TL;DR: Carbon credits may represent a potential revenue stream for food recovery organizations (FROs), but participation is complex, costly, and comes with significant data requirements and unanswered questions. At our recent member meeting, guest speaker Madisen Gittlin of the University of Minnesota’s Institute on the Environment shared insights into how carbon markets work, participation requirements, alternative pathways, and risks facing the food recovery industry. Members raised important questions about costs, revenue potential, data requirements, double-counting, donor relationships, and legal implications.
NFRA is not promoting carbon-credit participation. Our role is to gather reliable information, investigate industry-wide questions, and make that information accessible. Members have told us that finding clear, consistent information is difficult. We're committed to helping close that gap, working toward practical industry guidance, and giving organizations the information they need to evaluate their options and make decisions with confidence. What questions should we be asking? More to come!
By the NFRA Executive Board
Understanding the Carbon Credit Landscape
Carbon markets generally fall into two categories: compliance markets, where participation is legally mandated, and voluntary markets, where organizations purchase credits from projects that avoid, reduce, or remove greenhouse gas emissions. One carbon credit represents one metric ton of carbon dioxide equivalent (CO₂e).
Food recovery projects are beginning to enter these markets. Relevant standards include the Canadian Standards Association’s Greenhouse Gas Clean Project Standard and Verra’s 2023 standard specifically for food recovery.
Existing projects include the Mexican Food Banking Network and the Food Bank of Peru. In the United States, Brightly is launching the first U.S. food rescue credit initiative in partnership with Feeding America and other FROs.
As these programs develop, NFRA is working to understand the different standards, methodologies, and requirements so members have access to clearer information about how these markets operate.
What Does Participation Require?
Madisen outlined several significant barriers to entering the voluntary carbon market:
Scale: Rescuing approximately one million pounds of food annually is generally considered a minimum threshold for potential profitability.
Additionality: Organizations must demonstrate that emissions reductions would not have occurred without carbon-credit revenue. Existing funding, local policies, alternative diversion methods, and established food recovery practices can affect eligibility.
Data: Detailed information about recovered food is essential. Factors such as food composition and water content affect emissions calculations, creating substantial reporting demands.
Cost: Project development, independent third-party verification, and registry fees can reach tens of thousands of dollars.
Market conditions: An oversupply of credits and underdeveloped waste-reduction standards are creating additional uncertainty.
Additionality is particularly important. Projects generally need to demonstrate that food recovery in their area does not already receive continuous or guaranteed funding, is not mandated or incentivized by existing policy, does not have an equivalent or better alternative diversion method, and is not already common practice among local food donors.
Policy changes can also affect eligibility. For example, California's SB 1383 may make it more difficult for certain projects to demonstrate additionality.
These requirements may put voluntary-market participation beyond the reach of many smaller or volunteer-run organizations. NFRA recognizes the need for more practical information about eligibility, actual costs, data requirements, and realistic financial returns.
An Alternative: Directed Carbon Agreements
One alternative discussed was Second Nature’s Offsets Lab, which connects higher education institutions with sustainability projects, including food recovery.
Under this model, a university proposes a carbon-avoidance project that is peer-reviewed by another participating institution. Rather than selling credits on the voluntary market, the university purchases carbon-reduction credits directly from the FRO to offset its own emissions portfolio.
This approach may be accessible to organizations of any size, including those recovering less than one million pounds annually.
For FROs exploring alternatives to the voluntary market, NFRA will continue gathering information about pathways like this one, including how agreements are structured, what organizations need to participate, and what financial and legal considerations they should understand.
Important Questions and Industry-Wide Concerns
The discussion surfaced several issues that require further investigation. These aren't simply questions for individual organizations; they have implications for the food recovery sector as a whole.
Double-counting and donor relationships: If an FRO sells carbon credits associated with donated food, can the donor still claim the same emissions reductions in its sustainability reporting? What disclosures or agreements are necessary to avoid misunderstandings? Some donors may object to FROs selling credits associated with food they contributed.
Data ownership and duplication: How should the industry handle situations where multiple organizations are involved in recovering or distributing the same food? There is currently no clear industry-wide standard for preventing duplicate emissions claims.
Revenue and fees: Members shared widely varying estimates they had heard regarding potential Brightly revenue, ranging from approximately
2,500–3,500 to $20,000 per million pounds of recovered food, after reported developer fees of 40–50%. These figures are member-reported estimates, not verified revenue projections from Brightly, highlighting the need for greater transparency around pricing and transaction costs.
Standards and credibility: Different methodologies calculate emissions reductions differently, particularly regarding whether calculations include only avoided landfill emissions or also avoided primary food production. How should organizations evaluate these differences and communicate their impact accurately? There are also broader questions about the credibility of carbon offsets and whether claimed emissions reductions represent actual carbon avoidance.
Legal and reputational considerations: What language should FROs use in donor agreements, impact reports, and carbon-credit transactions? What disclosures are necessary to protect both organizations and their partners?
These questions highlight a significant challenge raised by members: reliable, practical information about carbon credits is difficult to find, and answers are not always consistent. NFRA is committed to helping close that information gap rather than making assumptions or recommendations on behalf of the industry.
How NFRA Will Help
NFRA's role is to serve as a central resource for collecting member experiences, identifying unanswered questions, and working toward clear, accessible industry guidance.
We will collect member questions and real-world scenarios involving carbon credits, donor relationships, and legal considerations. NFRA will also explore using its pro bono legal network to review language and develop guidance that FROs can use when addressing carbon credits with donors and communicating their environmental impact.
Our focus is not on determining whether organizations should participate. It's on helping members understand the landscape, identify potential risks, and access the information they need to make their own informed decisions.
Help Shape What We Investigate Next
We know there are more questions than answers right now, and we want to hear from you. Member input will help determine what NFRA investigates and what resources would be most useful to the industry.
What questions about carbon credits would you like NFRA to investigate?
Have you received a carbon-credit proposal or explored a potential partnership? What information was difficult to obtain?
Are there legal, financial, data, or donor-related concerns you would like clarified?
Would a dedicated task force to investigate specific issues be helpful? What should it prioritize?
What resources, expertise, or real-world experiences can you contribute?
Send your questions, scenarios, and suggestions to team@nationalfoodrecoveryassociation.org
The more information and experiences we gather across the sector, the better equipped NFRA will be to make that knowledge accessible to everyone. Our goal is to help food recovery organizations navigate emerging opportunities and challenges with greater clarity and confidence.
