As the European Commission reviews the Carbon Removals and Carbon Farming Regulation (CRCF), we at ISCIA are focused on understanding how we can build a carbon market that truly works for farmers.
This question was at the center of our recent webinar, Ensuring the EU CRCF is an Instrument that Supports Farmers, which brought together project developers, farmer representatives, and policy experts to discuss the market conditions needed for long-term success.
The timing of this discussion is significant. With the Article 18 CRCF review, LULUCF, the Effort Sharing Regulation, and ETS Phase 5 all under review simultaneously, Europe has a rare opportunity to shape not only how carbon removals are certified, but whether there will be enough demand to reward farmers for producing them.
"More than 20,000 farmers and land managers across Europe have already begun transitioning their practices in anticipation of this framework. They deserve a market that fairly rewards them for that work."
Farmers are ready, but CRCF carbon farming demand is expected to outpace supply soon
Across Europe, thousands of farmers have already begun transitioning to regenerative practices in anticipation of CRCF. Yet today's market is not developing at the same pace.
"This [is] the first time that we [see] an international market for payment for an ecosystem service. There is no space to fail."
Webinar experts highlighted a growing imbalance between expected supply and projected demand. ISCIA members estimate that CRCF could generate roughly 10 million tonnes of certified removals annually, while expected buyer demand is currently closer to 1–2 million tonnes. Without stronger demand signals, financing becomes more difficult, carbon prices remain low, and farmer confidence begins to erode.
That point resonated throughout the discussion. Panelists agreed that rebuilding confidence after an unsuccessful market launch would be far more difficult than getting the framework right from the beginning.
What farmers and landowners need for a sustainable, fair market
Throughout the discussion, participants emphasised that farmers need a viable business case to invest the time and resources required for practice transition. Expert panelists identified several priorities for making CRCF work in practice:
- Fair compensation
- Access to transition capital
- An open market
"What made us successfully transition our farm… was having an idea, having a vision of a farming system that we want to be in."
But vision alone is not enough. Access to transition capital is also necessary. Farmers need financing that bridges the early years of implementation, when costs increase before returns materialise. Public-private investment, including stronger alignment with the Common Agricultural Policy (CAP), could play an important role in reducing financial risk.
Transitioning to regenerative agriculture often requires new equipment, new management practices, and several years before agronomic and financial benefits are fully realised. During that transition, many farmers experience reduced income while continuing to carry significant production risk. Speakers noted that farmers can lose approximately €150–200 per hectare during the transition period, making access to capital essential.
Fair compensation is necessary for a thriving market. Current carbon payments remain well below what expert panelists believe is necessary to support widespread adoption. Several speakers suggested prices likely need to at least double to reflect the true costs, risks, and variability of transitioning across different farming systems and soil types.
"We were provided with extra support, so our cash flow was changed from negative to positive."
Finally, farmers need freedom to participate in multiple markets. Farmers should be able to choose among supply chain programs, voluntary carbon markets, and future compliance markets rather than being locked into exclusive purchasing arrangements.
The concept of a "first right of refusal" has recently been introduced by agrifood corporates on the allocation of CRCF carbon farming units.
Together, these comments reflected a broader theme of the discussion: insetting should remain an important option, but exclusive purchasing arrangements risk limiting competition, suppressing prices, and reducing farmers' negotiating power.
"We need the flexibility so that farmers can choose whether they want to use these units for reducing their value chain emissions or whether they want to sell those outside of the value chain."
"This is not an argument against corporate buyers. It is an argument against corporate buyers being the only buyer. The CRCF should be designed for the farmer so that farmers can choose the buyers and also not the buyers can choose their farmers."
Building demand is something that regulators can support
While measurement, certification, and verification continue to receive significant attention, webinar participants argued that demand activation now deserves equal focus.
Robin Saluoks outlined four proposals ISCIA has built in its Demand Activation Framework with other industry stakeholders, also recently presented directly to DG CLIMA:
Removing the "temporary" label from CRCF units, recognising that reversal risks are already managed through existing accounting and buffer mechanisms.
Utilising a European Buyers' Club to provide early market liquidity.
Creating incentives linked to the EU ETS that reward companies purchasing CRCF units during the transition period.
Developing a temporary EU buyback guarantee that would underwrite early-issued units for several years while the market matures.
The discussion also highlighted the importance of clear operational guidance that allows CRCF units to function across different market applications, whether companies use them within their own value chains or sell them into broader carbon markets.
Not every proposal will be easy to implement, but together they reflect a broader shift in the conversation: certification alone will not create a functioning market. Buyers, incentives, and thoughtful market design matter just as much.
The road ahead
The coming months will play an important role in determining how CRCF evolves. Decisions made during the current policy review could shape the market for years to come, not only for carbon removals, but for how ecosystem services are valued across European agriculture.
Through its policy engagement, technical working groups, and collaboration with project developers, farmers, buyers, and policymakers, ISCIA continues to help bridge the gap between policy ambition and practical implementation. By bringing together perspectives from across the value chain, the association is working to ensure CRCF develops into a framework that is both scientifically credible and economically viable for the people expected to deliver it.
As discussions continue with DG CLIMA, ISCIA will remain actively engaged in advancing practical solutions that build trust, unlock investment, and ensure Europe's farmers are rewarded for the environmental outcomes they deliver.
Further reading
Read ISCIA's open letter to the European Commission outlining recommendations for strengthening the CRCF.
Open Letter to the European Commission