Carbon Credits from Agriculture Agriculture is both affected by climate change and an important source of greenhouse-gas (GHG) emissions. At the same time, appropriate agricultural management can reduce emissions and increase carbon storage in soils and biomass. Carbon markets provide a mechanism through which verified GHG emission reductions or removals can potentially generate carbon credits and create an additional source of income for farmers. In India, agriculture has been identified as a sector eligible for participation in the offset mechanism of the Carbon Credit Trading Scheme (CCTS). The Government of India has also developed a framework for promoting the Voluntary Carbon Market (VCM) in the agriculture sector, with particular attention to participation by small and marginal farmers. What is a Carbon Credit? A carbon credit represents a quantified reduction, removal or avoidance of greenhouse-gas emissions. Under India's Carbon Credit Trading Scheme, a carbon credit is defined as a value assigned to a reduction, removal or avoidance of greenhouse-gas emissions equivalent to one tonne of carbon dioxide equivalent (tCO₂e). For agriculture, carbon credits may arise when a project demonstrates measurable and verifiable climate benefits compared with an appropriate baseline. It is important to distinguish between carbon sequestration and carbon credits. Increasing soil organic carbon does not automatically mean that a farmer has generated tradable carbon credits. A carbon project must satisfy the requirements of an applicable carbon-crediting methodology, including baseline determination, additionality, quantification, monitoring and verification. How Can Agriculture Generate Carbon Credits? Agricultural carbon projects can generate credits through two broad pathways: 1. Reduction of greenhouse-gas emissions Examples include reducing emissions associated with: Nitrogen fertilizer use Methane emissions from rice cultivation Manure management Agricultural energy use Other agricultural activities producing carbon dioxide (CO₂), methane (CH₄) or nitrous oxide (N₂O) 2. Removal or storage of atmospheric carbon dioxide Carbon can be stored in agricultural ecosystems through practices that increase carbon stocks, particularly soil organic carbon (SOC) and biomass. Potential practices include: Conservation or reduced tillage Crop-residue management Cover cropping Crop diversification and rotation Improved water management Appropriate fertilizer management Improved grazing management Agroforestry Biochar-based systems Restoration of degraded agricultural land International agricultural carbon methodologies recognise several of these practices as potential sources of GHG emission reductions or soil-carbon removals. Soil Organic Carbon and Carbon Credits Soil organic carbon is an important component of soil organic matter and represents a major carbon pool in agricultural ecosystems. When suitable management practices increase the amount of carbon stored in soil relative to an appropriate baseline, the resulting change in SOC stocks can potentially contribute to carbon-dioxide-removal credits. However, SOC measurements alone are not sufficient to establish the number of carbon credits generated. Carbon-credit methodologies require consideration of factors such as baseline conditions, project activities, changes in other GHG emissions, uncertainty, leakage and the permanence of carbon storage. For example, the Verra VM0042 Improved Agricultural Land Management methodology quantifies both GHG emission reductions and SOC removals associated with improved agricultural land management. Its eligible practices include reduced tillage, fertilizer management, residue management, water management, cover crops, crop rotations and improved grazing. Agriculture and India's Carbon Market India notified the Carbon Credit Trading Scheme (CCTS), 2023, which provides the framework for the Indian Carbon Market. The CCTS contains two principal mechanisms: Compliance mechanism: applies to specified obligated entities that must meet prescribed GHG emission-intensity requirements. Offset mechanism: allows eligible non-obligated entities to register GHG emission-reduction, removal or avoidance projects under approved methodologies. Agriculture is among the sectors identified for the offset mechanism. The Government of India has subsequently developed procedures and methodologies for operationalising the offset mechanism. As of July 2026, the Bureau of Energy Efficiency (BEE) lists approved agricultural methodologies including methane recovery from livestock and manure management at households and small farms and emission reduction through improved management practices in rice cultivation. Therefore, farmers should not assume that every agricultural carbon-storage activity automatically qualifies for a carbon credit under the Indian Carbon Market. Eligibility depends on the applicable approved methodology and project requirements. Voluntary Carbon Market in Agriculture The Ministry of Agriculture and Farmers Welfare launched the Framework for Voluntary Carbon Market in Agriculture Sector in January 2024. The framework aims to promote participation of farmers in carbon markets, build awareness and capacity, and encourage sustainable agricultural practices. The framework is particularly relevant to small and medium farmers because agricultural carbon projects may require aggregation of farms, technical assistance, monitoring and verification. Farmer participation can therefore occur through: IndividualFarmer → FPO /Cooperative → ProjectDeveloper → Carbon Standardor Registry → Validation andVerification → Carbon CreditIssuance → Buyer Aggregation can reduce transaction costs and make monitoring and verification more practical for small landholdings. Important Agricultural Practices for Carbon Farming 1. Improved fertilizer management Efficient nitrogen management can reduce nitrous oxide emissions. Practices may include appropriate fertilizer rates, timing, placement and source selection based on crop and soil requirements. 2. Improved rice-water management Water-management practices in rice cultivation can influence methane emissions. India has an approved offset methodology specifically addressing emission reductions through improved management practices in rice cultivation. 3. Conservation tillage Reduced soil disturbance can influence soil carbon dynamics, fuel consumption and other GHG emissions. However, the carbon benefit must be demonstrated under the applicable methodology rather than assumed. 4. Crop-residue management Retaining, incorporating or otherwise managing crop residues can influence soil carbon and GHG emissions. Burning residues may also generate emissions that need to be considered in agricultural carbon accounting. 5. Cover crops and crop diversification Cover crops and diversified rotations can contribute to biomass production, soil protection and changes in soil carbon stocks. Their carbon-credit eligibility depends on the methodology and project design. 6. Agroforestry Integration of trees with crops or livestock can increase biomass carbon storage while providing additional ecosystem and livelihood benefits. 7. Biochar Biochar produced from suitable agricultural residues can provide a pathway for long-term carbon storage when appropriately produced, characterised and accounted for. Indian agricultural institutions are also examining biochar-based carbon-credit opportunities. In August 2026, ICAR-CCARI reported a farmer-oriented initiative in Goa examining plantation residues, biochar production and carbon-market opportunities. How Are Agricultural Carbon Credits Generated? A simplified agricultural carbon-credit project can follow these stages: BaselineAssessment → ProjectDesign → FarmerEnrolment → ImprovedPractices → Monitoring → GHGQuantification → IndependentValidation / Verification → CreditIssuance → Sale / Retirementof Credits Step 1: Establish the baseline The baseline represents the conditions or management practices against which the project's climate benefit is assessed. Step 2: Define project activities The project identifies the agricultural practices that will produce measurable emission reductions or removals. Step 3: Establish additionality The project must demonstrate that the credited climate benefit satisfies the additionality requirements of the applicable carbon standard or methodology. Step 4: Monitor changes Relevant data may include: Cropping system Tillage practices Fertilizer application Irrigation Crop residues Livestock and manure management Soil properties Biomass Fuel and energy use GHG emissions Step 5: Quantify GHG benefits Depending on the methodology, benefits may be quantified using field measurements, approved models, default emission factors or combinations of these approaches. For example, VM0042 provides a measure-and-model approach and other quantification approaches for agricultural GHG reductions and SOC changes. Step 6: Validation and verification Independent assessment is required to determine whether the project meets the applicable carbon-crediting requirements and whether the reported emission reductions or removals are adequately supported. Step 7: Credit issuance After successful verification, eligible emission reductions or removals can result in the issuance of carbon credits according to the relevant programme. Measurement, Reporting and Verification Measurement, Reporting and Verification (MRV) is fundamental to the credibility of agricultural carbon projects. For soil-carbon projects, MRV may involve: SoilSampling → LaboratoryAnalysis → SOC StockCalculation → Repeated Measurements/ Modelling → UncertaintyAssessment → IndependentVerification Accurate soil-carbon assessment requires consideration of soil depth, bulk density, carbon concentration, sampling design and spatial variability. Current international methodologies are placing increasing emphasis on standardised soil sampling and laboratory analysis. Verra's current VM0042 methodology includes requirements relating to SOC measurement and has strengthened provisions concerning sampling, modelling and uncertainty. Carbon Credits Are Not the Same as Carbon Sequestration This distinction is important for farmers and agricultural organisations. Carbon sequestration refers to the process of transferring and storing carbon in a carbon pool, such as soil or biomass. Carbon crediting is an accounting and certification process in which a quantified climate benefit is converted into a tradable or otherwise recognised unit under a particular carbon programme. Therefore: "Increase in soil carbon is not automatically one carbon credit" The project must demonstrate that the carbon change is measurable, attributable, additional where required, sufficiently permanent, and compliant with the applicable methodology. Potential Benefits to Farmers Well-designed agricultural carbon projects may provide several benefits: Additional income from verified carbon credits Incentives for sustainable agricultural practices Improved soil management Better residue management Potential improvement in soil organic matter Improved water and nutrient management Greater climate resilience Support for agricultural diversification Improved environmental services The Government of India has specifically identified carbon markets as a potential mechanism for encouraging sustainable agricultural practices and providing additional benefits to farmers. Important Precautions for Farmers Farmers should carefully evaluate carbon-credit programmes before enrolling. A farmer should ask: Which carbon standard or government mechanism is being used? Which approved methodology applies to the project? What agricultural practices are required? How will baseline emissions or carbon stocks be established? How will soil carbon or GHG emissions be measured? Who will conduct validation and verification? Who owns the carbon credits? What proportion of revenue will reach farmers? What project and monitoring costs will be deducted? What happens if soil carbon decreases in subsequent years? What are the project duration and contractual obligations? Are there restrictions on changing agricultural practices or land use? Farmers should avoid programmes that promise a fixed number of carbon credits or guaranteed income without explaining the underlying methodology, monitoring system and verification process. Carbon Farming and Soil Health Carbon farming should not be viewed solely as a mechanism for selling carbon credits. The primary objective should be sustainable management of agricultural ecosystems. Practices that improve soil organic matter, reduce erosion, improve nutrient-use efficiency, protect biodiversity and conserve water can provide benefits beyond carbon accounting. A useful approach is: HealthySoil → SustainableManagement → MeasurableClimate Benefit → Verified CarbonReduction / Removal → PotentialCarbon Credit → AdditionalFarmer Income Role of Digital Technologies Modern carbon-farming projects can use digital technologies to improve data collection and MRV. Potential tools include: Geographic Information Systems (GIS) Remote sensing Satellite imagery Global Positioning System (GPS)-based field mapping Digital soil databases Mobile applications Soil sensors Artificial intelligence and machine learning Process-based soil-carbon models Digital farm records However, digital or artificial-intelligence-based estimates should complement, rather than automatically replace, scientifically appropriate field measurements and verification requirements. Key Message Agriculture can contribute to climate mitigation by reducing greenhouse-gas emissions and increasing carbon storage in soils and biomass. Carbon markets can potentially convert verified climate benefits into an additional economic incentive for farmers. However, agricultural practices do not automatically generate carbon credits. Credible carbon-credit generation requires an approved methodology, a defensible baseline, additionality where applicable, robust measurement and monitoring, uncertainty assessment, independent verification and transparent benefit sharing. For India, the emerging carbon-market framework provides an important opportunity to connect soil health, climate-smart agriculture, carbon sequestration and farmer livelihoods, while maintaining scientific integrity in carbon accounting. References: Dinesh, G. K., Sinduja, M., Priyanka, B., Sathya, V., Karthika, S., Meena, R. S., et al. (2022). Enhancing soil organic carbon sequestration in agriculture: Plans and policies. In Plans and Policies for Soil Organic Carbon Management in Agriculture, pp. 95–121. https://doi.org/10.1007/978-981-19-6179-3_4 Dinesh, G. K., Venkatramanan, V., Jayaraman, S., Bolan, N., Srinivasa Rao, C., Meena, R. S., et al. (2025). Carbon farming: Ecosystem services and its potential in achieving UN Sustainable Development Goals. Advances in Agronomy, 196, 201–378. https://doi.org/10.1016/bs.agron.2025.10.002 Ministry of Agriculture and Farmers Welfare, Government of India. (2024). Framework for Voluntary Carbon Market in Agriculture Sector. Government of India. Bureau of Energy Efficiency (BEE), Government of India. Carbon Credit Trading Scheme: Offset Mechanism and Approved Methodologies. Government of India. Ministry of Power, Government of India. (2023). Carbon Credit Trading Scheme, 2023. Government of India. Verra. VM0042 Improved Agricultural Land Management Methodology. Verra, Washington, DC.