Selling carbon credits outside the chain is the future

Selling carbon certificates outside the chain is a smart way to finance sustainability of the sector through demonstrable climate improvement. It puts dairy farmers in the spotlight as 'problem solvers' of a social issue. And to reassure the climate accountants: the climate profit on the dairy farm fully counts in the footprint of a kilo of milk and does not disappear from the sector. 

With the growing interest in carbon sequestration on permanent grassland, the discussion about the use of carbon certificates within or outside the chain is also increasing. 'Carbon certificates must remain in the chain' is a frequently heard statement at the management tables of the processing industry. A major dairy company recently called on its members to exercise restraint when it comes to selling carbon certificates. This is out of fear that this CO2 space will leak out of the dairy chain. The good news, however, is that this is not the case, regardless of who purchases the certificate.

Sponsoring
A carbon certificate is proof that the buyer has contributed financially to demonstrable and validated climate improvement outside the company's own gate. In terms of the Greenhouse Gas Protocol, this is called 'financial participation'; in flat Dutch 'sponsoring'. The climate benefit remains with those who remove CO2 from the atmosphere and store it sustainably in the soil; the dairy farmer! The buyer reaps the benefits through green marketing and demonstrating environmental entrepreneurship.

Compensation
Dutch climate policy and regulations (where applicable) are entirely focused on emission reduction; After all, every ton of CO2 that does not enter the atmosphere is a direct climate benefit. However, it is an illusion that our society will be completely emission-free in the short term. The energy transition takes time. And it is precisely during that transition that entrepreneurs and organizations voluntarily choose to neutralize (or compensate for) part of their emissions through climate improvement projects outside their own company gate. For example, because these projects yield climate benefits faster or more profit per euro invested. Some companies even consciously choose to increase costs by purchasing carbon certificates as an internal incentive for innovation and emission reduction. Excellent examples of climate social entrepreneurship.

Win win
Back to dairy farming. Both National Carbon Market Foundation (the organization that validates and issues carbon certificates) as KringloopWijzer are of the opinion that carbon captured on grassland counts towards the sector goals, even if the carbon certificates are sold. Think of it as an accounting, where the carbon balance is drawn up on December 31. The final balance (calculated for example by KringloopWijzer) is the footprint per kilo of milk supplied. The improvement compared to last year was made possible thanks to a financial contribution from Microsoft, Shell, the Water Board or the car dealer in the village. A unique win-win situation that the sector should embrace.

Powerful story
Although I understand that the processing industry and retailers are cautious about CO2 claims and their substantiation - the consumer organizations use the term 'green washing' quickly in the mouth - the carbon certificate system has been validated and guaranteed by an independent organization recommended by the government. Money from third parties becomes available through carbon certificates to help finance sustainability of the chain and improvement of the climate. This strong story must be told to the consumer without batting an eyelid. Because whoever connects farmers, citizens and businesses to the unique production factor of agricultural land, deserves the future.

Erik Jan from Huet Lindeman

Erik Jan van Huet Lindeman is director at Dutch Carbon Company. A company that connects Dutch farmers and companies to capture CO2 in agricultural soils.

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