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

This report can be delivered within 1 working day.

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
  • REDD+
  • ARR
  • 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.

How can this report add value to an organization?

Product/Innovation Strategy: The product segment helps the reader understand the different types of products and applications for the carbon credits market for agriculture, forestry, and land use. Moreover, the study provides the reader with a detailed understanding of the carbon credits market for a agriculture, forestry, and land use by application based on application (removal project, avoidance project, and combination project) and product on the basis of project type (forestry and land use, (which comprises of REDD+, ARR, and IFM), and Agriculture.

Growth/Marketing Strategy: The carbon credits market for agriculture, forestry, and land use has seen major development by key players operating in the market, such as business expansion, partnership, collaboration, and joint venture. The favored strategy for the companies has been partnerships, contracts, and business expansion to strengthen their position in the carbon credits market for agriculture. For instance, in August 2024, The Food and Agriculture Organization of the United Nations (FAO) and the National Bank for Agriculture and Rural Development (NABARD) held a high-level meeting in Mumbai to forge partnerships and strengthen collaboration between the two organizations. The meeting marked a significant step toward collaborative efforts in developing a carbon fund, strengthening Farmer Producer Organizations (FPOs), and promoting sustainable agricultural systems in India.

Competitive Strategy: Key players in the carbon credits market for agriculture, forestry, and land use analyzed and profiled in the study involve major companies offering carbon credits for various applications. Additionally, comprehensive competitive strategies such as partnerships, agreements, and collaborations will aid the reader in understanding the untapped revenue pockets in the market.

Methodology: The research methodology design adopted for this specific study includes a mix of data collected from primary and secondary data sources. Both primary resources (key players, market leaders, and in-house experts) and secondary research (a host of paid and unpaid databases), along with analytical tools, are employed to build the predictive and forecast models.

Data and validation have been taken into consideration from both primary sources as well as secondary sources.

Key Considerations and Assumptions in Market Engineering and Validation

• Detailed secondary research has been done to ensure maximum coverage of manufacturers/suppliers operational in a country.
• To a certain extent, exact revenue information has been extracted for each company from secondary sources and databases. Revenues specific to product/service/technology were then estimated for each market player based on fact-based proxy indicators and primary inputs.
• Based on the classification, the average selling price (ASP) has been calculated using the weighted average method.
• The currency conversion rate has been taken from the historical exchange rate of Oanda and/or other relevant websites.
• Any economic downturn in the future has not been taken into consideration for the market estimation and forecast.
• The base currency considered for the market analysis is US$. Considering the average conversion rate for that particular year, currencies other than the US$ have been converted to the US$ for all statistical calculations.

Primary Research

The primary sources involve experts from various industries, including the carbon industry and agriculture industry, among others. Respondents such as CEOs, vice presidents, marketing directors, and technology and innovation directors have been interviewed to obtain and verify both qualitative and quantitative aspects of this research study.

Secondary Research

This study involves the usage of extensive secondary research, company websites, directories, and annual reports. It also makes use of databases, such as Businessweek and others, to collect effective and useful information for a market-oriented, technical, commercial, and extensive study of the global market. In addition to the data sources, the study has been undertaken with the help of other data sources and websites, such as www.nasa.gov.

Secondary research was done to obtain critical information about the industry's value chain, the market's monetary chain, revenue models, the total pool of key players, and the current and potential use cases and applications.

Key Market Players and Competition Synopsis

The companies that are profiled for the carbon credits market for agriculture, forestry, and land use have been selected based on thorough secondary research, which includes analyzing company coverage, product portfolio, market penetration, and insights gathered from primary experts.

The carbon credits market for agriculture, forestry, and land use comprises key players who have established themselves thoroughly and understand the market, accompanied by startups looking forward to establishing themselves in this highly competitive market. In 2024, the carbon credits market for agriculture, forestry, and land use was dominated by established players, accounting for 78% of the market share. In contrast, startups managed to capture 22% of the market. With the increasing focus on adopting more sustainable solutions across various industries, more players will enter the global carbon credits market for agriculture with each passing year.

Some prominent names established in the carbon credits market for agriculture, forestry, and land use are:

• Indigo Ag, Inc.
• Carbon Credit Capital, LLC.
• Terra Global Capital
• South Pole
• Nori, Inc.
• The California Air Resources Board (CARB)
• Cargill, Incorporated
• Regenerative Agriculture Alliance
• Ecosystem Services Market Consortium (ESMC)
• Bayer AG
• 3Degrees Group, Inc.
• NATUREOFFICE
• Climetrek
• EKI Energy Services Ltd.
• Finite Carbon Corporation