Soil carbon credits: transforming farmland into profitable green assets

Climate finance markets are expanding down to the farm level, pricing farmland as carbon assets through measurement, reporting and verification (MRV) systems. World Bank data indicate that soil is the largest terrestrial carbon stock, storing about 2.65 trillion tonnes.

Soil carbon credits: what they are and how they work

Soil carbon credits are tradable instruments in which one credit represents one tonne of CO₂ absorbed and securely stored in agricultural soil through regenerative farming practices.

World Bank data show that protecting and increasing soil organic carbon (SOC) accounts for about 50% of total mitigation potential. An additional 20% comes from reducing nitrous oxide (N₂O) and methane (CH₄) through nutrient and water-resource management. FAO guidance on GSOCseq (2022) describes SOC-focused soil management as among the lowest-cost options, while also protecting food security and preventing soil degradation. The shift to regenerative farming models can therefore generate credits while restoring soil quality.

Pricing and market differentiation

Ecosystem Marketplace (2025) reports strong differentiation in the voluntary carbon market: carbon removal credits trade at prices about 381% higher than emission-reduction credits. Forest protection credits (REDD+) have remained near $2.5–$3.5 per tonne CO₂e, reflecting risks related to overhang and leakage. By contrast, removal credits from regenerative agriculture are valued in a premium range of about $14–$21 per tonne CO₂e.

MRV and issuance requirements under Gold Standard

The Gold Standard’s Soil Organic Carbon Framework sets issuance mechanics based on both emissions avoidance and SOC accumulation. It requires a minimum five-year baseline period before project start, no land-use change, and no reduction in yield relative to the preceding five years. Projects can quantify outcomes using three approaches: direct on-site measurement, peer-reviewed studies, or IPCC coefficients. The framework also requires a reserve fund for SOC credits to manage reversal risk.

Compared with forest credits (LULUCF), soil carbon credits have shorter cycles and focus on SOC pools, which reduces exposure to risks such as fire or above-ground biomass volatility. However, MRV must capture micro-level changes. FAO guidelines suggest using the RothC model to project SOC over a 20-year horizon.

Policy context for Vietnam’s export agriculture

As Vietnam’s export-oriented agriculture faces tightening requirements, soil carbon credits are emerging as a potential financial driver. The European Union’s Defending Forests Regulation (EUDR), the EU’s Carbon Removal Certification Framework (CRCF), and food companies’ Scope 3 emissions reduction requirements are increasing demand for credible carbon removal and MRV-ready practices.

Policy analysis by the German Umweltbundesamt and Ecologic Institute evaluates the CRCF (approved in 2024) as a key legal basis for certifying carbon removals. The reports also highlight uncertainties around permanence and recommend separating biological removals from geological storage strategies in policy design.

RothC model: forecasting SOC for crediting

The RothC (Rothamsted Carbon Model) is a scientific simulation system developed by Rothamsted Research (UK) to forecast changes in soil organic carbon. Instead of relying solely on costly periodic soil sampling, RothC simulates SOC storage using four input groups: (1) climate (temperature and precipitation); (2) soil properties (notably clay content); (3) vegetation cover; and (4) farming practices (biomass returned to soil).

Because RothC supports long-term projections and is widely used in soil-carbon methodologies, including Gold Standard projects, it can help farm operators forecast credit yields across project cycles (commonly 20 years), reducing MRV costs.

Vietnam’s emissions profile and a rice model for low-emission production

Research by Vietnam’s Ministry of Agriculture and Rural Development (now the Ministry of Agriculture and Environment) indicates rice is the largest greenhouse gas emitter in Vietnam’s agriculture. Vietnam produces 43–45 million tonnes of rice and exports 5–7 million tonnes per year. The Mekong Delta accounts for about 50% of output and 90% of rice exports.

BUR3 reports show rice production accounts for 50.31% of total agricultural emissions (about 50 million tonnes CO₂e per year) and 75% of methane emissions. Key drivers include continuous flood-prone paddies and fertilizer overuse. FAOSTAT 2025 confirms Asia’s agricultural emissions exceed 7.1 billion tonnes CO₂e, representing about 43% of global agricultural emissions. The ADB identifies flooded rice farming and fertilizer overuse as major biogenic emission sources.

Decision 1490/QĐ-TTg and targets for low-emission rice

To manage emission risk, Vietnam is implementing the project “One million hectares of high-quality, low-emission rice in the Mekong Delta by 2030” (Decision 1490/QĐ-TTg). According to data from the Project Management Board for Agricultural Projects (MARD), the program sets targets including reducing seed intake to below 70 kg/ha, cutting chemical fertilizer and pesticide use by 30%, and reducing irrigation water use by 20%.

The program requires the whole area to adopt at least one sustainable farming model (such as 1P5G, SRP, AWD) and receive a regional cropping code. Economically and environmentally, it is expected to cut emissions by at least 10%, increase value added across the value chain by 40%, and raise farmers’ profits by 50%. Total capital required for two phases is estimated at about $650 million.

MRV cost barriers and the need for aggregation

The main financial bottleneck for commercializing agricultural carbon credits is MRV cost. World Bank data indicate SOC stock fluctuations per hectare are narrow and slow, making periodic soil sampling and laboratory analysis expensive and risky for project developers. To optimize costs, the MRV Handbook supports a tiered approach by soil type, climate and farming system, combining three toolsets: direct measurement, modeling (including RothC and EX-ACT), and remote sensing, alongside farming-practice coefficients.

Aggregator model and financing structures

To address scale and marginal cost barriers, Vietnam uses an aggregator intermediary model to structure projects, consolidate farming areas, and standardize technical processes. World Bank guidance emphasizes that central coordination can reduce MRV costs and support compliance with international criteria for additionality, leakage and permanence.

In Vietnam, aggregators are already operating in rice projects by Loc Troi Group and in sugarcane farming in Thanh Hóa by Idemitsu, Mía đường Lam Sơn and Sagri. The approach includes a 500 ha pilot in 2025 and plans to scale to 8,000 ha from 2026. Idemitsu is described as the investor and credit off-taker, Sagri designs the MRV system, and farmers participate under contract linking arrangements.

For the rice value chain, RiceMoRe (developed by IRRI and the former Ministry of Agriculture and Rural Development, now the Ministry of Agriculture and Environment) provides data infrastructure. As of 2024, RiceMoRe covers 29 provinces and manages about 75% of the nation’s rice area.

IFC and Agreena: using MRV data for financing

On funding, a 2024 agreement between IFC and Agreena aims to build financing packages based on MRV data collected directly from farms. The mechanism is designed to allow commercial banks to recognize expected carbon-credit revenues as collateral, supporting debt service or serving as underlying assets for green bonds linked to emission reductions.

Implications for Vietnam’s carbon market development

Beyond Decision 232/QĐ-TTg (2025) on developing the carbon market, and based on guidance from the Ministry of Finance and the Ministry of Natural Resources and Environment, aggregator models are expected to evolve into financial-structuring players. This includes integrating agricultural supply contracts, green lending, bonds and carbon credits on a single MRV-digital platform. The goal is to mobilize emission reductions from millions of farmers into a liquid investment asset for global markets.