Navigating the complex policy landscape for carbon farming in The Netherlands and the EU

<ns3:p> Background The EU carbon removal and carbon farming (CRCF) framework sets the quality requirements for voluntary greenhouse gas certification schemes for i) permanent removal, ii) temporary carbon storage in long-lasting products, iii) temporary carbon storage from carbon farming, and iv) soil emission reduction. The next step is to develop <ns3:italic>“tailored certification methodologies for different types of carbon removal activities.”</ns3:italic> Via CRCF compliant certification schemes, certificates can be issued and sold to generate extra funding for carbon farming via voluntary carbon markets or other (future) performance-based incentive schemes (e.g., Agri sector Emissions Trading Scheme). Method We provide a qualitative assessment of the complex landscape of carbon farming incentive schemes and their associated monitoring, reporting, verification, and certification (MRV-C) frameworks. To illustrate these complexities, we take the farmers’ perspective of a Dutch dairy farmer that wants to implement different carbon farming activities (i.e., a portfolio), while aiming to secure a decent farm-level income. We discuss the farmers’ challenge by analyzing different options and routes for the financial valorization for several carbon farming activities. Results We find that the incremental MRV-C and incentive schemes, like the EU CRCF and potential agri-ETS are likely to add to the existing administrative burden for (carbon) farmers in the EU. Proper alignment, integration and standardization of the EU CRCF with existing MRV-C infrastructure(s) is needed to limit the administrative burden and transaction costs. Also, there is a need to provide better ex-ante clarity to (carbon) farmers and investors on the complementarity of incentive schemes from different policy domains (e.g., agriculture, climate, energy, bioeconomy). Conclusion We argue that the complexity of the MRV-C and incentives landscape ads to the administrative burden and flag this a potential source of inertia for investments in carbon farming. We conclude with recommendations to simplify and streamline the policy mix and MRV-C processes. </ns3:p>