Rabo Carbon Bank sells first carbon credits to Dutch companies

The carbon credits were earned by fifteen Dutch and American farmers, who avoid large amounts of CO2 emissions by making their dairy and arable farms more sustainable. Most of the proceeds from the credits sold revert to these farmers, who have promised the bank to sequester 10,000 metric tons of carbon from the atmosphere on their land each year for the next three years.

A number of dairy farmers and arable farmers in the Netherlands received an advance from the Rabo Carbon Bank last June to take measures that are good for the soil, including: not plowing or plowing less deeply, sowing herb grassland and applying less fertilizer. “This creates healthy soil that retains more CO2," explains Barbara Baarsma, CEO of the Rabo Carbon Bank. "In tackling climate change, farmers are too often seen as part of the problem, whereas in fact they are also part of the solution. Farmers can invest the proceeds from the credits in the transition to sustainable agriculture."

The CO2 emissions avoided are measured by parties such as Wij. Land with model calculations and soil samples. “Making agriculture more sustainable is not only up to the farmer,” says Baarsma. “And that isn’t just Rabobank’s opinion: it’s also the opinion of our customers who buy the credits and make sustainability profitable for participating farmers.” To qualify for the carbon credits, companies have to meet requirements imposed by the Rabo Carbon Bank. In this way, they all commit to CO2 reduction in their own operations and also in the supply chain.

The pilot scheme in the Netherlands and the United States is entering its second year and will continue for another year. Baarsma: “This is the future of farming: regenerative farming improves biodiversity and consequently the nutritional value of products, but also rewards farmers for their ecosystem services. In order to make the transition to sustainable agriculture that we all want, the price of credits has to rise further and the workload, such as data collection, has to be reduced. We’re working on that now.”

In an interview with Het Financeele Dagblad this week, Baarsma says she hopes the Carbon Bank will break even within a few years, thanks to the bank's ten percent fee per carbon loan. “In the low interest rate environment, the bank has to look for alternative revenue models.” Baarsma sees support in the development of the market for CO2 emission rights. A year ago, one metric ton of CO2 emissions in Europe cost forty euros - now it costs eighty. Polluting companies are thus the engine of a new business model for Rabobank. “The market potential is enormous,” Baarsma concludes.