Key steps were taken to explore solutions for applying the polluter pays principle to agriculture, notably at the 2023 workshop on agriculture inclusion in the EU ETS and the following stakeholder surveys. These initiatives aimed to gather insights and perspectives from various actors to find strategies for integrating agriculture into the EU ETS framework.
In 2023, some progress was made towards addressing the challenges of including agriculture in the EU ETS. The sector is not covered by the cap-and-trade system yet, despite it being a significant CO2 emitter. Key steps were taken to explore solutions for applying the polluter pays principle to agriculture, notably at the 2023 workshop on agriculture inclusion in the EU ETS and the following stakeholder surveys. These initiatives aimed to gather insights and perspectives from various actors to find strategies for integrating agriculture into the EU ETS framework.
Agriculture contributes to 11% of the EU's greenhouse gas emissions, while occupying 38% of the EU's land area. There was a decline of 15% in emissions between 1990 and 2000, but since 2005, emissions have stabilized, with only a 2% reduction by 2021. Forecasts for 2030 suggest a decrease of 4% at the EU level compared to 2005 levels, but if supplementary measures are implemented, there can be an 8% reduction. Emissions trends from agriculture are different among EU member states, with notable decreases in Croatia, Greece, and Slovakia, while increases were observed in Bulgaria, Estonia, Hungary, Ireland, Latvia, and Luxembourg.
Agriculture emissions in the EU are falling short of climate targets outlined in the European Climate Law - projections suggest the need for substantial reductions to meet goals set for 2030 and beyond. Climate change is already affecting agriculture, with significant impacts on yields and economic losses observed across EU Member States, showing the critical need to build resilience in food systems to address both environmental and economic challenges.
A technical workshop was conducted as part of the exploratory study "Applying the polluter-pays principle to agricultural emissions," commissioned by DG CLIMA. The workshop had several objectives:
The majority of participants were from Belgium, Germany, Denmark, the Netherlands, and France (with 53, 35, 27, 26, and 22 attendees, respectively). Also, representatives from non-European countries, including the US, New Zealand, and the UK, were also present, as they are involved in the European agricultural sphere.
The workshop discussions centered on the necessity of a better monitoring, reporting, and verification (MRV) systems, and considered various options and forms of emissions trading systems (ETS) that can apply to agriculture. There were mixed responses regarding those potential approaches, with some sector representatives advocating for separate targets and incentives for emission reductions and carbon removals. The main concerns were around fairness and social redistributions.
The majority of organizations responding to the questionnaire have international activities. Most of them are large structures with more than 250 employees.
In your opinion, how effective is putting a price on GHG emissions (i.e carbon pricing) from the agriculture sector to incentivise GHG emissions reduction in that sector?
⅓ of respondents believe that implementing a carbon price for agriculture could be highly effective, while 28% consider it somewhat effective. Academic and research institutions (75%) and public authorities (67%) mainly indicated that inclusion in the ETS would be somewhat effective.Mostly non-EU stakeholders were unsupportive of the idea.
While the workshop and survey did not give concrete outcomes, they have laid the groundwork for a quicker integration of agriculture into the EU ETS with clear scientific and social mechanisms in the years to come. Despite the lack of immediate solutions, these initiatives have begun the needed discussions among all the stakeholders involved.
In its 2040 climate roadmap, the EU executive did not include any specific targets regarding agriculture. While an earlier draft highlighted the possibility of a sector-specific target, the farmers' protests at the time and the pre-election political environment made it a “sensitive topic to touch upon” in the February 2024 announcement.
The topic came back in March 2024, still framed as “an idea under exploration”. Discussions centered on approaches to integrating agriculture into emissions trading systems (ETS), including its incorporation directly into the existing ETS or the establishment of a separate ETS, similar to the one planned for the building and transportation sectors. This theme was a focal point at the Carbon Farming Summit held in Valencia in March 2024.
The potential forms mentioned that the ETS for agriculture can take are:
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