The Honorable John Boozeman
Chairman, Senate Committee on Agriculture
The Honorable Amy Klobuchar
Ranking Member, Senate Committee on Agriculture
The Honorable Glenn “GT” Thompson
Chairman, House Committee on Agriculture
The Honorable Tim Scott
Chairman, Senate Committee on Banking
The Honorable Elizabeth Warren
Ranking Member, Senate Committee on Banking
The Honorable French Hill
Chairman, House Committee on Financial Services
Dear Chairmen, Ranking Members, and Members of the Committee,
We the undersigned organizations represent a coalition of crop and livestock environmental asset market builders, conservative conservation advocates, global leaders in digital asset brokerage and financial technology for environmental credits, and a consortium of over 50 energy and water stakeholders across industry and research universities, committed to strengthening American competitiveness in voluntary markets for verified environmental credits. We find the Senate’s Market Structure Discussion Draft presents an opportunity for the CFTC to provide desperately needed support for verified environmental credits as a bankable digital commodity, improving market integrity and velocity to the benefit of these sectors. We urge Congress to support this interpretation and any further amendments.
Environmental credits, such as carbon credits through agriculture and forestry, function as digital commodities when issued and tracked on a secure digital asset registry. These credits have driven billions of dollars in voluntary investment across conservation, regenerative and precision agriculture, forestry, and energy sectors. Market research firms have forecasted over $1.2 trillion in global market size for environmental credits by 2030, with other projections higher. Ongoing research at University of Michigan has also suggested that global cost of borrowing associated with environmental liability may afford up to $244 B in demand for offset credits annually. U.S. enterprises and other companies abroad will need to purchase high integrity environmental credits as a risk management tool.
Yet, the U.S. only captures a small percentage of global voluntary market revenue according to Morgan Stanley Capital Investments. Foreign environmental credits subject to regulated market structures have become more aligned with buyer needs, pulling investment overseas. This trend may accelerate as EU tariffs go into effect this year allowing liability deduction under bilateral agreements with foreign countries that regulate their environmental credit assets. U.S.-based credits outside of a regulated market structure will lag as a stranded asset class, from both global demand and the U.S. financial system, limiting opportunities for farmers, foresters, and energy sector – impacting US enterprise competitiveness.
Corporate and industrial demand for U.S.-verified environmental credits has weakened and may continue decline. Unless Congress takes steps to strengthen the bankability, reliability, and trustworthiness of this asset class, this negatively impacts farmers as stewards of conservation. Buyers need regulated, transparent “Buy-and-Bank” pathways for high-quality credits produced in the United States farming, forestry, and the energy sectors.
Congress must take intentional actions to strengthen the underlying integrity of environmental credits, and apply a regulated market structure to enable institutional finance to broker these assets with integrity. These actions would build on and go beyond the effect of previously passed bipartisan efforts supported by former Senator Braun, Senator Stabenow, and others.
The Senate should help maintain U.S. market leadership by ensuring the Digital Asset Market Structure draft is leveraged to build a more trusted and financeable market for America’s verified environmental credits. As most environmental credits can be considered digitally listed intangible commodities, Congress could leverage the opportunity for the CFTC to beneficially apply the digital asset market structure from the Senate draft to ensure bankability for verified credits as a digital asset class, helping brokers connect global demand with U.S. producers in farming, forestry, and energy sectors.
The undersigned organizations believe the Senate proposal provides a strong foundation for improving the bankability and market value of environmental credits that already function as digital assets. We urge Congress to support additional actions and potential amendments, such as the following:
- Support passage of the Senate discussion draft language, with the interpretation that it allows the CFTC to issue rules for environmental credits as digital commodities and to apply conflict-of-interest protections to market participants accordingly.
- Verified environmental credits—such as carbon credits from agriculture, forestry, or energy projects—are measurable, fungible digital assets that trade and hold value until retirement. As market‑valued intangible commodities they should be considered to meet the definition of a digital commodity, not covered by the Senate draft’s exclusions for tangible agricultural commodities or other exempt commodities.
- In passing the Senate language, explicitly encourage the CFTC to apply its rulemaking and conflict-of-interest provisions to market actors who function as the digital asset brokers and dealers of environmental credits.
- Consider an amendment to the Senate language, clarifying that the value of verified environmental credits is derived from publicly documented certification of integrity by accredited third-party verifiers.
- Verified environmental credits should be defined as covered digital commodities whose value comes projects that use validated methodologies according to third-party verification conducted by entities with widely recognized accreditation, such as ISO‑registered verifiers, or those recognized by U.S. agencies, with blockchain or other means used to link reporting of auditability and verifiability directly with the digital asset listing. This clarification could help steer market activity toward high‑integrity, transparent, third-party-verified assets, and would add more explicit clarity that environmental credits are covered under digital intangible commodities.
We deeply appreciate your commitment to protecting American dominance in digital commodities and recognizing this opportunity to strengthen the market structure for verified environmental credits, supporting America’s farmers, foresters, conservation and energy sectors.
Sincerely,