Indigo Ag beefs up carbon program with prices, partnerships

DECATUR, Ill. — Bolstered by partnerships with two major agricultural companies and increasing interest in its product, Indigo Ag’s carbon program continues to grow.

Chris Harbourt, global head of carbon for Indigo Ag, said he looks at the partnerships with Corteva and GROWMARK to add credibility and validation to the company’s carbon program.

“They put their energy into looking at our contract and really giving us the run-through and we came through the other side where we have a great relationship and we are excited for that validation for what we are trying to do,” said Harbourt at the Farm Progress Show in Decatur.

Indigo Ag’s carbon program continues to expand. The program recently launched in Wisconsin, the 23rd state. The primary geography for the program is in the Midwest.

“We have just over 3 million acres of farmers who are enrolled in the program,” Harbourt said.

He admits that it has been a challenge to get farmers enrolled.

“It’s new, it’s young, change is difficult,” he said.

To attract interest from farmers, Harbourt said he makes the case that selling carbon credits could benefit farmers financially.

“We keep raising the price of carbon. Last year we were at $20 a ton. We raised it to $27 this year. We see it going up into the $30s and $40s. When it gets into the $30s and $40s, that’s getting to be real money. We think there is just a pure economic case that can be made for a farmer to get in,” he said.

The program has been very popular with the buyers of those credits, which include major U.S. and global businesses.

“They are in high demand. We are sold out of the ones for 2020. We are sold out of 2021. So, we need growers to help make more of them,” Harbourt said.

Indigo Ag entered the world of carbon credits about two and a half years ago.

“We went out immediately and said the right way to approach this is with high-quality, registry-approved carbon credits. That’s what the buyers are looking for,” Harbourt said.

Harbourt said one of the priorities was to make sure there were buyers for the credits that would be generated.

“We went to the buy side first and said what is it that you want to buy? When you are buying a carbon credit, how do we create the thing that you want? They said registry approval was important,” he said.

So, Indigo worked with two well-known carbon registries, Climate Action Reserve and Verra.

“We worked with them to publish protocols, which is the guidance for the whole program,” Harbourt said.

Harbourt said Indigo’s position is that of the middleman.

“We have to be in the middle, assuring both groups, the farmer and the credit buyer, that the thing you can’t see, carbon, is actually being created and also, you don’t deliver it. You leave it in the field,” he said.

To verify practices and in order for the farmer to get paid for carbon, Indigo Ag has to verify the production of the carbon. To that end, the process requires a tremendous amount of data from growers who may be reluctant to share their farm information.

“We have a contract. We are very open about it, that the use is for carbon. I’ve said to farmers for years that the data they collect is most useful to them in that season and then it drops off in its value overall. The most valuable secondary use for data that I’ve ever seen is for carbon. It looks back at the historic data. It looks at your current year data and it gets you paid for that. It’s another form of revenue. My goal with the data is not to use it for something else; it’s to narrowly use it to help a grower make money with carbon,” Harbourt said.

The company offers a five-year contract with farmers on a 75/25 split of the price for the carbon, with farmers getting 75%.

While the amount of carbon that can be generated by a new practice varies by soil type, rainfall, primary crop and previous cropping, Harbourt gave an example using cover crops.

“If you’ve never planted a cover crop before in a northern Illinois or Indiana soil, you come in and you plant one in a year, you are going to be creating somewhere between half a ton and one and a half tons of carbon per acre per year. So, every year that you keep that up, we are ready to buy that from you,” he said.

Growers who begin new practices, such as cover cropping or minimum tillage, are the target for Indigo Ag.

“I think it’s important to distinguish that what I am doing is operating a carbon business and giving credit buyers what they want and what they want is fresh change,” Harbourt said.

Harbourt said the company is looking into ways to add value to grain produced using long-term conservation practices. Those long-term practices have been largely excluded from the raft of new carbon credit programs.

“They are only 5% of farmers. I want to figure out a way to work with them, but I want the other 95% to try no-till and reduced till and other things,” Harbourt said.