Apr 11 Carbon Credits as a 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 Climate Change Conference (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 there is a lot of talk about “carbon” because it is the GHG most emitted by human actions, 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 now, Brazil has been discussing the creation of a regulated carbon market, in which credits can be sold to countries that need to meet mandatory emissions reduction targets. Experts point out that Brazil has the potential to become a billion-dollar exporter of carbon credits. A study commissioned by the International Chamber of Commerce (ICC Brazil) from WayCarbon corroborates this expectation, indicating that the country could generate around US$ 100 billion in revenue from carbon credits by 2030, with opportunities in the agricultural and energy sectors standing out. In addition to being a signatory to the methane agreement, Brazil has committed to eliminating illegal deforestation by 2028 and neutralizing its emissions by 2050. Agriculture is one of the main axes for achieving these ambitious goals.

Over the decades, Brazil has gained global recognition due to its experience in conservation practices and the potential of its agricultural system. These characteristics are further highlighted when we consider the agricultural sector’s capacity to become carbon positive, contributing to the net removal of carbon from the atmosphere. This prospect 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 net negative balance, resulting in more carbon absorption than emission. This means that the agricultural sector can not only reduce its own emissions, but also contribute positively to the removal of carbon from the atmosphere.

To achieve this goal, in addition to reducing emissions where possible, it is essential to adopt sustainable practices that encourage the capture and storage of carbon 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.

In addition, it is essential to consider the use of renewable energy sources, such as the installation of solar panels on rural properties, the adoption of more efficient technologies, such as drip irrigation systems and the precise management of fertilizers, which helps to minimize losses and optimize the use of these resources, resulting in a reduction in emissions.

To illustrate, a study by Embrapa Rice and Beans in Goiás compared the integrated crop and livestock (ILP) system with the grain crop succession system (soybean-corn) in relation to the accumulation of carbon in the soil. The ILP system, especially with no-till farming, 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 market for carbon credits 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 sold on the voluntary market.