A quick peek into the report
Market Overview
Introduction of Carbon Credits Market for Agriculture, Forestry, and Land Use
The carbon credits market for agriculture, forestry, and land use monetizes on-farm practices that sequester atmospheric CO2 or avoid greenhouse gas emissions, transforming regenerative techniques, such as cover cropping, reduced tillage, agroforestry, and peatland restoration, into tradable environmental assets. In this voluntary market segment, each credit represents one metric ton of CO2e removed or avoided by agricultural activities, validated under rigorous frameworks such as Verra’s VCS, Gold Standard’s Climate and Agriculture methodology, or the emerging EU Carbon Removals & Carbon Farming (CRCF) Regulation. By channeling private capital into soil health and land-use innovations, the market offers farmers new revenue streams and bolsters global climate mitigation efforts through scalable, nature-based solutions.
Market Introduction
As of 2024, agricultural carbon credits account for roughly 100 Mt CO2e of the ~216 Mt CO2e in the Agriculture, Forestry, and Other Land Use (AFOLU) voluntary market, with prices averaging $4-6/tCO2e, nearly 15 % below forestry premiums. Leading food and agribusiness firms (e.g., Bayer’s ForGround, Indigo Ag, Nutrien) have enrolled over 3,000 growers across North America and Europe, leveraging satellite-based monitoring, reporting, and verification (MRV) tools to streamline project validation. Despite this momentum, fragmented methodology adoption and investor caution around permanence and additionality continue to constrain credit volumes, keeping agriculture’s share at approximately 30 % of total AFOLU issuance.
Over the next decade, robust policy drivers, such as the EU’s CRCF voluntary certification and anticipated U.S. “carbon farming” incentives under the Inflation Reduction Act, are expected to double annual agriculture-credit issuances to 200+ Mt CO2e by 2035. Advances in digital MRV (including drone-enabled soil-carbon mapping, blockchain-based registries, and AI-driven emissions modeling) will lower project development costs by 20–30 %, unlocking participation among smallholder and specialty-crop producers. Meanwhile, corporates across CPG, retail, and financial services are poised to integrate on-farm credits into comprehensive nature-positive portfolios.
Industrial Impact
The burgeoning carbon credits market compels agribusiness conglomerates and input suppliers to recalibrate their investment portfolios. Leading seed and fertilizer manufacturers, such as Corteva Agriscience and Nutrien, now allocate substantial R&D budgets toward carbon-smart products (e.g., low-tillage seed coatings, nutrient-use-efficiency inoculants) that qualify for soil?carbon protocols. This shift not only opens new service lines, but farmers can earn $15-$25/ha in upfront payments for adopting coated seeds or microbial biostimulants, as well as hedge revenue streams against commodity-price volatility. In response, private equity funds have been syndicating deals to bundle soil-carbon practices with precision?agriculture sensors, underwriting equipment-as-a-service contracts that deliver both agronomic and carbon outcomes.
On-farm operations have been undergoing a systemic redesign to optimize carbon sequestration alongside yield goals. Equipment OEMs such as John Deere and AGCO deploy telemetry-enabled, banded-application fertilizer rigs and high-clearance air seeding implements that reduce soil disturbance by up to 80%. These machines integrate directly with carbon?quantification platforms (e.g., Project Carbonview), automatically logging reduced-till passes and residue cover metrics to verifiers. By embedding carbon-credit eligibility as a native feature, operators streamline third?party audits, shrinking verification timelines from 90 days to under 30 days and capturing incremental returns of $10-$15 per acre, effectively lowering the breakeven cost of precision equipment by 8-12 %.
Grain handlers, ethanol producers, and food processors are increasingly conditioning offtake contracts on verified carbon attributes. Major cooperatives such as CHS and Archer Daniels Midland (ADM) have instituted “carbon?differentiated basis premiums,” paying farmers an extra $0.50-$1.00/bushel for corn delivered with chain-of-custody carbon certificates. To enforce traceability, these buyers integrate blockchain-anchored ledgers powered by providers such as Xpansiv and Persefoni that reconcile registry retirements with physical grain loads in real-time. Such frameworks reduce double?counting risk and allow processors to report carbon-neutral products to end markets, fetching 5-10 % price premiums in Europe and North America under voluntary labeling schemes.
Industrial stakeholders, from agrochemical giants to multinational grain traders, have been leveraging carbon-credit portfolios as a strategic hedge against emerging compliance regimes and border adjustment measures. For example, the EU’s proposed Carbon Border Adjustment Mechanism (CBAM) incentivizes non-EU soy and maize exporters to internalize embedded emissions, effectively valuing carbon credits at up to $33.96 / tCO2. Companies with established AFOLU-credit channels can offset potential CBAM liabilities by retiring voluntary credits, thereby smoothing tariff exposures. Simultaneously, insurers are offering bespoke “carbon-performance” underwriting, reducing premiums by 10-15 % for farms that maintain verified carbon sinks, further embedding carbon-credit economics into industrial risk models.
Market Segmentation:
Segmentation 1: by Application
• Removal Project
• Avoidance Project
• Combination Project
Removal Project Segment to Dominate the Global Carbon Credits Market for Agriculture, Forestry, and Land Use (by Application)
Removal-focused initiatives have surged to the forefront of the carbon credits market for agriculture, forestry, and land use sphere because they lock carbon into soils and biomass indefinitely rather than merely averting future emissions. Techniques such as deep-rooting cover crops, biochar soil amendments, and integrated agroforestry not only sequester CO2 but also bolster soil fertility, yield stability, and ecosystem diversity, qualities that satisfy stringent permanence requirements and attract price premiums of 20-30 percent over avoidance credits. The advent of high-resolution satellite imagery and AI-enabled soil-carbon modeling has slashed MRV expenses and accelerated audit timelines, further enticing corporate buyers who need demonstrable, long-lasting offsets for their net-zero commitments. As regulatory regimes such as the EU’s Carbon Removals and Carbon Farming Regulation increasingly reward genuine removals, removal-centric projects will continue to command the lion’s share of AFOLU credit demand.
Segmentation 2: by Project Type
• Forestry and Land Use
o REDD+
o ARR
o IFM
• Agriculture
Forestry Segment to Witness the Highest Growth between 2024 and 2035
The forestry segment is set to outpace other AFOLU categories from 2024 through 2035 due to its superior per-hectare carbon-sequestration potential, well-established measurement methodologies, and strong demand from corporate net-zero programs. Recent enhancements in remote?sensing and LiDAR-based forest-growth modeling have slashed verification costs by up to 30%, making large-scale reforestation and improved forest management projects more bankable. Simultaneously, regulatory tailwinds, such as the EU’s Carbon Removals and Carbon Farming (CRCF) Regulation, explicitly prioritize long-lived, nature-based removals such as afforestation, driving premium pricing (+15% vs. the VCM average) and long-term offtake contracts from major industrial emitters. Moreover, forestry projects deliver co-benefits (biodiversity, watershed protection, community livelihoods) that align with evolving ESG mandates, further reinforcing forestry’s dominant growth trajectory in the voluntary carbon credits market for agriculture and land use.
Segmentation 3: by Region
• North America - U.S., Canada, and Mexico
• Europe
• Asia-Pacific- China, Japan, South Korea, India, and Rest-of-Asia-Pacific
• Rest-of-the-World- Brazil, South Africa, and Others
Asia-Pacific led the carbon credits market for agriculture, forestry, and land use in 2024 owing to a convergence of large-scale farming operations, ambitious corporate net-zero targets in China, Japan, and South Korea, and rapidly expanding government “carbon farming” incentives. In China, agricultural subsidy reforms under the Ministry of Agriculture and Rural Affairs tied payments to soil-carbon sequestration pilots, unlocking hundreds of millions of dollars in project investment; meanwhile, Japan’s Farm Carbon Offset Program and South Korea’s Green New Deal both mandate voluntary agriculture offsets for key industrial sectors. Cost-competitive yields in emerging markets, where baseline emissions are higher and sequestration potential is vast, have driven a 38% year-on-year jump in AFOLU credit issuance, while digital MRV platforms have slashed verification timelines from months to weeks, further accelerating uptake. These factors have positioned Asia-Pacific as the fastest-growing region, outpacing both North America and Europe in volume and value growth.
Recent Developments in the Global Carbon Credits Market for Agriculture, Forestry, and Land Use
• In April 2025, Boomitra, a global leader in soil carbon markets, and the Social Carbon Foundation, the first accredited carbon certifier to fully integrate natural ecosystem and social impact in a high integrity carbon credit, announced the first issuance of soil organic carbon (SOC) removal credits through the Boomitra URVARA Project, marking a series of significant milestones in the global carbon credits market for agriculture.
• In March 2025, Grow Indigo, an agritech startup focused on regenerative agriculture and carbon farming, raised $10 million in funding from British International Investments (BII), the U.K.'s development finance institution. The funding aims to help expand the startup's sustainability initiatives, which already cover 2.5 million acres of farmland across seven Indian states, and accelerate its carbon credit program to benefit smallholder farmers.
• In October 2024, four big global companies, Bayer, GenZero (a wholly-owned arm of financial major Temasek), Shell, and Mitsubishi, decided to scale up their carbon credit program in nine states to empower farmers. The credits are generated through the adoption of smart agriculture practices, alternate wetting and drying (AWD), and direct seeded rice (DSR). These credits could be traded to enable farmers to get some extra income. The alliance planned to expand its program by adding nearly 8,500 hectares, streamlining the scientific measurement of greenhouse gas (GHG) emissions from rice paddies, and strengthening the farmer handholding and support system. The program further aimed to explore scale-up based on the experiences of the first two years of implementation.
Demand – Drivers and Limitations
Market Demand Drivers: Achieving Net-Zero Carbon Emissions Goal by 2050
Corporate net-zero commitments by 2050 have rapidly escalated demand for high?integrity agricultural, forestry, and land?use (AFOLU) credits. Unilever, which traces a significant portion of its emissions to agricultural supply chains, has already cut its direct and energy?procured emissions by over 70 % since 2015 and aims to eliminate the remainder as soon as 2030. To bridge the gap between internal reductions and absolute neutrality, multi?year purchases of soil-carbon and forestry credits from projects in Latin America and Southeast Asia are being locked in. Apple, having achieved operational neutrality in 2020, has committed to full value?chain neutrality by 2030; its Restore Fund channels nearly USD 280 million into conservation and reforestation schemes in Brazil and Paraguay, specifically targeting durable removals. Luxury group Kering, approved by the Science Based Targets initiative, has been reducing Scopes 1 and 2 emissions by 90 % versus 2015 levels by 2030, underpinning this ambition with nature?based credit procurement. Ingka Group (IKEA) likewise plans to halve its value?chain emissions by 2030, signaling significant AFOLU credit offtakes to offset residual emissions. These urgent net?zero roadmaps effectively convert corporate sustainability pledges into real?world demand for AFOLU carbon projects, driving market growth and underpinning project finance.
Market Restraints: Land Tenure Uncertainty and Registration Delays
Land tenure uncertainty and registration delays undermine the foundational eligibility of agricultural, forestry, and land use projects for carbon credit issuance. Development protocols across leading registries, such as Verra’s VM0042 for Improved Agricultural Land Management, mandate that project proponents demonstrate clear, legally recognized rights to the land through freehold ownership, long?term leases, or equivalent statutory titles registered with national land authorities. In many regions of Africa and Latin America, however, customary land tenure systems coexist alongside statutory regimes, creating ambiguity over who holds formal rights. Project developers often spend six to twelve months, or longer, securing and validating lease agreements or negotiating title clarifications before even applying for registry listing. This protracted pre-registration phase delays credit issuance and escalates transaction costs, eroding project IRRs and deterring smallholder aggregation models that rely on streamlined onboarding.
Market Opportunities: Blockchain Tokenization and Retail Access
Blockchain tokenization has been revolutionizing access to carbon credits for agricultural, forestry, and land use by transforming traditionally illiquid, registry-bound offsets into programmable digital assets that can be traded 24/7 on open markets. Through tokenization, each carbon credit, originally issued as a registry-managed certificate, is “bridged” onto a blockchain network and minted as a fungible or non-fungible token. This process enables fractional ownership, on-chain retirement, and real-time proof of provenance, while smart contracts automate compliance with registry rules and retirement protocols. As a result, buyers can transact in smaller lots, participate directly in carbon credits market from retail wallets, and verify retirement status instantly via public ledgers. By lowering minimum trade sizes and bypassing cumbersome bilateral negotiations, tokenization opens carbon markets to a broader retail investor base, individuals, family offices, and SME buyers while maintaining the high-integrity standards required by registries.
Analyst’s Thoughts
According to Debraj Chakraborty, Principal Analyst, BIS Research, “The carbon credits market for agriculture, forestry, and land use stands today at a critical inflection point. While nascent soil?carbon protocols have catalyzed over $8 billion in transactions in 2024, their heterogeneity in measurement methodologies and uneven buyer demand have thus far constrained broad-scale farmer participation. Furthermore, we anticipate that the convergence of remote?sensing technologies, AI-driven soil?health analytics, and the EU’s forthcoming Carbon Removals and Carbon Farming Regulation will standardize credits and materially reduce verification costs, driving the market toward a projected $140 billion by 2035. As agriculture’s carbon-sequestration assets mature, they will not only reshape farm-level economics, unlocking multiyear annuities for growers, but will also ripple across food, beverage, and bioplastics industries, compelling consumer-goods companies to integrate carbon credits into product labeling, supply-chain contracts and even financial instruments such as green bonds. Ultimately, the AFOLU carbon market’s evolution will serve as a frontier for decarbonization finance, setting a blueprint for how nature-based assets can be woven into global corporate net-zero strategies and catalyze systemic shifts in energy, manufacturing, and commodities trading.”
Carbon Credits Market for Agriculture, Forestry, and Land Use - A Global and Regional Analysis
Focus on Emerging Startups, Policy Framework, and Country-wise Analysis - Analysis and Forecast, 2025-2035
Frequently Asked Questions
Ans: The carbon credits market for agriculture, forestry, and land use comprises voluntary and compliance frameworks through which farmers, landowners, and project developers generate tradable credits by implementing practices that either remove CO? from the atmosphere or avoid its release. Under recognized standards such as Verra’s VCS, Gold Standard, and the emerging EU Carbon Removals and Carbon Farming Regulation, credits are issued for applications ranging from soil?organic carbon enhancement (e.g., cover cropping, reduced tillage, and biochar amendments) to agroforestry integration (planting trees alongside crops to sequester carbon in biomass and soils), peatland restoration (rewetting drained peat soils to prevent methane emissions) and improved manure management (digesters that capture biogas and reduce nitrous?oxide emissions). These diverse applications unlock not only new revenue streams for growers, compensating them at rates between $5 and $15 per ton of CO?e sequestered or avoided, but also provide corporate off-takers with credible, nature?based offsets to meet net-zero targets while delivering co-benefits in soil health, biodiversity, and water retention across agricultural landscapes.
Ans: The global carbon credits market for agriculture, forestry, and land use is operated by both established players and emerging startups who focus on offering carbon credit offering platforms and targeting diverse markets via contracts, agreements, and partnerships to enhance their global presence.
Ans: A newcomer aiming to differentiate itself in the carbon credits market for agriculture, forestry, and land use should concentrate on three interlocking pillars. First, invest in proprietary high-resolution measurement, reporting, and verification (MRV) technologies, leveraging satellite imagery, drone surveys, and in-field IoT sensors combined with AI-driven soil-carbon modeling to underwrite credits with demonstrably lower uncertainty and audit turnaround times. Second, develop integrated digital platforms that seamlessly bundle agronomic advisory services (e.g., cover-crop optimization, nutrient-management planning) with carbon-credit enrolment and real-time dashboards for farmers and buyers, thereby lowering transaction friction and capturing value across the supply chain. Third, carve out specialized, high-integrity credit streams, such as live-root carbon sequestration or biochar amendments, that command premium pricing under emerging voluntary and regulatory certification frameworks (e.g., the EU’s CRCF). By combining cutting-edge MRV, end-to-end digitalization, and targeted premium-credit products, the new entrant can outpace incumbents, secure superior project ROIs, and establish lasting partnerships with both smallholder and corporate stakeholders.
Ans: The following can be seen as some of the USPs of the report:
• A qualitative and quantitative analysis of the carbon credits market for agriculture, forestry, and land use based on application and product
• Quantitative analysis of application sub-segment, which includes:
o Removal Project
o Avoidance Project
o Combination Project
• Regional and country-level forecast on carbon credits market for agriculture, forestry, and land use, which includes industries for application and product
• A detailed company profile comprising established players and some start-ups that are capable of significant growth, along with an analyst view
Ans: Companies offering carbon credits in the market for agriculture, forestry, and land use for various applications or those investing in the carbon credits market for agriculture, forestry, and land use research will find this report useful. Additionally, companies operating in the agritech industry can learn more about the carbon credits market for agriculture, forestry, and land use trends and growth in the next decade.