What Should I Look for in a Carbon Contract?

Open any ag journal and you’ll find a checklist telling you what to ask before signing a carbon contract. With dozens of programs out there and each one different, it’s no surprise that 64 percent of farmers won’t participate in a carbon program because they don’t have enough information they can trust.

We’re here to help you make sense of it all, confirming what you need to know and why, and how our Carbon Initiative stacks up.

1 – Understand your partner and their business model

When joining a carbon program, you’re partnering with a company and, in some cases, signing a contract for up to 10 or even 20 years. Before you make such a big commitment, you need to know what you’re getting into.

Corteva launched its Carbon Initiative with the goal to keep carbon simple for farmers while allowing them to engage on their terms. Our initiative piggy-backs on Corteva’s commitment to deliver innovative solutions that also enrich the lives of farmers and consumers. 

We’re only asking for a 2-year commitment. You choose the practices to implement and sell your credits to Corteva at $15/ton (est. $5-$20/acre/year). We’ll do the heavy lifting — working with an independent nonprofit, the Ecosystem Services Market Consortium (ESMC*), to get your credits measured and verified. We then sell your credits to buyers for a small premium, which covers the program and certification costs. After two years, you can stay with Corteva or find a preferred buyer within ESMC’s marketplace.

2 – Know which practices you get paid for

Don’t just ask which practices are eligible to participate, make sure they work for your operation. Corteva lets you choose your practices, pick your fields, and has no acreage minimum. Eligible practices include introducing cover crops and/or switching to strip or no-till. Your Corteva advisor can help you assess whether these practices make sense for your operation agronomically and operationally.

3 – Understand how your carbon is measured and certified

Carbon buyers want certified credits they can trust to meet their sustainability commitments. That’s why Corteva is partnering with ESMC to independently measure and certify your carbon credits.

ESMC calculates your credits by quantifying estimated carbon levels in your soil from implementing new practices versus continuing “business as usual”. The difference makes up your carbon credit. ESMC’s model uses a combination of soil samples, satellite imagery, weather data, and your practices to generate your credits. Corteva covers all of these costs. 

4 – Know what your commitment is

Carbon markets are still new, so many farmers reasonably hesitate to get locked into a 10 to 20-year contract that could limit their flexibility as these markets evolve. Corteva removes this risk by asking for a 2-year commitment, after which time you can choose to continue with Corteva or find your preferred carbon buyer with one of the 60+ companies in the ESMC marketplace.

5 – Understand the implications if you can’t follow through on practices

Don’t get locked into any contract until you understand how the program deals with termination and “reversals”. For example, what happens if you agreed to introduce no tillage on a field, but extreme weather conditions require you to use a disk or plow? Or you tried to plant a cover crop, but it failed due to poor weather conditions? Corteva won’t drop you from the program or claw back payments previously issued if you have a reversal caused by natural events. Your future carbon payments would simply reflect the adjusted credits earned.

6 – Get the details on data requirements and data privacy

Data requirements and data tracking methods will be different depending on the program. Corteva requires three years of limited field data on your historical practices, plus data for the current crop year. Farmers use Corteva’s free, digital tool – Granular Insights – to securely log current and historical practices. We only collect the data necessary to verify compliance and certify your credits. You retain ownership of your data, and it’s protected in accordance with Granular and ESMC’s data privacy policies. None of your data is shared with carbon credit buyers.

Interested in learning more and talking with an expert? Get started at corteva.com/carbon or contact your Pioneer Seed sales professional or other Corteva advisor.

*ESMC is an independent nonprofit that works in collaboration with 60+ public and private organizations spanning the food supply chain. ESMC is launching an ecosystem services market to reward farmers and ranchers for their efforts to improve soil health.

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