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How Carbon Payment Estimates are Calculated
How Carbon Payment Estimates are Calculated

Check out this article for more information on how Carbon credit payment estimates are calculated for Carbon by Indigo.

Becky Scott avatar
Written by Becky Scott
Updated over a week ago

Carbon by Indigo calculates carbon payment estimates by taking the expected impact of each carbon farming practice (reducing tillage, planting cover crops, and optimizing nitrogen management) and multiplying by the expected carbon credit value of each ton of CO2 equivalent (tCO2e) sequestered or avoided. The payment estimate is based on a biogeochemical model that is in line with USDA standards and is likely representative of the model that Indigo will use to calculate credits for the upcoming carbon credit crop harvest.

The model estimates the tCO2e impact growers can see when they move from their current management practices to carbon farming practices. Currently, the model assumes each user starts at a conventional baseline, i.e., a traditional tillage grower, who has not previously planted cover crops, and who uses regional norms for nitrogen management. As carbon farming practices are selected, the tool calculates the average tCO2e impact of those practice changes across many different soil types and for geographies at and around your indicated location. The estimate shown via the tool is not a guarantee of payment. It is an average range of what growers with the same intended practice changes, in counties like yours, can earn. Depending on your baseline practices, exact soil type, and portfolio of management practices, your actual sequestration potential may be higher or lower than the estimate shown. Carbon by Indigo has on-staff agronomists and digital tools to support you on your carbon journey and help ensure your carbon practice changes generate maximum soil health and carbon credit value.

The practices highlighted in the Carbon Calculator Tool represent the highest-value carbon practices that growers can implement, but they are not exhaustive of the practice changes included in the Carbon by Indigo program. Carbon has one of the longest lists of eligible practices of any carbon program, ensuring more of your practice changes are compensated. See below for a summary of the practices included in Carbon by Indigo:

We encourage growers to use the carbon calculator tool to explore their carbon payment potential under different practice scenarios. Keep in mind that the payment potential will only increase as demand and price for agricultural carbon credits increases. Indigo is a committed carbon farming partner, and we are actively working to drive up demand and get the best prices for agricultural carbon credits. Growers in the Carbon by Indigo program benefit from any upside as carbon credit price increases and are guaranteed to receive at least 75% of the sale price of each credit.

If you have any questions feel free to reach out to a Carbon Customer Success Expert using the chat function in your carbon account.

Want to know more about how various practice changes can help generate carbon credits? The following are some extra considerations by practice category to take into account:

Reduced TIllage

Reducing tillage can come in the form of reducing the intensity or reducing the number of passes. The estimate shown for tillage reduction applies to both a transition from a conventional system to a reduced tillage system as well as a reduced tillage system to a no-tillage system. A slight reduction in tillage will likely result in a lower estimate than the one shown while a dramatic reduction in either intensity or number of passes will likely result in larger credit generation than the estimate shown.

Cover Crops

Adding cover crops is one of the best ways to generate carbon credits, improve soil health, and address other agronomic challenges like compaction and herbicide-resistant weed pressure. For growers who have not adopted cover crops in the past, the estimate generated will be an accurate estimate of what they might expect if they were to adopt a new cover crop. For growers who already adopted cover crops, intensifying current cover crop practices by adding new species, elongating the time cover crops are on your field, or terminating cover crops in new ways, can all be eligible carbon payment practices although they might lead to lower credit generation.

Optimizing Nitrogen Management

Generating carbon credits from improved nitrogen management can have benefits for soil health and profitability. The change to nitrogen management that has been shown to generate the most carbon credits is moving application timing closer to plant uptake.

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