Carbon Credits as Fertile Ground for the Agricultural Sector


Carbon Credits as Fertile Ground for the Agricultural Sector

Discover why agribusiness has become a key player in mitigating climate effects

The regulation of the carbon market began in 2015 when it was incorporated into the Paris Agreement, and its final details were agreed upon during the Conference on Climate Change (COP26) in November 2021. The main objective is to reduce Greenhouse Gas (GHG) emissions to prevent global warming from exceeding 1.5°C in the coming years. Although much is said about “carbon” because it is the most emitted GHG by human activities, the correct term to be used is “carbon equivalent” (CO2eq), as it encompasses any other GHG, such as methane (CH4), nitrous oxide (N2O), and others.

For some time, Brazil has been discussing the creation of a regulated carbon market, where credits can be sold to countries that need to meet mandatory emission reduction targets. Experts point out that Brazil has a billion-dollar potential to become a carbon credit exporter. A study commissioned by the International Chamber of Commerce (ICC Brazil) to WayCarbon corroborates this expectation, indicating that the country could generate around $100 billion in carbon credit revenues by 2030, with a focus on opportunities in the agricultural and energy sectors. In addition to signing the methane agreement, Brazil has committed to eliminating illegal deforestation by 2028 and neutralizing its emissions by 2050. Agribusiness is one of the main pillars to achieve these ambitious goals.

Over decades, Brazil has gained global recognition for its experience in conservation practices and the potential of its agricultural system. These characteristics are even more evident when considering the agricultural sector’s capacity to become carbon-positive, contributing to the net removal of carbon from the atmosphere. This perspective offers a significant opportunity for the sector to adapt to new needs and play a crucial role in mitigating climate change.

Although greenhouse gas emissions associated with agribusiness are significant, there are practices and approaches available to offset these emissions and even generate a negative net balance, resulting in greater carbon absorption than emission. This means that the agricultural sector can not only reduce its own emissions but also contribute positively to carbon removal from the atmosphere.

To achieve this goal, in addition to reducing emissions where possible, it is essential to adopt sustainable practices that encourage carbon capture and storage in the soil. Among these practices, agroforestry, regenerative agriculture, sustainable pasture management, reforestation, and ecosystem restoration stand out. By implementing these procedures, in addition to reducing emissions, it is possible to improve soil health, preserve biodiversity, and increase the resilience of the agricultural system, all without compromising productivity.

Furthermore, it is crucial to consider the use of renewable energy sources, such as installing solar panels on rural properties, adopting more efficient technologies like drip irrigation systems, and precise fertilizer management, which helps minimize losses and optimize the use of these resources, resulting in emission reduction.

To illustrate, a study by Embrapa Rice and Beans in Goiás compared the integrated crop-livestock system (ICL) with the grain crop succession system (soybean-corn) regarding carbon accumulation in the soil. The ICL system, especially with no-till planting, showed a significant increase in carbon accumulation compared to crop succession systems, with accumulation rates between 0.60 and 0.90 tons per hectare per year.

Although there is still no regulated carbon credit market in Brazil, rural producers can generate these credits by implementing sustainable practices that result in the reduction of GHG emissions into the atmosphere. These credits, once validated, can be traded and commercialized in the voluntary market, providing an additional revenue opportunity for producers.

However, it is important to emphasize that achieving neutrality or becoming carbon-positive requires comprehensive efforts and a systemic approach. Each property and each agricultural supply chain will have specific challenges and opportunities, and practices and strategies will need to be adapted to local circumstances.

The path for agribusiness to become low in carbon involves a combination of sustainable practices, technological innovation, rigorous monitoring of emissions, and investments in carbon offset projects.

Although it is a complex challenge, agribusiness plays a crucial role in transitioning to a low-carbon economy and mitigating the effects of climate change. The Brazilian agricultural sector has a unique opportunity to establish itself as a positive force in this fight, adding value to its products and meeting the growing global demand for sustainable production.