Sustainability Atlas
Food, Agriculture & Materials·12 min read··...

Trend analysis: Soil carbon MRV & incentives — where the value pools are (and who captures them)

Signals to watch, value pools, and how the landscape may shift over the next 12–24 months. Focus on data quality, standards alignment, and how to avoid measurement theater.

In 2024, the voluntary agriculture carbon credit market contracted sharply from $84.9 million to just $36.1 million—a 57% decline driven by quality concerns and market consolidation. Yet simultaneously, investment in digital MRV (Monitoring, Reporting, and Verification) solutions surged to $2.3 billion, with satellite-based verification systems reducing soil carbon measurement costs by 40% compared to traditional field sampling methods. This paradox reveals a market in transition: buyers are retreating from low-integrity credits while infrastructure players race to build the verification backbone that will unlock the projected $648 million voluntary agriculture carbon market by 2034. Understanding where the value pools are forming—and who is positioned to capture them—is critical for procurement leaders navigating Scope 3 agricultural supply chain decarbonization.

Why It Matters

Soil organic carbon (SOC) represents the largest terrestrial carbon pool, storing approximately 2,500 gigatons of carbon in the top three meters—more than three times the atmospheric carbon stock and four times all living plant biomass combined. The potential for agricultural lands to sequester additional carbon through regenerative practices offers a meaningful climate mitigation pathway, with estimates suggesting global croplands could sequester 0.9–1.85 GtCO₂e annually under optimized management.

For procurement professionals, soil carbon matters because agriculture typically constitutes 25–60% of food and beverage company Scope 3 emissions. The EU's Corporate Sustainability Reporting Directive (CSRD) and the SEC's climate disclosure rules are transforming voluntary carbon accounting into regulatory compliance requirements. By 2027, an estimated 90% of carbon credit transactions will require satellite verification—making MRV technology selection a strategic imperative rather than a technical afterthought.

The economic stakes are substantial. The soil carbon sequestration market reached $3.2 billion in 2024 and is projected to hit $9.8 billion by 2032, representing a 14.5% compound annual growth rate. However, value capture remains highly uneven: technology providers and aggregators currently extract 40–60% of per-acre carbon revenues, leaving farmers with thin margins that often fail to offset practice-change costs. This dynamic is driving rapid innovation in MRV efficiency and direct farmer payment models.

Key Concepts

Soil Organic Carbon (SOC) refers to the carbon stored within soil organic matter, including decomposed plant and animal residues, living soil organisms, and humic substances. SOC content varies from less than 1% in degraded agricultural soils to over 10% in healthy prairie and forest soils. The rate of SOC accumulation under regenerative practices typically ranges from 0.5–0.7 tons CO₂ per acre annually, though enhanced rock weathering and biochar applications can achieve 3–4 tons per acre.

MRV (Monitoring, Reporting, and Verification) encompasses the technologies, methodologies, and institutional frameworks that quantify, document, and validate carbon stock changes. Modern soil carbon MRV integrates three approaches: direct field sampling with laboratory analysis (high accuracy, high cost), in-situ spectroscopy probes (medium accuracy, lower cost), and remote sensing with machine learning models (lower accuracy per-point, but scalable coverage). The emerging consensus favors hybrid approaches that calibrate satellite observations with strategic ground-truth sampling.

Additionality requires demonstrating that carbon sequestration would not have occurred without the financial incentive from credit sales. This remains the most contentious element of soil carbon crediting, as many regenerative practices (cover cropping, reduced tillage) may be adopted for agronomic benefits independent of carbon payments.

Permanence addresses the risk that stored soil carbon could be released through future land management changes, drought, or fire. Most protocols require 20–100 year commitment periods and establish buffer pools where 10–25% of credits are held in reserve against potential reversals.

KPILow PerformanceTarget RangeLeading Practice
SOC Measurement Accuracy±30% uncertainty±15% uncertainty±5% uncertainty
Cost per Acre for MRV>$50/acre$15–30/acre<$10/acre
Farmer Revenue Share<30% of credit value50–65%>75%
Time from Practice Change to Credit Issuance>36 months18–24 months6–12 months
Permanence Commitment Period20 years40 years100 years
Credit Rating (ICVCM scale)BB or belowBBBA or above

What's Working

Satellite-AI Hybrid MRV Platforms

The integration of satellite remote sensing with machine learning models has fundamentally altered soil carbon economics. Companies like Boomitra and Perennial now deliver measurement costs below $10 per acre at continental scale, compared to $50–100 for traditional soil sampling. Perennial's digital soil mapping methodology (VT0014) received Verra approval, enabling projects to reduce sampling requirements by 60–70% while maintaining statistical rigor.

ICVCM Quality Labeling

The Integrity Council for the Voluntary Carbon Market (ICVCM) approved Verra's VM0042 v2.2 methodology in November 2024, creating a recognized quality benchmark. Credits carrying the Core Carbon Principles (CCP) label now command 15–25% price premiums, with 57% of all credits retired in H1 2025 rated BB or higher. This quality differentiation is concentrating buyer demand toward verified high-integrity projects.

Corporate Pre-Purchase Agreements

Major food companies including Nestlé, PepsiCo, and General Mills have shifted from spot-market credit purchasing to long-term offtake agreements with regenerative agriculture programs. These arrangements provide farmers with revenue certainty while enabling corporations to claim verified Scope 3 reductions aligned with Science Based Targets initiative (SBTi) requirements.

USDA Climate-Smart Commodities Program

The USDA's $3.1 billion Climate-Smart Commodities program has accelerated adoption by subsidizing MRV infrastructure costs. Partner organizations like Yard Stick have deployed measurement technology across programs receiving over $225 million in federal grants, creating demonstration effects that validate technology performance.

What's Not Working

Phantom Credit Controversies

Investigative reporting and academic studies have undermined market confidence. A 2023 Guardian analysis found that approximately 94% of Verra-certified rainforest offset credits were worthless, while a 2024 Berkeley study demonstrated that cookstove credits were overestimated by a factor of ten. Though these findings primarily affected forestry and energy access projects, the reputational spillover dampened soil carbon credit demand throughout 2024.

Farmer Economics Remain Marginal

Despite headline carbon prices of $15–30 per ton, actual farmer payments often fall to $5–12 per ton after platform fees, aggregator margins, and verification costs. At typical sequestration rates of 0.5 tons CO₂/acre, this translates to $2.50–$6 per acre annually—insufficient to cover the costs of cover crop seed, additional equipment passes, or yield risk during transition periods.

Permanence Uncertainty

Soil carbon gains achieved through reduced tillage or cover cropping can reverse within 3–5 years if practices change. The 2024 growing season demonstrated this vulnerability when drought conditions across the U.S. Midwest caused some projects to report net soil carbon losses despite continued regenerative practice implementation. Buffer pool mechanisms provide some protection, but buyers increasingly question whether 20-year permanence horizons meaningfully address climate timescales.

Methodology Fragmentation

The proliferation of competing protocols—Verra VM0042, Gold Standard SOC Framework, Climate Action Reserve, and proprietary corporate methodologies—creates comparability challenges. A ton of soil carbon credited under one standard may represent substantially different real-world outcomes than under another, frustrating procurement efforts to build consistent supplier engagement programs.

Key Players

Established Leaders

Verra operates the Verified Carbon Standard (VCS), holding approximately 63% market share in voluntary carbon retirements with over 2,000 registered projects globally. Their VM0042 Methodology for Improved Agricultural Land Management received ICVCM approval in late 2024, solidifying their position as the dominant agricultural carbon crediting standard.

Indigo Ag pioneered the farmer-facing carbon credit model, enrolling over 30 million acres across North America. Despite 2023 restructuring and staff reductions, they remain the largest single aggregator of soil carbon projects, with established relationships spanning corn, soy, and wheat production regions.

Gold Standard differentiates through mandatory sustainable development co-benefits, requiring projects to demonstrate positive community and biodiversity outcomes. Their 2024 expansion of soil organic carbon activity modules (Zero Tillage, Cover Crops, Managed Pastures) positions them for growth among ESG-focused European buyers.

Emerging Startups

Yard Stick has raised $30.26 million including backing from Toyota Ventures Climate Fund, Microsoft Climate Innovation Fund, and Breakthrough Energy Ventures. Their handheld spectroscopy probes enable instant in-field soil carbon measurement at 70–90% lower cost than laboratory analysis, addressing the MRV cost barrier that has constrained market scaling.

Perennial developed the VT0014 digital soil mapping tool approved by Verra, enabling project developers to optimize sampling strategies and reduce verification costs. Their platform integrates satellite imagery, machine learning, and soil databases to generate carbon stock estimates with quantified uncertainty bounds.

Boomitra combines satellite monitoring with AI and ground-truth validation to deliver end-to-end carbon credit development. Operating across multiple continents, they focus on enabling smallholder farmers in emerging markets to participate in carbon markets previously accessible only to large-scale operations.

Key Investors

Breakthrough Energy Ventures (founded by Bill Gates) has deployed capital into Yard Stick, Indigo Ag, and multiple soil health technology companies, representing one of the largest concentrated bets on agricultural decarbonization.

Microsoft Climate Innovation Fund invested in Yard Stick and maintains substantial carbon removal purchase commitments, signaling sustained demand for high-integrity soil carbon credits.

Rabobank partnered with The Nature Conservancy to establish a $500 million soil carbon credit marketplace in 2024, leveraging their position as a leading agricultural lender to integrate carbon payments into farm financing.

Examples

1. Regrow Agriculture and Cargill Partnership: Regrow provides digital MRV infrastructure for Cargill's regenerative agriculture supply chain initiatives spanning over 10 million acres. The partnership demonstrates enterprise-scale integration, with Regrow's platform enabling Cargill to track practice adoption, model carbon outcomes, and report Scope 3 emissions reductions to stakeholders. Microsoft's 2024 cloud partnership with Regrow further validated the technology stack for Fortune 500 deployment.

2. Agoro Carbon Alliance and Bayer Integration: Agoro Carbon Alliance, a subsidiary of Yara International, works with Bayer's Carbon Program to combine agronomic support with carbon credit monetization. Farmers receive per-acre payments averaging $15–20 for verified practice changes, with Bayer's field network providing technical assistance. The model illustrates how input suppliers can integrate carbon incentives into existing agronomic service relationships.

3. Soil Capital and European Farm Networks: Soil Capital operates across France, Belgium, and the UK, paying farmers for measured soil carbon changes rather than practice proxies. Their model employs annual field sampling with laboratory analysis, delivering higher measurement confidence at the cost of reduced scalability. European CSRD requirements are driving demand for this higher-verification approach among food companies sourcing from EU supply chains.

Action Checklist

  • Audit current Scope 3 agricultural emissions baseline using supplier-provided data and emission factor databases (GHG Protocol, Ecoinvent)
  • Map tier-one agricultural suppliers by geography, crop type, and existing sustainability certifications to identify regenerative practice potential
  • Evaluate MRV technology vendors using criteria of cost per acre, measurement uncertainty, methodology alignment (Verra VM0042, Gold Standard SOC), and integration capabilities
  • Establish pilot inset programs with 3–5 strategic suppliers, documenting practice changes, measurement protocols, and credit pathway decisions
  • Develop procurement contract language specifying carbon credit ownership, permanence commitment requirements, and reversal remediation obligations
  • Build internal capacity for distinguishing high-integrity credits (ICVCM CCP-labeled, BB+ rated) from lower-quality alternatives in spot-market sourcing

FAQ

Q: How do soil carbon credits differ from forestry REDD+ credits that faced integrity controversies? A: Soil carbon projects involve annual practice verification on actively managed agricultural land, creating more transparent baselines than avoided-deforestation scenarios. However, soil carbon faces its own challenges: lower per-acre sequestration rates (0.5–0.7 tCO₂ vs. 50–150 tCO₂ for forests), shorter natural permanence horizons, and measurement uncertainty in the 15–30% range. The key differentiator is that soil carbon projects typically involve verifiable practice changes (cover crops, reduced tillage) rather than counterfactual claims about avoided land conversion.

Q: What MRV approach should procurement teams require from suppliers? A: The emerging best practice combines satellite remote sensing for continuous monitoring with strategic ground-truth sampling calibrated to local soil conditions. Require suppliers to use Verra-approved or Gold Standard methodologies with ICVCM Core Carbon Principles eligibility. For insetting programs (credits applied to your own supply chain emissions), measurement uncertainty below ±15% and annual verification cycles are increasingly expected by reporting frameworks.

Q: Are soil carbon credits eligible for Science Based Targets (SBTi) claims? A: SBTi guidance distinguishes between abatement (reducing emissions within value chain boundaries) and neutralization (purchasing offsets for residual emissions). Soil carbon credits from your supply chain qualify as Scope 3 abatement if the practices occur on supplier farms and measurement follows approved methodologies. Third-party soil carbon credits can contribute to net-zero target neutralization but do not count toward near-term emission reduction targets. Procurement teams should structure supplier programs as insetting rather than offsetting to maximize SBTi alignment.

Q: What permanence commitments are required for regulatory compliance? A: The EU Carbon Removal Certification Framework (CRCF) requires minimum 35-year permanence for soil carbon, with monitoring at 5-year intervals. Verra and Gold Standard typically require 20–40 year project commitment periods with buffer pool contributions of 10–25% of credits. For corporate claims under CSRD, demonstrating contracted permanence periods exceeding 30 years with reversal remediation provisions is becoming the de facto standard.

Q: How should teams evaluate the farmer payment fairness of different programs? A: Request transparency on payment waterfall from credit sale price to farmer check. Leading programs deliver 60–75% of credit value to farmers; programs below 50% often struggle with enrollment retention. Additionally, assess whether programs require exclusive contracts, retain practice data rights, or impose yield-sharing provisions that create long-term farmer dependency rather than capacity building.

Sources

Topics

soilcarbonsupply chainpackagingScope 3fermentationprotein shift

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