Google has signed its largest publicly announced deal for carbon credits generated by reducing methane from rice farming, partnering with Indian climate-tech startup Mitti Labs on a project in Telangana.
The agreement is expected to help tens of thousands of smallholder rice farmers switch to a farming method that uses less water and produces less methane. Google said the project could eventually conserve billions of gallons of water while maintaining rice production.
The deal highlights a growing role for carbon credits, artificial intelligence and satellite technology in Indian agriculture, as companies look for ways to reduce emissions from farming while creating an additional income opportunity for farmers.
What is Google’s deal with Mitti Labs?
Google is purchasing carbon credits from a Mitti Labs rice-farming project in Telangana that aims to reduce methane emissions by changing how farmers manage water in their fields.
The project will introduce Alternate Wetting and Drying (AWD) across rice paddies. Instead of keeping fields continuously flooded, farmers periodically allow the fields to dry before flooding them again.
This matters because continuously flooded rice fields create oxygen-poor conditions in the soil. Those conditions encourage microorganisms to produce methane, a powerful greenhouse gas.
Google said the initiative is the largest publicly announced agreement to purchase credits generated from reducing methane emissions from rice cultivation.
How will Mitti Labs reduce methane emissions from rice farming?
Mitti Labs uses satellite data, AI and field-level monitoring to help farmers adopt water-saving rice cultivation practices and measure the resulting methane reductions.
The company’s technology combines satellite imagery with data collected directly from farms. Its systems can monitor factors such as crop conditions, soil moisture and flooding.
The company also works with farmers and local organisations on the ground rather than relying entirely on remote technology.
Mitti Labs previously said its climate-smart farming programs can reduce water use by about 40% and methane emissions by more than 50% without reducing crop yields.
The startup has expanded rapidly. In 2024, it was working with around 8,000 farmers. By 2026, its programs had grown to more than 100,000 farmers across several Indian states, according to TechCrunch.
Why is rice farming a major source of methane emissions?
Rice farming produces methane because flooded fields create conditions that allow methane-producing microorganisms to thrive.
Rice is one of the world’s most important food crops, but traditional flooded cultivation can have a significant environmental impact.
When rice paddies remain underwater for long periods, oxygen levels in the soil fall. Microorganisms then break down organic matter and release methane.
That makes water management an important part of efforts to reduce agricultural methane emissions.
AWD tackles the problem by allowing farmers to periodically drain their fields. The approach reduces the conditions that produce methane while also reducing the amount of irrigation water required.
How much methane and water could Google’s rice project reduce?
Google estimates that the project could have a major impact on both methane emissions and water consumption once it is fully implemented.
Mitti Labs aims to generate roughly 3 million tonnes of CO2-equivalent in near-term warming impact, using a 20-year global warming potential measure for methane.
Using the conventional 100-year measure, the same project represents about 1 million tonnes of CO2-equivalent.
The project is also expected to conserve billions of gallons of water across regional river basins in India.
For a country where agriculture places heavy demands on freshwater supplies, the water-saving benefit is an important part of the project.
How will Indian farmers benefit from the carbon credits?
Farmers participating in the program can receive direct payments while adopting farming practices that reduce methane emissions and water use.
The carbon-credit model gives climate benefits an economic value.
When farmers change their cultivation practices and the resulting methane reduction is measured and verified, the reductions can be turned into carbon credits. Companies can then purchase those credits as part of their climate strategies.
Mitti Labs has previously said that revenue from its carbon projects is shared with farmers and local communities.
The company has also been developing systems designed to make carbon-credit measurements more reliable by combining satellite monitoring with direct field measurements.
Why is Google’s rice methane deal important?
The deal shows how large technology companies are increasingly investing in agricultural methane reduction and carbon markets rather than focusing only on traditional carbon-offset projects.
For Google, the agreement adds another project to its wider effort to address emissions and support climate technologies.
For Mitti Labs, the deal provides a major corporate buyer for its rice methane credits and demonstrates the commercial potential of its technology.
The startup has already attracted significant investment. In August, Mitti Labs announced a $9.5 million Series A led by Aramco Ventures, bringing its total funding to $12.5 million.
Its business combines carbon-credit generation with a GeoAI platform designed to help companies and agricultural organisations monitor farming practices.
What is the future of carbon credits from rice farming?
Rice methane reduction could become a larger part of the carbon market as companies look for measurable ways to reduce short-lived greenhouse gases.
Mitti Labs is not alone in exploring this opportunity. Other agricultural and climate companies are also developing projects that connect changes in farming practices with carbon-credit revenue.
The challenge will be ensuring that the emissions reductions are real, measurable and independently verifiable.
That is particularly important for agricultural carbon credits because farming conditions can vary significantly from one field to another.
Google’s agreement with Mitti Labs therefore goes beyond a single carbon-credit purchase. It is also a test of whether technology can help bring climate-smart rice farming to a much larger number of small farmers while creating a financial incentive for them to participate.
If the model works at scale, Indian rice fields could become an important source of both methane reduction and additional farmer income.
