Note on carbon sequestration policies in the European Union

This note examines the state of carbon farming (CF) policies in the European Union (EU), highlighting their potential to deliver significant public benefits, such as improved soil health, air quality, and climate mitigation. The existing mechanisms for encouraging carbon sequestration and evaluating alternative support scenarios are assessed, starting from analysing the regulation on carbon sequestration certification adopted by the European Parliament and the Council following a proposal from the European Commission. This note analyses the integration of CF into the EU's Common Agricultural Policy (CAP) through cross-compliance measures, eco-schemes, and Rural Development programmes. Additionally, it explores potential CF support frameworks, including exclusive reliance on the first CAP pillar, the voluntary carbon market, and mixed approaches. The analysis highlights several trade-offs: balancing CAP budget limitations with the need for stronger environmental measures, mitigating market uncertainty in the voluntary carbon market, and ensuring that certification costs do not deter farmer participation. Despite these challenges, the findings suggest that including CF within CAP, either as an alternative or complement to the voluntary carbon credit market, could enhance carbon sequestration and align EU agriculture with climate neutrality goals, particularly when supported by a structured certification system.