Understanding carbon: The essentials of the carbon credit market

In the last of our series explaining how carbon credits can create additional income as part of a resilient and profitable farm business, Bill Goldie - sales adviser at environmental risk management consultant Redshaw Advisers - talks about the fundamentals of the carbon market.

Bill was one of a panel of experts who joined us for our webinar Confused about Carbon?

You can watch a video of the full webinar below.

The compliance market and the voluntary market

As Bill explains, there are two major markets for carbon credits: The compliance market and the voluntary market.

In compliance markets energy intensive industries buy allowances from governments to balance their emissions.

For example, in the UK, the UK Emission Trading Scheme mandates companies or organisations which are emitting 20MW of thermal power or over to buy allowances. The money raised is then intended to be spent on decarbonisation programmes.

In the voluntary market any business can buy credits to offset its residual emissions. Each carbon credit is equal to one tonne of CO2 avoided or removed from the atmosphere.

“The market was designed so that companies who have residual emissions that they are unable to fully decarbonise at that point in time can invest in projects that avoid or remove carbon,” says Bill (pictured below).

“This creates the much needed investment into projects, and allows those companies to showcase their environmental responsibility.”

At the beginning of the carbon market in 2007, most of the focus was on funding renewable energy schemes or protecting forests in order to avoid emissions.

Now the market is trending towards buying credits created through projects which remove carbon from the atmosphere, such as farmers adopting practices which improve soil health as part of Regenerate Outcomes.

“Regenerative agriculture, if done properly, can remove huge volumes of carbon from the atmosphere and as such generate huge volumes of removal credits,” says Bill.

Producing high value carbon credits for farmers

At Regenerate Outcomes we provide expert mentoring to help our member farms grow profits by improving soil health, reducing input costs and increasing soil carbon.

We baseline and monitor carbon levels to generate high quality carbon credits which can be sold to generate extra revenue.

The service is provided at no upfront cost and you are able to leave the programme at any time.

Please get in touch to find out how we can work with you.