Welcome to the New Food Finance weekly newsletter!

This week, we review “carbon farming”, and the prospect for farmers to earn carbon offsets to supplement their income, for example by adopting practices which sequester the greenhouse gas carbon dioxide in the soil.

The farm carbon project developer, Agreena, last month achieved compliance with Verra’s “Agricultural Land Management” carbon project methodology – esoterically named VM0042 – the first large-scale developer to do so.

Agreena has already achieved compliance with general international standards, as certified by the assurance body DNV. Getting the extra Verra stamp of approval may help scaling, given Verra is the world’s biggest carbon market registry, potentially helping farmers monetise their carbon offsets more easily.

Standard setter Verra aims to drive voluntary carbon market credibility by following a system of assurance and oversight, where independent bodies assess projects and any carbon offsets they generate, while also maintaining a registry which tracks projects and carbon credits.

There is little doubt that Agreena will benefit from achieving the milestone of Verra approval. However, the closure of rival carbon farming project developer, Nori, last year, reminded market participants of the “challenges of a stagnant Voluntary Carbon Market and tough funding environment.”

In addition, there remains a maze of carbon farming rules, which may be rigorous, but still make buyers and sellers wary of stepping into this market.

At New Food Finance, we track agtech and foodtech companies aiming to reduce the environmental impact of food production. We find carbon farming project developers have raised $4 billion in the last decade, rising over time (see Graphic of the Week).

In descending order of fund-raising, we find these companies using a range of standards and/ or assurance bodies:

1. Indigo Ag: has three core business themes: carbon credit generation; sustainable crop inputs; and market making. In carbon, Indigo has achieved approval for carbon credits issued by its projects, under the Climate Action Reserve’s Soil Enrichment Protocol in the United States.

2. GreenCollar: says it is the largest supplier of nature-based Australian Carbon Credit Units (ACCUs) to the Australian Government, and is actively working to generate new demand for high integrity ACCUs in the voluntary carbon market.

3. NetZero: is a biochar production company that uses pyrolysis to convert crop residues into biochar, which is subsequently incorporated into the soil, to sequster carbon and generate carbon credits. NetZero says its projects are certified by the ICROA-endorsed Puro Standard.

4. Klim: has produced an app which it says supports farmers to transition to regenerative agricultural methods. Klim monitors progress through farmer-centred photos of their practices, as well as satellite images. The company says its resulting carbon credits are TÜV-validated and certified, and “aligned with” Verra’s VM0042.

5. eAgronom: says it calculates the carbon credits generated on a farm, based on increased carbon levels in the soil. It says third party verifiers validate and verify these data, and that it “follows strict methodologies defined by the Verra Standard”.