In the context of climate change, agriculture provides both a challenge and an opportunity.
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As the agricultural sector and its customers in the food manufacturing industry explore sustainable solutions to meet their climate goals, the concept of carbon "insets" in agriculture emerges as an opportunity to reduce greenhouse gas (GHG) emissions and remove carbon from the atmosphere.
While carbon "offsets" have been around for several years, carbon insets are relatively new and not as well understood.
Carbon offset markets provide an opportunity for companies to purchase carbon credits from projects that reduce GHG emissions somewhere else to offset emissions in their own operations and supply chain.
Offsets can be generated from a range of projects (e.g. forestry, peat restoration, soil and vegetation rehabilitation) and then traded.
Offset markets have been impacted recently due to quality concerns and consumer and investor pressure for companies to make sustained improvements by investing in decarbonising their own supply chains.
Carbon insets provide an avenue to genuinely reduce GHG emissions and are particularly relevant to the grains sector where supply chain traceability is already well established.
Insets are a way to track emission reductions within a supply chain, provide a pathway to improve resilience and productivity in farming practices and provide an additional income stream for farmers.
Farming practices like tillage, fertiliser use, irrigation, land-use change, and fuel consumption contribute to GHG emissions both directly and indirectly.
Programs are being developed, such as Cargill's SustainConnect, to assist and incentivise cropping farmers in their transition to more sustainable farming practices and to reduce the carbon footprint of the resultant commodities.
These changes can be quantified in terms of the equivalent carbon dioxide (CO2e) that is avoided or removed from the atmosphere.
In a carbon inset program, each tonne of CO2e that is reduced or removed is equivalent to a type of carbon credit that is called a carbon inset.
Unlike carbon offsets, which, once traded, can no longer be claimed by the farmer, carbon insets are used to track emission reductions through the supply chain.
Each participant in the supply chain can claim the GHG reductions because the carbon footprint of the commodity they are using has been reduced, and the GHG reductions have not been used to offset emissions elsewhere.
Farming entities and even whole industries need to consider the implications when selecting which projects and, therefore, carbon markets they wish to participate in - carbon offset programs where the reductions can be sold but no longer claimed or carbon inset programs where the farmer is paid by participants in the supply chain and all, including the industry itself, can claim the emissions reductions they have genuinely helped to achieve.
