Farm Eligibility

When evaluating a carbon market opportunity, it’s critical to understand the specific eligibility requirements and the scope of the program. These factors will determine if a farm qualifies and how they can participate.

• Are there geographic limitations or minimum acreage requirements?

• Is the program available only to farmers supplying specific buyers or corporations?

• Are farmers required to be enrolled in a federal conservation program? If so, are there Adjusted Gross Income (AGI) limits?

Eligible Practices

Most programs reward the adoption of specific practices that reduce greenhouse gas emissions or increase soil carbon. Some programs may also allow farms to stack practices for greater benefits, while others recognize only new or additional practices for eligibility.

• What combinations of practices can farms implement to qualify for additional funding and benefits?

• Can carbon program funding be combined/stacked with other funding sources, such as EQIP?

• Are there lookback periods for early adopters? If so, how far back do credits apply?

• What additionality requirements apply (e.g., are only new practices eligible)?

• How likely is it that an eligible practice will be discontinued or changed?

Land Eligibility

Programs often have specific requirements related to land tenure and ownership, which may impact your participation. For tenant farmers, formal leases and landowner authorization are typically required.

KEY QUESTIONS TO ASK

• Can specific fields be enrolled, or must entire operations be included?

• Can rented or leased land be enrolled? Are formal lease agreements required?

• What is the best approach to selecting which fields to enroll?

Crop Rotations and Management Changes

Most programs allow flexibility in crop rotations, even if specific crops are required. For dairy farms, changes in forage crops for feed are generally acceptable. Confirm that the program can adapt to the operation’s needs.

KEY QUESTIONS TO ASK

• Does the program allow for adjustments in crop rotations or practices?

• What protections are in place for farmers who need to modify their practices?

Future Opportunities to Expand/Reduce Enrollment

Programs often allow producers to adjust participation over time, whether expanding or reducing enrollment.

KEY QUESTIONS TO ASK

• How much flexibility does the program offer to accommodate changes in farm operation/management?

• How is the program designed to evolve or adapt over time?

Program duration

Commitments range from 1 to 20 years, often depending on the type of program. Corporate opportunities typically require shorter commitments.

• How long is the required commitment?

• What is the recommended timing for implementing practices?

• Are there penalties for early program exit?

Permanence

Programs that fund carbon sequestration in soil or vegetation may require that the practice remain in place for a certain number of years.

• What happens if tillage is reintroduced or the land is sold during or after the program?

• Are there penalties for non-compliance or reversals, whether intentional or unintentional?

• How is permanence measured, and what obligations remain after the contract ends?

How much work will I need to do?

Implementing new practices requires effort, particularly in the first cycle, with data collection, planning, and learning. While the initial measurement and reporting phase can be intensive, subsequent annual data collection is typically less demanding.

• How much time will be required upfront to enroll and re-enroll over the project duration?

• Will on-farm practice verification occur, and how is it conducted?

• What resources or training are available to support practice changes?

Data sharing requirements

Most programs require detailed operational data, such as planting dates, fertilizer use, and crop yields. Data collection may be through software, interviews, or manual entry.

• What types of data must be shared, and how frequently?

• Is the use of specific software required, and is a subscription necessary?

• What happens to the collected data after the program ends?

• Who owns the data, and what protections are in place?

• Is assistance available for data collection and submission?

Payment Rate

Programs typically use either a pay-for-outcomes model (based on verified carbon credits) or a pay-for-practice model (fixed payments for implementing specific practices). In 2025, most dairy projects average $15-25 per tonne. Payments usually occur annually or semi-annually via direct deposit once verification is complete.

• How frequently are payments issued?

• Will an estimate of the payout be provided, and how accurate is it expected to be?

• Are payouts influenced by market fluctuations, weather, or other external factors?

• How are payments made?

Participation Fees and Funding Distribution

Most projects take a percentage of the carbon payments, ranging from 15-50%. Some of the fees shared with project developers cover the cost of measuring and modeling outcomes, audits, and registry listing costs, which together can represent $3-$10 per tonne.

• How does the payment offer compare to other programs?

• What fees are deducted from payments, and what do they cover?

• Is there an option to negotiate payment rates or fee structures?