Carbon Emission Trading: Where to Get Data and How to Solve Farmers' Problems

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How emission trading for greenhouse gases works and how to make it easier
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The carbon credit market is growing every year. McKinsey estimates that in eight years, the demand for carbon credits could increase by a factor of 15, and the market could be worth $ 50 billion. It's no wonder that more and more companies are joining this industry. That includes agricultural companies, which either sell emission quotas themselves or act as intermediaries between other companies and farmers. The area is new, so there are many questions. For example, what is the best way to check farmers' data about their fields and crops? Let's examine how one can simplify the interaction and save time for parties on both sides of carbon emission trading.
Rada Klimenko
Head of B2B
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Philip Kondratenko_OneSoil Agronomist
Rada Klimenko
Head of B2B
The carbon credit market is growing every year. McKinsey estimates that in eight years, the demand for carbon credits could increase by a factor of 15, and the market could be worth $ 50 billion. It's no wonder that more and more companies are joining this industry. That includes agricultural companies, which either sell emission quotas themselves or act as intermediaries between other companies and farmers. The area is new, so there are many questions. For example, what is the best way to check farmers' data about their fields and crops? Let's examine how one can simplify the interaction and save time for parties on both sides of carbon emission trading.

Where to Get Data for Carbon Credit Eligibility

To receive money for soil carbon sequestration, farmers must confirm that their farming methods are environmentally friendly. Every company that sells carbon credits makes a list of requirements that a farmer needs to meet. The lists vary, but the basic principles are the same. Below are some of the challenges faced by companies that trade carbon credits and how OneSoil's technological solutions powered by machine learning algorithms can help those companies:

1️⃣ Specifying the boundaries and acreage of the field (s) where eco-friendly farming methods will be used.

Yes, the company can request information about the field area directly from the farmer, but how can it verify the information? Some companies still send representatives to the fields to calculate the area and determine the payments. The process takes a lot of time and money and, in the long run, binds the business to one region, which prevents it from scaling.

What OneSoil offers. Quickly and easily confirming field boundaries and acreage based on satellite images. In fact, the OneSoil platform allows you to determine field boundaries with an accuracy of 5 m. We've used machine learning algorithms to identify all fields in Europe, North and South America, China, Japan, and Australia. You can see how the process works in the OneSoil app.
By the way, we've got borders for all fields in Europe, North and South America, Australia, New Zealand, Russia, Turkey, China, Japan, Kazakhstan, Uzbekistan, and South Africa.
2️⃣ Identifying the crop sequence.

For some greenhouse gas markets, farmers must provide reports on all crops grown in their fields over the past five years. However, not everyone keeps such reports.

What OneSoil offers. Crop data for Europe and the United States from 2016 to the present day. Our satellite image processing algorithms can determine what is growing in a particular field with high accuracy. This only became possible in the last few years when images with sufficiently high resolution appeared. Crop data obtained from an independent source can be used in many different ways, and our business partners appreciate that.

In addition, OneSoil will soon begin identifying cover crops, which will simplify the process of confirming farming methods even more.
OneSoill can indicate the crop sequence of all fields in the world over the past six years: we have been analyzing satellite images since 2016.
3️⃣ Determining planting dates and harvest dates.

The exact dates of field operations are difficult to know in advance since they depend on the weather. Usually, they can only be found out from the farmers themselves.

What OneSoil offers. Have you already guessed? Finding out the planting and harvest dates from satellite images! Based on open data from the Sentinel-1 and Sentinel-2 satellites, we calculate the dates of field operations with an accuracy of 3 to 5 days. By combining signals from two satellites, we were able to make the algorithm operate regardless of the weather conditions present when field operations were performed. Contact us if you need planting and harvest dates.
Here's an example of how OneSoil can help companies check the planting/harvest dates submitted by farmers. This OneSoil-made map shows when planting took place for early grain crops in the Kirovohrad region of Ukraine. In 2019, the recommended planting dates for early grain crops in this region were from March 30 to April 15. White represents fields that were planted on time; red represents fields that weren't planted on time.

Other challenges with carbon credits

1️⃣ The tillage method is hard to confirm.
This parameter is as important as field boundaries, crop sequence, and field operation dates. Unfortunately, it's impossible to determine the tillage method based on satellite images.

2️⃣ Farmers don't want to change their tillage methods.
For many, the no-till and strip-till methods are unprofitable. The $20 per hectare that the farmer will receive for carbon payments (if everything goes well) will most likely not cover the yield losses that usually occur in the first few years of no-till or strip-till.

⚡ Sometimes minimal tillage is simply the most reasonable option. If the soil quality is poor and there is little precipitation, the no-till method is the only way to preserve the soil for future generations. Moreover, it's more profitable.
Philip Kondratenko
Agronomist
It's very painful to see farmers who have less than 250 mm of precipitation per year that are still plowing. It's suicide.
⚡ In general, it's not necessary to switch to no-till. Introducing cover crops is sufficient to receive carbon credits payments. This approach also costs money, but if things work out, the farmer won't go bankrupt by not plowing.

3️⃣ The emissions trading scheme is not transparent.
The best universities in the world are struggling to learn how to calculate the volume of greenhouse gases that remain in the soil. However, there is currently no single solution to this.
Usevalad Henin
GIS specialist, agricultural chemist, co-founder of OneSoil
As long as there is no scientific methodology for calculating greenhouse emissions produced by different tillage methods, carbon credits remain a challenging idea.
In short, there are many questions and contradictions when it comes to carbon credits. One thing is clear: if you’re trading emissions, the best thing you can do is automate several stages of data confirmation to avoid wasting your time and farmers' time.

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