The Farm to Fork Strategy establishes that a new EU Carbon Farming Initiative will be launched in 2021, in order to reward climate-friendly farming practices, via the Common Agricultural Policy (CAP) or through other public or private initiatives linked to carbon markets. The Strategy also establishes that the Commission will develop a regulatory framework for carbon credits. Carbon farming refers to the management of carbon pools, flows and GHG fluxes at farm level, with the purpose of mitigating climate change. This involves the management of both land and livestock, all pools of carbon in soils, materials and vegetation plus fluxes of CO₂ and CH4, as well as N2O.
It includes carbon removal from the atmosphere, avoided GHG emissions and emission reductions from ongoing agricultural practices. Farm-level payments for carbon farming can be action-based or result-based. Action-based schemes reward land managers for putting in place climate-friendly agricultural practices. In result-based schemes the payment to land managers is directly linked to measurable indicators of the climate benefits they provide.
The advantage of this approach is that the use of public or private funds is more directly linked to the intended climate objective. In addition, farmers enjoy a greater degree of flexibility, as they are free to choose their management strategies to achieve the desired results, rather than following a set of rules. Hybrid schemes combine elements of action- and result-based schemes, typically offering a payment to carry out a set of management actions, which is ‘topped up’ if farmers can demonstrate that they have delivered additional climate benefits. This study explores how a widespread adoption of carbon farming in the EU can be triggered, with a particular focus on result-based carbon farming payments.
The project reviewed existing international and EU payment schemes that reward carbon sequestration, reduced or avoided emissions in agriculture. On the basis of this review, five key thematic areas were selected for analysis: peatland restoration and rewetting; agroforestry; maintaining and enhancing soil organic carbon (SOC) on mineral soils; grasslands; and livestock farm carbon audits. The analysis in these five areas informed the development of a guidance handbook for practitioners that are considering setting up a result-based carbon farming scheme, such as public authorities, non-governmental organisations and private investors. The research was discussed with policy and scientific experts during two Roundtables held in October 2019 and September 2020.
