Soil carbon scheme eyes huge Eastern European expansion

Quantum Commodity Intelligence – Sustainable farming projects in Lithuania and Poland initiated by climate tech investment marketplace HeavyFinance could generate as many as 650,000 carbon credits during their first monitoring periods, with huge growth to come as the company expands also into Ukraine.

Fernando Hierro Garcia, senior sustainability business development manager, said the company's first project in Lithuania, where HeavyFinance is based, started in 2020 and completed its first monitoring period at the end of last year. 

"The initial amount of farmland enrolled in the programme was a little over 20,000 hectares and that is going to be issued at least 150,000 carbon credits," he said, adding that for the second period additional farmers with at least 10,000 hectares are enrolled in the programme.

A second project in Poland, which is about six months behind the Lithuanian one, is expected to have 150,000 hectares of farmland enrolled before the end of its first monitoring period later this year, which in total will deliver between 300,000 and 500,000 carbon credits, Hierro Garcia said.

And, just like in Lithuania, more farmers are expected to be enrolled in the scheme in Poland for the second monitoring period, with a partnership in Ukraine expected to cover about 320,000 hectares lined up for the company's third project.

HeavyFinance was established initially to help fill a financing gap in the agricultural sector in Europe that had found it hard to secure support from traditional funding sources, such as banks, because of the price volatility of the sector.

The company evolved to also provide support to farmers wishing to transition to regenerative farming practices resulting in the programme that is now in operation to create carbon credits from sustainable soil management practices.

These practices include no-till or reduced tillage, reduced use of fertilisers, reduced fuel consumption, crop rotation and cover crops.

The company aims to ensure robust carbon accounting by conducting large-scale on-the-ground soil sampling, said Hierro Garcia.

"So far we have conducted the largest private soil sampling exercise in Eastern Europe and soon will repeat a similar milestone in Central Europe," he said.

"We have done a little over 3,500 soil samples so far and will be doing another 1,500 by the end of April," he added.

The projects are being developed using US-based registry Verra's VM0042 Methodology for Improved Agricultural Land Management.

At the moment, there are not any plans to expand to other countries, given the opportunities for expansion in the countries HeavyFinance is already operating in.

For example, Hierro Garcia said Lithuania has 2 million hectares of farmland alone, with Poland having five-times as much, before even considering the potential in Ukraine.