Pilots, payments and pre-existing: Six questions for Bayer’s carbon program

MONMOUTH, Ill. — When Bayer rolled out its carbon sequestration pilot program last summer, it had questions — and wanted answers.

The biggest question was, would farmers be interested in the program? The answer to that was that the cutoff date for the program was moved up due to more applicants than expected.

The program paid farmers who adopted new practices, including no-till, strip-till and cover crops, $10 per acre.

Chad Bilby, North America Commercial Innovation Experimentation Lead at Bayer Crop Science, discussed the carbon pilot program and answered questions about the program during the Central and Northern Illinois Virtual Agronomy Meeting, hosted by the Bayer Learning Center in Monmouth.

How about the operation that has no-tilled or strip-tilled for 25 years? Are they eligible for the pilot program?

“In the pilot program, it had to be new practices. That was probably the No. 1 question we got, what if I’ve been doing these things? It was really because the registries, that’s what they look at. They look at the additionality, or what you’re adding as new that is now sequestering carbon. Going forward, I think we are trying to have conversations to say ‘what if’ these same practices have been done and is there a way to get credit or to recognize those past investments and efforts? But for the pilot program we did last fall, it didn’t qualify.”

Are the growers who participated in the pilot program still eligible for this year’s enrollment?

“Yes. There actually was a multi-year opportunity for them, an agreement they could sign. They could discontinue at any time, but it was really for us to say, if you are going to continue these same practices, year on year on year, we’re in it as well for a duration of time.”

If you enroll in Bayer’s carbon program, can you still receive money from the Natural Resources Conservation Service and other government programs or do you have work strictly with Bayer’s program?

“I don’t know. There are a lot of programs out there. I don’t know the nuances of those other programs in terms of can you participate in more than one. I would say generally, when you are sequestering carbon, based on a new practice and that practice is identified, you need to determine where that carbon gets sold. Just like your grain in your field, you pick — am I going to take this grain to town or am I going to put it in a bin? But you can’t do both with the same grain. It’s kind of the same thing. You have to generally determine which path you want to go down versus double-dipping in multiple programs. I can’t speak to all programs and the nuances of those, so that’s the caveat I’d put on that.”

On the incentive, is it $10 per acre or can you get $10 for no-till and another $10 per acre for cover crops?

“The pilot program was the one I referenced that we were offering $10 an acre at that time. It didn’t matter if you were adopting cover crops as the new practice, no-till as the new practice or both. In that combination, you couldn’t just adopt cover crops without no-till. Every other combination you could do no-till by itself, you could do no-till with cover crops. If you were already doing no-till you could add cover crops, but it didn’t matter in terms of the incentive. The $10 per acre applied to either.”

What happens if the credits are worth more than the $10 per acre Bayer is offering?

“I think that’s the choice farmers will have. Who do you want to partner with around carbon? I think that right now, there’s no established firm market here in the U.S. for carbon yet. There probably will be a lot of choice there and you will have that choice in front of you. Where we’re trying to come at this is to be a really solid choice for you and not only from a revenue opportunity, but from the data platform and making it really simple for you to assess carbon and evaluate that going forward. I do think if there are more opportunities in other programs, you are always going to have that type of choice, to look at those.”

What is the value to a corporation for carbon long term? Is it just due to public pressure and sustainability or is there true, tangible monetary value?

“We are very serious as a company. I think there’s value here long term for all of us. I think it’s an exciting space. It’s certainly gained a lot of press here recently, but I do see long term opportunity here with this. There’s a lot of interest and it’s growing. I think for us to get involved and make sure ag is represented in this space and is a valid and key component to helping with this problem, with this global problem, has long-term aspects to it.”