LOOKING AHEAD AT CARBON MARKETS

The marketplace for carbon sequestration continues to develop rapidly, with opportunities available for farmers, ranchers and landholders. It’s a complex market that involves the exchange of carbon or greenhouse gas storage in exchange for economic value paid by companies trying to limit their carbon footprint. The marketplace is both voluntary and compliance-driven, which adds further complexity to the market access for farmers. 

In April 2021, Compeer Financial formed a carbon workgroup focused on four main areas: 

1. The political environment and potential impacts for our clients and opportunities for Compeer to influence that policy 

In Washington D.C., politicians have been considering various policy initiatives that support the establishment of carbon markets, and conservation funding to help producers speed up adoption of climate-smart practices. In meetings with members of Congress, Compeer directors and senior leadership have shared the commitment our farmer clients have toward continuous improvement on carbon reduction strategies and sustainability, and reiterated that any public policies enacted by the federal government on climate must be incentive-based and voluntary for producers. 

2. Educational opportunities for Compeer clients and partners 

Compeer Financial is undergoing an effort to develop market access for farmers in the areas of soil and timber carbon sequestration, and renewable natural gas (RNG sales). Over the next several months, Compeer will be providing education and information about RNG for clients. 

3. Practices already complete or in progress by Compeer and our clients 

Land Core and Compeer recently partnered to bring real-world data to the soil health nonprofit’s initiative to build a predictive model for the risk-mitigating benefits of soil health practices. Compeer will develop and pilot various incentive options based on the Land Core risk model, becoming the first major agriculture financial services provider to approach risk assessment through the lens of sustainability and soil health. 

4. Opportunities within the carbon markets for Compeer clients to gain transparent market access 

Compeer has been exploring ways to help our clients who are curious about the carbon market to start thinking about carbon crops. Compeer’s financial officers and crop insurance teams already have a lot of deep experience understanding and supporting farms looking to make the most out of their acreage, and protect the hard work of our member-owners. As markets develop that move toward “carbon crops” and soil health initiatives, we are exploring and piloting ways to use the data we already collect and the on-farm relationships we cultivate to help make the data collection and carbon credit creation process as easy for our clients as possible.

This article was originally printed in the Winter 2022 edition of Compeer Financial's Cultivate magazine.