AUTHORS: Aaron Scheid (Ecologic Institute) – Hugh McDonald (Ecologic Institute) – Julia Bognar – Laure-Lou Tremblay

This report, co-authored by Ecologic and IEEP, demonstrates that despite both the potential benefits and risks of carbon farming for biodiversity, most of the current carbon farming mechanisms fail to incorporate sufficient protections to ensure net positive biodiversity impact. The report identifies challenges and opportunities for implementing standards for biodiversity into carbon farming mechanisms and proposes requirements to ensure that carbon farming standards enhance and safeguard biodiversity, alongside delivering climate mitigation.

Carbon farming – the implementation of farm management practices to mitigate climate change – will need to play a key role for European Union (EU) to reach net zero GHG emissions. Within the EU, management of carbon pools, flows, and GHG fluxes through farm management practices offers an estimated emission reduction and carbon removal potential of 101-444Mt CO2-e per year.

The global loss of biodiversity is a parallel emergency to climate change – and agriculture is Europe’s single largest contributor to biodiversity loss. Agricultural practices must change to reverse the current trend of EU-wide biodiversity loss. This will be essential to meet multiple EU policy targets, including those set by the EU Green Deal and the proposed EU Nature Restoration Law.

Carbon farming standards are increasingly seen as a solution to upscale carbon farming. The proliferation of private and public voluntary carbon market standards is reflected by the proposal of the Framework for Carbon Removals Certification by the EU Commission (November 2022), which seeks to ensure the high quality of carbon farming (and other types of) removals and thus trigger greater upscaling.

Carbon farming interventions (such as managing peatlands, agroforestry, and enhancing soil organic carbon (SOC) on mineral soils) can provide benefits for biodiversity: soil health benefits, above and below ground biodiversity, as well as other environmental co benefits such as water balance, air quality, and climate adaptation.

However, there must be careful consideration of the context-specific biodiversity impacts to avoid potential harmful impacts – a carbon farming practice that is beneficial in one area could in fact be harmful elsewhere.

Overall, carbon farming standards pose both a risk and an opportunity for biodiversity. In this report we review ten carbon farming actions and standards and provide recommendations on how standards can safeguard and enhance biodiversity, as well as delivering climate mitigation.

Our review of ten carbon farming standards, methodologies, and policies identified five approaches to safeguard or enhance biodiversity, each with different advantages and disadvantages.

We conclude that none of the reviewed standards adequately promote biodiversity or safeguard against carbon farming having negative biodiversity impacts. The current carbon farming standards contain criteria or approaches to safeguard and enhance biodiversity to differing degrees. Some standards apply no biodiversity approaches; others apply several.

There is an opportunity to design EU-wide carbon farming standards that can enhance biodiversity while safeguarding against negative impacts. For farmers, compensation for ecosystem conservation and restoration can provide an incentive to adopt practices that will benefit both climate and biodiversity.

Carbon farming standards must do more to safeguard and enhance biodiversity through carbon farming actions. Failing to do so poses some significant risks, and misses a significant opportunity to maximise win-win outcomes for climate change mitigation and biodiversity.

In this report, we propose a targeted approach. This considers that different carbon farming actions pose different risks and opportunities for biodiversity. It also reflects that larger, more lucrative carbon farming projects and participants have larger impacts on biodiversity and are less likely to be deterred by more demanding biodiversity requirements (and their associated transaction costs).