Public Commentary: The following overview outlines FG Capital’s approach to Soil Organic Carbon project finance. It is provided for informational purposes only and does not constitute investment advice or a solicitation.
SOC Carbon Projects – Soil Organic Carbon Structuring & Monetization
Healthy soils represent one of the most cost-effective carbon sinks available. By adopting conservation practices—reduced tillage, continuous ground cover, precision nutrient management—producers can increase organic-matter stocks and generate high-integrity removal credits. FG Capital delivers end-to-end advisory, capital raising, and market-access solutions that align agronomic gains with predictable cash flows.
Eligible Management Practices
- No-Till and Strip-Till: Minimising soil disturbance to curb oxidation losses.
- Multi-Species Cover Crops: Enhancing below-ground biomass and microbial activity.
- Extended Crop Rotations: Incorporating legumes and deep-rooted species to raise carbon inputs.
- Optimised Fertiliser Application: Reducing nitrous-oxide emissions through precision placement.
- Managed Grazing: Integrating livestock to stimulate root growth and organic-matter turnover.
Advisory Workflow
1 | Baseline Assessment
• Stratified soil-core sampling combined with historic management data.
• Alignment with recognised methodologies such as Verra VM0042 or Gold Standard Soil Carbon Framework.
2 | Financial Structuring
• Working-capital credit lines for seed, equipment, and advisory services.
• Pre-issuance offtake agreements securing a minimum price floor.
3 | Implementation & MRV
• Digital platforms capturing field operations, input reductions, and yield metrics.
• Periodic soil resampling and third-party verification.
4 | Credit Monetization
• Structured forward sales to corporates seeking removal tonnes.
• Spot transactions once credits are listed on accepted registries.
5 | Long-Term Stewardship
• Ongoing agronomic support, performance benchmarking, and transparent reporting to stakeholders.
Indicative Financial Parameters
| Metric | Typical Range |
|---|---|
| Annual Sequestration Potential | 1.0 – 2.5 tCO 2 e per hectare |
| Up-Front Funding Requirement | USD 3 – 6 per forecast tonne |
| Forward Sale Price (Year 0) | USD 8 – 12 per tonne |
| Target Equity IRR | 14 % – 18 % unlevered |
Representative Capital Stack
| Tier | Security Package | Cost of Capital | Investor Profile |
|---|---|---|---|
| Senior Pre-Purchase Facility | Pledged delivery schedule; escrowed proceeds | Fixed price USD 8 / t | Carbon offtake platforms |
| Mezzanine Revenue Share | Subordinated claim on credit revenues | 9 % – 11 % coupon + upside | Impact-focused credit funds |
| Producer Equity | Residual cash flow | 15 % – 20 % target IRR | Agribusiness operators, cooperatives |
Stakeholder Benefits
- Producers: Diversified income, improved soil health, and potential yield resilience.
- Local Communities: Enhanced water retention, biodiversity gains, and rural employment.
- Credit Purchasers: Access to removal credits with demonstrable co-benefits and transparent provenance.
- Investors: Exposure to agriculture-linked assets with measurable environmental impact.
Engagement
Organisations evaluating a Soil Organic Carbon initiative are welcome to engage with our advisory team. We would be pleased to discuss feasibility studies, financing structures, and long-term project governance.
This document has been prepared solely for informational purposes. It does not constitute investment advice and should not be interpreted as an offer to buy or sell any security, financial instrument, or service.
