Today Indigo announced its second crop of verified, registry-issued carbon credits at scale. It is our second crop of agricultural carbon credits, and more broadly, only the second time soil carbon credits have been generated using the Climate Action Reserve’s Soil Enrichment Protocol. Our first crop was proof of concept, but with Carbon Crop II, we've established the quality, scale, and momentum needed to transform the carbon market and catalyze agriculture as an immediate, scalable solution to climate change, while also enhancing critical soil health and crop resiliency.
Here we’ll take a deep dive on how these credits work, Indigo's process for producing them, and why it matters for carbon buyers, carbon farmers, and the future of agriculture.
What are Carbon Credits?
First, a quick review of how carbon credits work. The world of greenhouse gas (GHG) accounting can be broadly divided into two worlds: inventories and interventions. A GHG inventory, also known as a footprint, is a snapshot assessment of GHG emissions over a particular time, usually one year, for a particular boundary of assessment (e.g., a company’s value chain, or a product life cycle, or a country). Only recently has the scope of inventory accounting expanded to include carbon removals from the atmosphere, in addition to emissions1. An intervention, on the other hand, focuses on a particular change in GHG emissions and/or removals due to a specific action.
Our Carbon by Indigo program uses intervention accounting as laid out in a carbon offset project protocol in order to generate carbon credits that represent the climate benefits of changes to cropland management practices. In other words, when farmers implement new sustainable practices on their farms that are proven to sequester carbon in their soil, we measure and model the carbon those changes sequester or abate and generate one carbon credit per tonne of carbon sequestered or abated. These credits are then sold to companies who use them voluntarily to offset their own GHG footprint1. Companies who use carbon offsets should only do so after taking real steps to first reduce their footprint2. At that point, they should only use high-quality credits that have been independently verified against rigorous standards and issued through an independent, public registry. Indigo works with the Climate Action Reserve to verify our carbon credits from farms in the United States. Creating high-quality carbon credits requires adherence to rigorous standards for scientific integrity, data collection, transparency, and verification.
Producing the First Agricultural Carbon Credits at Scale
In June 2022, Indigo introduced a new crop: agricultural soil carbon credits, generated at scale. Carbon credits have been around for years, but this was the first time someone generated verified, registered carbon credits from agricultural soils, using agricultural practices, at scale. That issuance of 22,225 credits was a major milestone of a journey that Indigo has been on since 2018. The journey started under the Climate Action Reserve’s Soil Enrichment Protocol (SEP), where our project, titled CAR1459, was established and we began engaging farmers about climate smart management practices. It represented not only the first credits to be issued under SEP, but also the first-time project impacts were quantified using a biogeochemical process model that had been successfully calibrated and validated against the Reserve’s rigorous guidance and review process.
Before we dig into what was different about this second harvest for our program, let’s review how agricultural carbon credits are created.
The starting point for generating any high-integrity carbon credits is the development of a rigorous protocol (or methodology) to provide the guidance and requirements for projects to follow. The Climate Action Reserve’s SEP was developed over a 10-month period in 2020, with a group of experts working together to draft the protocol with input from the public.
Indigo has adopted this protocol as our guide for producing credits from farms in the United States. When farmers enroll in our Carbon by Indigo program, they adopt one or more eligible sustainable farming practices during their initial growing season in our program, such as no-till farming or implementing cover crops. Following the harvest of the crop that was grown with the new practice change(s), the grower then provides detailed management data that allow Indigo to construct the baseline and model scenarios for quantification. For this second issuance, Indigo executed the following process:
Carbon Crop II: Momentum at Scale
These detailed steps must be repeated before every credit issuance. That first verification (i.e., audit) took approximately 10 months, and we learned a lot about how to improve efficiency and accuracy in our modeling. Now, Indigo has achieved our second issuance of over 110,000 credits under the SEP, following an independent verification process in approximately six months–40% faster! Here are a few more progress highlights from our second issuance.
Carbon Crop II: Process Improvements
| Expanded "domain" | Indigo’s science team leveraged new and expanded sources of published data to prepare a second model calibration and validation report that was independently reviewed and approved by the Reserve. This second report expanded Indigo’s modeling capabilities to include cotton, resulting in 285 cotton acres included in the quantification and verification for Reporting Period 2 (a.k.a., “RP2”) 2. |
| Faster verification | The time from verification kick-off to credit issuance was reduced from 10 months to only 6 months. |
| More of everything |
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| Reduced uncertainty | The project’s uncertainty deduction was reduced 52%, from 37.64% to 18.23%. This reduction was achieved due to the larger scale of the population in RP2, as well as advances in the statistical approach used in the second model validation report 3. |
On to Carbon Crop III
The initial issuance established what was possible. With this second issuance of verified, registry-issued agricultural carbon credits, the Carbon by Indigo program has demonstrated that it is not only possible to develop a carbon program under the SEP, but that the process is scalable and repeatable.
Soil offers a unique ability to expand the Voluntary Carbon Market (VCM). With each year comes a new agricultural crop and a new carbon crop. Carbon by Indigo will continue to expand its reach to more farmers, while existing farmers will continue to refine and add to their climate smart practice changes to maximize their carbon crop and revenues. Indigo is also actively working to expand the scope of the carbon program beyond the US to address agriculture globally.
1 This is known as retiring credits, which you can learn more about here.
2 A “Reporting Period” or “RP” is the period of time over which project activities are reported and quantified. Equal to one cultivation cycle, except the first reporting period which may be two cultivation cycles.
3 You can find out more about what uncertainty is and the role it plays in generating credits, here.