What to Know About Carbon Insets versus Offsets

Business News/Analysis, Farming/Growing, Feedstocks, Field/Orchard/Plantation Crops/Residues, Funding/Financing/Investing, Infrastructure, Marketing/Market Forces and Sales, Opinions, Resources, Sustainability, Technical Resources

March 16, 2023

Print This Article Share it With Friends

by Margy Eckelkamp (AgWeb) To date, most carbon programs available to farmers have required a change in practice, which left many long-term users of no-till practices and cover crops on the sidelines.

However, 2023 is shaping up as a turning point. Tom Ryan, president of Truterra, says this will be a transformational year for two reasons:

The groundswell of efforts with USDA Climate Smart grants.
A shifting focus to carbon insets.

Plus, market demand is strong, says Ron Hovsepian, CEO of Indigo Ag.

“With our second crop of carbon credits, we’ve proven this is beginning to be a recurring revenue stream,” Hovsepian says. “It’s important to understand soaring growth comes from the demand to remove carbon in two different ways — offset or inset — and that we enable both as part of our overall journey.”

What is the difference between insets and offsets in terms of carbon markets? Insets reduce emissions on the farm based on how the grain was grown, while offsets compensate for emissions elsewhere.

Explained another way, offsets are a cost-share for a change in practice that leads to fewer greenhouse gas emissions, whereas insets derive their value through the supply chain.

While Ryan sees a future where offsets will continue to be offered, he describes offsets as transactional and insets as transformational.

TEMPLATE FOR THE FUTURE

Like Truterra, Carbon by Indigo offers “look back” programs providing credit opportunities for change practices in the past three to five years. Both companies believe new programs will open the doors for long-term practitioners. READ MORE

Comments are closed.

Advanced BioFuels USA