Soil Carbon Credits in India – How Farmers Are Earning from Regenerative Agriculture
Introduction: The New Harvest
Indian agriculture is undergoing a transformation. Farmers are discovering a new harvest — not from their fields, but from the carbon stored in their soil.
The numbers are compelling. Over 2 lakh farmers are now using AI, satellite imagery, and regenerative farming to earn from carbon credits while restoring the land. These farmers have brought 1.1 million acres under climate-positive agriculture, removing 2 million tonnes of carbon.
In January 2026, Indian agriculture reached a major milestone with the approval of the Aadi project (VCS 2590) , a regenerative agriculture soil-carbon project developed by Grow Indigo under Verra. This marked the first issuance of high-integrity soil carbon credits from India.
Regenerative farming gradually improves soil health by increasing organic carbon, enhancing moisture retention, supporting microbial activity, and reducing dependence on chemical fertilisers. As heavy industries are pushed to reduce or offset emissions, demand for verified carbon credits increases. Agriculture, through soil carbon sequestration and regenerative practices, becomes a potential supplier — not via subsidies, but via markets.
This guide provides a comprehensive overview of soil carbon credits in India — how they work, what farmers can earn, real-world projects, and how to participate in this growing market.
What Are Soil Carbon Credits?
Definition
Soil carbon credits are generated when farmers adopt regenerative agricultural practices that increase the amount of carbon stored in the soil. This carbon sequestration is quantified, verified, and sold as carbon credits.
The Carbon Cycle
| Component | Description |
|---|---|
| Atmospheric CO₂ | Plants absorb CO₂ from the atmosphere through photosynthesis |
| Plant biomass | Plants convert CO₂ into organic matter |
| Soil organic carbon | Organic matter decomposes and becomes part of the soil |
| Carbon storage | Carbon is stored in the soil for years or decades |
Why Soil Carbon Matters
| Benefit | Description |
|---|---|
| Climate mitigation | Removes CO₂ from the atmosphere |
| Soil health | Improves fertility, water retention, and microbial activity |
| Crop yields | Increases agricultural productivity |
| Resilience | Enhances drought and flood resistance |
| Biodiversity | Supports soil ecosystems |
How Soil Carbon Sequestration Works
The Process
- Photosynthesis: Plants absorb CO₂ from the atmosphere
- Root exudates: Plants release carbon compounds into the soil
- Decomposition: Organic matter breaks down and becomes soil organic carbon
- Stabilisation: Carbon becomes protected in soil aggregates
Regenerative Practices That Increase Soil Carbon
| Practice | Description | Carbon Impact |
|---|---|---|
| No-till farming | Avoiding ploughing to prevent soil disturbance | High |
| Cover cropping | Growing cover crops to protect and enrich soil | High |
| Crop rotation | Diverse crop rotations to improve soil health | Medium |
| Composting | Adding organic matter to soil | Medium |
| Agroforestry | Integrating trees with crops | High |
| Biochar application | Adding biochar to soil | High |
The Role of Soil Microbes
Soil organic carbon enhancement is supported by microbial activity. Regenerative farming supports microbial activity by:
- Increasing organic matter inputs
- Reducing chemical inputs
- Maintaining soil moisture
- Promoting biodiversity
The Regenerative Agriculture Revolution
The Scale of the Movement
Over 2 lakh farmers are now using AI, satellite imagery, and regenerative farming to earn from carbon credits. These farmers have brought 1.1 million acres under climate-positive agriculture, removing 2 million tonnes of carbon.
The Technology Driving Change
| Technology | Application |
|---|---|
| AI | Predicting carbon sequestration, optimising practices |
| Satellite imagery | Monitoring land use and vegetation |
| IoT sensors | Measuring soil carbon and moisture |
| Blockchain | Tracking credits and ensuring transparency |
The Companies Leading the Way
| Company | Focus | Key Achievement |
|---|---|---|
| Varaha | AI-powered carbon removal platform | 1.1 million acres, 2 lakh farmers |
| Grow Indigo | Soil carbon projects under Verra | First Indian soil carbon credits issued |
| Prithu | Full-stack carbon removal platform | Raised $1.1M for smallholder farmers |
The Government Support
The government is supporting soil carbon through:
- NITI Aayog's Frontier Tech: Showcasing AI in agriculture
- IIT Roorkee initiatives: Carbon credit projects across Western UP
- Chhattisgarh's SOC enhancement project: 80,000 hectares under soil organic carbon enhancement
Indian Soil Carbon Projects: Real-World Examples
Project 1: Grow Indigo's Aadi Project (VCS 2590)
| Aspect | Details |
|---|---|
| Developer | Grow Indigo |
| Registry | Verra (VCS) |
| Methodology | VM0042 |
| Type | Regenerative agriculture soil-carbon project |
| Status | Approved in January 2026 |
| Significance | First high-integrity soil carbon credits from India |
Project 2: Varaha's AI-Powered Platform
| Aspect | Details |
|---|---|
| Developer | Varaha |
| Technology | AI, satellite imagery, regenerative farming |
| Scale | 1.1 million acres, 2 lakh farmers |
| Carbon Removed | 2 million tonnes |
Project 3: IIT Roorkee's Western UP Initiative
| Aspect | Details |
|---|---|
| Developer | IIT Roorkee |
| Location | Western Uttar Pradesh |
| Focus | Sustainable and regenerative agricultural practices |
| Goal | Scientific soil health improvement, carbon sequestration measurement and verification |
Project 4: Chhattisgarh's Soil Organic Carbon Enhancement Project
| Aspect | Details |
|---|---|
| Location | Dhamtari, Chhattisgarh |
| Scale | 80,000 hectares across two phases |
| Focus | Trapping carbon in the earth to boost soil fertility and water retention |
Project 5: Prithu's Carbon Removal Platform
| Aspect | Details |
|---|---|
| Developer | Prithu |
| Focus | Soil organic carbon enhancement, alternate wetting and drying in rice, biochar application |
| Funding | $1.1M raised |
| Target | Smallholder farmers |
Farmer Economics: What Can Farmers Earn?
The Revenue Model
Farmers don't participate individually. Instead, they participate through project developers who:
- Aggregate farmers into a single project
- Provide technical support and training
- Handle measurement, reporting, and verification
- Sell credits and share revenue with farmers
The Farmer Share
Farmers typically receive 60-80% of the carbon credit revenue, with the project developer taking the remainder for costs and services.
Annual Income Estimates
| Farm Size | Practice | Annual Carbon Sequestration | Revenue at ₹800/credit |
|---|---|---|---|
| 1 acre | Regenerative agriculture | 0.5 – 1.0 tonnes | ₹400 – ₹800 |
| 5 acres | Regenerative agriculture | 2.5 – 5.0 tonnes | ₹2,000 – ₹4,000 |
| 10 acres | Regenerative agriculture | 5.0 – 10.0 tonnes | ₹4,000 – ₹8,000 |
Note: Actual sequestration varies by soil type, climate, and practices.
The Long-Term Value
Soil carbon credits are not a one-time payment. They can provide annual income for 10-20 years as carbon continues to be sequestered in the soil.
The Co-Benefits
Beyond carbon revenue, farmers benefit from:
- Improved soil health: Increased organic carbon enhances moisture retention and supports microbial activity
- Reduced chemical inputs: Lower dependence on chemical fertilisers
- Increased yields: Healthier soil produces better crops
- Resilience: Better drought and flood resistance
Methodologies for Soil Carbon Credits
VM0042 (Verra)
VM0042 is the methodology used for the first Indian soil carbon credits. Key features:
| Feature | Description |
|---|---|
| Type | Methodology for soil organic carbon enhancement |
| Applicability | Agricultural land, including smallholder farms |
| Key requirements | Baseline soil sampling, monitoring, verification |
| Co-benefits | Biodiversity, water quality, farmer livelihoods |
VM0042 and Smallholder Projects
The Grow Indigo project used VM0042 to issue 57,463 carbon credits, making it the first smallholder soil carbon credit issuance under this standard globally.
VM0042 Key Requirements
| Requirement | Description |
|---|---|
| Baseline sampling | Soil samples must be taken to establish baseline carbon levels |
| Monitoring | Regular monitoring of soil carbon levels |
| Verification | Third-party verification by a VVB |
| Permanence | Carbon must be stored for at least 10 years |
Other Methodologies
| Methodology | Registry | Description |
|---|---|---|
| VM0042 | Verra | Soil organic carbon enhancement in agricultural lands |
| AMS-III.AU. | CDM | Methane avoidance in rice cultivation |
| GS methodologies | Gold Standard | Soil carbon and sustainable agriculture |
The MRV Challenge: Measuring Soil Carbon
Why MRV Is Challenging
| Challenge | Description |
|---|---|
| Spatial variability | Soil carbon varies significantly across a field |
| Temporal variability | Soil carbon changes over time |
| Cost | Soil sampling and analysis are expensive |
| Accuracy | Measurement methods have varying accuracy |
The Role of Technology
| Technology | Application |
|---|---|
| Soil sampling | Physical samples for baseline and verification |
| Spectroscopy | Near-infrared spectroscopy for rapid measurement |
| Satellite imagery | Remote sensing of vegetation and land use |
| AI | Predictive modelling of soil carbon |
| IoT sensors | Real-time monitoring of soil conditions |
The MRV Framework
| Step | Description |
|---|---|
| 1. Baseline | Establish initial soil carbon levels |
| 2. Monitoring | Track soil carbon over time |
| 3. Reporting | Document changes and practices |
| 4. Verification | Independent third-party verification |
The Cost of MRV
MRV costs can be significant, which is why farmers don't participate individually. Project developers aggregate farmers to spread these costs across many participants.
The Role of Technology: AI and Satellite Imagery
AI in Soil Carbon Projects
Varaha, an India-based carbon removal developer, is using AI to:
- Predict carbon sequestration potential
- Optimise farming practices
- Monitor project performance
- Reduce MRV costs
Satellite Imagery
Satellite imagery is used to:
- Monitor land use and vegetation
- Track changes over time
- Validate farmer-reported data
- Reduce the need for field visits
The Technology Stack
| Layer | Technology |
|---|---|
| Data collection | Satellite imagery, IoT sensors, soil sampling |
| Analysis | AI, machine learning, predictive modelling |
| Reporting | Digital platforms, blockchain, registries |
| Verification | Third-party auditors, remote sensing |
The Impact on Costs
Technology is reducing MRV costs, making soil carbon projects more viable for smallholder farmers.
Step-by-Step: How to Develop a Soil Carbon Project
Step 1: Identify Eligible Land
Action: Identify agricultural land suitable for regenerative practices.
Criteria:
- Cropland or pasture
- Willing farmers
- Appropriate soil type and climate
Step 2: Recruit Farmers
Action: Recruit farmers to participate in the project.
Key considerations:
- Farmer training
- Technical support
- Benefit-sharing agreements
Step 3: Select Methodology
Action: Choose an appropriate methodology (e.g., VM0042 for Verra).
Timeline: 2-4 weeks
Step 4: Establish Baseline
Action: Conduct baseline soil sampling to determine initial carbon levels.
Requirements:
- Representative sampling
- Laboratory analysis
- Documentation
Timeline: 4-8 weeks
Step 5: Implement Practices
Action: Farmers adopt regenerative practices:
- No-till farming
- Cover cropping
- Crop rotation
- Composting
- Agroforestry
Timeline: Ongoing
Step 6: Monitor and Measure
Action: Monitor soil carbon levels and farmer practices.
Methods:
- Soil sampling
- Remote sensing
- Farmer reporting
Timeline: Ongoing
Step 7: Prepare Project Design Document
Action: Document the project design, including:
- Project description
- Methodology
- Baseline
- Monitoring plan
- Benefit-sharing
Timeline: 4-8 weeks
Step 8: Validation
Action: Have the project validated by a VVB.
Timeline: 2-4 months
Step 9: Registration
Action: Register the project with Verra, Gold Standard, or CR-I.
Timeline: 14-30 working days
Step 10: Verification and Issuance
Action: Verify emission reductions and apply for credit issuance.
Timeline: 2-4 months
Step 11: Sale
Action: Sell credits to buyers.
Timeline: Ongoing
Challenges and How to Overcome Them
Challenge 1: MRV Costs
Problem: Soil sampling and analysis are expensive.
Solution: Use technology (AI, satellite imagery) to reduce costs. Aggregate farmers to spread costs.
Challenge 2: Farmer Participation
Problem: Farmers may be reluctant to change practices.
Solution: Provide training, technical support, and clear benefit-sharing agreements.
Challenge 3: Additionality
Problem: Demonstrating that practices would not have happened without carbon finance.
Solution: Document financial, technological, and institutional barriers.
Challenge 4: Permanence
Problem: Carbon stored in soil can be released if practices are abandoned.
Solution: Long-term contracts, buffer pools, ongoing monitoring.
Challenge 5: Verification
Problem: Verification is expensive and time-consuming.
Solution: Use technology to reduce verification costs. Work with experienced VVBs.
Challenge 6: Market Access
Problem: Finding buyers at competitive prices.
Solution: Use a broker like Carboned.in to access market intelligence and buyer networks.
The Future of Soil Carbon in India's Carbon Market
The Growing Opportunity
As heavy industries are pushed to reduce or offset emissions, demand for verified carbon credits increases. Agriculture, through soil carbon sequestration and regenerative practices, becomes a potential supplier.
The Market Potential
| Metric | Value |
|---|---|
| Farmers participating | 2 lakh+ currently |
| Land under climate-positive agriculture | 1.1 million acres |
| Carbon removed | 2 million tonnes |
| Potential scale | 147+ million hectares of degraded land |
The Policy Support
| Policy | Support |
|---|---|
| CCTS Offset Mechanism | Enables soil carbon credits |
| Green Credits Programme | Promotes tree planting and soil health |
| Budget 2026 | Agriculture's role in carbon market recognised |
The Technology Enablement
AI, satellite imagery, and IoT are making soil carbon projects more viable and cost-effective.
How Carboned.in Can Help
At Carboned.in, we help farmers, project developers, and investors navigate the soil carbon credit market.
Our Services
| Service | What We Do |
|---|---|
| Project Feasibility Assessment | Determine if your project qualifies |
| Methodology Selection | Choose the right methodology (VM0042, etc.) |
| Farmer Recruitment | Help you recruit and train farmers |
| MRV System Design | Design cost-effective monitoring systems |
| Documentation Support | Prepare PDDs and supporting documents |
| VVB Coordination | Connect you with empanelled VVBs |
| Registration Support | Guide you through Verra, Gold Standard, or CR-I |
| Credit Brokerage | Connect you with buyers at competitive prices |
Why Choose Carboned.in?
| Reason | Why It Matters |
|---|---|
| Legal Expertise | Led by Siddharth Gupta, Advocate, Calcutta High Court |
| Regulatory Knowledge | Deep understanding of Verra, Gold Standard, and CR-I methodologies |
| Practical Experience | Real-world experience with soil carbon projects |
| End-to-End Support | From feasibility to sale, we guide you every step |
Your first consultation is completely free. No obligation. Just honest advice.
Frequently Asked Questions
What are soil carbon credits?+
Credits generated when farmers adopt regenerative practices that increase soil organic carbon.
How many farmers are participating in soil carbon projects?+
Over 2 lakh farmers are using AI and regenerative farming to earn from carbon credits.
How much land is under climate-positive agriculture?+
1.1 million acres.
How much carbon has been removed?+
2 million tonnes.
What methodology is used for soil carbon credits?+
VM0042 is the primary methodology for soil organic carbon enhancement under Verra.
How much can farmers earn?+
Farmers typically receive 60-80% of carbon credit revenue. Annual income varies by farm size and practices.
What are the co-benefits of soil carbon projects?+
Improved soil health, reduced chemical inputs, increased yields, and resilience to drought and floods.
What is the Aadi project?+
A regenerative agriculture soil-carbon project developed by Grow Indigo under Verra, approved in January 2026.
What is Varaha?+
An India-based carbon removal developer using AI to help farmers earn from carbon credits.
What is the MRV challenge?+
Measuring and verifying soil carbon is expensive and complex, requiring soil sampling, laboratory analysis, and third-party verification.
How does technology help?+
AI, satellite imagery, and IoT sensors reduce MRV costs and improve accuracy.
What is the Green Credits Programme?+
A government programme promoting tree planting and soil health.
Can soil carbon credits be sold internationally?+
Yes, through Verra or Gold Standard.
How long does a soil carbon project last?+
Typically 10-20 years for the crediting period.
How can Carboned.in help?+
We provide end-to-end support for soil carbon project development, from feasibility to credit sale.
Siddharth Gupta is the founder of Carboned.in and specialist counsel for India's carbon compliance framework — advising obligated entities, project developers, and buyers on CCTS, CR-I registration, and credit transactions.
