Regulation grows to support carbon farming

carbon farming regulation

The regulatory framework around carbon farming is maturing, with the EU’s carbon removal regulation proposal and the U.S’ Growing Climate Solutions Act recently signed into law. What does this mean for the future of carbon sequestration in soils?

Carbon farming is widely considered as a key strategy to help the world meet its decarbonization goals and limit global warming. That’s why governments around the world are developing guidelines and regulations to standardize this practice.

What is carbon farming?

Carbon farming is a new expression that refers to a range of regenerative agricultural practices that result in carbon sequestration in the soil, roots and leaves of food products. These practices require systemic changes from the conventional (extractive) way we produce food, which leads to soil degradation and desertification and limits the earth’s CO2 absorption capabilities. 

With the CO2 absorption that comes from regenerative agriculture, it is possible to generate carbon credits to sell to third parties wanting to offset their carbon footprint: this creates an alternative revenue stream for farmers.

Focus on soil health

Carbon farming practices focus on promoting soil health and enhancing ecosystem services. They include planting seeds without tilling the ground, managing livestock grazing to increase soil fertility and covering the soil with regenerative crops between planting seasons, amongst many others.

According to the Carbon Cycle Institute, “at least 35 of these practices are identified by the Natural Resource Conservation Service (NRCS) as conservation practices that improve soil health and sequester carbon while producing important co-benefits, including: increased soil water holding capacity, hydrological function, biodiversity, and resilience”.

Measuring the benefits of carbon farming

The benefits of regenerative agricultural practices are widely observed, but rarely measured. Because switching to this farming model takes time, energy and financial resources, farmers tend to be reluctant to try it without government support or proof that it can lead to better outcomes.

This is why ClimateTrade has teamed up with Azolla Projects to develop the first carbon farming project in Spain. Starting this spring, the project will unite farmers, public administration, technology centers, private companies and the financial sector in a working group to develop an impact measurement methodology on 3,000 hectares of land in Catalonia and Aragón, where regenerative agriculture practices will be implemented to improve CO2 sequestration in the soil.

At the same time as measurement and monitoring techniques grow, governments are working to develop a regulatory framework to ensure the positive impact of these practices in the fight against climate change.

Carbon farming regulation in the U.S.

In December 2022, President Biden signed the Growing Climate Solutions Act into law. The goal of this legislation is to break down barriers for farmers, ranchers, and foresters interested in participating in carbon markets and embracing climate-smart practices. More specifically, the law will help food producers to generate and sell carbon credits by setting up a third-party certification process through the U.S. Department of Agriculture (USDA). It also involves the creation of an online resource for farmers looking to connect with carbon experts and of an Advisory Council to provide input to USDA and ensure the program remains effective and works for farmers.

The bipartisan bill garnered support from across the political spectrum and was passed in the Senate in June 2021.

Carbon farming regulation in the EU

The European Union is also trying to standardize carbon farming practices in order to support the generation of carbon credits within the agricultural sector. In November 2022, the European Commission adopted a proposal for the certification of carbon removals, including from regenerative agricultural practices. 

The proposal set out rules for the independent verification of carbon removals and rules to recognize certification schemes that can be used to demonstrate compliance with the EU framework. Additionally, it established four “QU.A.L.ITY” criteria: quantification of activities and benefits; additionality; long-term carbon storage; and sustainability.

However, the proposal failed to answer certain questions, particularly about how carbon farming measures should be remunerated: whether through an EU funding instrument like the Common Agricultural Policy or via the sale of carbon credits on the voluntary market. It did clarify that carbon farming credits would not be able to be sold within the EU’s mandatory carbon scheme.

The Commission is now set to develop tailored certification methodologies for the different types of carbon removal activities, supported by an expert group that will begin its work in Q1 of 2023.

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