.

Common challenges and how to overcome them

Ranchers who want to sell carbon credits may face several common challenges, but there are ways to overcome each one. 

Here are some examples of common challenges:

  1. Knowledge and expertise: Understanding the details of carbon markets, soil sampling and analysis methodologies, third party verification and certification requirements can be challenging. Overcoming this challenge involves educating oneself about carbon credit sales, attending workshops or training programs, and seeking guidance from experts or organizations who specialize in carbon storage. Collaborating with knowledgeable partners can help navigate the complexities of the process.
  2. Initial investment: Transitioning to regenerative practices and establishing the necessary infrastructure for measurement and verification may require an initial investment. Ranchers can explore financial incentives, grants, or funding programs that support sustainable agriculture or carbon storage initiatives. Government agencies, environmental organizations, or carbon credit platforms may offer assistance or resources to help offset the costs of transitioning to carbon credit sales. For example, when you work with Grassroots Carbon, ranchers don’t pay upfront for the costs associated with measuring and certification. Instead, those costs come out of the first year’s profits.
  3. Measurement and verification: Accurately measuring and verifying carbon storage can be challenging. This challenge can be combated through working with soil scientists, agronomists, or carbon credit consultants who specialize in quantifying carbon storage. These experts can provide guidance on measurement methodologies, data collection, and monitoring systems, ensuring compliance with certification standards.
  4. Certification and market access: Gaining certification for carbon credits and accessing the market can be daunting. To address this, ranchers can seek partnerships with organizations or platforms that facilitate certification and market access. These entities can assist with the certification process, connect ranchers with potential buyers, and provide market intelligence and networking opportunities.
  5. Market volatility and pricing: Carbon credit markets can be subject to fluctuations and varying pricing structures. Ranchers can mitigate this challenge by diversifying their revenue streams and exploring multiple market channels. Engaging with brokers, buyers, or carbon credit platforms can help understand market dynamics, negotiate favorable pricing, and identify long-term agreements or partnerships for fair prices and more stability.
  6. Data collection and monitoring: Collecting and managing the required data for carbon credit sales can be time-consuming and resource-intensive. Ranchers can streamline data collection by adopting digital tools or software specifically designed for carbon accounting and monitoring. These tools can automate data collection, streamline reporting processes, and provide real-time insights into carbon storage progress.
  7. Long-term commitment: Selling carbon credits requires a long-term commitment to sustainable practices and ongoing monitoring. To structure this commitment, ranchers can develop a comprehensive sustainability plan which aligns with their operational goals and the requirements of the carbon credit market. Regular monitoring, documentation, and reporting ensure compliance and provide a solid foundation for continued credit sales.

By proactively addressing these challenges and seeking appropriate support and resources, ranchers can overcome barriers and successfully navigate the process of selling carbon credits. Collaboration, education, and strategic planning are key to achieving both environmental and financial benefits from carbon credit sales.

All these requirements and challenges may seem too complicated to handle.  Many ranchers instead work with a partner who handles these details for them. This  gives you time to do what you are good at: managing your ranch.

Working with Grassroots Carbon 

Ranchers interested to learn more about implementing or improving regenerative practices have the option to work with Grassroots Carbon, the first carbon credit partner that focused exclusively on regenerative ranching of grasslands. Grassroots Carbon sets up agreements with ranchers to measure and certify their carbon credits, then find buyers for them. Ranchers working with Grassroots Carbon don’t have to worry about the credits, they can use their time to  implement or improve their regenerative practices.

Potential benefits for ranchers:

  1. Additional revenue stream: Selling carbon credits provides ranchers with a new source of income. By implementing regenerative ranching practices that sequester carbon in the soil, ranchers can earn revenue from the environmental services their land provides.
  1. Enhanced sustainability: Adopting regenerative ranching practices not only helps sequester carbon but also improves the overall health and resilience of the land. These practices promote soil health, water retention, and biodiversity; leading to more sustainable and productive ranching operations.
  2. Land stewardship: Selling carbon credits showcases ranchers’ commitment to environmental stewardship. It demonstrates proactive efforts to protect and improve the land in your care.
  3. Market differentiation: Selling carbon credits can provide a competitive advantage for ranchers. Buyers and consumers are increasingly seeking products and services from businesses that demonstrate environmental responsibility. By participating in carbon credit markets, ranchers can differentiate themselves in the marketplace and attract environmentally conscious customers.
  4. Access to grants and incentives: Participating in carbon credit programs may open doors to additional financial opportunities. Some initiatives offer grants, subsidies, or incentives to support ranchers in implementing regenerative practices and sequestering carbon. These resources can further enhance ranchers’ economic viability and sustainability.
  5. Long-term financial resilience: Carbon credit sales provide ranchers with a potential long-term revenue stream. As carbon markets continue to evolve and mature, the value of carbon credits may increase over time, offering ranchers a stable income source that complements their traditional livestock operations.