(Bloomberg) -- Wildfires have ripped through the Texas Panhandle in recent weeks, killing more than 7,000 livestock animals and scorching grasslands. One fire has also impacted a carbon offset project that uses cattle to help manage the land in a way that boosts soil health and carbon levels.

With dry, windy weather this week, new blazes could ignite even as firefighters are still working to contain the Smokehouse Creek Fire, the largest wildfire in Texas history. The blaze quickly burned through more than 1 million acres in Texas and Oklahoma.

Wildfires have proven to be a problem for companies looking to offset their climate footprint by paying to protect forests, where carbon is stored in trees. Last year, a blaze burned a portion of a British Columbia forest linked to carbon credits, sending the carbon stored in damaged trees back into the atmosphere. The Texas fire also released carbon dioxide. That may not ultimately impact credits already sold in part thanks to a cache set aside for risks such as wildfire. Still, it raises the question of whether soil carbon offset projects face similar fire risks as their forest counterparts. 

Soil sequesters carbon grabbed from the atmosphere by plants. Some of that carbon is passed through roots into the soil where, in addition to fostering a healthy array of microbes, it can be locked up as long as it’s undisturbed. Certain land practices such as selective cattle grazing and fostering deep-rooted plants can help store carbon across what’s known as the soil profile, or different layers of earth.

The ranch impacted by the Smokehouse Creek Fire is among the more than 80 ranches and landowners in Texas and 11 other states working with the San Antonio-based Grassroots Carbon, which sells carbon credits to companies looking to offset their climate pollution by supporting projects that store carbon in soil for decades. Grassroots Carbon issued the first soil carbon credits in the US and distributed the first payments to ranchers in 2022, according to its site. Marathon Oil Corp., Nestle S.A., and Shopify Inc. are among the companies that have purchased credits. (One credit represents 1 metric ton of CO2 removed from the atmosphere.)

Read more: Companies Are Dropping Carbon Offsets, But Still Buying the Worst Ones

The project impacted by the fire was among the original regenerative ranches to partner with the company, but Grassroots Carbon declined to disclose the ranch name, owners or exact location. The site lost property and animals in the fire, according to Grassroots Carbon co-founder Henk Mooiweer.

What happened to the carbon stored below ground, though, is a different matter. The company says the ranch’s soil carbon levels were likely only minimally impacted, if at all. Grassroots Carbon relies on measurements taken down to 3 feet (1 meter) below the surface, which Mooiweer said helps determine how any change in soil carbon “is distributed over different depth levels.” 

“Maybe the best news of the whole story: Natural soil carbon is very fire resistant,” he said. 

“There’s some credibility” to the idea that the carbon stayed stashed far from the surface, said Chris Tolles, co-founder and chief executive officer of  Yard Stick, a startup that measures soil carbon. “Soil is actually an amazing insulator.”

But that may be beside the point,  said Grayson Badgley, a research scientist at the US-based nonprofit CarbonPlan.“Grassroots is right to point out that fire wouldn’t immediately affect soil carbon deeper underground,” said Badgley. “However, that probably isn’t enough for sorting out the implications of the fire in terms of offsets.” 

To sell offsets, projects need to show they have taken actions to reduce CO2 that otherwise would’ve remained in the atmosphere. Soil already sequesters carbon, and a regenerative ranch would need to show its land management practices have helped the process. 

“So while there might be plenty of carbon stored deeper underground,” Badgley said, “the more relevant question is: where in the soil profile is the newly stored carbon that Grassroots sold as offsets? Have there already been changes deep underground or do the credits represent changes to soil carbon stocks near to the surface?”

At a regenerative ranch, cattle are rotated frequently, resulting in patches of land undergoing a “short but intense grazing period followed by a long period of rest,” said Mooiweer, all to maximize grassland growth and promote deep root systems.

If those roots remain alive, the grasses may grow back quickly, “but it’s not an overnight thing,” Tolles, who is not involved with the Grassroots Carbon project, said.

The first foot of soil is usually where there’s the most microbial activity and organic matter, the source of carbon, according to Mahdi Al-Kaisi, a professor emeritus at Iowa State University. The top inch of soil, and all the CO2 in it, “was basically lost immediately” due to the fire, he said, adding that with the loss of vegetation cover post-fire, the soil is at risk of releasing more carbon in the coming weeks and months due to water and wind erosion. 

Thanks to regenerative land management, the grasslands have deep root systems, and Mooiweer anticipates that vegetation will come back — and fast. But he said that if this doesn’t happen, soil carbon levels could be negatively impacted. The “worst case scenario” is drought following fire, hampering the ability of vegetation to come back quickly, Mooiweer said. But on a recent visit to the regenerative ranching community in Hemphill County, Texas, the Grassroots team was encouraged to find “grasses have started to reappear,” he added.

All carbon credits sold are recorded by registries, or voluntary offset marketplaces, that have protocols to assess credits consistently. Grassroots has already delivered credits using the standards and registry run by the nonprofit Regenerative Standard, which requires a portion of credits allocated for any given project not initially be sold but instead held as a “buffer” to account for any possible unavoidable losses of carbon storage. 

Mooiweer expects that the recent wildfire “will not lead to use of any of the buffer pool,” though Grassroots will need to confirm that. The group’s soil carbon estimates include “large conservative safety margins,” he added. 

Carbon credits are a popular but controversial climate solution, where projects have been accused of being ineffective in drawing down carbon and relying on shaky accounting. Wildfires and their potential to send forest projects’ carbon reserves up in literal smoke have presented a challenge to the industry’s credibility.

Soil carbon credits make up only a small fraction of the global market for credits, but that’s poised to change. “There’s a large wave of soil carbon projects” being developed by Verra and a new protocol at the Climate Action Reserve, two registries, Badgley said. Indeed, Grassroots is in the process of starting projects under the Climate Action Reserve now.

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