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Writer's pictureMike

Q&A - GOT CARBON?

Welcome to the second edition of Got Carbon. We are going to go a little further in depth around what some expectations could be when looking to sell credits not only for today but also in the future. We are hard at work getting you in a position to give you an idea of what an offer could look like. We hope to have this to you by the end of this month.


But, in the meantime there are a few more pieces of information that you should consider before continuing down this path. Take a few minutes to familiarize yourself with these key items. These questions by no means indicate anything that will be in what we bring to market but are things you need to know when looking at all of your options.


1. What is durability? Durability is the length of the contract that you will be held to. This is something that is required in the marketplace and can last anywhere from 10-100 years.


2. What does this mean for me? What this means is that you will be expected to continue the same practice that you started at the beginning of this period for the duration of that contract.


3. What if I cannot do the same practice for that long? If you cannot do the same practice change for the length of the durability because of Mother Nature then there is a force majeure clause that will allow for this. IF you just decide to stop doing said practice, you could be subject to a payback depending on what contract you choose to sign. This is the importance of reading the fine print when looking at different marketplace options.


4. Why are the contracts so long? The contracts are this long because they allow for the purchaser to ensure that the credits they purchased are still in the ground. This allows them to fully make a claim on those credits and use them for their strategies.


5. How often will I have to report data? Data will be reported one time each year. This data will then be pushed on an aggregated level to the purchaser.


6. What is verification? Verification is part of the carbon market that could be closely identified as an “audit.” During this process the 3rd party will ensure that you have done what you said you did and utilize NDVI imagery as well as actual spot checks on fields. If you cannot pass the verification, you will not be allowed to sell your carbon credits on that field. Verification happens in all carbon markets and not every grower will be subject to these interactions.


7. Does verification cost money? Yes, to have your credits verified it can be anywhere between $3,000-$5,000. BUT, this is why you are working with a data manager. As your data manager we will be able to take groups of individuals and do verification in small regions that will allow us to keep the verification cost low. So, instead of each grower paying that money this would be divided amongst many growers across those acres.


8. Do I have to enroll my entire operation? No, you may do as many or as few fields as you like.


9. How do I know how much carbon I have generated? Through the data collection process we will then pass that information on to the carbon company we are working with and they will use “Comet Planner”or “Daycent” to calculate the amount of carbon. They could possibly request soil samples as well. These soil samples will most likely be on soil carbon.


10. What is a realistic amount of carbon my field will generate? Realistically you can expect anywhere between .3-.75 tons/acre. The actual average is about .4 tons/acre. Please keep in mind that you are paid by the ton and not by acre.


11. What is a lookback period? A lookback period is the amount of time from when you began your practice change. These are also how they identify what are known as “vintage credits”


12. Will there be a look back period in your offer? At this we are not able to say definitively yes or no. But we do anticipate that we will have that available up to 5 years.


If you have made it this far, thank you. If you still have continued interest and you did not sign up on the website last time, please take the time to do so. You can go to the main page of the website and halfway down it will say create new log in.


We understand that many of you want to move quickly as spring is approaching. Please understand that we are making sure that we are doing what is best for you as the farmer and we do not have any critical errors through this process. This is especially important given the length of these contracts.


Please let me know if you have questions or feedback.


Mike

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