5 minute read 4 Nov 2021
Plant seedling at farm

How will soil carbon enable positive change to take root in farms?

Authors
Vighnesha Adiga

Senior Manager, Food and Agribusiness | Switzerland

Collaborates with Food and Agribusiness clients both locally and globally enabling them to re-imagine ag-food ecosystem. Developing a sustainable farming in his two acre small holding farm.

Stephan Laux

Leader Food and Agribusiness Innovation Center EMEIA | Switzerland

Intrigued by the impact of digitization, the changing consumer and the agility dilemma of big corporations.

5 minute read 4 Nov 2021

A new business model – carbon farming – could tackle issues around sustainable food production and climate change.

In brief
  • Climate change, regulatory pressures and consumer expectations are changing the way agriculture works
  • Carbon farming could be a new enabler of healthy and sustainable ecosystems
  • Farmers, consumers, companies and the public sector all stand to benefit – with the right credits system and permanent capture concept in place. 

In the agriculture industry, a perfect storm is brewing. Shrinking productive farmlands, pest outbreaks and climate change are impacting crop cycles and yields. Farmers’ concerns on the land are clouded further by national and international issues such as the recent pandemic, regulation, trade issues and embargoes. At the same time, consumers are seeking more sustainable, healthier and affordable food – and greener products overall. It’s a complex  situation that requires a radical rethink of the agricultural landscape.

Consumer priorities

84%

consider sustainability when making purchase decisions

According to the June 2021 EY Future Consumer Index, 84% of global consumers say sustainability is important when making purchase decisions, but 47% say it costs too much to purchase sustainable products. Against this background, over two-thirds are looking to companies to act as leaders in driving positive social and environmental outcomes.

It’s not just consumers putting pressure on organizations to embrace more sustainable practices. At the regulatory level, companies are bracing for a wave of green taxes and government initiatives to reduce the environmental impact of their business. The Kyoto Protocol, which came in to force in 2004, has since been followed up by the Paris Agreement, with goals reflected in national and supranational initiatives like the European Green Deal and the US Climate 21 Project. As momentum grows, so too are creative approaches to deliver on ambitious climate targets. One of these is an emerging new business model: carbon farming. Various government organizations and initiatives have recognized carbon farming as a critical piece in the sustainability puzzle:

  • Intergovernmental Panel on Climate Change (IPCC)

    In 2020, the IPCC released its special report on Climate Change and Land, addressing greenhouse gas (GHG) fluxes in land-based ecosystems, land use and sustainable land management in relation to climate change adaptation and mitigation, desertification, land degradation and food security.

  • “4 per 1,000” initiative

    In Europe, the topic of carbon storage in soil got significant public attention for the first time in 2015 when the French government launched its “4 per 1,000” initiative at the COP21 Paris Climate Summit. The idea: If we increase by 0.4% a year the quantity of carbon contained in soils, we can halt the annual increase in CO2 in the atmosphere.

  • European Commission

    In 2021, European Commission announced the launch of a carbon farming initiative within the Farm to Fork Strategy. This was to promote a new green business model that rewards climate–friendly practices by land managers. In addition, as part of the Circular Economy Action Plan, the Commission will develop a regulatory framework to certify carbon removals based on robust and transparent carbon accounting. This will enable the authenticity of carbon removals to be monitored and verified – and support the European focus on results-based carbon farming instead of previous action-based approaches.

In the agribusiness, this regulatory pressure will accelerate change that was already afoot. Data-driven smart agriculture, new technologies like gene editing and advanced techniques such as vertical farming have already been shaking up the industry. As an exciting new enabler of change, carbon farming will be key in creating ecosystems that can tackle the growing challenges of the agriculture industry – and contribute to a healthy and sustainable food supply.

Carbon farming refers to techniques designed to sequester carbon in the soil or avoid the production and release of carbon. Some of the known methods include the use of cover crops, no-till techniques, smart fertility solutions, limiting anaerobic digesters or switching to rotational grazing. New discoveries and innovative approaches are set to offer further ways to sequester carbon in soil. Carbon farming can be complemented by other mechanisms, such as systems to certify and incentivize good practices around deforestation or water quality.

Let’s put this into context. What almost every farm has in common is the huge expanse of soil at its disposal. Soil is an efficient carbon sink, with huge capacity to store carbon over time. A skilled farmer can use carbon farming to manage the carbon pool, flows and greenhouse gas fluxes at farm level with the purpose of mitigating climate change and building sustainable farming practice. Combining evolving data-driven agriculture with carbon farming practices has potential to solve multiple challenges around food security strategies across the globe. 

All players in the agribusiness and food ecosystem – farmers, seed suppliers, crop protection and input players, processors, equipment manufacturers, food manufacturers – have an opportunity to participate in and contribute to the progress of carbon farming. But beyond the immediate agriculture landscape, the potential of carbon farming has not gone unnoticed. The question is how to bring together the needs of farmers, governments and other stakeholders.

Globally, there is a growing appetite for green investment opportunities – and novel ways to demonstrate green credentials. Developing innovative business models and enabling growth across the ecosystem will be key.
Vighnesha Adiga
Senior Manager, Food and Agribusiness | Switzerland

Globally, major agribusiness input players have announced initiatives to encourage carbon farming by incentivizing farmers through a credit system. Though still exploratory, firms are rewarding farmers for adopting climate smart practices such as no-till farming and the use of cover crops. These acquired carbon credits are then traded with interested organizations.  Globally, there is a growing appetite for green investment opportunities – and novel ways to demonstrate green credentials. Developing innovative business model and enabling growth across the ecosystem will be key.

It’s a great idea, but farmer participation in carbon farming initiatives is mainly at the pilot phase. Large scale participation cannot be observed to date, and there is no well-known market for credits from carbon farming. For a concept with such an enormous potential these are significant warning signs. 

As we have seen, carbon farming is a promising new opportunity. The challenge – and task – now is to bring together all the expertise and perspectives needed to empower change. This relies on the knowledge and experience of farmers and other agribusiness players in managing the soil system, navigating external influences like weather and planning ahead for a low-carbon cycle long-term. Change will be enabled by digitalization as a crucial tool in tracking carbon storage and trading credits. At the same time, there is still much work to be done to develop, manage and maintain high-impact carbon credit systems for public and private stakeholders at every level and also to solve bigger question around permanent carbon storage. 

Summary

The agriculture industry is already undergoing significant changes as pressure to produce more sustainably coincides with the challenges of climate change and regulatory demands. Carbon farming is emerging as a novel business model that – with the right development and support – has the potential to make a positive contribution to the food supply ecosystem, and beyond.

About this article

Authors
Vighnesha Adiga

Senior Manager, Food and Agribusiness | Switzerland

Collaborates with Food and Agribusiness clients both locally and globally enabling them to re-imagine ag-food ecosystem. Developing a sustainable farming in his two acre small holding farm.

Stephan Laux

Leader Food and Agribusiness Innovation Center EMEIA | Switzerland

Intrigued by the impact of digitization, the changing consumer and the agility dilemma of big corporations.