Climate Farmers – an influential think-and-do tank focused on regenerative farming – has stepped away from carbon markets. This news has been making headlines since it was announced in June. So what’s the problem with carbon markets? And are there alternatives that might work? Oliver Moore spoke with Ivo Degn of Climate Farmers, and others in the field to find out more.
“Carbon markets, as they exist today, aren’t built to support the kind of agriculture or climate solutions that matter most.”
In June Ivo Degn of the think tank Climate Farmers made the above statement in a post on LinkedIn, as part of a series of much discussed and shared messages about how Climate Farmers is no longer participating in carbon markets.
“We didn’t come to this lightly. Our work was rooted in a deep belief – that regenerative farmers should be rewarded for restoring ecosystems, that soil carbon could be a meaningful climate lever, and that markets could help scale the transition,” Degn said. So what’s gone wrong?
What are carbon markets?
Carbon markets mean European farmers can monetise emissions reductions or carbon sequestration via carbon credits. These markets are split into compliance and voluntary mechanisms.
Voluntary Carbon Markets (VCMs) allow the generation and sale of carbon credits to companies aiming to offset their emissions beyond regulatory obligations. Credits are typically created by adopting practices like agroforestry, no-till farming, cover cropping, peatland rewetting, and methane reduction in livestock systems. Each verified tonne of CO₂e reduced or removed can yield a credit.
Farmers must:
- Adopt carbon-sequestering or emission-reducing practices.
- Work with a certification standard (e.g. Verra, Gold Standard, Plan Vivo).
- Undergo monitoring, reporting, and verification (MRV), often using remote sensing, soil sampling, and digital tools.
- Meet criteria for additionality (the practice wouldn’t have happened without the market) and permanence (the carbon stays stored for decades).
Prices vary from €10–€50/tonne depending on the practice, co-benefits (e.g. biodiversity), and buyer demand.
Compliance approaches exist too, but are less likely to generate additional income for farmers.
The EU Emissions Trading System (EU ETS), currently does not include agriculture, but that may change. The EU Carbon Removal Certification Framework (CRCF)—adopted in 2024—aims to standardise the certification of carbon farming methods for potential inclusion in regulated markets and public subsidy schemes.
Under the Common Agricultural Policy (CAP), farmers can also receive eco-scheme payments for climate practices, but these are not tradable. The CRCF may bridge public and private incentives, enabling credits to be recognised in formal carbon accounting.
Weakening ambition
The context is one of lower environmental ambition at EU level. In June the Food Policy Coalition wrote to a number of relevant Commissioners regarding the possible weakening of the EU’s 2040 climate ambition.
The letter, signed by 17 civil society and farming organisations, expresses concern that loopholes under consideration for the 2040 target “are riddled with risk and uncertainty.” Worrisome “shortcuts” include “deviating from the domestic nature of the EU targets as enshrined in the Climate Law and reintroducing historically failed international carbon offsets”.
This goes against “what has been recommended and reiterated by the European Scientific Advisory Board on Climate Change and modelled in the Commission’s own impact assessment”.
Instead “structural changes and a modest shift to healthier diets” could reduce emissions by 44% by 2040” the letter emphasises, using the Commission’s impact assessment on the 2040 climate target as evidence.
It continues: “Proven holistic solutions, such as agroecological, organic farming, and paludiculture address not only climate concerns but wider biodiversity, water, health, and animal welfare issues and increase the system’s resilience by truly transforming EU agriculture.”
Instead the direction of travel will embed industrial agriculture via “applying technical tweaks to business as usual or compensating with offsets” the letter states.
Not working
A cursory glance at the debate on carbon farming suggests farmers are increasingly worried about a fragmented, uncertain, costly, risky, simplistic, stifling approach, biased towards industrial ag and corporate farms.
In particular, the backgrounding of co-benefits – social and environmental synergies – and ignorance of the complexities of regenerative farming in the real world – with weather volatility and other variables – stand out as concerns.
Having developed Europe’s first internationally approved and open-source soil carbon methodology, a methodology which influenced and inspired many measures by companies and the work of the European Commission, Degn of Climate Farmers echo many of these concerns.
Speaking to ARC on zoom, he said “a couple of years in, we realised that even when hand-tailored, and written in consultation with farmers, carbon markets structurally disincentivise regenerative farms”.
“You end up disqualifying a lot of small family farms because they simply don’t have the evidence that you need for quality carbon credits.” And so, Degn says, they ended up with a lot of “large scale industrial fund-owned farms with basically one crop, a cover crop, maybe a single species of tree over a thousand hectares.”
Measuring carbon alone, he adds, means “we incentivise, penalise or reward weather, right?” In other words – if it rains carbon may be retained, if there is a drought, it will disappear which will impact your measurements.
What might work?
Degn points to the work of EARA – European Alliance for Regenerative Agriculture – for a possible solution.
“They just ran research on a metric that they have agreed on, which is the regenerative full productivity… so instead of looking only at carbon, they look at whether or not regeneration is taking place. Carbon is a co-benefit of regeneration, right? So if we have regeneration going on, there will be carbon capture.”
The Regenerating Full Productivity Index describes itself as “a multidimensional performance metric developed by farmers, researchers and agronomists to capture the full spectrum of land stewardship outcomes: agronomic, ecological and economic. RFP builds on the conventional Total Factor Productivity (TFP) model, integrating field-level measurements, farmer-generated data, and satellite imagery, benchmarked at local, national and European levels. Unlike conventional metrics, RFP measures ecoeffectiveness, synergies and context-specific outcomes.”
It’s also worth remembering that “every farmer in the world is a carbon farmer,” as Mateusz Ciasnocha, Polish farmer and founder of European Carbon Farmers, told ARC when invited to comment on the decision by Climate Farmers.
The mission of European Carbon Farmers is to build a farmer-centric bridge between climate and agricultural policies by promoting “carbon farming”.
Ciasnocha describes the move by Climate Farmers as both “understandable” and “regrettable”. Carbon markets, he notes, “despite a lot of progress made” are “still the Wild West.”
“The work of Climate Farmers was central and important in moving the space in the much-needed holistic direction,” he observes. “Seeing carbon not as a goal itself, but as part – a transformational one – of a much bigger picture.”
“Climate Farmers will be missed and the journey without them will be lonelier than otherwise,” said Ciasnocha, acknowledging on a personal level that it was a pleasure to work day-to-day in cooperation with the organisation.
However, “with the strategic involvement of the EU,” European Carbon Farmers is persuaded, “we continue moving in the right direction.” Ciasnocha cites a number of examples of this:
- Carbon Removals and Carbon Farming (CRCF) Regulation [also considered promising by EURAF, more details below]
- Carbon Removal Expert Group meeting on carbon farming, held in May 2025
- Mission Soil
- private sector initiatives e.g. Soil Capital
- research institutions and EU-funded projects e.g. MIDAS, Carbon Farming Central Europe
- EU Carbon Farming Summit, held in March 2025
Going forward, Ciasnocha hopes for “continuous and more strategic engagement from the various European Ministries of Agriculture and alignment with other Ministries at the national level. This is a frontier we need a breakthrough on, but we are getting there.”
EURAF – the European agroforestry representative organisation – while concerned about offsets rather than insets, sounds a more optimistic note on what may be coming down the line.
The organisation told ARC “we believe that EU Carbon Removals and Carbon Farming (CRCF) Regulation (2024/3012), published in December 2024, will help restore confidence and attract private finance. It establishes the first EU-wide voluntary framework for certifying carbon removals, carbon farming, and carbon storage. The CRCF Delegated and Implementing Acts will follow soon and provide much-needed standardisation, quality criteria (quantification, additionality, long-term storage, sustainability), and monitoring/reporting/verification (MRV) processes.”
Advances in geospatial mapping and their proposals for more targeted CAP support also give them hope.
EURAF proposes “a 5 year starter-pack, followed by adoption of successful plantations into carbon farming certification from yr 6 onwards.”
It also thinks serious consideration must be given to “the inclusion of AFOLU (Agriculture, Forestry and Other Land Use) into the 3rd round of the EU Emissions Trading System.”
Conclusion
Both regenerative farmers and agroforestry adherents have proposals and preferences which could make carbon farming more holistic.
At present, there are serious concerns – but also real options being progressed or being proposed.
Much is said about working with farmers – how the EU’s emerging systems and approaches for carbon markets and related supports develop will say a lot about how real or otherwise this is.
More
Is the EU Positive about Reaching Carbon Negative? New ARC report shows more work needed
New ARC Report | Carbon Farming – Stakes, Issues and Alternatives
Position Paper on Soil Carbon Sequestration and its Possible Remuneration through CO2 Certificates
This Farmer Says He’s Not Drowning in Paperwork – He’s Swimming in EU Money
Serbia | Between Tradition and Transition – Regenerative Agriculture in Vojvodina
