AUTHOR: Krystyna Springer
As the European Commission prepares the legislative proposals that will underpin the framework for the EU’s 2040 climate target, the current direction of travel indicates that the Carbon Removals and Carbon Farming (CRCF) framework – supported by demand-mobilising mechanisms such as a Buyers’ Club and a public-private CRCF Facility – will serve as the primary instrument for steering economic actors in the agricultural sector to engage in climate mitigation.
The scale of the role envisaged therefore raises a question about what a voluntary certification framework can reasonably be expected to carry, and about where complementary regulatory, funding and value-chain measures will be needed alongside it. As the viability of the mechanisms considered by the Commission is tied to the properties of a credit-based system, the analysis focuses on the components of that architecture: the accounting for CRCF units in greenhouse gas reporting, the nature and integrity of the resulting claims, and how these in turn shape the demand on which the whole approach depends.
Several considerations will shape the framework’s effectiveness, including the need for clearer guidance on claims and scope 3 reporting, the limits of a credit-based approach for certain agricultural activities, the framework’s wider effect on the regulatory environment, and the potential of a performance-based certification route. These considerations bear directly on what the framework can be asked to do, and on where other measures must take over. On that basis the paper offers five policy recommendations:
- Clarify the scope 3 reporting rules for agri-food companies so that a supplier’s certified reduction may be reflected downstream regardless of any credit sale outside the value chain – in keeping with the principle that a scope 3 inventory is a static snapshot of emissions across the supply base – without reviving the double-claiming concern that drives exclusivity clauses and risks suppressing demand.
- Develop the certificate-of-performance approach within the CRCF’s existing monitoring and verification architecture, as the instrument better suited to value-chain demand and to recording farm-level practice, reaching a wider range of mitigation levers than a tradable credit can accommodate and recognising early movers without recourse to standardised baselines.
- Extend corporate scope 3 transparency. Mandatory scope 3 disclosure will support the visibility and accuracy with which companies report their supply-chain emissions, allowing for farmers efforts to be recognised. The recent narrowing of CSRD obligations removes that visibility from many of the firms whose demand the framework relies on.
- Consider obligations on downstream actors, such as the processors, manufacturers and retailers whose businesses depend on a productive and resilient European land sector, to account for, and progressively reduce, the emissions embedded in their supply base, as the effective source of the demand which a voluntary architecture is unlikely to generate on its own.
- Design for a fair transition. Obligations downstream would shape the terms on which farmers are paid, and without deliberate safeguards their cost and risk may settle on the producers least equipped to bear them. A fair transition for the farmer is a condition of the policy’s acceptability and durability.
Photo by matthiasboeckel (Pixabay)
