Dairy Farmers of America, the largest milk marketing cooperative, has made the first purchase of verified carbon credits within the livestock value chain from one of its Texas dairy farmer owners. The buy represents the first transaction in the carbon insetting marketplace.
Unlike the traditional offset purchases of carbon credits for actions taken on the farm, the inset market ensures farmers are paid directly for their actions and allows those in the supply chain to purchase credits to meet individual companies’ sustainability goals.
The new cloud-based livestock carbon market launched by Elanco Animal Health and Athian establishes the first protocol to pay producers who adopt specific manure management standards or use Elanco's feed additive Rumensin, which the company said reduces enteric emissions by 5%.
DFA, a cooperative owned by nearly 11,000 family dairy farmers across the country, has an individual company goal to reduce greenhouse gas emissions across its supply chain by 30% by 2030.
“We’re gratified to see this science-based, third-party verified and validated system coming to life with the Athian platform and that dairy farmers are among the first to prove it works,” Dennis Rodenbaugh, DFA president and CEO, said in a statement. “By working within the value chain on an insetting approach with the companies we work with every day ... farmers can directly benefit.”
By using the feed additive, Texas farmer DFA-farmer owner Jasper DeVos has been able to reduce emissions by nearly 1,150 metric tons of carbon dioxide equivalent (CO2e).
In a statement, DeVos said the inset marketplace allows his operation to “accelerate the adoption of conservation practices and supplement income on the farm” to reinvest in additional stewardship actions and contribute to the overall financial health of the operation.
Athian CEO Paul Myer told Agri-Pulse this first purchase by an offtake partner proves insetting works and that more offtake partners are willing to pay for actions within their supply chain.
“This is a long-term solution to the problem of climate change. It's not an ad hoc or a flash in the pan or some kind of climate offset bubble,” Myer said. “We're driving true systemic change.”
Myer said Athian provides a pathway for small and medium-size operations to participate because those barriers to entry are much lower, giving producers “instant access to an ecosystem that will fund those practice changes.”
This first transaction provides DeVos at least $30 a metric ton for those reductions, Myer said. The credits Athian will be selling in 2024 will be real-time credits for practice changes that took place this year.
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Farmers are part of the “show-me culture,” Myer said, and with the first sale of credits providing a new income stream, he believes it will “open the floodgates” of farmers who want to be added to the platform and willing to sell the credits they create.
“We realize that the only way we're going to move the needle on climate change is to get a large percentage of farmers on the platform,” Myer said. “This will be an illustration that provides to farmers there’s real money to be made here if they jump in, if they make that commitment, that there’s going to be a market for those credits.”
The next approved Athian protocol for producers to adopt and claim credit for involves Elanco’s Bovaer feed additive, which the Food and Drug Administration is expected to approve for use in the first half of the year.
Myer said Athian has several offtake partners who have contractually committed to purchase those Bovaer verified credits once available.
Katie Cook, vice president of farm animal health at Elanco, a seed funder of Athian, said in a statement there is potential for more than $200 million in additional value for the U.S. dairy industry with adoption of these feed additives and sale of carbon credits.
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