Indigo’s first issuance of carbon credits is being called a watershed moment for the industry. However, it’s not the first time we’ve heard of carbon credits for agriculture. What makes these credits different? Heather Gieseke is the Head of North American Carbon Commercial for Indigo. She says the Indigo carbon credits are the result of a standardized and repeatable process for producing the highest-quality credits at an unprecedented scale.
“Agriculture represents one of the largest carbon sinks on the planet. What a carbon sink is, it basically means you’re absorbing more carbon than you are releasing. And the two largest sinks in the world are vegetation and water, so agriculture makes up one of the biggest components of that vegetation piece. Indigo ag helped develop and use a novel hybrid soil-sampling and modeling approach to generate credits at an unmatched level. This represents the first time a company was able to calculate and sell Ag carbon credits in a scientifically-rigorous, multi-step process across a really wide group of producers. For farmers and buyers, registry approval is an important step. Passing the rigorous checks presented by the registry means Indigo credits are the highest quality, and buyers are willing to pay more for them.”
Gieseke talks about how many growers signed up for the first round of credits and how Indigo expects the program to grow.
“We had 175 farmers in this first issuance across 16 states who enrolled more than 100,000 credit-generating acres. Utilizing established and accepted sustainability practices, they were able to produce nearly 20,000 credits for our network of buyers. Farmers can sit in the driver’s seat here. They can choose how and who they work with for their carbon credit partnerships. For example, they can work directly with us, or if they already have an established relationship with someone like for Corteva Agrisciences, they can work with their Corteva representative to begin a partnership, and that may make more sense for them based on the data they’re already sharing with that company or the different digital tools or agronomic tools that that company has.”
The next round of credits issued will be even larger than the first one.
“Today and moving forward into the next issuances that we’ll have over time, we have nearly 2,000 farmers across 30 states that have enrolled almost five million acres, giving participating farmers in the program the ability to truly generate a new annual income stream on their farm in the form of agriculture carbon credits. We’re currently working in a supply-deficit, meaning we have more companies wanting to purchase credits from our farmers than we have available to sell to them. So, it’s a challenge to solve.”
Farmers have an opportunity to generate a new annual income stream and she talks about how it works.
“Farmers adopt regenerative farming practices that store carbon in the soil or reduce emissions, so it’s really all-encompassing, and when the program launched, Indigo has secured commitments from buyers at $20 per credit, and this was back in 2019. Shortly after, it advanced to $27 per credit. And now, Indigo AG has announced that it’s secured future credit-purchase commitments at $40 per credit. The thing I really want to drive home there is, as the price of credit goes up with Indigo Ag’s program, the price the farmer gets is going to continue to go up as well. So, there’s just tremendous opportunity there.”
Gieseke adds that farmers can anticipate their carbon farming payouts will increase alongside the growing value of carbon credits year over year. Farmers can find out more about the financial benefits and how the process works at indigoag.com/carbon.