New guide helps farmers navigate carbon sequestration contracts

In a new guide for Minnesota farmers, Farmers Legal Action Group attorneys explain the potential risks posed by carbon sequestration contracts.

Farm and ranch practices that sequester carbon from the atmosphere could yield profits from carbon market programs, but many questions remain about the programs. (Erin Ehnle Brown / Grand Vale Creative LLC)

Farmers are fielding more offers than ever from various companies to make changes on their operations that sequester carbon and sell companies credit for that sequestered carbon.

These relations between farmers, large companies and often third-party vendors are defined by contracts, and to help navigate the murky world of carbon sequestration contracts, Minnesota Farmers Union (MFU), Farmers Legal Action Group (FLAG) and the Minnesota Department of Agriculture (MDA) released the Farmers’ Guide to Carbon Markets in Minnesota.

The 32-page guide was developed in response to questions and concerns raised by MFU members, according to a release by MFU. The Farmers’ Guide to Carbon Markets in Minnesota was written by attorneys Stephen Carpenter and Lindsay Kuehn.

Farmers Guide Carbon Market Contracts in Minnesota First Edition January 2023 by Michael Johnson on Scribd

FLAG Executive Director Scott Carlson said that before authoring the guide, FLAG was receiving "frequent questions" from farmers and ranchers about the legal aspects of carbon sequestration contracts.

“After looking into some of the contracts offered by various companies, it was clear that farmers and ranchers would benefit from guidance on many of the legal issues, questions, and potential risks posed by committing to carbon sequestration contracts," said Carlson. "We knew there was a need for a Farmers’ Guide to Carbon Markets in Minnesota, and the public’s interest has been high.”


The guide discusses the current market for carbon contracts, and some of the aspects of the markets that can become important for the contract terms. It also covers the few points in Minnesota contract law that can be important for carbon contracts.

"It is important to note, however, that a contract may require certain parts of the agreement to be governed by the law of another state. That type of language can be binding on the parties to the contract," reads the guide.

The guide also breaks down selected contract language and the meaning of that language.

Minnesota Agriculture Commissioner Thom Petersen said the MDA was pleased to partner with MFU and FLAG to develop a guide that ensures Minnesota farmers have access to the information they need to succeed in the market.

Thom Petersen.jpg
Thom Petersen

“Minnesota farmers now have greater opportunities to combat climate change by tapping into this new and evolving carbon marketplace; however, we must recognize the concerns farmers may have,” said Petersen.

Carbon markets are unregulated which has encouraged private initiatives to make their own rules for market oversight.

“The carbon markets are really in their infancy, without a lot of regulation and common structure,” said Pat Lunemann, a dairy farmer and director of Minnesota AgriGrowth. “Carbon markets are like the wild, wild west, where everyone is shooting from the hip. No entity is there to assure that contracts are fair to both parties involved. Going forward, there is much potential for farmers to capture rewards for innovative practices on their farms and the guide describes the opportunities and the obstacles that may be in front of us.”

Lunemann is one of 10 farmers who served as advisors to the guide’s authors, who shared their questions surrounding the carbon marketplace.


The guide is available at no cost at

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