Carbon Credits: What Are Ranchers Actually Signing

A lot of Texas ranchers have heard the pitch by now: get paid for the way you're already managing grass. Some of that money is real and already in ranchers' hands. The details of what you're actually agreeing to take more digging.

Grassroots Carbon, a Texas-based soil carbon company, made the first soil carbon payments to U.S. ranchers in January 2022, a first round of $200,000 split among six Texas ranchers. By November 2023, that had grown to $3 million paid out from that year's credits. As of a January 2026 announcement, the company's total stands at $40 million paid to ranchers since 2022, plus $10 million in advance payments, with no out-of-pocket cost to enroll. That $40 million figure is confirmed as a live number on the company's own site as of December 2025.

The program's own materials describe the commitment as adopting regenerative grazing practices that improve soil health, forage availability, water retention, and biodiversity, in practice, rotational or adaptive grazing rather than continuous overgrazing. The process starts with a baseline soil measurement, then tracks land management through software called PastureMap, with soil re-tested periodically to confirm the carbon is actually building up. The measurement standard behind it, called bCarbon, was developed at Rice University's Baker Institute and is outcome-based rather than a fixed checklist of required practices.

Payment works as a revenue share: landowners get 80 percent of what the carbon credits sell for, paid annually, with soil testing built into the contract each year. Independent reporting on the program describes contract terms running around 10 years, longer than a lot of ranchers realize when they first hear the pitch.

One thing worth knowing before signing anything: there's no published guidance, not from Grassroots Carbon, Texas Farm Bureau, AgriLife, or the Texas Comptroller, on whether enrolling in a carbon program affects a property's agricultural, or open-space, tax valuation. That doesn't mean there's a problem. It means it's undocumented, and it's a question worth asking your own county appraisal district directly before enrolling, not after.

Texas Farm Bureau has been flagging carbon contract risks since 2021: additionality (are you being paid for a change you weren't already going to make), contract length, payment schedule, and whether the agreement blocks you from participating in other USDA conservation programs at the same time. Texas A&M AgriLife's ag law program published a detailed fact sheet in 2023 covering exactly this kind of contract, walking through verification methodology, payment terms, how the contract term interacts with estate planning, whether it creates any lien or title issue on the land, indemnification clauses, and penalties for early termination.

None of that is a reason to avoid these programs. It's a reason to read the contract closely, or have someone who does ag law for a living read it first.

The money is real. Whether the contract is a good fit for a given operation depends entirely on the terms, and those terms are worth reading before anyone signs.

Grassroots Carbon, homepage ($40M paid to ranchers stat): https://grassrootscarbon.com/

Grassroots Carbon, How It Works for Ranchers: https://grassrootscarbon.com/ranchers/

GlobeNewswire, Grassroots Carbon Becomes First U.S. Company to Deliver 1.9 Million Tons of Carbon Removals (Jan. 9, 2026): https://www.globenewswire.com/news-release/2026/01/09/3216151/0/en/Grassroots-Carbon-Becomes-First-U-S-Company-to-Deliver-1-9-Million-Tons-of-Carbon-Removals-Through-Regenerative-Ranching.html

PR Newswire, Grassroots Carbon Pays U.S. Ranchers $3 Million From Its 2023 Soil Carbon Drawdown Credits: https://www.prnewswire.com/news-releases/grassroots-carbon-pays-us-ranchers-3-million-from-its-2023-soil-carbon-drawdown-credits-302081626.html

Drovers, Grassroots Carbon Targets Grazing and Pastureland: https://www.drovers.com/news/industry/grassroots-carbon-targets-grazing-and-pastureland

Texas Monthly, Grassroots Carbon and Regenerative Ranching: https://www.texasmonthly.com/news-politics/grassroots-carbon-regenerative-ranching/

Baker Institute, bCarbon: A New Soil Carbon Storage Standard: https://www.bakerinstitute.org/research/bcarbon-new-soil-carbon-storage-standard

Texas Farm Bureau, Carbon Market Considerations for Farmers, Ranchers: https://texasfarmbureau.org/carbon-market-considerations-for-farmers-ranchers/

Texas Farm Bureau, Carbon Credit Brokers Contacting Texas Farmers, Landowners: https://texasfarmbureau.org/carbon-credit-brokers-contacting-texas-farmers-landowners/

Texas A&M AgriLife, Understanding and Evaluating Carbon Contracts (Lashmet & Kaase, 2023): https://agrilife.org/texasaglaw/files/2023/07/understanding-and-evaluating-carbon-contracts.pdf

Texas Comptroller, Agricultural and Timber Exemptions: https://comptroller.texas.gov/taxes/property-tax/ag-timber/