Water quality protection
How does this market work?
Bay Bank connects landowners to markets for water quality improvements. By implementing conservation actions that lower nitrogen and phosphorous loads to waterways, landowners can generate credits and sell them to organizations whom voluntarily purchase the credits or entities like waste water treatment plants that need credits to maintain compliance with government-provided permits.
Bay Bank currently connects landowners to two water quality markets Chesapeake Fund and the State of Maryland’s nutrient trading program.
Chesapeake Fund
Am I eligible to sell credits?How do I generate credits?
How much money do credits sell for?
How much will it cost me to generate and sell credits?
What is required of me in order to generate credits?
Can I see specific requirements?
I am interested. Now what do I do?
State of Maryland Nutrient Trading
Am I eligible to sell credits?How do I generate credits?
How much money do credits sell for?
How much will it cost me to generate and sell credits?
What is required of me in order to generate credits?
Can I see specific requirements?
I am interested. Now what do I do?
Chesapeake Fund
Am I eligible to sell credits?
The first step in determining your eligibility is to visit LandServer, http://www.landserver.org. LandServer can generate a report that estimates your potential to generate credits for a variety of market areas.
Chesapeake Fund is targeting nutrient credit purchases in the Tuckahoe Creek watershed in Maryland. The Fund will expand to the following targeted watersheds over time:
- Little Conestoga, Pennsylvania
- Muddy Creek, Cooks Creek and Lower Dry Run, Virginia
Other watersheds with high nitrogen loadings to waterways are also eligible.
How do I generate credits?
To generate credits for the Chesapeake Fund, landowners reduce nutrient loads to waterways by implementing one or more of the following approved best management practices:
- Conservation tillage
- Riparian forest buffer
- Riparian grass buffer
- Wetland restoration and creation
- Land retirement
- Tree planting
- Enhanced nutrient management
- Cover crop
- Off-stream watering with fence
- Off-stream watering without fence
- Off-stream watering with fence and rotational grazing
- Row crop to grass or pasture
- Dairy feed management
- Ammonia emissions reductions
- Mortality composter
Each chosen practice must also follow these guidelines:
- All projects must result in additional nitrogen reductions and/or removals compared to that which would otherwise have occurred in the absence of the Chesapeake Fund's financial support. Projects cannot be the result of any existing efforts to comply with legally mandated requirements (e.g., permit conditions, mitigation, settlement agreements) of any local, state, or federal permit.
- Projects supported by the Chesapeake Fund cannot be used as the private cost-share required for government agricultural conservation dollars, nor will projects paid for by government or private dollars for another purpose be eligible to generate nitrogen offsets
- The Chesapeake Fund only selects projects with the strongest likelihood that nitrogen reductions are sustainable and long term, with priority for those that could be sustained even beyond the contract period.
The number of credits that your project generates will depend on a number of factors including your property's existing nutrient loads to waterways, proximity to the Chesapeake Bay, selected best management practice(s), etc. Chesapeake Fund provides calculators to help you estimate your number of potential credits. Select the calculator that identifies your existing land use:
How much money do credits sell for?
Voluntary nutrient credit markets are just emerging, so there are few benchmarks for what credits may be worth. Chesapeake Fund invested in its first projects in 2010. As the Fund continues to purchase credits, more information on credit prices will be available.
When selecting projects, Chesapeake Fund places heavy emphasis on the cost-effectiveness of the resulting nutrient reduction. That is, your price per pound of nutrient reduced. You will need to decide which practices will work with your property to deliver the most cost-effective reductions. A technical service provider can help you with this assessment.
How much will it cost me to generate and sell credits?
There are costs associated with generating and selling credits. Bay Bank and Chesapeake Fund provide a number of services intended to reduce expenses for designing water quality protection projects and registering credits. These are available on the Bay Bank website.
You may also choose to pay a consultant or other outside experts to design your project and help prepare a contract to sell credits. Bay Bank maintains a list of experts qualified to work on each habitat type. Once a project and contract are completed, it must be verified by an independent auditor before credits can be registered. These latter two costs can be deducted from the price of the credits, but other fees related to project design and contract development will in most cases need to be paid prior to the sale of credits.
Project development costs for will vary depending on which practices you are interested in pursuing. In some cases you can arrange with conservation groups and consultants to bear up-front expenses, which can be recouped once credits are sold.
What is required of me in order to generate credits?
- All credits will be registered with Bay Bank. This allows landowners to document their conservation actions and buyers to obtain certainty that each credit represents real nitrogen reductions.
- Implementation, operation, and maintenance of projects will be verified and documented using protocols and standards developed for the Chesapeake Fund in order to ensure that real, verifiable pollution reductions have been achieved.
Can I see specific requirements?
For more information, visit the Chesapeake Fund's website
I am interested. Now what do I do?
- In your account page, create an “expression of interest” to generate Chesapeake Fund credits. Chesapeake Fund will now be able to find you.
- Once you have used Chesapeake Fund’s credit calculators to assess your credit potential, update your Marketplace listing with your number of estimated credits (i.e., “advance credits”).
- When funding for a particular watershed is announced, contact a service provider to help you complete your application.
- Complete transaction with Chesapeake Fund
The Chesapeake Fund's 2009 funding cycle is now closed. To stay up-to-date on funding availability, note your interest in your account (link and add functionality to add email to a new Chesapeake Fund database field).
State of Maryland Nutrient Trading
Am I eligible to sell credits?
Maryland facilitates the trading of nitrogen and phosphorus credits between farmers and permitted facilities like wastewater treatment plants. The first step in determining your eligibility is to visit LandServer, http://www.landserver.org. LandServer can generate a report that estimates your potential to generate credits for a variety of market areas.
Farmers present in the Chesapeake Bay portion of Maryland and Delaware are eligible to generate and sell nitrogen and phosphorus credits.
How do I generate credits?
To generate credits, landowners reduce nutrient loads to waterways by implementing one or more of the following approved best management practices:
- Conservation tillage
- Riparian forest buffer
- Riparian grass buffer
- Wetland restoration
- Tree planting
- Stream restoration
- Enhanced nutrient efficiency
- Cover crop
- Off-stream watering with fence
- Off-stream watering without fence
- Off-stream watering with fence and rotational grazing
- Crop conversion
- Animal waste management systems: livestock or poultry
- Dairy feed management
- Ammonia emissions reductions
- Algal turf scrubber
- Oyster aquaculture
Each chosen practice must also follow these guidelines:
- Farmers must demonstrate that they have already reduced nutrient loads to levels required by the State of Maryland. These limits are known as “baselines.” Visit LandServer to determine your watershed’s baseline requirements.
- Farmers must comply with all local, state, federal laws, regulations, and programs.
- The farmer and any nutrient credit trade cannot cause or contribute to water quality effects locally, downstream or, bay wide.
- Projects paid for by government dollars (e.g. USDA Environmental Quality Incentives Program) for another purpose are not eligible to generate nitrogen credits during the life of the project. However, a farmer’s private share of any cost-share program is eligible.
- The idling of whole or substantial portions of farms is not eligible to generate credits
- Credits can only be generated once a practice is installed
The number of credits that your project generates will depend on a number of factors including your property's existing nutrient loads to waterways, the nutrient baselines for your watershed, proximity to the Chesapeake Bay, selected best management practice(s), etc. Maryland’s nutrient trading website can help you calculate your potential credit yield.
How much money do credits sell for?
Nutrient credit markets are just emerging, so there are few benchmarks for what credits may be worth. As the nutrient trading market develops, more information on credit prices will be available.
How much will it cost me to generate and sell credits?
There are costs associated with generating and selling credits. Bay Bank and Maryland’s nutrient trading program provide a number of services intended to reduce expenses for designing water quality protection projects and registering credits. These are available on the Bay Bank website.
You may also choose to pay a consultant or other outside experts to design your project and help prepare a contract to sell credits. Bay Bank maintains a list of experts qualified to work on each habitat type. Once a project and contract are completed, it must be verified before credits can be registered. These latter two costs can be deducted from the price of the credits, but other fees related to project design and contract development will in most cases need to be paid prior to the sale of credits.
Project development costs for will vary depending on which practices you are interested in pursuing. In some cases you can arrange with conservation groups and consultants to bear up-front expenses, which can be recouped once credits are sold.
What is required of me in order to generate credits?
- All credits will be registered with State of Maryland. This allows landowners to document their conservation actions and buyers to obtain certainty that each credit represents real nitrogen reductions.
- Projects need to be verified and monitored.
Can I see specific requirements?
For more information, visit Maryland’s nutrient trading website.
I am interested. Now what do I do?
- Generate a LandServer report to determine your state nutrient trading basin, your watershed’s baseline requirements, and identify other funding opportunities to reach baseline
- In your account page, create an “expression of interest” to generate Maryland nutrient trading credits. Buyers will now be able to find you on the Bay Bank Marketplace.
- Once you have used Maryland’s credit calculators to assess your credit potential, update your Marketplace listing with your number of estimated credits (i.e., “advance credits”).
- Submit a Maryland Agriculture Nutrient Credit Registration and Certification application. Maryland’s nutrient website will automatically populate this form for you. Or you download the application here
You can contact a service provider to help you complete your application. - Complete transaction with a buyer and report to Maryland’s registry through their nutrient trading website
