Farmers are a key resource to help sequester carbon and lower emissions.
But many still have more questions than answers as they wade through emerging, voluntary markets that seek to incentivize farmers to do everything from changing practices to storing carbon on their farms.
The Wabash Valley Stewardship Alliance, in response, hosted two carbon market conference meetings Aug. 24 in Lawrenceville and McLeansboro to dig into the topic. The Alliance includes the Farm Bureaus in Crawford, Edwards, Gallatin, Lawrence, Hamilton, Richland, Wabash, Wayne and White counties.
“We’ve got a team of staff working on all facets of sustainability,” Shelby Swain Myers, American Farm Bureau Federation (AFBF) economist, said at the meeting held on the Roger Knight farm near McLeansboro. “We’re trying really hard to be a trusted resource.
“When we talk about the carbon market, and what it will look like on our farm, how is it going to be implemented?” she asked.
And that’s a key question that remains unclear.
What seems clear at this point is companies are eyeing incentives of around $50 per ton to capture the carbon dioxide they emit and permanently sequester it in pore space thousands of feet below the surface by 2026. Several carbon capture and geological storage projects seek to transport liquified carbon from ethanol and fertilizer plants for permanent storage in Illinois pore space. Those companies will need to enter into agreements with landowners for the rights to build the pipeline and use their pore space.
Laura Harmon, Illinois Farm Bureau associate counsel, offers tips for farmers.
And various companies are developing voluntary, incentive-based markets for farmers for soil carbon credits.
What might farmers be asked to do to sequester carbon in the soil, John Pike, research agronomist with Pike Ag in Marion, asked attendees at the conference.
There are potential markets to do everything from changing a crop rotation, reducing or eliminating tillage, planting and managing cover crops to providing data and field access. Farmers through the process can earn money selling carbon credits.
“I think there’s going to be some opportunities,” Pike said. “But it’s important to think beyond the payment to what’s the value to your farm.”
Pike also addressed the subject Aug. 25 at the Illinois Wheat Association’s summer forum in Okawville.
A number of one to two year pilot programs are already underway in Illinois and surrounding states, according to Myers.
Carbon team created in response to members' questions and interest.
“These (markets) are still in development, are changing regularly and are often proprietary,” the economist said. “There’s a lot of questions to be answered.”
For instance, the cost of maintaining the data and verifying results, though methods such as soil sampling, has not been thoroughly addressed as to who could bear the expenses.
Early adopters of conservation practices also might not have as many opportunities to be rewarded for their work compared to those who implement new practices.
“It’s clear a lot of people don’t understand what agriculture has been doing for decades in terms of conservation stewardship,” Myers said. “We’re trying to represent the growers’ voice as much as possible.”
Myers urged farmers interested in carbon market opportunities to explore the market first and seek legal guidance before signing a contract. More information is available at AFBF’s website, fb.org.
U.S. Rep. Cheri Bustos reintroduced bipartisan legislation Thursday intended to reduce carbon emissions, improve air quality and increase demand for biofuels into the future.
The House bill, called the Next Generation Fuels Act, would establish a minimum octane standard for gasoline and require sources of the added octane value to reduce carbon emissions by at least 40% compared to baseline gasoline. The proposal also limits the use of aromatics in meeting this new higher-octane standard, as well as in current-market gasoline.
“One of the biggest concerns I hear is that with electrical vehicles, improved mileage and liberal policy preference, ethanol’s days could be numbered or that there’s a ceiling for it and that it would be felt across the Corn Belt,” said Illinois Farm Bureau President Richard Guebert Jr., who thanked Bustos for her leadership.
Among the co-sponsors: Illinois’ U.S. Rep. Darin LaHood, R-Dunlap; James Comer, R-Ky.; Emanuel Cleaver, D-Mo; Jason Smith, R-Mo.; and Cindy Axne, D-Iowa.
Specifically, the bill would do the following:
• Phase in higher gasoline octane levels through greater use of low-carbon renewable fuels beginning with a 95 Research Octane Number (RON) standard and increasing to 98 RON.
• Require automakers to use a test fuel consisting of 20% ethanol with a minimum 95 RON octane value to certify new vehicles for emissions and fuel economy standards, beginning with 2026 automobiles.
• Automakers can also use alternative test fuel of 98 RON and consisting of 25 to 30% ethanol to certify new vehicles for emissions and fuel economy. Beginning in 2031, automakers would be required to use the 98 RON, 25 to 30% ethanol test fuel to certify new vehicles for emissions and fuel economy.
Rodney Weinzierl, executive director of Illinois Corn Growers, compared the proposed change to when vehicles went from leaded to unleaded gasoline.
“The new regular will have a much higher octane value, which will allow the auto manufacturers to build cars that will only run on that fuel,” he told the RFD Radio Network. “But those cars will get more mileage. They will have a much larger reduction in greenhouse gas emissions; fuel will have a lot fewer carcinogenic elements or ingredients, and it will help auto makers reach the corporate average fuel economy standard (CAFÉ) giving them choices for the consumers going forward with much better mileage. The requirement kicks in in model year ‘26. If this bill passes, those cars would be built in the summer of 2025, and a big shift in fuel supply as we know it coming in the future.”
Renewable Fuels Association President and CEO Geoff Cooper called the proposal an “innovative roadmap to more efficient, more affordable, lower-carbon fuels.
“Waiting and hoping for massive growth in battery electric vehicle sales and a greener electricity grid is not the way to address today’s energy security, air quality and climate concerns,” Cooper said. “We need real solutions right here, right now. This legislation would ensure cleaner, greener liquid fuels are available in the near term to reduce carbon emissions, improve fuel efficiency and protect human health.”
Farmers interested in enrolling in a voluntary, incentive-based carbon sequestration contract in the future should do their homework and consult a lawyer before signing on the dotted line.
Those are among the tips provided by Laura Harmon, Illinois Farm Bureau associate counsel, during a pair of carbon market conferences hosted in southern Illinois by the Wabash Valley Stewardship Alliance.
The market for carbon sequestration in the soil remains in its infancy and the contract terms are constantly changing.
“At this point in time, everything is in play,” Harmon said during one of the meetings at the Roger Knight farm near McLeansboro. “If you’re reviewing an agreement and don’t like it or any of its provisions, let the company know. It’s all up for negotiation.”
Types of carbon sequestration contracts include the following:
How long are the soil carbon sequestration contracts?
“It changes,” Harmon said. “Earlier this year it was 10 years, but we’ve seen some drop to five years.”
IFB has a carbon team to help farmers and landowners decipher various contracts. Harmon urged anyone interested in a carbon contract to have a lawyer review it and also contact their local Farm Bureau office for assistance before signing it.
“Don’t just look at the contract itself,” she said. “A lot of times there’s an (online) link with additional terms which are also part of the contract.”
Harmon also advises farmers to make sure that, if a contract is terminated, the farmer retains ownership of carbon credits; make sure that the company can’t terminate the contract at any time without cause, since you incur the expenses upfront, but are paid over a five-year period.
Harmon noted some soil carbon contracts allow companies to gather and use data for any reason. She cautioned farmers to avoid allowing a data grab and limit the company’s use and access to their data to only those records necessary to verify they are in compliance with the contract.
Several companies want to store carbon in pore space thousands of feet below the surface in Illinois and are seeking easements from landowners. Harmon discussed compensation that farmers can expect to receive in exchange for the right to inject CO2 in the pore space which includes a bonus/injection payment; a royalty during CO2 injection; surface damage payment; and a closure fee.
Easement terms should also limit the right to use the surface, clearly define what is the pore space, what can be injected and require the company to indemnify the landowner for any potential liability as a result of the injection of CO2 into the pore space.