What Is Carbon Farming?

Carbon farming is an approach to agriculture that involves managing land in a way that sequesters carbon from the atmosphere, stores it in the soil and vegetation and reduces the amount of CO2e* that are released into the atmosphere during production.

*CO₂-equivalents (CO₂e) are a unit of measurement used to standardize the climate impact of different greenhouse gases.

BASF enables rigorous certified carbon insetting and offsetting through a seamless digital framework created in its program. The platform collects data required for verification and certification from scientifically driven certification bodies such as The Gold Standard and Verra. It then monetizes carbon emissions reductions and removals obtained through implementing specific agricultural interventions by having these officially converted to internationally recognized carbon offset or inset certificates. Methodologies (protocols) are essential to quantify greenhouse gas emissions and savings accurately and consistently. BASF’s program fulfills all requirements of Verra’s VM0042 (“Methodology for Improved Agricultural Land Management”). 

VM0042 underlies Verra’s and The Gold Standard’s certification processes for offset and inset certificates. 

Carbon insetting is when a company reduces its carbon footprint by investing in carbon efficiency projects within its supply chain. This contrasts with “offsetting” emissions through external projects unrelated to their emission scopes. 

Emitters thereby invest in actions to increase the carbon efficiency within their value chain, reducing their scope 3 emissions. This is typically done by collaborating with suppliers to reduce emissions, implementing renewable energy solutions, and reducing waste. 

Carbon offsetting is a mechanism that allows individuals or companies – most commonly large emitters – to compensate for their residual carbon emissions by financing or investing in projects that reduce greenhouse gas emissions elsewhere. While these entities often focus on reducing their emissions through carbon insetting first, they may have to resort to offsetting credits for emissions, which cannot be more readily abated.  

In the brief history of carbon offset markets, projects have mostly pertained to renewable energy and reforestation domains. The emissions reductions achieved by these projects are then measured, verified, and sold as carbon credits to the buyers, who can use them to balance their residual emissions. 

Voluntary carbon market (VCM) refers to carbon markets where companies or individuals voluntarily choose to offset their carbon emissions by purchasing offset credits (i.e., participation is not required, therefore members opt in to either selling or buying carbon credits) or where companies seek to reduce the overall carbon intensity of their value chain. Soil carbon projects operate in the VCM. These credits are typically generated by projects that are not regulated by governments but have been certified by recognized third-party registries. Through voluntary carbon markets, companies can take additional steps to reduce their carbon footprint beyond regulatory requirements, while those in unregulated sectors (such as agriculture) can demonstrate their commitment to sustainability by compensating for their emissions.  

There are many VCMs, regional and international, and no one trading platform for voluntary carbon credits. Voluntary markets are self-regulated through carbon standards (such as VERRA or The Gold Standard), to which projects wishing to sell carbon credits must have projects audited and registered. The carbon price in voluntary markets can be hugely variable and linked to numerous factors, including quality, assurance, origin, other social or environmental benefits for Corporate Social Responsibility (CSR) and Environmental Social Governance (ESG) purposes, supply and demand, cost of production, etc. VCMs represent a fast-growing market, particularly as sustainability goals become more important for companies' ESG strategies, driven by sectoral climate targets, regulation from governments, and consumer demand.  

Agriculture has an immense potential to provide carbon credits to the voluntary carbon market, helping to offset emissions (by reduction and sequestration). Carbon savings must comply with different standards as a basis for global trading, setting a high bar for agriculture.