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Welcome to the Carbon Stations podcast where we speak to some of the leading figures in
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the emerging carbon industry. Our guest today is Chris Tolles, CEO and co-founder of the
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soil carbon measurement company, Yardstick. Chris, it's a pleasure to have you on the
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show. Thanks for making the time for this. Now, what Yardstick does is of course very
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fascinating and we'll dive into that in just a bit. But first, I'd like to get a bit of
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your backstory and what you used to do before entering the soil carbon space.
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Yeah, not soil carbon. I have maybe a typical background for your average soil carbon measurement
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startup CEO. Immediately before Yardstick, I was doing the same thing in one way, which
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is science commercialization. That's generally my jam, my focus, but completely different
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in almost every other way. I was bringing to market the research of a dermatology researcher
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here in Boston, amazing woman named Amelia Jaworski, who had pitched me on an edible
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sunscreen product, ingestible sun protection with a fern compound. You eat it and it works
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like sun protection. It's pretty trippy and it is not at all bullshit, which was my initial
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suspicion. So completely different company, consumer product, direct e-commerce subscription.
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I sold that in early 2020 and then it was like, hey, I want to do that again. That being
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co-founded company alongside a scientist and was only looking at climate. So got involved
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in MCJ, my climate journey, their Slack group, and found my remarkable co-founder, Kevin,
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and our lead science advisor, Christine Morgan, who had been working on this for pretty literally
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15 years at that point.
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Wow. So what exactly inspired you to get into this space particularly, like of all the climate
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mitigation options available?
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Yeah. I mean, what appeals to me about soil as a climate solution is all the same things
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as everybody else, working with natural systems, affordability, immediacy, co-benefits. In
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the US, I find it especially inspiring because it can bridge a pretty profound cultural gap.
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We sort of code switch between conversations around soil carbon and soil health with some
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frequency which I like. Honestly though, because I'm the business guy, I am not the ideas guy
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or gal. I'm an executor, right? Like I'm taking a real technology and turning it into a company.
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So the number one thing that got me excited about yardstick was these aforementioned two
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people. Kevin, who's our CTO and my co-founder, Hardwood Wizard, was at SpaceX and Planet
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Labs and can make anything in his basement. And Christine Morgan, this world-class soil
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scientist who toiled in obscurity, at least obscurity relative to crystals for a great
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deal of time, right? She's the classic scientist that 15 years ago figured out the thing that
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I'm now getting religion on, which is, hey, soils matter almost infinitely and measurement
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is inseparable from any impact. So the chemistry I had with them, the quality of the underlying
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academic research, those are the things that really got me most excited because there's
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lots of great climate solutions out there, right? I could have met a DAC scientist and
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gotten riled up about DAC and that certainly was possible. So I have no particular loyalty
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to soil before I met Christine Morgan and now I do. And I'm enormously grateful to both
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of them for giving me the benefit of the doubt as well, considering I didn't have any background
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in the sector from a science perspective.
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Okay. And so speaking of measuring, I've spoken to a number of different companies that each
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have their own approaches to carbon farming and measuring soil carbon. But yardstick's
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approach definitely does stand out to me. And I'd love it if you could please get into
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the details of how it all works and why it's so amazingly accurate. And if I'm not mistaken,
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it's cost effective as well.
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Yes. Yeah. I'm not sure it's amazingly accurate, but it's very accurate or more precisely,
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it's accurate enough to do the job. And we can talk a little bit more detail about that.
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But our core purpose is to replace combustion analysis of soil carbon. Combustion is the
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name of the laboratory process that happens when you ship a physical soil sample to a
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lab. Our current paradigm of measuring soil carbon with conventional physical soil sampling
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and laboratory analysis, it works in the sense that like it's there and it's accessible,
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but it definitely does not work in terms of its scalability, both operationally, like
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physical soil samples or giant pain in the ass and cost wise. The marginal cost of each
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of those analyses at the lab is just too high for us to be able to do this at scale. And
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the only measurement technologies that are ones that are going to have impact at global
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scale are the ones that have global scalability. So while we will never be as scalable in one
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way as a satellite, soil carbon is underground and satellites can't see underground. So we
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represent a sort of ride or die proximal soil carbon measurement perspective. Proximal means
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like boots on the ground, you know, infield on farm. That comes with the downside of you
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have to get there, right? You have to be in a truck. You can't be in a satellite, but
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it comes with the benefit of actually interacting with the soil, which is essential if you're
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going to characterize it well, at least in terms of soil carbon. The particular technology
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that we're commercializing is called in situ spectroscopy. In situ again means infield on
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farm and that's distinct from a laboratory deployment of spectroscopy, which requires
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the same physical sample soil sampling, drying and grinding. So we use spectroscopy on wet
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soils that are intact in the field on the farm. We can include a link to a video of
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our technology because that makes everything make much more sense, but it's basically a
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big drill. And as we drill into the soil, we're recording a movie of the soil profile.
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Spectroscopy essentially means fancy video camera. And so from that movie, we can give
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you the same thing that the laboratory gives you organic carbon content or organic carbon
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stocks, but do it way, way cheaper because the amount of time required to collect the
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information is much smaller. And more importantly, we're eliminating the cost burden of laboratory
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analysis in situ spectroscopy was one of the primary technologies that Christine spent
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some time with. And that's what we're commercializing our hardware. We also do stratification and
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sample plan design. Of course, we've got a website and a software platform because who
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doesn't. But the core novelty, the most interesting piece of our technologies, I guess, is certainly
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our hardware. And that's what we're most famous for.
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Okay. That's that's very impressive. And thanks for really diving deep into the technicals
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of it. We'll definitely include a link for the video you mentioned. But what does all
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this look like from a farmer's perspective? Like, say I'm a farmer interested in starting
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to generate carbon credits from my property and I want to hire you to help me with that.
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How would I go about the whole process?
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Well, you don't. You don't hire me. I do soil carbon measurement on your farm or your
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ranch or your forest, for example. But the only reason I'm there is because you have
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already decided to enroll in somebody else's program. So let's use an example. Organic
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Valley, one of our customers, Organic Valley does a greenhouse gas inventory and they realize,
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oh, 80 to 90 percent of my emissions are Scope 3. It's all my supply chain. It's all where
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my milk comes from. So Organic Valley says, how am I going to hit my net zero goal without
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figuring out how to do low carbon intensity milk? So it goes to their dairies and it says,
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hey, yesterday you sold me milk with this carbon intensity and tomorrow I would like
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that to be lower, please. And I'll provide incentives. I'll finance capital expenses
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that you have to invest in new equipment. I'll finance R&D on perhaps new grazing practices
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for your cows that could reduce total emissions. As part of this project, I'm also going to
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hire Yardstick to come measure soil carbon so that we can figure out how our soil carbon
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stocks changing over the lifetime of the project. Are they declining? Are they growing? If they're
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declining, are they declining slower than they would have otherwise? If they're growing,
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good, would they have grown otherwise? So my paying customer is Organic Valley, but
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I'm doing the work on your land because you are a supplier to Organic Valley. That means,
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of course you need to let me on your property, but you don't give me cash. Organic Valley
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gives me cash. And that structure holds if we're talking about voluntary carbon markets,
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soil carbon offset project developers, Indigo is the most visible of those. If Indigo is
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doing the same thing, trying to recruit farmers in Iowa to change the farming practices, it's
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Indigo who would be Yardstick's paying customer, even though I'm still doing the work on the
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land of already enrolled farmers in Indigo's program. What the actual experience is like
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for you though as a farmer to be clear is we get introduced via email, you know, a month
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beforehand Indigo says, please don't shoot Yardstick when they pull up. And then you
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like open the gate, we chat, we show off our technology. But the only thing that we actually
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require from farmers or ranchers are field boundaries, polygons that describe your land,
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although those typically come from our paying customer as well, having already been provided
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by the farmer or rancher and physical access. You just, you need to let me on your property
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because Yardstick is a service in the US. We sell soil carbon measurement services on
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a per acre basis. I'm not handing the farmer or organic valley our spectral probe. I'm
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being hired. That means Yardstick maintains its own world-class field team to go do the
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physical work of quote unquote sampling, even when it's with our novel spectral probe rather
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than conventional sampling equipment.
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Okay. But just to be clear, for your paying customer, your hardware solution is more cost
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effective than if they were to have soil samples sent to a testing lab, correct?
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Yeah. The bulk of our work so far has been conventional stock quantification. And that's
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because we've been working on probe R&D in parallel to figuring out how to deploy a commercial
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sampling organization, which is going to have to have those skills, whether it's conventional
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sampling equipment or a spectral probe in their hands. So if you've been my customer
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at any point over the last three years, there's an extremely high likelihood that the stock
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reporting that we've done back to you, which is the thing you hired us for, is via laboratory
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analysis, the process that we're trying to eliminate. But nonetheless, yes, with in situ
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spectroscopy, as our probe is reaching maturity now and is ready to deploy to be deployed
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at scale, you'll enjoy much lower per acre costs of that stock quantification experience.
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Okay. Thank you. So I've come across several polls and studies over the past couple of
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years that say carbon farming practices aren't adopted as someone hoped for, like at the
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speed that someone hoped for or at the scale necessary to make an impact and that farmers
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are largely reluctant to participate in the voluntary carbon market. But as you're fully
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immersed in this sector and have been for a few years now, could you please share your
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own observations of how quickly, if at all, carbon farming is gaining momentum? Because
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is there a noticeable increase in interest or are things looking rather slow from your
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perspective as well? Yeah. So I think it's important to define carbon farming as a phrase
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because people use that to mean lots of different things. What you described is very accurate
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in terms of enrollment in voluntary carbon market, VCM project development. You see very
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high awareness, like 90 ish percent awareness of these programs and then like low single
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digit percent enrollment. But again, we're talking enrollment in a VCM offset project
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developer working in soil. That's accurate. The barriers there are number one, economics.
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A $20 ton just doesn't move the needle for a farmer that's otherwise making $600, $700
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an acre in corn. Number two, complexity. These are enormously complex programs. And while
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every project developer does their best to shield participating farmers from unnecessary
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complexity, there's just like still a lot of necessary complexity. And so it can be
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pretty bewildering. And my marketing professor taught me that the confused mind does not
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buy. So when you're a farmer and you're getting hit up by a half a dozen programs and you
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know you can only enroll in one, you're like, whoa, I'm going to let this kind of like simmer
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for a bit before I make a long-term commitment. And by definition, most of these programs
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are long-term commitments because that's central to the long-term confidence in the climate
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benefits of reducing emissions or preserving or restoring soil carbon stocks. I'd say
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outside of that narrow lens of ACM enrollment, there are real positive trajectories for adjacent
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things that I would still call part of the soil carbon movement, even if they're not
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VCM. So a perfect example of that is a bunch of policy momentum. USDA is currently spending
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$3.1 billion on a program called Climate Smart Commodities that basically says, hey, the
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bulk of our emissions in the agricultural sector and the bulk of the revenue, the economic
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value of the agricultural sector is commodities. So how could we decarbonize commodities? Let's
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finance a whole bunch of original science to evaluate the potential of different ways
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of farming and ranching to produce that low carbon intensity milk that I just described
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Organic Valley as belonging to buy. The percentage of large companies that have SBTI aligned
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net zero goals is skyrocketing. Every single agricultural food product probably has that
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same 80-ish percent of their emissions in scope three, which means they got to figure
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out how to do low carbon intensity milk or beef or corn or corn holo or whatever it is.
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There's a lot of reasons the US government spends money, obviously, but nonetheless,
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you don't spend $3.1 billion taxpayer money lightly. So I'm greatly encouraged that that's
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both compelling from a policy perspective and culturally politically feasible for USDA
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to invest in. IRA significantly expanded programs like EQIP and CRP. They have some of their
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own challenges in terms of climate impact rigor, but nonetheless are directionally the
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kind of things that we want to see. IRA also authorized $300 million of new research into
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soil carbon. There's probably seven, eight, nine marker bills that have been introduced
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between the House and Senate to influence farm bill. Farm bill expired in September.
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It's a five-year program, and so it'll be renegotiated this coming year likely. Carbon
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180 has a really awesome policy tracker that you can use to see the great momentum from
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different law and WICERS promoting soil carbon, soil health as a solution. And then lastly,
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I think there's a real encouraging upward trajectory with a slightly different piece
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of vocab of regenerative agriculture. Now the problem is regenerative agriculture itself
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doesn't mean one thing. It means like 14 different things to 14 different people, but it shares
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much of the same goals and values as an overlapping soil carbon community or soil carbon market,
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if you want to think of them that way. The premise of a lot of that work is also that
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we shouldn't be over-focused on carbon. So-called carbon tunnel vision is like a real thing.
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I think there's great advocacy within the RegenAg movement that carbon is the co-benefit,
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and what we're actually trying to preserve and restore is soil function. Our primary
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science scientific collaborator, Christine, whom I mentioned earlier, her organization
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is called the Soil Health Institute for a reason, not the Soil Carbon Institute, because
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soil does a whole bunch of things besides a kind of narrowly defined CO2e type role
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of carbon storage. That also helps with some of that cultural political complexity I mentioned.
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People in Iowa may or may not give a shit about CO2e. They definitely care about soil
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health because without soil health, they don't have yield, and without yield, they don't
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have revenue, and without revenue, everybody's unhappy. So soil health all of a sudden becomes
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much more credibly a national security concern, rather than a quote unquote climate concern,
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and that gets it out of some of the echo chambers of coastal elite tech types like me living
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here in Boston. I find that greatly encouraging, the work of SHI to basically say there's a
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set of solutions here that simultaneously solve for soil function, food security, farmer
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and rancher income, and emissions. That's what gets me really excited, even as I totally
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concede many of the bummer numbers of how the last few years of soil carbon VCM efforts
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have not proved out to demonstrate successful enrollment numbers, at least among kind of
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broad-acre commodity cropping producers in the Midwest.
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So do you think that perhaps framing or like reframing the issue as regenerative farming
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practices instead of carbon practices would help farmers adopt regenerative farming practices
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at a larger scale? Or you think these practices would be more trustworthy?
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Maybe. I mean, yeah, we're pretty in the weeds now. I don't think a simple vocab change is
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going to have any influence by itself. But insofar as that's a part of a broader conversation
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around what are the opportunities here, who are the stakeholders, how do we speak to the
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existing core motivations of each stakeholder a little better, that's something that I'm
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very strongly supportive of. And you already see that. I mean, all soil VCM efforts are
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seeing a lot of the same challenges. And so if you look at the websites of a lot of these
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programs, they're already, I think, doing a much better job of speaking to existing
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fundamental economic concerns and soil health concerns, rather than over-rotating on the
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like carbon, carbon, carbon, greenhouse gas messaging that was probably a little more
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prevalent even just two or three years ago. But that by itself isn't going to change anything,
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right? It's the more fundamental challenges of economics and complexity that are the more
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important barriers to tackle.
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You mentioned some of the ongoing programs of the US government. Could you please speak
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to those in more detail? Like, for example, what are the incentives offered to farmers
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and where exactly does the funding go?
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Yeah, so they're enormously varied. And that's because the approach USDA took was basically
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an RFP process where they say, I got a shit ton of money. If you got ideas, like bring
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them. And of course, USDA wants to spend the money, not only in Iowa. So they incentivized
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proposals from diverse states, diverse types of land use. We're on one project that is
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doing agroforestry with breadfruit in Hawaii. And like, I did not see breadfruit as a key
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climate oriented commodity, but like, here we are. Of course, that's because USDA wants
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to build political consensus by saying, hey, everybody gets a little bit, right? Which
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is shrewd, which is a wise way to approach it. The consequence though, is that the actual
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projects that have been awarded are enormously diverse. Yardstick is on five or six, I believe.
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Some are doing sustainable aviation fuel. Some are doing regenerative grazing practices
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for beef cattle in the West. One I already mentioned is doing agroforestry. That's with
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Propagate, another awesome climate startup, and TNC, the Nature Conservancy, who's also
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an investor in Yardstick. That's fun for us. Like, we want a soil carbon, soil lands, climate
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lands on all agricultural control land use. And that makes it hard from a product focus
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perspective because the breadfruit people probably need something different than the
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soy and Iowa people. But I think it appropriately represents the opportunity for every agricultural
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land use context in the US to ultimately be part of the solution rather than only part
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of the problem. And the projects are all posted online. If you Google USDA climate smart commodities,
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or we can include a link in the show notes as well, it's pretty fun to scroll through
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and to be like, yeah, somebody is working on sorghum and decommodidizing sorghum. That's
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good. We should. I guess in a more general way, do you see this space as growing at the
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scale that we needed to grow to actually, you know, have meaningful impact? Oh, never.
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Who in climate thinks it's like going great? I mean, obviously a lot of things are going
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great, but no, it is woefully horrifyingly too small. But in the future, like do you
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see it in the near future? Maybe what's near? Well, say, say the coming year. Yeah, I'm
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encouraged by the coming year. A smart person once talked about how like low quality insights
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talk about market size and high quality insights talk about market growth rate because ultimately
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it's the future market of soil carbon region ag, whatever you want to call it, that yardstick
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participates in. So I'm not happy with it right now. It's a heck of a lot bigger than
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it was, but I believe I've been doing this for a few years as well. So it's easy for
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me to show up and be like, this isn't growing at software adoption rate speeds. We're, we're
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off target. But also, you know, the Christine Morgan's of the world are like, I have been
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screaming about this for 20 years and people are finally listening. It's tough to see circumstances
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like indigo's struggles, right? Would like market leaders struggle. It can put a real
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wet blanket on a lot of fast follower efforts. That's definitely a challenge. I don't know.
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I try and avoid ball spineries. I think it's possible to simultaneously be encouraged by
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the momentum that we have and really troubled that there are still profound structural barriers
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to things changing the way we need them to be. Right? If, if call this, you know, soil
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carbon as a movement, if as a movement, we end up like organics, like I think I'll be
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bummed, right? It's still, it's still the exception rather than the rule. And you know,
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we can argue about whether it's good or healthy for organics to be the rule rather than the
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exception. But at least in the U S there's a lot of promising alternative ways of thinking
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and behaving that gets stuck in this kind of niche, whole foods mom, part of the market.
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And again, what I find super compelling about S H I's work is what they do to say, this
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isn't just like a crunchy granola farmer thing. This is just better economics for any farmer
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who cares about economics. And you know what farmer cares about economics? Every single
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one of them. I find that super inspiring, even as of course I would prefer that indigo
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or we're slaying rather than, than struggle it on in some cases.
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And speaking of economics, maybe just one last annoying question that's related to the
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VCM's. Since you said that $20 a ton is way too low to incentivize anyone. Where do you
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think that like sweet spot is price wise for, for things to start moving and become more,
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more interesting to farmers? Yeah. So what really matters is two things
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that are slightly different from price per ton. And they are number one, a price per
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ton on a sort of like quality or durability adjusted basis. The challenge of most soil
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work in market right now is that a lot of the engineered carbon removal, especially
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frontier led conversation is super duper over rotated in my humble opinion on durability.
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And so you see a ton of like a thousand dollars or don't bother conversations out there. And
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so I can't do that or most soil can't do that or almost stuff. I can't do that. I measured
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that can either cause it's like been around for eight years. So who knows whether it can
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do a thousand, but you get my point. We don't just need, we need this interesting triangulation
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of a ton price that is high enough to deliver farmer economics and low enough to still attract
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a bazillion dollars of purchasing behavior, constraining the conversation to VCM while
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soil acknowledges that yeah, we're, we're always going to be the less durable part of
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the spectrum. I think a hundred dollar banger of a soil ton goes head to head with a $500
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a ton, like really compellingly. And there's not a lot of $500 a ton right now anyway,
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or if there are, you know, they're being sold below cost, which isn't a sustainable pricing
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strategy. The second thing that matters is less so dollars per ton and more dollars per
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acre per year, which connects dollars per ton to yield, right? Like tons CO2e per acre
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per year and take rate. What percentage of the credit flows through the project developer
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to the land manager. Most project developers or at least most larger project developers
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have committed to something like 70, 75% of ton price flowing through to the land manager.
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They'll have to compete on that, right? If they have to compete for enrollment, which
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right now they don't, or rather maybe they do among early adopters, but they don't relative
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to the rest of the market. And the other real uncertainty there is that carbon yield question,
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right? The reason, one of the reasons yardstick exists is because the causal relationship
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between management practices and soil carbon stock changes is super weak. If you told me,
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Hey, today I farm like this, tomorrow I'm going to farm like that. How much more soil
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carbon will I get? 99.9% of the time the answer is like, I don't know, because we just haven't
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looked at the incredible complexity of these systems with enough insight for long enough,
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especially because remember, soil carbon is really hard to measure. So how the hell could
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we in the interim? So that's one of the key uncertainties that we're trying to help address
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is better measurement to establish a better understanding of the causal relationship results
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in better agronomy. We can give people better farming advice if this is a thing that we
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want to prioritize. And therefore the yield, the average yield across the board will be
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stronger. You're getting more tons per acre per year. You're getting more credits per
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acre per year as price goes up simultaneously with stronger MRV, thanks to God willing,
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in part yardstick, all of a sudden, I don't know, 50 bucks an acre per year. If this is
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10% of your conventional crop revenue, but it's high gross margin revenue, half of family
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farms in America lose money every year. So you can have actually a pretty modest revenue
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bump and as long as it's high gross margin revenue, it can flip a whole bunch of operations
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from not profitable to profitable, which is a pretty powerful story to be able to tell.
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That's also why you see the rapid advancement of a lot of higher durability work in soil,
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especially in the domain of like enhanced rock weathering. These are company like Lithos
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or Ion or Undo or companies that are pursuing inorganic carbon stock accumulation in soils,
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which may have higher durability. These are companies like Andes or Loam Bio, where the
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portion of the total soil carbon stock that they're changing, they intended to be inorganic
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carbon, which is higher durability, maybe probably separate conversation and then therefore
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more attractive to higher price per ton buyers that are in the frontier kind of realm of
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carbon buying entities.
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Okay. Thank you for the very detailed response.
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Yeah, sorry. I don't know if you always want a minute answers, but I'm not, I'm not good
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at the...
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No, no, I do. I do.
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I'm not always good at the 30 second answer.
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We don't want 30 second answers. The more details, the better.
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But just one last question before we wrap up the episode is circling back to yardstick
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in particular, like what do you have planned for the upcoming weeks, months, years maybe?
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Are there any major developments in the pipeline or announcements that you're ready to share?
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Yeah, there better be. You know, venture backed tech startup, I better have stuff on the...
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Yeah, a few things are really exciting. One is this year we'll be fielding our one meter
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spectral probe instead of a 45 centimeter spectral probe, which is great that particularly
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unlocks spectroscopy on grazing lands, which are more commonly quantified to a one meter
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stock.
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Number two is last year, Vera published a revision to one of its soil carbon methodologies,
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VM42, that explicitly permits spectroscopy for stock quantification, which is amazing.
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That's what we do. We love it. So we'll be deploying a line to VM42. The spectroscopy,
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we'll do our first international projects. We'll definitely be in Australia. We'll probably
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be in Mexico. I personally will be in Spain in March for a carbon farming conference.
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And so I'm really hopeful that we can drum up some enthusiasm from Europe. We'll be
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publishing our first paper, which is massive for us and three and a half years in the making
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that puts data to these claims that we can go head to head with laboratory analysis.
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Super duper proud of that. Yeah, then just as always, like more acres, more revenue.
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We want to show that this is a real business, that there's demand, that our thesis that
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we're an enabling technology well beyond only VCM motivations is a key part of our commercial
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strategy. And so excited to be kicking off many of those USDA climate smart commodity
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projects on super diverse landscapes, coast to coast in the US. Right now about half our
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work is cropping and half is in grazing contexts, but we're literally coast to coast. Fall 2023
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alone, we were from Maine to Washington State to New Mexico to Arkansas. So that's like
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most of the agricultural land of the US. I'm really proud of that. Our field team is absolutely
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unbelievable. And there's going to be a lot more just like that this coming year.
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Brilliant. Sounds like a very exciting year for yardstick. Chris, this is very, very insightful
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conversation. Thank you for sharing so much of your knowledge with us. It was a genuine
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pleasure to have you.
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You bet. Thanks for having me.
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If you enjoyed this episode of the Carbon Stations podcast and would like to hear more
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conversations like this, please be sure to subscribe. We really appreciate the support.
