What is Soil Carbon? The fundamentals, and why we just published a report on it

AlliedOffsets' report tracks the soil carbon market's shift toward credibility, from the first CCP-certified soil credits and repeat buying by Microsoft, to third-party validated field measurement and corporate buyers like Amazon sourcing directly into their supply chains for Scope 3 targets. Download the 'Soil Carbon Market Report' below. 

Soil is the second largest carbon sink on the planet, behind only the oceans. For most of the last century it's been an overlooked one, quietly depleted by intensive agriculture and land use change. In 2026, that's starting to shift, and the voluntary carbon market is paying close attention.

What is soil carbon?

Soil carbon is carbon dioxide that plants have pulled from the atmosphere and stored underground, sometimes for decades or centuries, as part of the soil itself. Soil carbon sequestration is the broader process behind this: removing CO2 from the atmosphere through plant photosynthesis and locking it into the ground as organic matter.

The scale of the opportunity is significant. The Intergovernmental Panel on Climate Change estimates that croplands and grasslands could sequester between 0.4 and 8.6 gigatons of CO2 equivalent per year. In the US specifically, agricultural soils alone could potentially store up to 13% of domestic greenhouse gas emissions annually, largely because more than half of US land is under agricultural management.

How it works

The mechanism is straightforward, even if the science behind measuring it isn't. Plants draw CO2 from the air and water from the soil to form carbohydrates through photosynthesis. Some of that carbon moves down through the plant's roots, along with fallen leaves and other organic matter, feeding soil microbes along the way. Those microbes convert the carbon into stable organic matter that becomes physically trapped in the soil structure and bonded to minerals, storing it long term rather than releasing it back into the atmosphere.

Several land management practices help this process along: conservation tillage, cover cropping, planting perennial crops, agroforestry, and managed grazing all increase how much carbon soil can hold. It isn't a one-way process, though. Disturb the soil or change practices, and stored carbon can be released again, which is why measuring and maintaining it matters as much as building it up in the first place.

The benefits go beyond carbon

Increasing soil carbon tends to be a genuine win-win. Healthier, carbon-rich soils improve water filtration, build resilience to climate impacts and disease, and reduce farmers' reliance on fertilizer, which has knock-on benefits for water and air quality. Economically, soil carbon practices can improve yields and profit margins in some systems, while creating new demand for technical assistance providers and expanding opportunities for NRCS offices, university extensions, and private companies working with producers on soil health.

Why everyone's talking about it this year

Soil carbon has been a slow-burn story in carbon markets for years, but 2026 has brought several developments that suggest it's moving from niche to mainstream.

In November 2025, the ICVCM approved the Climate Action Reserve's Soil Enrichment Protocol for its Core Carbon Principles label, making Carbon by Indigo's soil credits the first agricultural credits to carry CCP certification. Buyer confidence followed: Microsoft signed a 12-year agreement in January 2026 to purchase 2.85 million soil carbon credits from Indigo, its third major transaction with the company and a strong repeat-buying signal from the market's largest offtaker.

Measurement is catching up with demand, too. In February 2026, Veterans Carbon Holdings confirmed the first third-party validated soil-sample carbon credits issued in the US, based on direct stratified soil sampling rather than satellite imagery or modeled estimates. VCH plans to distribute roughly $1.1 billion in direct payments to US farmers and landowners over the next nine years.

Demand is also showing up outside the open voluntary market. Agreena issued close to 11,000 Verified Impact Units to two large food and beverage buyers, while Indigo's value-chain clients include AB InBev, VF Corp, and Walmart. Amazon, including Whole Foods, contracted directly with Regrow and AgriCapture in March 2026 to reduce methane and water use across its US rice supply chain, feeding directly into Scope 3 targets. Corporate buyers, in other words, are increasingly building soil carbon into their supply chains rather than sourcing it purely on the open market.

Taken together, these developments point to a market that's moving past the modeling debates that have dogged it for years and toward a more measured, verified, and commercially embedded version of soil carbon. It's a space worth watching closely, and one AlliedOffsets will keep tracking as it develops.

Download the full report here.