South Africa’s agricultural sector is one of the biggest contributors to carbon emissions in the world, says Gray Maguire, AgriCarbon programme lead for the Carbon Neutral Group SA. Maguire gives us insight into carbon credits and how it benefits farmers.
In 2021, Carbon Neutral Group South Africa took in their first group of farmers as entrants to their AgriCarbon programme. While not the country’s first carbon credit certification, is the first programme recognised internationally.
Maguire, who holds a master’s degree in interdisciplinary global change from Wits University, and has more than a decade’s experience developing sustainability solutions, says that the Carbon Neutral Group is not a farming organisation, but specialises in carbon.
“We don’t go out there ourselves and go and tell a farmer, ‘Okay, you can change over to no-till in this type of soil’ or ‘you need to apply lime because your pH is too high’. We don’t have that level of expertise. We’re carbon experts. So, what is necessary from our side is that we work through other partner organisations who have the expertise and have inside knowledge into what really makes sustainable agricultural activities work.”
It is through these partner organisations that they can gather data for the programme and are thus able to guide farmers in terms of what they can do to use less carbon, adapt better to climate change, and improve their overall resource efficiency, Maguire explains.
What are carbon credits?
In simple terms, carbon credits can be defined as reducing how much greenhouse gases your operation emits in order to compensate for gases emitted elsewhere. Companies can purchase these credits from organisations like Carbon Neutral Group SA, which in turn results in payments to farmers.
Maguire explains that they sell the carbon credits generated by their farmers to their international clients.
“We generate carbon credits and then we sell them to the international clients who are on the Climate Neutral’s books, who incorporate them as part of their net-zero carbon footprinting approaches. That allows us to be able to channel funds back to the farmers, who are busy physically implementing regenerative practices on the ground.”
How do you earn carbon credits?
Regenerative agriculture, which includes farming practices that improve the environment, is the key to generating carbon credits and earning money for them.
Farmers who take part in the programme, provide data about their farming practices; including the tillage and cropping details, produce, cover crops, harvest information, fertiliser usage, and soil testing records. The organisation then analyses this information, and if they think the farm can generate carbon credits, sends it to independent auditors for evaluation.
Maguire explains that South Africa recognises three different carbon standards. They are the verified carbon standard, the clean development mechanism, and the gold standard. The method used by Carbon neutral Group SA is the VM0042 methodology, which is part of the verified carbon standard.
“The methodology was only actually officially released in September 2020, and we are the first company in the world to have gone through the audit cycle, actually processing the data that we received from farmers who’ve been involved in regenerative farming activities.”
This method, he says, looks at how farmers implement certain farming practices, including the minimisation of soil disturbance, improvements around grazing practices, reduction in fertiliser application, and the improvement of crop applications.
“Those are the main categories that regenerative practices fall under, but there are very many different ways of being able to implement those different sectors.”
What are the benefits of earning credits?
The entire point of generating carbon credits for farmers, says Macguire, is to reduce the environmental impact of your farming practises and thus ensure that your operation remains sustainable for much longer.
“On the one side of things, there is a reduction in emissions. This happens when farmers implement regenerative practices that reduce things like nitrogen fertiliser which breaks down into nitrogen dioxide, a very potent greenhouse gas. It has a potency of about 275 times that of carbon dioxide.”
By farming regeneratively, farmers limit the damage to their soils and replenish the soil organic carbon levels on their land. By doing this, farmers make their operations more resilient to droughts.
“There’s also, and this is the bigger part, the development of soil organic carbon. One of the things that are really key in the South African context, [is that] we’ve lost between 45% and 65% of the soil organic carbon that has been historically stored in our soils over the last 80 years, as a result of industrial agricultural practices.”
What this means is that the soil has less nutrients and is of a poorer quality, which affects every other farming aspect, including water use.
“It also means that the microbial environment is not as well supported in the soils and the soils themselves are less capable of being able to retain water. So, it means there’s degradation of soil, which happens quite a lot. It also means that farmers need to use unnecessarily large amounts of water in order to be able to keep their crops growing.”
Who qualifies to sign up for carbon credits?
At the moment, smallholder farmers are not able to sign up for the Carbon Neutral SA programme. Maguire explains that, even though smaller farmers are less likely to weather the effects of climate change, the programme is only open to bigger farmers as they tend to have more data.
“We intend to be able to [include smallholders]. There are 35 million smallholder farmers in Sub-Saharan Africa, and Climate Neutral Group as a whole recognises the centrality of being able to make the solution available to them.”
Maguire says that their decision to include only bigger farmers is simply due to how new the programme is. Essentially, he says, by starting off with bigger farmers, they can craft their carbon credit tools in order to make it more efficient and inclusive in future.
“At this point, we are not working with farms that are under 50 hectares in size. We’re not incorporating them into the programme at this stage, but we will be doing so as we move into the future. As our tool becomes more and more sophisticated, and the amount of time required to process data coming from any one individual farm becomes less, we can include them.”
Why should exporting farmers consider carbon credits?
South Africa lacks sufficient policies in relation to sustainability and carbon management, Maguire says. This could end up hurting the sector, especially as it is the biggest sector in the country.
“Agriculture is by far the biggest employer in terms of provision of livelihoods. If you look at the number of people in small-scale farming, it’s over two and a half million small-scale farmers inside South Africa. There are 680 000-odd people employed by the commercial agricultural sector. It is an enormous sector.”
As one of the only sectors that grew during the Covid-19 pandemic, Maguire says that the lack of sufficient policy around carbon management could severely impact farmers trading with countries in the European Union (EU).
“It is a super important sector, and if you look at the policy environment that we’re implementing around it, it is not very progressive at all. If you look at the regulatory environment, a lot of those are policies and regulations that we developed in the 1940s. We’re way behind the rest of the world.”
The EU is in the process of implementing a mechanism called Carbon Border Adjustment Mechanism, says Maguire. This involves the placing of a tariff on the carbon emissions of imported produce, so as not to disadvantage producers in the region.
“At least 38% of the South African exports go to the EU, and the EU is implementing policies as part of the European Green Deal. What they’re trying to do, is to decarbonise their economy, and also at the same time, protect their producers from companies that could produce less environmentally friendly in other places.”
From 2026 produce importers from South Africa can expect to have these tariffs implemented, something he describes as “really worrying”.
“South Africa has the highest carbon emissions per $1 million of [agricultural] exports in the world, by far. We stand at 1100 tonnes per $1 million. The second highest country in the world is Poland, and they’re only at 600. So, we are way over the line and it’s worrying because there is no approach from national government to address this. So, decarbonisation is really important.”
Advice for farmers looking to earn carbon credits
Maguire advises that farmers approach companies claiming to help with carbon credit generation with extreme caution. He says that the process is complicated and requires a high level of expertise.
“If you’re wanting to explore this route, just be very careful in terms of actually taking the time to look at who you’ll be partnering with when pursuing these avenues. Earning carbon credits requires a lot of very specialised skills and you can end up wasting a lot of your own time and missing out on the economic benefits if you don’t do your homework.”
If you are interested in earning carbon credits, the AgriCarbon programme is open for applications until 30 September 2022.
Sign up for Farmer’s Inside Track: Join our exclusive platform for new entrants into farming and agri-business, with newsletters and and podcasts.