Analytical overview of carbon farming
Mariya Hristova
Women2Invest (Cohort 2022) | ?????? FoodTech | AgriTech | Food & Agriculture | Sustainability and innovations | EIT RIS Policy council | Talks about #funding, #food, #climatetech and #innovation
What is carbon farming?
The Commission's definition of carbon farming as set out in its Communication on Sustainable Carbon Cycles is as follows:
“Carbon farming can be defined as a green business model that rewards land managers for taking up improved land management practices, resulting in the increase of carbon sequestration in living biomass, dead organic matter and soils by enhancing carbon capture and/or reducing the release of carbon to the atmosphere, in respect of ecological principles favorable to biodiversity and the natural capital overall.”
Carbon farming practices can foster long-term resilience to climate change, also providing soil protection, water retention, shelter for livestock and crops and diversification of income. Carbon farming can help reduce GHG emissions, however, other actions at farm level will also be required to deliver on-farm climate mitigation, including those that address other greenhouse gases (methane, nitrous oxide) and take account of all emissions and removals over the whole farm.
2. Why is carbon farming important now?
The land use sectors (agriculture and forestry) have an important role to play in meeting the EU’s target of achieving net zero emissions by 2050 and the 55% reductions required by 2030, as set out in the EU Climate Law . The proposal for a Regulation on Land Use, Forestry and Agriculture , as part of the ‘Fit for 55’ package, sets out the objective of a climate-neutral land sector by 2035 (carbon removals should balance the greenhouse gas emissions from all land, livestock and fertiliser use) and the land sector becoming a net sink from 2036 onwards.
It also sets a Union target for net removals of 310Mt CO2eq by 2030, a level last seen in 2013. Targets are set out for each Member State. Annex 1 sets out a comparison of the proposed targets with those under the current Land Use, Land Use Change and Forestry (LULUCF) regulation. However, there has been some concern that the integration of non-CO2 emissions from the agriculture sector will lower the incentive to reduce methane (CH4) and nitrous oxide (N2O) emissions, with greater emphasis being placed on CO2 removals to offset these emissions, thereby undermining effective climate action.
As a key component of the EU Green Deal, in December 2021, the European Commission adopted a Communication on Sustainable Carbon Cycles in which it promotes the upscaling of carbon farming as a green business model and sets out a series of short to medium-term actions to address current challenges to achieve this. Amongst other things, this is intended to:
Mitigation potential of carbon farming practices
McDonald et al (2021) estimated that carbon farming practices had significant mitigation potential, equivalent to 3-12% of current EU emissions (or 26+% of current EU agricultural emissions). This report also highlighted that there is a lack of information available at national and regional level on which practices deliver the greatest mitigation potential, although some studies exist on specific types of practice (e.g. Wiesmeier et al. 2020, Pellerin et al. 2013 on managing soil organic carbon on mineral soils in Germany and France).
Actions identified as most able to deliver strong co-benefits include practices or land use changes that maintain existing carbon stocks (thus avoiding future emissions) and/or restore sequestration potential in degraded stocks as well as those that create new carbon stocks. The Table below summarises the mitigation potential of the most promising, including restoration of drained peatland, agroforestry, afforestation and the management of arable mineral soils. This table illustrates how wide the potential variation is (e.g. for catch and cover crops) because it depends, at the level of individual parcels of land, on the biophysical conditions (e.g. soils, climate) the current farming system/land use and how easily reversed the practice is.
At different scales from region to farm to parcel, the actual mitigation potential of carbon farming depends on how, where and for how long carbon farming is practised. Permanence of the mitigation benefits is crucial to achieving EU targets for the land-based sector. However it also affects how secure a carbon farming business model is for the land manager and therefore the funding options, both public and private, that will be most likely to support the upscaling required to deliver the demanding EU target for a climate-neutral land sector in just 13 years’ time, and maintain this in perpetuity.
In achieving rapid upscaling of carbon farming at EU level, there will to a certain extent be a trade-off for policy makers between practices that involve limited change to the farm business model but are easily reversed, and practices which are long-term business changes in land use/farming systems, but more likely to provide security of mitigation benefits in the long-term. Furthermore, upscaling is not just about how much land is used for carbon farming, but also maximising the available mitigation potential on the land that is used (i.e. getting as close as possible to the maximum t CO2-e/ha/yr on the land that is used, without risk to biodiversity and other ecosystem services. This is also relevant to reducing potential displacement of agricultural production.
As highlighted in the Commission’s definition of carbon farming (above), carbon farming practices should adhere to ecological principles and be beneficial for biodiversity. Depending on the practices there may be other environmental co-benefits such as reduced risks of soil erosion and of floods, improved water infiltration and availability, and improved microclimate adaptation – but also risks, which require safeguards.
EU Carbon Removals and Carbon Farming Certification (CRCF) Regulation
On 10 April 2024, the European Parliament adopted the provisional agreement on the Carbon Removals and Carbon Farming (CRCF) Regulation , which created the first EU-wide voluntary framework for certifying carbon removals, carbon farming and carbon storage in products across Europe. By establishing EU quality criteria and laying down monitoring and reporting processes, the CRCF Regulation will facilitate investment in innovative carbon removal technologies, as well as sustainable carbon farming solutions, while addressing greenwashing.
Farmers, land managers or traditional biogenic CO2 players will now be able to earn and trade carbon removal certifications with industries aiming for carbon neutrality. The CRCF will raise the quality of the carbon removal credits exchanged in voluntary carbon markets, and open doors for investments in projects that excel in removing carbon or achieving negative emissions, as investors will be able to better compare carbon removal efforts using the CRCF quality criteria and certification methodologies.??
As more farming operations adopt regenerative practices and food and agribusinesses seek for carbon neutrality, there is a significant market opportunity for EO services,?resulting in improvements that make these services more affordable over time.
The EU is funding research to discover the best mix of in-situ monitoring, modelling, and remote sensing for Soil Organic Carbon (SOC) measurement. The EU is now more focused on accuracy while also aiming to create plenty of room for innovation. Looking ahead to 2030 and beyond, emerging technologies like Remote Sensing solutions for SOC evaluation may gain traction as they evolve.
Permanent carbon removal
Permanent carbon removal refers to human activities removing CO2 from the atmosphere and storing it securely and durably for several centuries.?Some examples include:
Related EU support & funding
Related publications
2. Carbon farming involves practices that enhance carbon sequestration and storage in forests and soils, or that reduce greenhouse gas emissions from soils. These practices include:
Carbon farming
Carbon farming rewards farmers and foresters for implementing climate-friendly practices, complementing their income. By 2026, the Commission will assess whether to expand the scope of carbon farming to include greenhouse gas emission reductions from livestock activities.
Related EU support & funding
Related publications
01/2021 - Technical handbook about guidance on implementing carbon farming in the EU
Carbon storage
Bio-based construction products like timber or agricultural crops offer significant potential for long-lasting storage of CO2. By promoting sustainably sourced bio-based materials and advanced construction techniques, we can create energy-efficient buildings that serve as carbon sinks. The revised Energy Performance of Buildings Directive allows building owners to declare their structures’ carbon storage capacity on their Energy Performance Certificate (EPC). With the EU CRCF methodology, building owners will be able provide reliable and transparent evidence of their buildings' carbon storage capacity on their EPC.
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Related EU support & funding
What is the regulation for?
The CRCF Regulation mandates third-party verification and the publication of certification-related information in an EU-wide registry and aims to streamline certification processes, making them cost-effective yet robust. It also introduces group certification, easing the burden for small farmers and foresters. Thanks to standardised baselines and remote sensing technologies, powered by the Copernicus satellite system , the Regulation will help cut measuring and reporting costs.
To ensure synergies with existing EU schemes, the certification process is largely based on the bioenergy certification rules under the Renewable Energy Directive since 2009, and includes the following steps:
Next steps
To implement the CRCF regulation, the Commission will take the following steps:
Questions and answers:
1.What are carbon removals and why are they important for the climate?
The European Union (EU) has committed to reaching climate neutrality by 2050 to secure a liveable future on our continent and our planet. The first and most urgent priority is the reduction of EU greenhouse gas (GHG) emissions. At the same time, research increasingly shows that carbon removals (i.e. technologies and practices for removing carbon dioxide (CO2) directly from the atmosphere) will be a key enabler for a future intermediate EU climate target for 2040, as recommended by the Commission in its recent Communication and in the EU industrial carbon management strategy.
Carbon removals can be grouped in three broad categories of activities or projects:
? Permanent carbon removals: Permanent carbon removals include a wide range of industrial technologies that capture carbon from the atmosphere and securely store it for several centuries, preventing any release back into the air. This process occurs in geological formations, reactive minerals, or through permanently chemically bound carbon in products. For example, this includes technologies like direct air carbon capture with storage (DACCS) and biomass with carbon capture and storage (BECCS). Under new EU rules (see below), permanent carbon removals should not be associated with Enhanced Hydrocarbon Recovery (EHR), in order not to increase GHG emissions.
? Carbon farming: Carbon farming encompasses a broad range of practices and processes on agricultural land, wetlands, in forests or coastal environments that sequester carbon from the atmosphere through biological processes, while also generating positive effects for biodiversity. For example, carbon farming can include activities such as reduced tillage, the introduction of legume/rotation crops, improved forest management, reforestation, and agroforestry. Some carbon farming activities, such as peatland rewetting, can both reduce soil carbon emissions and increase biogenic carbon removals. In addition, carbon farming activities could also reduce emissions of nitrous oxide associated to the excessive use of fertilisers.
? Carbon storage in products: atmospheric or biogenic carbon can also be captured and stored in long-lasting products, such as wood-based construction elements of buildings or bio-based insulation materials. Typically, the storage of carbon in products needs to be guaranteed over the long term, requirement which excludes short-lived products such as paper or furniture. In addition, activities in this category do not include fossil Carbon Capture and Storage (CCS) or Utilisation (CCU). While these technologies do help storing or recycling fossil CO2 emissions, they do not remove carbon from the atmosphere.
2.What are the objectives and key elements of the CRCF Regulation?
Deploying a range of carbon removal and carbon farming activities across the European Union is a great opportunity to boost industrial competitiveness, ensure food security, and promote the bioeconomy. However, the deployment of carbon removals and carbon farming at scale faces several barriers. There are not yet widely accepted standards for measuring, reporting, these activities. In addition, current costs for permanent carbon removals are still significantly high and deployment at scale is needed to bring them down. To address these barriers, in February 2024 the European Parliament and the Council reached a political agreement on the first EU-wide voluntary framework for certifying permanent carbon removals, carbon farming and carbon storage in products, known as Carbon Removal Certification Framework (CRCF Regulation). The Regulation has been developed to facilitate and speed up the deployment of high-quality carbon removals and soil emission reductions, while fighting greenwashing and harmonising conditions in carbon removal markets. Developing EU certification methodologies for the quantification of removals is also the first step towards their possible future integration into the EU climate policy framework post-2030. To be certified, eligible activities need to comply with four quality criteria and related EU certification methodologies (see questions 3 and 5) and need to undergo third party-verification and certification (see question 6). The Regulation distinguishes three groups of activities that can generate four certified units:
Type of activity
? Permanent carbon removals
? Carbon farming
? Carbon storage in products
3. What are the QU.A.L.ITY criteria?
Building on best practices , the Regulation requires activities to meet the four criteria (so-called ‘QU.A.L.ITY’ criteria’) of quantification (against a baseline), additionality, long-term storage, and sustainability.
? Quantification (article 4): certified activities need to deliver a measurable net benefit for the climate. Therefore, carbon removals or soil emission reductions generated by activities over their entire duration (called ‘activity period’) need to go beyond a baseline and need to outweigh any direct or indirect GHG emissions associated with the implementation of the activity. To keep the administrative burden low, in the EU certification methodologies the Commission will set out highly representative standardised baselines - that accurately reflect standard practices and the regulatory and market conditions in which the certified activity takes place. Standardised baselines aim to recognise early efforts of land managers and industries that have already engaged in carbon removal action in the past. The Commission shall review the standardised baselines at least every five years and update them as appropriate. Where the setting ofstandardised baselines is not possible, for instance due to a lack of data, the EU certification methodologies will include rules and default factors for operators to calculate their own activity-specific baselines. The activity-specific baselines shall be periodically updated at the beginning of each activity period.
? Additionality (article 5): certified activities need to be additional, i.e. they need to go beyond the standard practice. In other words, operators must carry out activities that are not already imposed upon them by the applicable law. Moreover, activities should become financially viable thanks to the incentive effect provided by the certification. Such effect is present when the incentive created by the potential revenues resulting from the certification changes the behaviour of operators in such a way that they engage in the activity to achieve additional carbon removals or soil emission reductions. To keep certification costs manageable, an activity is deemed to meet the additionality criterion when it generates carbon removals or soil emission reductions beyond a standardised baseline. However, when an activity-specific baseline is used due to lack of a standardised baseline, the operators will need to apply specific additionality demonstration tests, whose rules will be set out in the relevant EU certification methodology.
? Long-term storage (article 6): to ensure that carbon is stored permanently or over the long term, operators need to monitor and guarantee the storage of carbon over a given period (so-called “monitoring period”) – and are liable for any carbon reversal occurring during the monitoring period. For instance, permanent carbon removals need to be stored for several centuries (i.e. at least 200 years), carbon storage in long-lasting products for at least for 35 years and carbon farming for at least 5 years. The EU certification methodologies will set out specific rules on monitoring and liability, reflecting the expected duration of the storage and the risk of carbon reversal. For instance, permanent carbon removals with underground storage will be subject to the same safeguards of the CCS Directive. In addition, under the Regulation, certified units generated by carbon farming and carbon storage in products are temporary and therefore expire at end of the monitoring period, unless the latter is renewed, or permanent storage is demonstrated by the operator. These additional safeguards aim to transparently address differences in durability amongst the various carbon removal activities, while at the same time avoiding burdening operators with disproportionate liability commitments.
? Sustainability (article 7): to contribute to the wider sustainability objectives, activities need to meet minimum sustainability requirements, which will build as appropriate on the “Do No Significant Harm” (DNSH) Screening Criteria set out under the Taxonomy Regulation. Under the Regulation (article 7, paragraph 3), operators can also voluntarily report co-benefits for other environmental objectives such as the protection and restoration of biodiversity and ecosystems, soil health, avoidance of land degradation, climate change adaptation, the reduction of greenhouse gas emissions, water quality, zero pollution or the circular economy. In particular, carbon farming activities must generate co-benefits for biodiversity, soil health, or avoidance of land degradation. Reporting these co-benefits is expected to give more economic value to the certified units and therefore result in higher revenues for operators. Administrative burden could be kept low through, for instance, the development of positive lists of activities that are shown to result in biodiversity cobenefits.
Chronology:
Over the coming months and years, the EU Commission will make key decisions on the development of the methodologies. The first methodologies, expected by the end of 2024, are likely to be open for public consultation. In addition, legislative discussions, such as about a possible agETS, will be critical to determine where the CRCF credits might come into play in the future.
Sources:
1. European Commission. (2021). Communication from the Commission to the European Parliament and the Council Sustainable Carbon Cycles COM(2021) 800 final. Brussels, 15.12.2021. Retrieved from https://ec.europa.eu/clima/eu-action/forests-and-agriculture/sustainable-carbon-cycles_en
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