Introducing a tax on agricultural GHG emissions? The Danish case

In its first progress report on EU climate policy published in January 2024, the newly-established European Scientific Advisory Board on Climate Change noted that there is no EU-level price on emissions in agriculture/food, forestry and land use, which suffer from an overall lack of incentives to reduce emissions and increase removals. It recommended that the EU should start preparations now with a view to expanding the pricing regime of EU GHG emissions to all major emitting sectors, including agricultural/food and LULUCF, through a legislative proposal for after 2030.

In November 2023 the Commission published an exploratory study investigating ways to price GHG emissions from agricultural activities along the agri-food value chain and how this could be accompanied by providing farmers and other landowners with financial incentives for climate action.… Read the rest

What does the Commission’s proposed 2040 climate target mean for agriculture?

On 6 February last, the Commission published its Communication Securing our future:  Europe’s 2040 climate target and path to climate neutrality by 2050 building a sustainable, just and prosperous society. The Communication proposes a Union-wide, economy-wide 2040 target reaching 90% net GHG emissions reduction compared to 1990 levelsthat will put the EU on an effective, cost-efficient, and just trajectory towards climate neutrality by 2050, as called for under the European Climate Law”.

In fact, what the Climate Law calls for is ambiguous. In recital (30), the Commission should propose a Union intermediate climate target for 2040, as appropriate, at the latest within six months of the first global stocktake carried out under the Paris Agreement and which was concluded at COP28 in Dubai in December 2023.… Read the rest

Trilogues begin on the Certification Framework for Carbon Removals Regulation

The Commission put forward its legislative proposal for a Certification Framework for Carbon Removals (CFCR) in November 2022. The Regulation has the two broad objectives to define quality criteria for carbon removal activities to ensure only high-quality removals are certified, and to define rules for the verification and certification of carbon removals, including rules for the functioning and recognition by the Commission of certification schemes. The main innovation in the Regulation is that it defines Certified Removal Units (CRUs) that can be used in national or corporate GHG inventories or exchanged through voluntary carbon markets.

In a previous post last September, I discussed the amendments to the Commission’s proposal being discussed by the Council and European Parliament at that time.… Read the rest

What can we learn from New Zealand’s experience in introducing a scheme to price agricultural emissions?

The European Union is pondering the possible introduction of a pricing scheme for agricultural emissions as a way to accelerate the reduction in agricultural emissions on the way to net zero emissions by 2050. In the wake of criticism from the European Court of Auditors in its 2021 report on the climate performance of the CAP, and in light of the Court’s recommendation that the Commission should “assess the potential to apply the polluter-pays principle to emissions from agricultural activities, and reward farmers for long-term carbon removals”, the Commission has commissioned an exploratory study on pricing agricultural emissions and rewarding climate action in the land sector.… Read the rest

Mitigation potential in EU agriculture

In my previous post on this blog, I noted that the Commission’s impact assessment (IA) accompanying its presentation of the new Effort Sharing Regulation (ESR) proposal concluded that very little additional agricultural mitigation is expected in the period 2021-2030, over and above what is projected to occur under current policies.

Two possible conclusions might be drawn from this finding. One is that the agricultural sector lobby organisations have used their political clout to ensure that the sector is required to do as little as possible to contribute to the EU’s 2030 climate targets. This reaction was advanced by some NGO activists in response to the post.… Read the rest