Carbon Markets Offer New Opportunities for Producers
Published Friday, July 31, 2026
California's carbon market, also known as the Cap-and-Invest Program, is the largest carbon market in North America. Agricultural operations that implement qualifying practices to reduce or capture greenhouse gas emissions may be able to generate and sell carbon credits, creating an additional source of revenue alongside traditional farming operations.
A recently completed dairy project in Modesto illustrates the potential of these investments. The operation installed a methane capture system that generated more than 8,300 carbon credits during its first four months of operation. In addition to capturing methane from cow manure, the system filters and reuses water while improving overall manure management. With carbon credits trading at approximately $30 to $35 each, projects like these can provide environmental and economic benefits.
Several state programs are available to help producers invest in emissions-reducing technologies. The Dairy Plus Program provides funding for projects that reduce greenhouse gas emissions, improve water quality and support alternative manure management practices. Applications are due Sept. 14.
The California Department of Food and Agriculture's Healthy Soils Program also supports practices that improve soil health, increase soil organic matter and enhance carbon sequestration. Beyond improving long-term soil productivity, these practices may help position producers to participate in private carbon markets. Applications for the Healthy Soils Program are expected to open in January 2027.
Staff contact: Daniella Legostaev, dlegostaev@cfbf.com.
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