Five years ago, David Gruenbaum abandoned dairy farming and a conventional method of growing greens that relied on tilling large quantities of cow manure into his fields, which launched carbon into the atmosphere in the process. Today, the Ohio farmer grows corn and soybeans without tilling the land. In the off-season, he uses a variety of cover crops that trap carbon in the soil and improve its fertility, rather than leaving the fields bare.
These so-called regenerative practices are gaining popularity as a way to draw carbon down and mitigate the effects of climate change — and the tech industry is taking notice.
Fueled by enthusiasm from the Biden administration, tech companies like Microsoft and Shopify are eyeing agriculture as an untapped opportunity to offset their carbon footprints. Advocates for soil carbon sequestration are hopeful that the influx of cash will inspire cautious farmers to shift to more sustainable practices. But skeptics fright the program will only marginally impact climate change while giving corporations license to proceed polluting.
For Gruenbaum, selling carbon credits is a way to recoup some of the costs of the changes he’s made in recent years and reinvest in his farm. Microsoft plans to pay Gruenbaum for the carbon he has already trapped in his soil. It’s 1 of several agricultural carbon credits Microsoft is purchasing through Truterra, a sustainability program launched by the dairy company Land O’Lakes in 2016.
“We’re just trying to do better,” Gruenbaum said. “When I leave here, I want this place to be better than I found it.”
The shift at Gruenbaum Farms is 1 of the rare agricultural initiatives that Microsoft approved as part of its first ever purchase of carbon credits in January. Each credit is meant to represent 1 metric ton of carbon dioxide removed from the atmosphere.
Microsoft agreed to buy 1.3 million carbon credits in 1 of the largest offset purchases in history. But just 200,000 of Microsoft’s credits are for soil carbon sequestration initiatives. The company is being selective about this rising market because measuring the actual impact of carbon capture in soil is costly and difficult, as Gruenbaum Farms illustrates.
Like forestry, it’s hard to prove that agricultural initiatives really store carbon that would otherwise remain in the atmosphere. Gruenbaum said that even without Microsoft’s money, “I would proceed on with what I’m doing.” But he said this initial round of initiatives could be a bellwether for farmers who are more hesitant to shift to regenerative practices.
“I will talk about it, you’ll see other farmers see that advantage and then they will take that same money and start adding conservation-minded practices and doing things to preserve the soil,” he said. “That’s the end that will approach out of this as the money comes downstream, you’ll see other farmers that wouldn’t have made that change. There’s always some people that do things that are ahead of the curve.”
Microsoft’s huge purchase is part of its formidable carbon removing plan. The company is working to become “carbon unfavorable” by 2030 and remove all of its historical carbon emissions from the atmosphere by 2050. Elizabeth Willmott, head of Microsoft’s carbon program, said the company can leave no stone unturned in pursuit of these goals despite the limits of carbon removing.
One of the biggest challenges for this rising soil carbon sequestration market is a lack of clear standards that buyers, sellers, and regulators agree on. Microsoft hopes that President Joe Biden, an advocate for farmland carbon removing, will change that.
“We know we need to invest in carbon removing to mitigate climate change and we need to know that we’re doing the math in a clear and clear and accountable way,” Willmott said. “Those standards are absolutely necessary. Will they ever be excellent? Probably not, but the best we can do is to nonetheless be practical, impactful, and clear. The transparency comes in the partnerships that need to happen with government.”
Microsoft could require 6 million carbon credits yearly by 2030 to meet its goals, according to the company’s sustainability chief Lucas Joppa. He told Reuters that agriculture has to be part of that equation but echoed Willmott’s call for “greater transparency.”
A few entrepreneurs see that need for transparency as a business opportunity. Startups like Nori and Indigo Ag have emerged in recent years to validate agricultural carbon credits and help farmers find buyers.
Seattle-based Nori uses third-party auditors and a USDA computer model to estimate how much carbon farms in its market are capturing. It’s an approach that gets around the high costs and accuracy challenges of soil sampling — a barrier for some farmers. Though the company has had some early success with small and medium-sized businesses, it’s proving difficult to land large corporations, Nori CEO Paul Gambill said. Nori submitted a proposal to Microsoft but wasn’t selected for its first round of soil initiatives.
“There’s a huge potential risk factor for huge corporate buyers,” Gambill said.
Companies can land in hot water for funding initiatives that don’t actually remove atmospheric carbon or forestall prospective emissions.
“We’ve taken care of all of that diligence,” Gambill said. “We’ve done the hard work of building out these generalizable standards and verification processes so that you, as a customer, don’t have to have teams of sustainability people and consultants doing that work. We’ve turned this into a simple e-commerce checkout flow. Ironically, the people at the huge companies who are responsible for huge purchasing, there’s inertia to how they make their decisions and this doesn’t quite fit.”
Those decision makers are hopeful that the federal government will step in to create standards for farmland carbon credits.
The Biden administration is studying what it would take to create a carbon bank that encourages farmer participation. One thought is to guarantee a minimal price for farmland credits. Meanwhile, the Senate is considering a bipartisan bill that would create a certification program at the USDA to create standards for carbon removing in agriculture.
A more formalized agricultural carbon program could encourage other tech companies with high emissions and huge sustainability goals — like Amazon — to follow Microsoft’s lead. But some environmental groups are begging Congress not to establish a carbon offset market for farmers because of the difficulty in accurately measuring the benefits of such initiatives. Soil carbon sequestration is too new and untested to scale this quickly, they argue.
“There’s sort of a gold rush in this space right now because people see the true value of soil carbon practices as a resolution to climate change and to other issues, but there haven’t been clear standards set for the market yet,” Microsoft’s Willmott said. “That’s 1 of the most thrilling things that I see probably coming out of the Biden administration.”