There are some important lessons garnered from 2021’s exploratory year for growers considering carbon sequestration. KCoe’s Pinion Advisory team recommends three things you can do now to prepare for potential carbon market opportunities in 2022, or beyond.
Lesson 1: The carbon opportunity cannot be applied to every landowner. There are basic requirements that should be met. (KCoe has developed a unique Carbon Scorecard to help landowners determine if they are qualified candidates: Is Your Operation Carbon-viable?)
Assess Your Potential:
- Quantify carbon and potential sequestration, reductions, and avoided emissions.
- Review requirements and commitments.
- Begin planning credits or programs to target based on your farm’s potential.
- Project credit volume potential.
Lesson 2: The benefits of carbon market opportunities are not the same for everyone. Each operation will need to be evaluated separately. In other words, just because a peer or neighbor is doing it doesn’t make it right for you. There are many individual operational factors – crops, acreage, geographies, buyers, etc. – to be considered to figure out a carbon market credit strategy that will be financially worthwhile.
Plan for Operational Expenses:
- Review financials.
- Understand financial benefits of practices.
- Model out your break-even.
- Set aside working capital.
- Coordinate with your landowner and / or lender.
- Plan for measurement and verification expenses.
Lesson 3: Cleaning up your data/books/records is required. Not only before the process begins to ascertain if the opportunity is there for you, but throughout the entire process to provide the credit buyers with proof.
Prepare for Carbon Credit Sales Opportunities:
- Gather evidence / proof of practices.
- Set up management systems.
- Capture the right data.
- Find a project developer.
KCoe’s Pinion Advisory team of sustainability specialists help landowners, farmers, and ranchers to explore whether a carbon program is in the best interest of the farm or ranch for the long run. Contact a KCoe sustainability advisor to learn more.