Corteva expands carbon credit program

DECATUR, Ill. — Corteva recently announced the expansion of its Carbon Initiative for the 2022 crop year.

The program, supported though collaboration with Indigo Ag, provides a path for farmers to maximize the value of their soil health practices by producing independently verified credits measured, generated and sold through Carbon by Indigo.

The collaboration brings access to a guaranteed buyer network for independently certified carbon offsets, including leading global organizations such as Boston Consulting Group and JPMorgan Chase.

Expanded farmer benefits for 2022 now include:

Aligned incentives: Farmers will receive 75% of the credit value, so as future prices rise, they capture the majority of the upside.

Premium prices: Highest quality credits built on Indigo’s scientific rigor maximize the value of this opportunity. Based on market projections farmers could earn as much as $30 or more per credit, with the added security of a guaranteed minimum payment of $15 per credit.

More states: The offering is available across 11 states, including Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.

More practices and more crops: Increased nitrogen use efficiency is an eligible practice change, in addition to introducing cover crops and reducing tillage. The initiative also now supports 17 of the most common crop types across the United States.

Longer look-back: Farmers will get paid on eligible practice changes that were conducted post harvest of 2020.

Through this expansion, the Corteva Carbon Initiative’s core focus remains to help farmers produce carbon credits simply and for a fair price, with programmatic and agronomic support from a Corteva adviser.

Farmers are in control of their practices and can use Corteva’s free and easy-to-use digital tool, Granular Insights, to securely log those practices, seamlessly measure their impact and generate premium credits with Carbon by Indigo.

Ben Gordon, Corteva’s carbon and ecosystem services global portfolio leader, gave details of the program that connects farmers with buyers and pay them for sustainability outcomes.

“For farmers that adopt a new practice since harvest of 2020, that’s strip-till, no-till, increased nitrogen use efficiency or cover cropping, farmers can make essentially $3 to $30 an acre. The requirements are they sign a contract and then we help them set their baselines,” said Gordon during the Farm Progress Show.

“We take some soil sampling at no cost of the farmer. We use some of the data that they use though our free tool, Granular Insights. We quantify the impact of those new practices that they’ve made and then pay them a guaranteed $15 a ton and they get 75% of that total value until we have a price target this year of $30 a ton, which means it’s a net new revenue stream for that farmer.”

Agronomic Priorities

Gordon was asked to comment on the notion that while farmers want to be more sustainable, they also want more information on the best way to do it for their farm.

“It starts with the agronomy. Even though I’m the guy that’s in carbon, agronomics are priorities one, two and three, and if it makes sense agronomically and operationally for your operation, then let’s talk about a carbon program,” Gordon said.

“What we can do is help make that business case a lot more compelling with those extra pricing, but you don’t want to sacrifice yield, you don’t want to sacrifice your operations. Everything needs to pencil out, not just your carbon program.”

A recent Purdue University study found 44% of farmers who have not already adopted carbon sequestration practices report increased interest in on-farm stewardship during the past five years.

Lack of access to necessary equipment and services, as well as concern about return on investment, were cited as the biggest barriers to practice adoption.

Transparency

There are those ready to jump into the carbon market. There are also skeptics and those who want to wait several years down the road before getting involved.

Gordon was asked what he sees in carbon programs going forward and how he addressed that skepticism.

“For us, it’s all about transparency, both on how we talk about it — agronomy first — we’re not going to try to sell something that we don’t believe will be good for your operation. But really it comes down to our contract. We clearly very simply lay out that the farmer will get 75% of the value, so as price increases, farmers get three times as much as we do,” he said.

“It’s easy for farmers to opt out. They can leave every single year. We have to re-earn that business and be held accountable.

“We have a lot of flexibility in there. We pay on outcomes, which means if you need to till that one given year, you’re not going to get paid on that field that year, but you’re not going to get penalized. You can stay in the program because there are situations where you need to till or need to do something that you didn’t signup for. Maybe it’s a drought year and you’re not going to plant a cover crop. Do the right thing for your farm, not for the program and we’ll have the flexibility built in.”

Growing Interest

Gordon added that the interest in the new program continues grow since it was launched last spring and now enters an expanded phase.

“We were in the tens of thousands of acres as soon as we announced and it hasn’t slowed down. There’s a reason we went from three states to 11 and from two crops to 17. It’s nice when people are asking for more of what you’re doing,” he said.

Farmers interested in learning more about the new carbon market opportunities through Corteva’s Carbon Initiative can go to www.corteva.com or by visiting with a Corteva or Pioneer representative.