The European Commission has published an action plan for the development of Carbon Farming within the EU, entitled: Communication on Sustainable Carbon Cycles.

The plan outlines that:

• The EU will pursue a hybrid approach to financing carbon farming, driven through public schemes and a private carbon credit market.
• The EU will kickstart this by promoting carbon farming under EU policies, such as CAP Eco-schemes, the LIFE Programme and Cohesion Funding.
• A new legislative proposal will be introduced by the end of 2022 which will standardise the monitoring, reporting and verification methodologies, in order to establish a “clear and reliable certification framework” to facilitate the trading of carbon credits under both pubic schemes and private markets.
• This legislation will outline which carbon farming actions will be possible and it is to be development by the European Commission, in collaboration with stakeholders and EU country experts. There will also be dedicated funding for Carbon Farming under Horizon Europe to further develop monitoring, reporting tools and digital solutions.
• The Commission’s aim is that every farmer will have access to verified emission and removal data by 2028 to allow them to take up carbon farming. They believe that this should allow carbon farming initiatives to contribute to the removal of an additional 42Mt C CO2eq by 2030.

How It will work:

The Commission’s Communication outlines the aim of establishing Carbon Farming as a new business model that rewards land management practices resulting in an increase of carbon sequestration in living biomass, soils and/or dead organic matter by enhancing carbon capture or reducing the release of carbon into the atmosphere. It provides a non-exhaustive list of examples of carbon farming practices, while also stating the pre-condition that carbon farming is site specific and depending on bio-climatic conditions.

This list includes:

• Afforestation, reforestation and sustainable forestry management
• Agroforestry and other forms of mixed farming, combining woody vegetation
• Use of catch crops, cover crops, conservation tillage and other practices which protect soils, reduce soil loss by erosion and enhance soil organic carbon on degraded arable land;
• Targeted conservation of cropland and set areas for permanent grassland
• Restoration of peatlands and wetlands to reduce oxidation of existing carbon stocks.

Farmers under taking these measures would be entitled to generate carbon credits, which would be verified and certified in accordance with the EU legislation. The credits could then be sold to either public schemes, or private companies.

Private buyers of these credits could be “economic operators within the bioeconomy such as food processing companies that want to reduce the carbon footprint in their own value chains” as well as “companies and individuals who want to financially contribute to more climate action on the land and to neutralise their own unavoidable emissions.”

However, many questions remain unanswered:

• Which land management practices can qualify as Carbon Farming practices?  Dairy grassland can sequester a significant amount of atmospheric carbon, however specific options within the livestock sector have not been highlighted within the examples provided by the Commission in this communication.
• There is still lack of clarity about which sectors would be accredited for carbon removals or reductions, if the credits are sold by farmers to other industries. It is very important that the work undertaken by agriculture sector will continue be recognised and accounted for in emissions performance of the agricultural sector and not used as a means of reducing the emissions of another sector.
• The pricing and payments system is still unclear, for example it has not been clarified whether there will be one standard price per carbon credit, with prices in existing private carbon markets ranging from €6-110 tCO2e.

Alison Graham – European Affairs Executive