EU wants to reward farmers and foresters for nature-based carbon removals

By 2030, the European Commission wants a complete overhaul of Europe’s natural landscapes – switching from unhealthy ecosystems at risk of emitting carbon to restored homes for biodiversity that capture and store carbon.

But farmers and foresters must be at the heart of this transition and properly incentivised so that they can make a living from sustainable practices that help sequester carbon.

Forests, cropland and grassland make up just under half of European territory and hold enormous potential for the capture and storage of carbon. However, land use practices such as intensive tilling, alongside other factors like climate change, mean they are falling short of this potential.

By 2030, the European Commission wants natural spaces, like forests and soil, to capture 310 million tonnes of CO2 – a dramatic turnaround from the 225 million tonnes they were expected to sequester under a business as usual scenario.

“We really need to make sure that this is the decade of change," said Ville Niinistö, the Green lawmaker in charge of the revision of the land use regulation (LULUCF). He is pushing for the 2030 target to be raised to a highly ambitious 490 million tonnes.

"If we want to address climate change and be in line with the Paris Agreement's targets and also look beyond 2050 and carbon negativity, carbon sinks should be increasing on a level that achieves something around 700 million tonnes by 2050," he told EURACTIV.

‘Carbon farming’

To achieve this target, landowners need to be included in the drive to restore nature and sustainably manage it while also turning a profit.

This includes incentivising landowners to take part in so-called 'carbon farming', where farmers and foresters introduce measures, like crop rotation and reforestation, to increase the amount of carbon dioxide that is captured.

“If we sequester carbon in our ecosystems – forests, wetlands – it also has to bring benefits for biodiversity as well. Then farmers, foresters and other land managers need to be rewarded for this financially,” said EU Green Deal chief Frans Timmermans at a Commission event on carbon removals.

And it is not just about the money – more sustainable practices will also benefit farmers and foresters by improving their land, said Niinistö.

To achieve this, the Finnish MEP says the EU's common agricultural policy (CAP) must be shifted from the current hectare-based system of funding to a system that rewards sustainable farming practices.

Carbon farming needs to be incentivised and rewarded, according to ASAJA, the Spanish association of young farmers.

"In Spain, the eco schemes will help carbon sequestration. However they are not currently incentivised; instead, we are faced with a series of obligations. Without any doubt, the contribution made by agriculture should be rewarded and a market of carbon would help,” they wrote during a Twitter chat with EURACTIV about carbon removals.

“Carbon farming can be a ‘win-win-win’ situation for climate, for the quality of our soils and for the farming community, with better productivity and additional income source, as long as National Strategic Plans are in line,” according to the European Dairy Association.

“The right incentives are also fundamental for acknowledging and rewarding farmers’ efforts in implementing more climate-friendly practices,” the group added.

Alongside CAP money, Niinistö has proposed that 5% of revenues from the EU’s emissions trading scheme should help fund carbon removals.

Voluntary markets

Private financing can also support nature-based carbon removals. Markets based around carbon farming are already popping up. For example, the Rabo Carbon Bank, run by the Dutch Rabobank, describes itself as a one-stop-shop for farmers to unlock the carbon capturing potential of their soil.

“We have to make the transition from conventional farming, which emits greenhouse gases to regenerative farming, however defined, which can reduce and remove greenhouse gas emissions,” said Barbara Baarsma, the CEO of Rabo Carbon Bank.

The bank facilitates the generation, monitoring and verification of carbon credits, which companies can then buy. It also incentivises sustainable practices and emissions reductions by farmers.

However, Baarsma warns that the two revenue streams – carbon credits and incentives for reducing emissions – do not yield enough extra revenue for most farmers to make the transition to sustainable farming methods. According to her, a broader set of rewards must be put in place.

And while there should be a focus on creating healthy ecosystems, rewilding and restoring nature, policymakers need to be cautious of completely monetising this, warn environmental organisations, like Bellona Europa and WWF.

“There's really a risk that in this whole discussion about certificates and offsets and voluntary carbon markets we end up monetising nature-based stuff without much basis for it to count as a removal,”  Mark Preston Aragonès, a policy officer at Bellona Europa told EURACTIV.

Impermanent removals

While there are strong arguments for restoring natural spaces and incentivising the capture of carbon, there are major barriers yet to be overcome. This includes the fact that nature-based carbon removals are impermanent – a forest for instance can be destroyed by storms, pests or wildfires, which are becoming more frequent with climate change.

When that happens, the carbon is released back in the atmosphere, and that must be accounted for somewhere.

“Nature is by nature non-permanent. You have these risks and you have to deal with it,” a Commission official told EURACTIV, adding that nature cannot be turned into a permanent carbon storage.

With concerns around permanence also comes the question of who carries the liability for the carbon that is released back into the atmosphere – the bank or authority issuing the carbon credit or the farmer.

“We have to account for the fact that this risk will exist, even if we make it as small as possible. There will always be a small risk and, when we define our policy, we should account for that,” said a Commission official.

But making a farmer liable for carbon storage over 100 years may be a non-starter in terms of incentives because the farmer would not be able to carry that liability, he added.

At the moment, the European Commission is looking into the “optimal distribution of this risk of non-permanence” between those providing carbon credits and those financing it, the official told EURACTIV.

Certifying carbon removals

Another big and, so far, unanswered question is how to certify carbon removals at EU level to ensure that the level of carbon claimed to be taken out of the atmosphere matches reality.

There is a “big appetite” for rewarding carbon capture in the land sector, according to Timmermans, but there needs to be a simple and robust system to ensure that the amount of carbon sequestered is accurate.

The European Commission is working on creating this system and will table its proposal by the end of the year. Farming groups, who are first in line, insist that the scheme needs to be simple.

“There is indeed a concern for the farmers who already deal with a lot of bureaucracy on a daily basis,” said COPA-COGECA, the EU association which represents 22 million EU farmers.

For them, the system must be reader-friendly and easily available to farmers and foresters.

“It is hence extremely important that the EU Commission makes this project something that is easily accessible and applicable for farmers. It will be a lost opportunity if a high administrative burden slows the uptake of carbon farming,” COPA-COGECA wrote on Twitter.

ASAJA, the Spanish association of young farmers, also highlighted the need for “an easy, robust, credible and transparent measurement system”.

In this system, monitoring, reporting and verification will be essential to validate carbon removals. There are different ways of doing this: direct observation and measurement, modelling, and remote observation using satellites. The EU will need to find the right balance between those depending on cost, feasibility and acceptability, a Commission official told EURACTIV.

However, while WWF favours nature-based carbon removals over technology-based ones, it is concerned about the EU’s plans when it comes to regulating these.

“Removals in the land use sector are hard to measure and can easily be reversed – they cannot simply be considered as tonne-for-tonne equivalent to fossil fuel or fertiliser emissions," it warns.

WWF adds that, if the European Commission gets its way, polluters could “buy their way out of trouble and avoid carbon taxes or having to make emissions cuts in their own value chains”.

“Instead of an offset scheme, the Commission needs to focus on public funding, which would help farmers and foresters to take climate action without letting polluters off the hook,” Alex Mason from WWF told EURACTIV.

[Edited by Frédéric Simon]