The Trends Behind Carbon Insetting
Four Reasons Why Startups Are Seizing The Insetting Opportunity
Market Signals
27% higher productivity: A new study launched by the European Alliance for Regenerative Agriculture (EARA) has found that farmers can produce ‘significantly more food for less’ by transitioning to regenerative practices.
2,000% increase in investment: VC dollars invested in ag biotech startups in Latin America have risen by 2,000% from 2020 to 2024. We featured Ascribe, a portfolio company with a presence in Brazil, in a past edition of the GuidePost.
$4 billion in food tech M&A in 2025: According to Crunchbase data, $4 billion worth of M&A transactions in the sector have already occurred globally this year. That compares to nearly $5.5 billion in all of 2024 and just $34 million in 2023.
The Trends Behind Carbon Insetting
The last few years have seen surging interest and investment in carbon insetting.
Unlike traditional carbon offsets, where a company pays for emissions reductions outside of its own operations, carbon insets integrate carbon reduction and removal directly within a company’s supply chain.
As U.S. companies seek more credible, impactful climate solutions (and aim to steer clear of greenwashing claims), insetting is gaining traction, with regenerative agriculture practices being the most common form of insetting.
Here are four trends behind the growth of carbon insets.
Pressure for corporations to reduce carbon emissions and meet their climate commitments: Emissions within a supply chain can make up 70% to 80% of a company’s carbon footprint. Under pressure to meet their climate targets, corporations are shifting from offsets outside their supply chain to insets within it.
Growth and challenges in the offset market: The voluntary carbon market is growing but in flux, as the credibility of offsets has come under greater scrutiny. The demand for quality carbon credits has indirectly led to greater interest in insets and strategies where corporations can directly control the quality of their carbon removal.
The “stacked benefits” of insetting: Regenerative agriculture insetting has additional benefits beyond carbon reduction. It can enhance crop productivity, increase water availability, improve community resilience, and promote biodiversity. For more, check out the image below from BCG’s report on the stacked benefits of regenerative practices for soil health.
Reputable endorsements from climate institutions: The Greenhouse Gas Protocol (GHGP) and the Science Based Targets initiative (SBTi), two major institutions that influence corporate climate action, have endorsed insetting in their official climate guidance.
Startups are beginning to seize this opportunity.
Eion, a Trailhead portfolio company with a patented approach to enhanced rock weathering (ERW), signed a partnership with Perdue AgriBusiness in a first-of-its-kind carbon insetting deal.
Eion provides farmers with a replacement for ag lime (limestone or calcium carbonate intended to reduce soil acidity) in the form of crushed olivine. Rain and soil acidity dissolve the olivine, boosting soil pH, improving soil health, and capturing CO₂ from the atmosphere. The dissolved olivine eventually makes its way to the ocean, where the carbon is permanently sequestered.
The deal with Eion will enable Perdue grain farmers to remove 3,500 tons of CO₂ by applying olivine on farmland across the Mid-Atlantic.
“We see a massive opportunity for ERW to easily incorporate within the agricultural supply chain for the long haul and, to that end, are focused on expanding our portfolio of insetting agreements,” Anastasia Pavlovic, Eion CEO, said. “With approximately 800 million acres of farmland in the US alone, agricultural insetting projects can catalyze the ERW sector toward annual gigaton CO₂ removal.”
Eion, which aims to remove 10 million tons of CO₂ annually by 2030, is just one company in the Trailhead portfolio focused on insets. Funga is another. They are restoring biodiversity by reintroducing native, growth-promoting fungal communities to forest soils.
“A big part of Funga's work is creating carbon removals within timber forestry landscapes, through the reintroduction of fungal biodiversity,” Colin Averill, CEO of Funga, said. “When possible we try to work with customers that rely on timber for some part of their business. This allows our customers to move towards net zero while also enabling a regenerative agriculture transition within their own supply chain. By taking climate action, they also support a more sustainable future for the commodities they rely on. That's a win-win.”
Founder Fundamentals
How to leverage AI in the writing process. We hand-type every word you read in the GuidePost, but that doesn’t mean we don’t use AI in the writing process: exploring ideas, fact-checking statistics, and conducting grammatical edits. AI is a helpful writing (and thinking) companion, which is why we loved this podcast by David Perell on how to write with AI. Here are four takeaways from the podcast:
Write with AI: The most effective approach is writing with AI rather than having AI write for you. Use it for brainstorming, feedback, research, iteration, and editing while maintaining your voice.
Use AI for research. Tools like ChatGPT’s Deep Research can help deconstruct and outline complex queries with well-cited research that’s better than the results from traditional Google searches.
The core writer skills of good taste and unique perspectives will endure. Whether writing solo or with AI, success hinges on discerning taste and secrets (AI, after all, doesn’t know secrets).
Quality is king, regardless of origin. In 10–15 years, readers won’t care whether a piece was AI-assisted or human-written. They’ll only care about its objective quality.
Portfolio Updates
Portfolio companies Local Line and Edacious helped Wyebrook Farm prove with nutrient testing that its grass-fed beef packs more protein and vitamins, leading to stronger farm sales. Local Line.
HowGood has integrated with New Hope Network’s Beacon Discovery platform to provide 3rd-party verified sustainability claims and merchandising. New Hope Network.
What We’re Reading
World’s Biggest Wealth Fund Defies ESG Backlash. Norges Bank Investment Management, which oversees $1.9 trillion in assets, remains committed to environmental, social, and governance (ESG) standards. Bloomberg.
A Food Reckoning Is Coming. Our diets are awful for the planet. But we can’t simply abandon food. The Atlantic.
SNAP Budget Faces $200 Billion Cut Over the Next Decade. The cost of SNAP has grown substantially over the past several years. In 2019, the program cost about $60 billion annually. By 2022, it had jumped up to $119 billion per year. But its budget is on the chopping block. Food Fix.
The Consortium Designing Regen Finance Infrastructure for the Midwest. Twenty funders will design a first-of-its-kind “capital orchestrator”—a financial platform that strategically coordinates multiple forms of capital to build a resilient, sustainable, and profitable agricultural sector. RFSI.
Promising Corporate Traction in Regenerative Agriculture. Corporations are making significant commitments to implement regenerative agriculture practices. Bonds referencing regenerative agriculture have jumped from $1.4 billion in 2023 to $4.1 billion in 2024. Responsible Investor.
Is All Micromanagement Bad? How the best startup leaders balance details and delegation. First Round Review.
The Trailhead Jobs Board
Trailhead’s 29 portfolio companies are hiring for 29 jobs. Check out the roles on the Trailhead Job Board.