Unblocking finance for low-carbon agriculture
With the entry into force of the European carbon farming certification framework (CRCF), the European Union now has a first-of-its-kind tool to certify climate-friendly agricultural and forestry practices. One thing is now clear: while certification methods are progressing, it is funding that has become the main concern. To structure demand, the Commission is counting on a Buyers’ Club of public and private buyers, and expects the agri-food industry to help finance the transition of their upstream agricultural supply chains.
Uncertainty over the rules for claiming credits is presented as a major barrier to financing European agricultural carbon credits. This uncertainty points directly to what is known as “double claiming”: when a farmer engages in a low-carbon project and sells carbon credits to a third party, the agri-food company that sources from them fears being unable to account for those same reductions in its own GHG inventory. As a precaution, many companies then turn away from these projects, and even discourage their suppliers from taking part.
Our new I4CE study “Double claiming of agricultural carbon credits: time to stop worrying” shows that this fear is largely unfounded. Counting a physical emissions reduction in one’s inventory and funding it are two separate things, and they can coexist: clarifying European regulation would be enough to remove the ambiguity. We hope this work will add a useful voice to the debate.
Alongside this publication, we are releasing two further contributions:
- Recommendations for certifying improved forest management, as work on a CRCF methodology in this area gets underway, amid concern over the capacity of the European forest carbon sink.
- A policy brief on best practices for the future Buyers’ Club for European agricultural carbon credits.
These contributions share one conviction: scaling up low-carbon agricultural and forestry practices depends as much on solid public and private financing as on pragmatic and transparent rules.
