Planning Your 2024 Scope 3 Approach

The start of a new year is a great time to reflect back on 2023 and evaluate what to incorporate into your company’s scope 3 approach for the year ahead. At AgSpire, we were particularly excited about the following developments that will create infrastructure for more on the ground scope 3 outcomes, streamlined claimability, and more payments to producers in the coming year.  

  • ESMC became the first user of SustainCERT’s market-first value chain decarbonization impact solution, which will enable more co-claiming of shared scope 3 intervention outcomes.  
  • Verra launched a scope 3 Standard Program Development Group that will work to ensure Verra’s scope 3 program is designed to unlock immediate and large-scale investment in credible supply chain action.  
  • Science Based Targets Network released the first science-based targets for nature – specifically related to freshwater and land.  
  • Athian announced the establishment of the first-of-its-kind voluntary livestock carbon insetting marketplace.  
  • More than 120 USDA Partnerships for Climate Smart Commodities Grants were signed into action and are now in the process of generating outcomes and paying producers.  
  • NRCS awarded more than $1 billion across 81 projects under its Regional Conservation Partnership Program that prioritize the scaling of climate-smart practices.  

Needless to say, there are a multitude of opportunities through which to generate progress. But how do you pick? With only a handful of growing seasons left until 2030 – the deadline for many companies to achieve their near-term science-based targets – even the smallest component of your scope 3 approach needs to have purpose and value.

Here are three ways to ensure you are moving into 2024 with focus and impact:  

> Manage Costs: To scale programs and achieve a greater impact, managing costs is paramount. Careful prioritization and strategic utilization of available resources will help manage costs. 

GHG Protocol makes a clear differentiation between what is required and what is recommended. Prioritize the essentials to ensure your cost of carbon stays within budget. Additionally, public funding mechanisms or other financial partners can be leveraged to amplify the reach and magnitude of outcomes you hope to generate.  

> Watch the Evolving Standards: GHG Protocol has stated that their Land Sector & Removals Guidance is scheduled to be finalized for implementation in 2024. Focus on adhering to those requirements that should not change and those where multi-stakeholder initiatives like the Value Change Initiative are amassing valuable feedback.  

> Provide Programmatic Assistance to Farmers: Technical assistance is just one form of support that producers need to participate in sustainability programs. Most programs also require large amounts of data collection, data cleaning, reporting, and in some cases, audit time to allow buyers to claim outcomes. As GHG Protocol requirements become clearer, so will the need to help producers accomplish these tasks. 

About the Author

ZACH PINTO
Director, Carbon & Ecosystem Service Markets

Zach promotes company strategy and client success by assisting industry groups, food and ag companies, and farmers on their sustainability goals. Zach has worked on carbon issues for stakeholders across the agriculture value chain and in a wide array of commodities, developing expertise in farm-level carbon accounting, MRV platform usage, voluntary and compliance market schemes, science-based targets, ESG reporting, and strategic planning.

Leveraging Alternative Funding Mechanisms

Companies who are looking to launch projects that will help them achieve scope 3 targets must ask many questions right out of the gate: What types of interventions should we focus on?  What region do we start in first?  Who are the right partners?  How do we quantify the outcomes?  And finally – Who is going to pay for this? 

Certainly, alignment of upstream and downstream groups who share scope 3 emissions is a powerful tool for helping to spread out the cost of on the ground implementation of projects. But due to recent funding allocations from the Commodity Credit Corporation (CCC) and the Inflation Reduction Act (IRA), the United States Department of Agriculture (USDA) has emerged as another strong partner who can help to bring funds to the table to assist with farm and ranch level practice implementation.  

The USDA has been a long-time proponent of conservation-based practices on farms and ranches around the country and has provided funding through a multitude of programs. Although most of these programs receive funding regularly through Farm Bill reauthorizations, additional funding was included in the IRA in August of 2022. The IRA appropriated approximately $19.5 billion in new funds for agriculture conservation efforts and – more than 25% of those funds were allocated to the Regional Conservation Partnership Program (RCPP), through which Alternative Funding Arrangement (AFA) cooperative agreements will help support place-based, farm-level interventions that can advance progress towards scope 3 targets.   

RCPP is not the only mechanism that can be deployed for launching an on-the-ground project. Additional programs include: 

> Conservation Innovation Grants (CIG) On Farm Trials on both the national and state level 

> Conservation Implementation Strategy (CIS) funding pools in certain states, and  

> RCPP Classic, which operates differently than the RCPP AFA listed above. 

Your company’s goals, measurement and verification standards, budgets, and capacity are some of the items that should be considered when choosing a path forward in any of these funding opportunities.   

Over the past three years, AgSpire has been involved with the design and submission for projects that have helped our partners leverage more than $250 million dollars of funding to support voluntary, incentive-based sustainability projects on farms and ranches throughout the country. Contact us to learn more about these programs and how to incorporate them into on-farm programs.

About the Authors

JARED KNOCK
VP, Business Development

As a Vice President of Business Development at AgSpire, a company he co-founded, Jared draws on his 25 years of on-the-ground experience to drive practical and natural solutions within agriculture.

Jared a farmer and rancher from Eastern South Dakota, with a diversified crop and livestock operation that focuses on cow calf production. His expertise has been further honed through his background in livestock genetics, seed sales, and business development. Jared has a degree in Animal Science from South Dakota State University and China Agricultural University in Beijing.

AUSTIN KNIGHT
Technical Advisor, Regenerative Agriculture Systems

Austin grew up helping on the family century farm and now operates that farm with his uncle raising hogs, corn, and soybeans. Austin has seen the effects of incorporating conservation practices on his own farm and uses those experiences to help others incorporate practices on their operations. Prior to joining AgSpire, Austin worked as a Sustainability Agronomist working with producers across the country helping bring value to their operations through sustainable practices.

Austin holds a bachelor’s degree in Agronomy from Iowa State University. He is also a Certified Crop Advisor (CCA).

4 Considerations for Successful Farm-Level Interventions

In the private sector to date, more than 50 US-based food and agriculture companies have set rigorous greenhouse gas reduction targets – leading to a widespread focus on reducing the largest portion of their footprints: Scope 3 emissions. These include all upstream and downstream greenhouse gas emissions that fall outside of a company’s direct control, typically within their upstream or downstream supply chains.

As the largest source of emissions, Scope 3 also offers the greatest opportunity for reductions. For the ag and food companies we work with, farm-level interventions hold immense potential both for reductions and removals. Despite this potential, successful farm-level interventions can be complex and challenging to design and implement. Many companies have conducted supply shed hotspot analyses and even identified strategic interventions to implement – but are struggling to truly generate results on the ground.

At AgSpire, we drive success down to the ground level with a simple approach: putting the producer first. By using that as our guide, we are able to amplify and accelerate results – delivering benefit throughout the supply chain, from the farmers and ranchers on the ground, to the companies we work with, and ultimately to our environment at large.

When designing a farm-level program, here are four ways in which putting the producer first can lead to measurable progress: 

  1. Get Regional: The US EPA currently breaks ecosystem management into 12 ecoregions across the continental US – each with different climates, weather patterns, soils, water sources, and plant species. As such, growing corn in South Dakota, for example, looks very different than growing corn in Kansas. In a Scope 3 program, this may mean approaching growers in different regions with entirely customized opportunities, practices, and incentives – based on the context, markets, and ecosystems of those localities. This regional approach helps accelerate adoption and lead to better outcomes.
  2. Design for Resilience: It is imperative to remember that implementing practice changes of any kind creates financial risk for the farmer – including additional input costs or investments in new equipment or other infrastructure, for example. This risk can create challenges for program recruitment, enrollment, and even program retention. That said, designing programs that simultaneously reduce GHG emission and create on-farm benefit through a positive return on investment in the form of improved profitability, enhanced farm resilience, shrunken costs, or greater productivity go a long way to creating producer motivation and interest.
  3. Build with Empathy: Despite the credibility that comes with rigorous models, standards, protocols, and verification practices, these requirements don’t always align with how a producer runs their operation. For example, not all producers keep 3-5 years’ worth of records on file at any given time at the level needed to enter the most rigorous carbon programs. Understanding these realities and adapting program requirements helps lower barriers that might keep an interested farmer or rancher from participating or changing practices.
  4. Provide Support: On-the-ground success is dependent on helping connect producers with the right practices, programs, and incentive mix for their operation. Providing producers with technical assistance to successfully implement the practices and financial assistance needed to cover the financial burden of tackling the change can be a significant motivator for participation and on-going retention.

About the Author

ZACH PINTO
Director of Carbon & Ecosystem Service Markets

Zach promotes company strategy and client success by assisting industry groups, food and ag companies, and farmers on their sustainability goals. Zach has worked on carbon issues for stakeholders across the agriculture value chain and in a wide array of commodities, developing expertise in farm-level carbon accounting, MRV platform usage, voluntary and compliance market schemes, science-based targets, ESG reporting, and strategic planning.

Understanding Carbon Intensity Scores

Carbon intensity (CI) is simply defined as carbon dioxide emissions per unit of energy. While the definition might be simple, figuring a CI score is anything but simple.

Carbon dioxide makes up the majority of greenhouse gas emissions across all industries, including the agricultural sector. Carbon Intensity Scores allow us to quantify and compare the emissions associated with producing, distributing, and consuming a product or activity. A higher score indicates a higher carbon footprint.

Ascertaining for a unit of feedstock produced and crediting the correct amount of carbon sequestered is a complex task with a high level of uncertainty. Many data points need to be measured, recorded, and verified to develop an accurate CI number. MRV platforms help assist in collecting and compiling the data necessary to calculate CI numbers efficiently and accurately.

On a farm, a CI Score accounts for all up- and downstream emissions per unit of output – including that of the practices and inputs used. In particular, scores are affected by fertilizer and chemical application types and rates, on-farm energy consumption per unit area, and yield per unit area. While each farm and system vary, the fertilizer and chemical application types and rates contribute the most to a CI score, on average.

With agriculture systems serving as the origin for so many of our products, this has huge implications for CI Scores off the farm as well. With our in-house expertise in MRV, we are helping companies better understand their carbon footprints and the right strategies to reduce or sequester emissions.

There is a growing body of evidence that shows that regenerative agriculture can have a positive impact on CI scores.

> A study published in the journal Nature found that regenerative agriculture could help to reduce global greenhouse gas emissions by up to 10 percent. Read More >>>

> Another study published in the journal Science, found that regenerative agriculture could help to improve water quality and increase biodiversity. Read More >>>

The environmental benefits of regenerative agriculture are numerous and stretch throughout the value chain.

Contact AgSpire to learn more about your Carbon Intensity Score and how to unlock the potential of regenerative agriculture, email info@agspire.com.

About the Author

DEREK VER HELST
Senior Conservation Agronomist

Derek has over 15 years of experience working with landowners and corporations to design, manage, and validate research trials, maximizing short- and long-term crop outputs. With a continued passion for conservation and the natural ecosystem, he is focused on the natural symbiosis organisms have with one another in the environment. Always eager to learn, he is continuously expanding his knowledge of soil health, chemistry, and pest disease management.

Derek holds a bachelor’s degree in Biology from South Dakota State University and a master’s degree in Agronomy from Iowa State University. He is also a Certified Crop Advisor and Technical Service Provider through NRCS.

Carbon Disclosure Laws and the Impact on US Agriculture

Earlier this month, California made history by enacting the first carbon disclosure laws in the United States. On October 7, 2023, Governor Gavin Newsom signed both the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act.

Despite being state regulations, these new laws will impact farmers and ranchers as well as food and ag companies nationwide. The laws’ requirements affect all large public and private companies doing business in California. With the size and diversity of California’s economy, the laws are estimated to impact over 5,000 entities – and their contractors and suppliers.

Mandatory climate and emission reporting begin in 2026 and 2027 – giving those impacted time to understand the requirements and their implications for their business.

The Climate Corporate Data Accountability Act

Also known as SB253, this new law requires companies doing business in California with over $1 billion in revenue to report corporate greenhouse gas emissions to the California Air Resources Board (CARB).

Of note, starting in 2027, companies must publicly report Scope 3 emissions. Scope 3 refers to indirect upstream and downstream GHG emissions that are produced within a company’s value chain. For both producers and companies, this mostly takes the form of purchased goods and services, all the way down to the farm.

All reporting must conform to the Greenhouse Gas Protocol standards and guidance. Additionally, companies must include a review by an independent third-party assurance provider.

The Climate-Related Financial Risks Act

Also known as SB 261, this accompanying law requires companies with at least $500 million in revenue that do business in California to report on their climate-related financial risks. Risk reports must be submitted to CARB starting in 2026 and must occur on a biennial basis thereafter.

Key Takeaways

Given how much of the United States economy moves through California, these two laws will heavily impact US food and agriculture, putting these industries in the spotlight with new requirements and opportunities.

For Farmers

In the short term, farmers operating in the US should not be affected by these regulations on a day-to-day basis. Both laws require Scope 3 reporting in aggregate. Individual, operation-specific carbon intensity scores would not be disclosed. In addition, errors in reporting will not be penalized, given the uncertainties associated with Scope 3 emissions. Lastly, all standards and guidance documents required by these regulations allow for estimation.

In the long term, however, farmers may notice two major changes:

> Data Gathering: Producers who participate in carbon or regenerative agriculture programs may be asked for more data and opportunities to verify practices to create a more accurate picture of farm-level emissions and impacts. Review all program contracts carefully when presented with an opportunity to earn income for generating insets or offsets of any kind to understand these requirements.

> Potential for More Opportunities: Both regulations will result in national attention on farm-level carbon footprints. As such, downstream companies could bring more opportunities to producers to generate revenue from insets and offsets. Farmers should work with advisors familiar with these programs and requirements to set goals, create improvement plans, and evaluate all options available to them.

For Food & Ag Companies

Implications for food and ag companies are much more direct. To help set up your company for success, here are three key considerations to prepare for the reporting requirements:

> Create a plan for measurement, monitoring, and verification: Evaluate options for estimating and monitoring Scope 3 emissions at the farm level. A number of models exist out there, and each has different strengths and weaknesses. A plan should be put in place to monitor emissions on an annual basis.

> Evaluate hotspots and opportunities: As Scope 3 reporting becomes routine, so too will the need to show progress. Companies can plan progress now by identifying the landscapes with the greatest emissions and the greatest opportunities for reductions and removals.

> Implement pilots: The next 3 years create a strategic runway for companies to begin testing scalable approaches to decarbonization, so that they can be activated at the landscape level when reporting is required.

Read More:

About the Author

ZACH PINTO
Director of Carbon & Ecosystem Service Markets

Zach promotes company strategy and client success by assisting industry groups, food and ag companies, and farmers on their sustainability goals. Zach has worked on carbon issues for stakeholders across the agriculture value chain and in a wide array of commodities, developing expertise in farm-level carbon accounting, MRV platform usage, voluntary and compliance market schemes, science-based targets, ESG reporting, and strategic planning.

Unlocking Biochar’s Potential

by Derek Ver Helst

A proven way to sequester carbon and a soil amendment showing benefit for farmers – it’s no wonder that biochar is gaining traction in sustainable agriculture conversations.

Terra Preta

As we seek new ways to mitigate atmospheric changes, biochar presents a promising proposition – especially in agriculture communities that can use it as a soil amendment to contribute to soil health. As the availability and accessibility of biochar has increased in recent years, many farmers have seen increased yields, coupled with a decreased need for synthetic inputs – all thanks to biochar applications.

While the use of biochar might be a new practice to US farms, it’s not a new practice globally. In fact, it dates back 2500 years, with origins in the Amazon rainforest. Indigenous people of the region burned forest debris and covered the burning biomass with soil. The resulting ‘man-made’ soil (referred to as Terra Preta) was found to be far more productive than any of the native soils.

We now understand that it offers many agronomic benefits for soil, including increased water infiltration and holding capacity, microbiome health, and nutrient content.

The Science of Biochar Carbon Capture

Biochar is the lightweight, black carbon residue produced via a process called pyrolysis. It is produced using the most abundant carbon sources on Earth as feedstocks: forest and crop residues, grasses, animal waste, and food waste. By heating these feedstocks to extreme temperatures in an environment without oxygen, the molecular bonds break, producing three different forms of carbon: stable carbon, ash, and volatile compounds.

The biochar carbon that is created in this process is indefinitely stable and can stay sequestered in the soil for hundreds to thousands of years. This makes it a valuable carbon sink – as the feedstocks absorb carbon as they grow, and the conversion to biochar prevents the emissions that would have been released as the natural wastes decomposed.

Due to its ability to enhance soil carbon sequestration, biochar presents great opportunities both for insetting and offsetting to meet sustainability commitments. The Science Based Targets Initiative (SBTi) has highlighted biochar in their new Forest, Land and Agriculture Science Based Target-Setting Guidance as a key insetting strategy for companies with land-based footprints to use in reaching their targets. Similarly, Verra has created a methodology for biochar to be used as an offsetting strategy due to the carbon storage associated with the production and use of biochar.

Improving Our Soils

Like most solutions within agriculture, biochar isn’t a one-size-fits-all solution. Instead, many factors determine the best types to use, as well as the optimum application techniques, rates, and timing.

Depending on the feedstock used and the temperature at which the biochar is produced, there is wide variety in the physiochemical composition of biochar – offering different benefits to soils. For example, a biochar produced from hazelnut shells will have a different physiochemical makeup than one made from ash tree sawdust. There are two main characteristics to consider, based on these physiochemical differences:

  • The porosity of biochar, which has the largest impact in how it reacts with water and nutrients in the soil profile. Internal structures in the feedstock such as the phloem and xylem define the porosity of the biochar it produces.
  • The amount of nutrients, which are determined by the chemical characteristics of the feedstock, along with oxidation/reduction reaction catalyst, pH buffering and CEC capabilities.

Learn More & Next Steps

For Farmers: USDA-NRCS has deployed new EQIP practice codes to encourage biochar use adoption (Codes 336/808 are referred to as the “Soil Carbon Amendment” practices). Read more from NRCS

For Companies: With its carbon sequestration potential, biochar can be an incredibly effective way to address Scope 3 emissions – either through credits or supporting its use in agriculture. Read this case study from Microsoft

Here at AgSpire, we are utilizing biochar in climate-smart commodity programs and look forward to incorporating the benefits of biochar more broadly. Contact us to learn more about how our advisory and implementation assistance services can help with your sustainability or land goals.

About the Author

DEREK VER HELST
Senior Conservation Agronomist

Derek has over 15 years of experience working with landowners and corporations to design, manage, and validate research trials, maximizing short- and long-term crop outputs. With a continued passion for conservation and the natural ecosystem, he is focused on the natural symbiosis organisms have with one another in the environment. Always eager to learn, he is continuously expanding his knowledge of soil health, chemistry, and pest disease management.

Derek holds a bachelor’s degree in Biology from South Dakota State University and a master’s degree in Agronomy from Iowa State University. He is also a Certified Crop Advisor.

Strengthening Your Sustainability Strategy

by Zach Pinto
Director, Carbon & Ecosystem Service Markets

In late 2015, many governments adopted the Paris Agreement – a legally binding, international treaty on greenhouse gas emissions. Since then, corporations and NGOS have joined governments to develop targets and strategies to limit environmental impacts. Now several years into the treaty, recent articles and analyses indicate that, collectively, we aren’t on track to make the changes needed.  

Sustainability Commitments 

To date, 341 food and agriculture companies have committed to and are engaging in science-based targets to advance sustainability and lower their environmental footprints. 

Within those commitments, targets around Scope 3 emissions offer the greatest opportunity for reductions and impact. Scope 3 emissions are environmental externalities that fall outside of a company’s direct control, typically within their upstream or downstream supply chains.  

For many food, feed, fuel, and fiber companies across the globe, reducing environmental impacts at the farm level is imperative for making progress toward these targets. 

Solutions within Agriculture 

Promising research shows that solutions exist within agriculture to accelerate progress and generate environmental benefit. From carbon sequestration, to improved water quality and usage, to enhanced biodiversity, these solutions can be scaled for positive global impacts.  

The good news is, much of the great work our industry is doing to inset its impacts – carbon programs, ecosystem markets, NRCS programs, USDA Partnerships for Climate Smart Commodities – can count as progress toward these targets. The key, of course, is making sure all of this work is measurable, verifiable, and scalable – and ensuring that the changes work for farmers and ranchers – both agronomically and economically.  

Here are three ways to strengthen your sustainability strategy and start unlocking the potential within agriculture:

  • Plan your strategy: Clarify what your supply shed looks like and outline your path forward. What are the most effective ways to drive change, measure progress, and reward farmers in the process? 
  • Partner with farmers: Farmers know how to farm, but adoption of regenerative practices is not a one-strategy-fits-all approach – cover crops don’t work for every farm, for example. Once you know where to focus, make sure you consult growers in the region to ensure you create interventions that work for their farm-specific conditions, make agronomic sense, and prove to be economically viable. 
  • Implement on the ground: Run pilots to test strategies and eventually scale them into full interventions. Ensure practices and outcomes align with leading public cost share programs and private ecosystem service markets that pay growers and count towards your targets.

Read more about how AgSpire can provide strategic guidance and implementation assistance to advance your sustainability goals: Our Services

Learn More

To showcase the great work going on in our industry, incentivize continuous improvement, and reward farmers for the positive practices they implement, many companies worldwide have set rigorous, protocol-based targets. These include:

  • Science-Based Targets: These targets define how quickly and by how much companies should reduce their environmental impacts, based on the best available science, to ensure that global goals such as the Paris Agreement or the Global Biodiversity Framework are met. Science-based targets for greenhouse gas emissions must be validated by the Science Based Targets Initiative (SBTi), and Science-based targets for water, land, and biodiversity must be validated by the Science Based Targets Network (SBTN).  
  • Net Zero Targets: Net Zero Targets are science-based targets that set the standard for how a company can credibly reduce their carbon footprint to net zero (when the amount of all greenhouse gases a company emits equals the amount it removes from the atmosphere) by 2050.

Additional Reading and Citations:

Soil Health and Carbon Sequestration in US Croplands: A Policy Analysis – https://food.berkeley.edu/wp-content/uploads/2016/05/GSPPCarbon_03052016_FINAL.pdf 

Cover Crops, No-Till Increase Carbon Gains in Soil – https://www.no-tillfarmer.com/articles/9818-cover-crops-no-till-increase-carbon-gains-in-soil

Negative Emissions Technologies and Reliable Sequestration – https://nap.nationalacademies.org/catalog/25259/negative-emissions-technologies-and-reliable-sequestration-a-research-agenda

About the Author

ZACH PINTO
Director of Carbon & Ecosystem Service Markets

Zach promotes company strategy and client success by assisting industry groups, food and ag companies, and farmers on their sustainability goals. Zach has worked on carbon issues for stakeholders across the agriculture value chain and in a wide array of commodities, developing expertise in farm-level carbon accounting, MRV platform usage, voluntary and compliance market schemes, science-based targets, ESG reporting, and strategic planning.