MRV financing under EU carbon farming governance: a review

Le financement des mécanismes MRV dans le cadre de la gouvernance européenne en matière d'agriculture carbone: une analyse

Jana Poláková, Martin Hvarregaard Thorsøe, Adam Svoboda, Silvia Coderoni, Laure Bamière (), Kamel Louhichi (), Katarina Elofsson, Paolo Sckokai, Berit Hasler and Greet Ruysschaert
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Jana Poláková: Faculty of Agrobiology, Food and Natural Resources - CZU - Czech University of Life Sciences Prague
Martin Hvarregaard Thorsøe: Department of Agroecology - Aarhus University [Aarhus]
Adam Svoboda: Faculty of Agrobiology, Food and Natural Resources - CZU - Czech University of Life Sciences Prague
Silvia Coderoni: Department of Agricultural Sciences, University of Bologna, Bologna, Italy and Faculty of Bioscience and Agro-Food and Environmental Technology, Campus Universitario di Coste Sant' Agostino, University of Teramo, Teramo, Italy.
Laure Bamière: UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Kamel Louhichi: UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Katarina Elofsson: ENVS - Department of Environmental Science [Roskilde] - Aarhus University [Aarhus]
Paolo Sckokai: Department of Agricultural and Food Economics - Unicatt - Università cattolica del Sacro Cuore [Piacenza e Cremona]
Berit Hasler: Department of Food and Resource Economics - ITU - IT University of Copenhagen
Greet Ruysschaert: ILVO - Research Institute for Agricultural, Fisheries and Food

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Abstract: This study reviews and compares the financial mechanisms required to support verifiable agricultural soil carbon stocks under the European Green Deal. It examines monitoring, reporting, and verification (MRV) systems for soil carbon removals and emission reduction through carbon farming (CF) projects, exploring how financial mechanisms can be designed to support rigorous measurement while ensuring economic viability for land managers. The review identifies a central accuracy–cost paradox: while result-based MRV systems require high-precision monitoring for credibility, they increase implementation costs that create barriers to farmer participation. Upfront financial burdens and deferred rewards make result-based mechanisms alone insufficient to drive adoption. A policy mix involving public, private, and civic resources is essential for mitigating CF project implementation costs and managing risks related to regulatory additionality. For example, the findings indicate that result-based CF projects will likely need complementary support, including publicly funded CF advisory services that reduce participation barriers by addressing farmers' information gaps associated with MRV. Collective monitoring arrangements distribute fixed MRV costs and improve economic viability for small-scale farmers, though institutional conditions for equitable aggregation require clarification. Blended financing combining public budgets, private markets, advisory support, and cost pooling addresses the accuracy–cost paradox more effectively than single-instrument policies. The findings demonstrate that effective soil carbon sequestration requires realigned governance structures that explicitly integrate MRV financing into CF project design. This enables the agricultural sector to scale up carbon removal and advance SDG13 (Climate Action) and European climate neutrality targets.

Keywords: voluntary carbon markets; soil ecosystem services; climate finance; carbon removals and carbon farming regulation; carbon credits (search for similar items in EconPapers)
Date: 2026-09-04
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Published in Frontiers in Climate, 2026, 8, ⟨10.3389/fclim.2026.1835304⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05741920

DOI: 10.3389/fclim.2026.1835304

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