Recently, the Biden administration has shown increasingly more interest in the world of agricultural carbon credits — especially within hemp farming. This kind of trading would do wonders for not only the hemp industry, but it could positively impact our farmers — and our environment — as well.
Today, we’re taking a closer look into what carbon credits are and how they could impact the hemp industry and our farmers.
What are Carbon Credits?
Carbon credits are essentially a “tradeable” form of permits, licenses, or other certifications that allow farmers to produce a certain amount of carbon dioxide (or other greenhouse gas). One credit is worth one ton of CO2, and each company receives a set amount of credits that will decrease as time goes on. Companies can choose to hold onto these credits or sell them to other businesses that need them more.
The entire goal of crafting carbon credits is to reduce overall levels of greenhouse gas emissions. By capping companies’ carbon production off at a certain point — and rewarding them with more credits when they offset their carbon emission — these large-scale producers are able to seriously cut down on the amount of greenhouse gasses they produce.
While the idea of carbon credits has been around since the Kyoto Protocol in 1992, only recently has the US become interested in its involvement within the hemp industry. The government legalized hemp production in 2018 and has slowly been coming around to the idea of this crop’s potential since. President Biden’s interest in carbon credits for hemp farmers, then, may have quite an impact on the industry we see today.
The Impact on the Hemp Industry & Its Farmers
For hemp farmers, the idea of trading carbon credits is incredibly promising. As a crop that’s now federally legal and utilized for so many different products, it only makes sense to help the environment as production continues.
Right now, there’s a lot of speculation surrounding the impact of this kind of trade within the world of hemp. To help clear things up, we’ve broken down some of the biggest impacts (and benefits) that a decision like this would bring to our plant-based community.
Let’s take a closer look into the effects of carbon credits on the hemp industry and how it might benefit US farmers.
More Producers, More Product
Carbon credits are an attractive trade for most farmers. As it stands, the hemp cultivation industry is still a bit confusing and has quite pricey fees. Not to mention, there aren’t any set standards across the board, making it challenging to understand proper rules and regulations. However, with the reward of carbon credits in the back of their minds, more farmers may feel incentivized to grow their own.
Of course, this would increase the amount of hemp grown in the United States, expanding the market even further than before. For consumers, this is a wonderful end result. For farmers, this may create more competition; more competition may lead to better, more exciting products to help brands stand out from the rest.
All in all, it’s clear that carbon credits for hemp farmers could help boost production, as it makes the process seem a lot less daunting — and way more rewarding.
Better Profit Gain
With carbon credits, hemp farmers have a good chance at a higher profit gain within their business. This can be because of a few reasons.
First, and most obviously, the hemp industry is flourishing. Cultivating hemp is a lucrative business that many are finding success in. Carbon credits would allow companies that have been interested in the venture — but were too confused by the process — finally start the cultivation they desire.
Selling carbon credits to companies that need them is another efficient, easy way of making a profit. Let’s say you have five carbon credits but only need two to grow the amount of hemp you want. Then, you can take those leftover three carbon credits and sell them to a business that does need them, giving you extra profit and helping other cultivators grow. It’s a win-win for everyone.
In general, the hemp plant is known for its eco-friendly characteristics. One of the most significant properties of hemp is its carbon sequestration.
Studies show that just one hectare of hemp can absorb 15 tons of carbon dioxide. These numbers are significantly higher than what you’d see from your typical forest. This means that the more hemp you grow, the more carbon your plants are removing from the atmosphere. For this reason, carbon credits for the hemp industry are becoming more and more intriguing.
But, hemp does even more for the environment than just that.
Another considerable benefit of hemp is how quickly it cultivates. You can grow a whole hemp crop in just a few months, and the plant actually helps regenerate and restore your soil. Properties like these allow you to not only grow more hemp but to experiment with cultivating a more comprehensive range of crops, as well. For hemp farmers, having these carbon credits to grow hemp would be an incredible value to their farms, and it would be just as beneficial to our planet.
The Future of Carbon Credits and the Hemp Industry
At this point, there has been so much talk about carbon credits within the hemp industry, and it’s inevitable that the US government will implement something in the near future. Thankfully, for our farmers and small businesses, this is a good thing! And for our environment, it’s even better. Decisions like this can have substantial positive impacts, as they reach a diverse range of people across the US. Once implemented, we can only assume the success we’ll see in hemp industry growth and environmental progress.
Because hemp is a sustainable, renewable resource, giving more people the incentive to grow is positive all around. Carbon credits appear to propel the hemp industry in the right direction, as it seems to be something we can all benefit from. But, we’ll just have to wait and see what the future holds.
Written by Mell Green – National Hemp Association Volunteer Writer