Derivation and Evaluation of a Business Model to Promote Carbon Farming That Generates Valid Carbon Removal

Abstract

This contribution evaluates and examines the scope of 26 global carbon farming projects with a view to analyzing existing concepts for developing a business model for promoting carbon farming in order to generate valid carbon removal. It thus addresses an important aspect of the objectives of the European Green Deal. This study is based on a literature search analyzing four certification standards, an expert-based online survey, and an expert-based online workshop to evaluate different practice approaches identified by previous studies and additional information sources. The results highlight the theoretical potential of a result-based business model using agroforestry to fulfil the essential requirements to promote carbon farming for generating carbon removal. Although the study has limitations regarding the number of projects examined and experts consulted, there is a high probability that the underlying requirements could not be sufficiently fulfilled when translating them into practice. The identified concepts failed as a consequence of inadequate permanence assurance mechanisms, impractical measurement accuracy, poor precision in baseline scenarios, and lack of additionality. To remedy this, we recommend a shift away from a pure focus on promoting carbon farming to achieve carbon removal towards promoting the co-benefits of carbon farming. Further research should evaluate the extent to which stakeholders are interested in giving their financial backing to these co-benefits.

1. Introduction

To comply with the European Climate Law passed in 2021 and the requirement to achieve EU climate neutrality by 2050, strategies for reducing emissions by at least 55% by 2030 are needed [1]. Given its potential for sequestering carbon from the atmosphere, soil plays an essential role in this context. The CO₂ absorbed by plants from the air during photosynthesis and released into soil in the form of organic matter, for example, can be captured from the atmosphere and stored over a long period if the soil type, site factors, and management are suitable [2,3,4,5]. This storage property of soils is also addressed by the European Green Deal [6] envisaging the promotion of maintaining and strengthening the resilience of natural carbon sinks [7]. This target is often mentioned in the context of carbon removal generated by building up humus, defined as the “non-living, finely divided organic matter in soil, derived from microbial decomposition of plant and animal substances” [8]. The EU defines “carbon farming” as a carbon removal activity related to land management that increases carbon storage in living biomass, dead organic matter, and soils by enhancing carbon capture and/or reducing the release of carbon into the atmosphere [9]. A distinction should be made here between humus-building measures, which can lead to carbon removal, and the rewetting of peatlands, which leads to emission reductions [10]. Carbon farming generating carbon removal is also becoming increasingly essential in political terms. For instance, the 2018 “4 per 1000” (https://4p1000.org/?lang=en, accessed on 6 November 2023) initiative in France is based on the idea of removing anthropogenic CO₂ emissions by increasing global soil organic carbon (SOC) stocks in the top 40 cm of the soil by 0.4% annually through improved soil management.

Scientific studies have increasingly highlighted the lack of effectiveness of carbon farming when it comes to climate protection unless there is proven potential to increase SOC stocks [11,12]. Therefore, various studies have already explored different carbon farming projects and practices for promoting land use management contributing to climate change mitigation. Don et al. [11] pointed out strengths and weaknesses in different agricultural management practices often associated with humus build-up used in carbon farming projects, for instance. As part of the European Interreg Project on Carbon Farming [13], assorted projects were examined for the purpose of deriving policy recommendations for carbon farming projects.

COWI [14] explored existing carbon farming schemes, barriers, and solutions for their implementation within the EU. Paul et al. [15] investigated the effectiveness of carbon farming certificates in terms of their climate change mitigation effects from soil science, agricultural management, and governmental perspectives. Furthermore, they found issues here regarding the permanence, measurability, additionality, and formulated baseline scenarios, which were also confirmed by other findings [11,16]. However, in their study, Paul et al. [15] pointed out the need for a further examination of business models to promote carbon farming. In addition, the EU has shown a strong interest in researching business models to promote carbon removal, for instance through carbon farming. An EU Commission’s proposal [7] clearly emphasizes the need for developing new business models until 2030 for creating incentives for climate-efficient agriculture. The absence of such business models also extend to adjacent areas of land use, such as regenerative agriculture [17]. The present study addresses this research gap and analyzes the scope for its development to promote carbon farming and its evaluation in terms of generating valid carbon removal from the angle of the issues already identified. The knowledge gained here could also serve as a template for the business model development in related areas such as regenerative agriculture. The derivation of the business model is based on the investigation of carbon farming projects, as they concentrate their funding on carbon sequestration through humus build-up and are already being rolled out in practice. Using the insights gained from previous research, this study summarizes and supplements them with examples identified in an internet search. In this way, it substantiates the empirical evidence of the results. In addition, it provides a summary of carbon farming-specific certification requirements and examines whether and, if so, how these could be fulfilled in practice.

To do this, definitions of the business model and associated requirements to be met are first needed. So far, a uniform definition does not exist [18]. This study, therefore, refers to a definition given by Osterwalder and Pigneur [19]: “A business model describes the rationale of how an organization creates, delivers, and captures value.” Regarding carbon farming, this value manifests itself in valid carbon removal. A corresponding business model, therefore, needs a management practice for humus build-up leading to carbon removal and concepts for implementing the administrative framework. Both management practices as well as concepts have to be based on requirements for ensuring the validity of the generated carbon removal. Certification standards for voluntary carbon removal projects provide a reliable basis for deriving requirements. Therefore, they will be designated as “certification requirements” in the following. Since management practices and concepts have to be financed, an underlying reimbursement mechanism is necessary. When considering a business model as a whole, the reimbursement mechanism and the certification requirements form the administrative framing and determine the selection of concepts and management practices, while concepts and management practices constitute their implementation. For example, the requirement “additionality” can be met by implementing an unusual management practice. Through this, management practices and concepts deliver, create, and capture the value of the business model in the shape of carbon removal. An overview of these terms and their connections is depicted in Figure 1.

In order to derive a business model, the first step was to identify reimbursement mechanisms and certification requirements. For this purpose, the existing literature was used on the one hand, and four certification standards for voluntary carbon removal projects were examined on the other. Against this backdrop, it was then investigated whether and how reimbursement mechanisms and certification requirements could be met in practice by selected carbon farming projects and four selected management practices. To this end, a literature analysis and an expert survey, followed by an online expert workshop with the respective experts, were conducted.

2. Materials and Methods

The evaluation process was divided into four consecutive steps (Figure 2). In step 1, a literature search was carried out to define reimbursement mechanisms and to create the certification requirement list by summarizing the requirements of four certification standards. Furthermore, these had to be sorted thematically according to concept and management practice. In step 2, carbon farming projects and their used concepts regarding the reimbursement mechanism and fulfilling the certification requirements were derived from previous studies and supplemented by findings from an internet search. The concepts were then evaluated regarding their suitability in enabling a business model to provide valid carbon removal via carbon farming by using an expert-based online survey. During this, a best-practice concept was identified for each requirement. In step 3, agricultural management practices derived from previous studies were selected and evaluated in a further literature search regarding the requirements identified in step 1. According to Don et al. [11], these have shown a humus-building effect. In step 4, a business model example was derived and compared to recommendations gained from an expert-based online workshop. In the following sections, the steps are described in more detail.

2.1. Step 1: Creation of the Criterion List

The criterion list was based on three certification standards for voluntary offset projects and a certification framework provided by the European Commission. The selected standards Verra (https://verra.org/, accessed on 6 November 2023), the Gold Standard (https://www.goldstandard.org/, accessed on 6 November 2023), and Plan Vivo (https://www.planvivo.org/, accessed on 6 November 2023) provided a methodology adapted for land use projects applicable to European conditions. In addition, they had been identified as suitable standards for voluntary offset projects [20,21]. Verra is a registered nonprofit corporation with headquarters in Washington, D.C., founded in 2007. It creates standards for activities such as reducing deforestation, improving agricultural practices, addressing plastic waste, and achieving gender equality. Gold Standard was established in 2003 by the WWF and other international NGOs with the goal of ensuring that projects reduce carbon emissions and also contribute to sustainable development. The Plan Vivo Foundation is an Edinburgh-based company. It is registered as a charity in Scotland and certifies projects that meet the Plan Vivo Standard for community and smallholder land use and forestry projects.

At the end of November 2022, the EU Carbon Removal Certification Framework (CRCF) [22] was published with the aim of setting out criteria to define high-quality carbon removal, for instance from carbon farming. This framework aims to ensure the transparency and credibility of certification and therefore establishes rules for independently verifying carbon removal and regulations for recognizing certification schemes used for demonstrating the compliance with the EU’s framework [23]. The CRCF is also designed, among other things, specifically for carbon farming projects. To prove the completeness of the criteria derived from the standards, they were compared and supplemented with other literature sources. These requirements were then thematically sorted.

2.2. Step 2: Evaluation of the Concepts

In a second step, carbon farming projects from the Interreg North Sea Carbon Farming Project [13] and additional projects identified in an internet search via Google by using the search strings “carbon farming”, “carbon farming project”, “Carbon Farming Projekt”, “Humusaufbauprojekt”, and “CO₂ Zertifikate Humusaufbau” were selected. A total of 64 projects were identified that merited closer examination. Figure 3 gives an overview of all identified projects, their location, and their status (excluded or further examined). The sites of most project headquarters are indicated, which is not necessarily the site of the implementation of management practices. In the case of multiple sites or sites spread around the world, the site of the respective headquarters is indicated.

After the first evaluation, 38 projects were excluded as they were not “real” carbon farming projects as they only considered practices such as peatland restoration or did not provide enough information for a proper evaluation. The requirement specified a separate project homepage or at least documents available in writing, such as flyers or reports. If the project initiator only reported on the project’s existence, for instance, it was excluded. Hence, 26 carbon farming projects from the USA, Australia, and Europe were selected for closer examination. The fact that some projects were certified according to a recognized standard at the time of examination had no impact on their selection. Both projects certified by a private standard, and those not certified were taken into account. This was because certification did not necessarily mean better compliance with certification requirements and vice versa. The selected projects were then examined in a structured content analysis, according to Mayring [24]. This involved breaking down each project into concepts that might fulfill the derived requirements. All investigated concepts were then assigned to the respective requirement and summarized in one respective category. A category is, therefore, the generic term for several concepts that meet the same requirement. Via an online survey processed using the “Unipark” survey tool, an Enterprise-Feedback-Management-Software 21.2 provided by Tivian, 10 experts evaluated the suitability of the concepts for fulfilling the underlying requirements. Participant selection was based on available contact data from the CRCF homepage, where opinions of the respective experts were available and professional competence on the subject could be assumed. The experts, belonging to NGOs, were researchers, farmers and representatives of farmers, carbon farming project initiators, and think tank members. Excel was used for data processing and basic statistical analysis.

2.3. Step 3: Evaluation of Management Practices

In the third step, management practices were selected by investigating the various relevant proposed humus-building practices [11]. A large number of them had to be excluded in advance since they did not lead to carbon removal when considered holistically. In this context, the restoration of peatlands was also excluded from consideration, as this always leads to emission reductions [10]. Only the management practices of catch crops, diverse crop rotations, agroforestry, and converting arable land into grassland were analyzed more closely due to their approved potential for compensating for GHG emissions through increased SOC stocks in Germany and Europe. The excluded management practices and the justification for exclusion are summarized in

Table 1. Excluded carbon farming measures and the justification for their exclusion. Source: own depiction based on Don et al. [11].

Management Practice	Justification for Exclusion
Use of biochar	The potential for C-sequestration is mainly limited due to the limited availability of suitable biomass in Germany [25,26]
Reduced and minimal tillage	Merely redistributes SOC stocks [27,28]
Harvest residues remaining on the field	less climate protection effective than their energetic use [29]
Non-burning of crop residues and vegetation	Prohibited by law in Germany [30]
Organic fertilization	Studies confirm the positive effect of SOC stocks but give cause for concern regarding ultimately shifting carbon sources. Life-cycle analysis is needed to evaluate use from a climatic point of view [31], which could not be carried out in the context of this work
Wetland and peatland conservation/restoration	Was not addressed in the article because of a broad scientific consensus considering this measure as highly effective and relevant in terms of climate protection by reducing emissions (e.g., [10]). As described in the introduction, this work does not focus on reduction practices.

.

By using a further literature search, the selected management practices were evaluated according to their ability to meet the corresponding certification requirements.

2.4. Step 4: Derivation of Business Model and Comparison to Expert Recommendations

In a fourth step, a business model based on the best-practice concepts and management practices was derived. This example business model was furthermore compared to expert recommendations. Therefore, carbon farming as an overall strategy to promote carbon removal from adapted land use was evaluated and discussed again in a final online workshop. This was also to prevent bias by splitting the projects into individual concepts. The workshop was carried out via Zoom with six experts who also took part in the survey. Excel was used for data processing and basic statistical analysis.

3. Results

The presentation of the results is structured as follows: First, the reimbursement mechanisms and corresponding concepts were identified and evaluated. Secondly, certification requirements for concepts were processed, and corresponding concepts were categorized and evaluated. In a third step, certification requirements for management practices were determined, and practices were evaluated based on these. Lastly, a business model example based on identified best-practice approaches was derived and compared to expert recommendations gained from an online workshop.

3.1. Identification of Reimbursement Mechanisms and Evaluation of Assigned Concepts

The reimbursement mechanisms in general as well as the selected and compiled concepts were evaluated by experts in an online survey that assessed suitability for promoting the achievement of valid carbon removal. An evaluation represents the mean of all the individual evaluations given by the 10 experts. Using this online survey, the mechanisms and concepts were rated on a scale of 1 (best) to 5 (worst).

During the literature research and the subsequent project examination, it was found that the remuneration can be broken down into two main mechanisms, result-based and management-based payments. This differentiation can also be found at COWI [14], for instance. Result-based payments are characterized by the fact that the distribution of funds is linked to a specific target value that must be achieved. These systems are therefore particularly suitable for remunerating carbon removal services, as a specific quantity to be compensated for by humus build-up can be set as a target value. However, the remuneration and promotion of desirable side effects are neglected in terms of the inability to link the payments to several target values. In order to actually be able to attain valid carbon removal, compliance with the certification standard requirements is essential, which subsequently limits not only the selection of possible concepts but also management practices. Result-based payments can either be paid out annually after implementation of a management practice or at an agreed end date. An annual pay-out was rated slightly better by the experts at 2.00 regarding the promotion of carbon removal than a one-time pay-out (2.44).

Management-based payments, on the other hand, are made for the mere implementation of a measure, regardless of the result achieved. This benefits a promotion of positive side effects obtained by management practices. However, since funds are distributed independently of the effect achieved, this mechanism is not suitable for generating carbon removal. Compliance with certification requirements is therefore not urgently required, which leads to increased flexibility for both the selection of concepts and management practices, though meeting the standards could improve the project quality and may, therefore, be recommended. The reimbursement is paid out immediately after implementing the management practice and is rated at 2.44. Some projects also offer a combined approach in which 70% of the remuneration is result-based and 30% is management-based. This approach is also rated at 2.44.

Table 2. Concepts for implementing result- and management-based payments categorized by the reimbursement mechanism and the superior category and their suitability evaluation for carbon removal promotion.

Reimbursement Mechanism	Category	Concept	Evaluation
Result-based payments	Certificates	Amount of bound carbon is transformed into short-term credits (5–10 years), which are sold to emitters (business, government, or private customer). Corporations with banks providing a fund may be possible	2.35
		Long-term credits (25 or 100 years) can be sold at a set price, on the spot market, or held for future sale
Management-based payments	Fund	Fund created by government or a business to support sustainable agriculture	2.78
	Discount	Famers receive discounts on arable land rented from the municipality when they use carbon farming practices	2.56
	Direct marketing/ labeling	The introduction of management practices is based on the farmers initiative, demanding a higher pro-duct price through direct marketing	2.44

lists concepts for implementing result- and management-based payments categorized by the reimbursement mechanism and the superior category and their suitability evaluation for promoting valid carbon removal.

A total of four categories of reimbursement mechanisms were identified, of which certificates can be assigned to result-based payments, and fund, discount, and direct marketing can be assigned to management-based payments. Certificates can be divided into short-term credits with a term of 5 to 10 years and long-term credits with a term of 25 or 100 years. The latter are usually used in Australian carbon farming projects certified as part of the Emission Reduction Fund (ERF). Certificates are used by companies, municipalities, and, in rarer cases, private individuals to offset their CO₂ emissions. Experts rated this mechanism best overall with an average of 2.35.

Funds to promote selected management practices for sustainable agriculture are used less frequently and are rated the worst overall in terms of their suitability for promoting the achievement of carbon removal (2.78). The concept of granting discounts on rental prices when implementing carbon farming practices and the marketing of a farmer’s initiative via direct marketing were also only utilized in one project but were rated slightly better at 2.56 and 2.44.

3.2. Identification and Evaluation of the Concepts

To evaluate the concepts found with the help of online research, they were first clustered using content analysis as described in the methodology. The selected and compiled concepts were evaluated by experts in an online survey assessing the suitability regarding the respective requirements. For each of them, one concept based on the expert’s evaluation was selected, using a decisive factor of the best average rating. For this purpose, the average ratings of all concepts within one requirement were compared. This resulted in a total of 16 requirements and 18 best-rated examples listed in

Table 3. Summary of the requirements of a certification standard for carbon removal and the corresponding best-rated carbon farming concepts and number accompanied by the mean of the expert-based evaluation referring to the 26 projects.

Requirement	Best-Rated Project Concepts	Evaluation
Reliability
Able to provide an annual, independent, and scientifically reliable validation and verification of the monitoring report and all supporting evidence and documents	Monitoring tool (e.g., platform or app) is used to upload field and management data	2.33
Creation of a reliable baseline and baseline scenario that is regularly updated, including pre-project evaluation	Modeled baseline	2.31
Resilience
Able to mitigate social, environmental, economic, political, technical, and administrational risks of non-permanence now and in the future	Involving stakeholders in the process, indicating risk factors, defining rules for interaction (Code of Conduct)	2.56
Able to provide a buffer account	Buffer income and holdbacks	2.50
Provides a healthy financial concept with a balanced cost-effectiveness ratio and a fitting investment system	Short-term credits (5–10 years)	2.35
Able to generate, record, and reward co-benefits	Generating environmental benefits	1.33
Stakeholder engagement
Managed with transparency and accountability, acceptance, and engagement of relevant stakeholders	Transparency in documentation	1.67
Encourages innovation, self-help, and mutual learning and develops positive ways to leverage group dynamics and local community support	Learning programs for producers	1.67
Able to set up a formal input, feedback, and grievance mechanism for the purpose of providing stakeholders with an opportunity to submit any feedback or raise grievances throughout the entire project life and includes stakeholders in decision processes	Open communication and feedback mechanism	1.78
Supports project participants with advice and know-how	Community and scientific research organized via app	1.67
Provides a project-participant-friendly and motivating approach	High payments to reward farmers; no additional costs like soil samples	1.33
Conservative
Conservative estimation of emission reductions and limitation of ex ante credits	Conservative calculation of emission reduction and exclusively ex post credits	1.67
Considers pre-project efforts	Only estimation of additional reduction	2.44
Measurable
Quantifiable in relation to its emission mitigation and cost-efficiency using recognized measurement tools (including adjustments for uncertainty and leakage) against a credible emission baseline	Measuring and modeling of emission reductions	1.77
Registered
Registered in a transparent registry and/or in a GHG inventory with clear ownership, retraceability, and retirement after selling to avoid double issuance (same emission reduction is registered in two different registers) or double selling	Registered by an independent verifier	1.83
Compatible with GHG emission inventories	-	-
In demand
Provides attractive conditions to buyers (e.g., price), and there is a supply-and-demand balance (certificates which are unsold do not contribute to climate protection)	Sustainable development impacts of project activities	-
	Project effort on site	-
	High market volume	-

. Column 3 gives the average evaluation of these best-rated concepts and represents the mean of all the individual evaluations given by the 10 experts. Using this online survey, the concepts were rated on a scale of 1 (best) to 5 (worst). Several projects used the same concept but put it into practice differently. Hence, they were further divided into implementation examples in the different projects. This is not depicted in Table 3 but can be found in Appendix A (

Table A2. Summary of the requirements of a certification standard for carbon offsetting and the examined, corresponding project concepts translated into practice with the underlying concept highlighted in bold and the average expert evaluation.

Number	Requirement	Concepts Translated into Practice	Evaluation
Reliability
1	Able to provide an annual, independent, and scientifically reliable validation and verification of the monitoring report and all supporting evidence and documents	Evaluation based on a monitoring tool	2.33
		Documentation of measures via uploaded photo documentation, with verification by project initiator	2.50
		Emission reduction is verified by an independent verifier	2.83
		Annual monitoring and verification by project initiator and controlling of carbon sequestration success
		Verification process in collaboration with peer communities to develop place-based verification systems
2	Creation of a reliable baseline and baseline scenario that is regularly updated, including pre-project evaluation	Modeled baseline scenario	2.31
Resilience
3	Able to mitigate social, environmental, economic, political, technical, and administrative risks of non-permanence now and in the future	Interaction and involvement of stakeholders in a professional and ethical manner	2.56
4	Able to provide a buffer account	A certain amount of the certificate price is held back for five years. If there is no reemission in the meantime, 20% is paid to the farmer; if not, the percentage can be reinvested (in other projects)	2.50
		Carbon loss credits are held back until the former level of SOC stocks is reached again
		A certain amount of the certificate price is reinvested in other carbon capture projects
5	Provides a healthy financial concept with a balanced cost-effectiveness ratio and a fitting investment system	Amount of bound carbon is transformed into short-term credits (5–10 years), which are sold to emitters	2.35
		Long-term credits (25–100 years) can be sold at a set price, on the spot market, or held for future sale
		Famers receive discounts on arable land rented from the municipality when they use carbon farming measures	2.56
		Fund created by cooperation with banks to support agricultural projects and generate certificates which can be sold	2.78
		Fund created by a business depending on a defined amount of CO2 to be sequestered within 5 years. If the sequestration is successful, the farmer is paid
		Fund created by shareholders on one hand and independent buyers on the other
6	Able to generate, record, and reward co-benefits	Project activities generate co-benefits such as reduced soil erosion, improved water quality, increased rural incomes, and enhanced resilience to extreme weather events	1.33
		Soil carbon improves water-holding capacity and infiltration, nutrient availability, and soil biology; the project also offers annual payments for the delivery of co-benefits associated with the sequestration of carbon in soil
Stakeholder Engagement
7	Managed with transparency and accountability, acceptance, and engagement of relevant stakeholders	Transparency in documentation through direct insights for buyers into the practiced measures	1.67
8	Encourages innovation, self-help, and mutual learning and develops positive ways to leverage group dynamics and local community support	Producer program with access to technical support and resources	1.67
		Several events and an institution for disseminating research	1.78
		Organized self-learning groups of farmers	1.78
		Platform accessible via app for farmer community	2.11
9	Able to set up a formal input, feedback, and grievance mechanism for the purpose of providing stakeholders with an opportunity to submit any feedback or raise grievances throughout the entire project life and includes stakeholders in decision-making processes	High standards for dealing with stakeholders, open communication, and feedback are valued	1.78
10	Supports project participants with advice and know-how	Community and scientific research organized via app as a consulting tool	1.67
		Corporation with ecological experts, foresters, natural resource managers, marine biologists, mapping and system specialists, economists, legal advisers, and people with lengthy experience working in the public sector or living and working on the land
		Free expertise to interested farmers as individuals or groups
		Corporation with research institutions
		Project initiator acts as the linchpin to draw together the knowledge, networks, and financial solutions from leading private and public parties
Conservative
12	Conservative estimation of emission reductions and limitation of ex ante credits	Requirements include reviewing the historical practices on the fields with respect to the current practices to ensure that an accurate and conservative emission reduction can be quantified	1.67
13	Considers pre-project efforts	Project initiator only wants to estimate the real additional emission reduction	2.44
		Farmer may be able to obtain payments for climate-smart practices he has already implemented or plans to implement; project initiator considers adoption to mean continuous (every year) use of these practices beginning in the year of adoption	2.67
		Farmers may be paid from farming practices implemented in previous years
		The argument is that farmers with good soils have a good base for accumulating even more humus	3.67
14	Provides a friendly and motivating approach for project participants	No additional costs like soil sampling.	1.33
		They offer high payments and give support to the participants; the finance system is very flexible	1.67
		Farmers are supported by enriching their soil quality and developing regenerative land use without any restrictions	1.89
Measurable
15	Quantifiable in relation to its emission mitigation and cost-efficiency using recognized measurement tools (including adjustments for uncertainty and leakage) against a credible emission baseline	Modeling SOC stock changes and validation by measuring soil samples	1.77
		SOC stock changes can be either modeled or measured or a combination of both
		Calculation of SOC stock changes based on models and scientific values
		Measuring the SOC stock change using GPS-based technology with initial and later soil sampling within 3–5 or more years	2.31
		Use of open-source data tools for modeling the SOC change	2.85
		Optical determination of biomass input by recording images
		Use of models to determine SOC stock changes
		Calculations with an Excel tool
		Using standardized values based on research to determine the input of a specific procedure	3.62
Registered
16	Registered in a transparent register and/or in a GHG inventory with clear ownership, retraceability, and retirement after selling to avoid double issuance (same emission reduction is registered in two different registers) or double selling	Certificates are used internally	-
		Emission reductions are registered by an independent verifier (gold standard, platform, etc.)	1.83
		Register is provided by the project initiator	4.00
-	Compatible with GHG emission inventories	Not relevant as certificates cannot be counted as an official emission reduction	-
In Demand
17	Offers attractive conditions to buyers (e.g., price), and there is a supply-and-demand balance (certificates that are unsold do not contribute to climate protection)	Generating co-benefits such as reduced soil erosion, improved water quality, increased rural incomes, and enhanced resilience to extreme weather events as sustainable development impacts of project activities	-
		The implementation of the climate mitigation measures and, by extension, their effects take place in the local environment of the stakeholders	-
		High interest in carbon markets: in 2021 298 Mt CO2eq was traded and approx. USD 1 billion was spent on voluntary certificates [31]	-

).

Besides an evaluation, the practical relevance of the individual concepts was recorded. For this purpose, the implementation frequency as a measurand for practicability and the expert evaluation as a measurand for effectiveness with regard to valid carbon removal generation were assessed.

The results showed a high variance in the number of projects offering a concept to fulfill a requirement. More than half of the projects had a verified monitoring and reporting process (62%), a baseline (88%), a healthy financial concept (100%), support programs for participants (65%), participant-motivating approaches (58%), a measurement tool (81%), a registry (54%), and attractive conditions for buyers (100%). This suggests that these requirements have a high practical relevance and are comparatively simple to implement. However, the best-rated concepts were rarely translated into practice. Between four and a maximum of 50% of the projects used these best-rated approaches, which confirmed the large quality difference between them.

Figure 4 depicts the implementation shares of the concepts regarding the underlying requirement in relation to the projects considered. They are divided into best-practice concepts, the sum of all concepts corresponding to the requirement (regular concepts), and no concepts.

Examining the individual concepts more closely, at least 42% of the projects used a monitoring tool to upload field data and management practices to a platform or app for verification by an independent inspector or project initiator. Furthermore, there was a major difference in creating the baseline. Only one project provided information about its modeling using GHG estimation models, but no further information was given about the model and the utilized data, although the baseline quality is largely dependent on these factors. Mostly, the first soil sample measure was used as a baseline for further emission reduction estimations. This process was evaluated as fair (2.9), although preference should be given to modeling a baseline on historical field data and influencing factors, for instance climate data.

Mitigating non-permanence risks without directly linking them to re-emissions could be reduced by indicating risk factors, describing them in the methodology and formulating conduct guidelines. To prevent re-emissions, at least four projects provided a buffer account that was implemented differently. On the one hand, a certain amount of remuneration for the certificate remuneration amount was retained over the project duration. If re-emissions could be avoided during that time period, the farmer then received the remaining payments. In the event of re-emission, predominantly Australian projects would withhold newly issued certificates until the original SOC stock had been restored or a certain amount of the certificate payment had been reinvested in other carbon capture projects. Although the latter could offer an advantage in terms of risk diversification, this concept was not rated any better. For reimbursing the implementation costs, certificates for selling the amount of bound CO₂ for compensation purposes were rated best. In order to fully meet the requirements, the resilience of the financing system is also of high relevance. Since short-term credits have already been identified as the best-rated concept as a reimbursement mechanism, they were selected here as the most resilient system to meet this requirement. Additionally, the generation of co-benefits and their rewards were rated highly (1.33). However, so far, only one project has reported having a reimbursement system on co-benefits. It was not possible to obtain any more detailed information about this process. Furthermore, actively involving stakeholders in the project process by providing information, engaging in a feedback process, and formulating rules for interaction, such as the Code of Conduct of Australian projects, was highly relevant. In addition, the success of the project and implementation of the agricultural practices could be greatly influenced by supporting the project participants with expert know-how, self-learning groups, the opportunity to join a community of colleagues and other “carbon farmers”, and workshops or conferences. Also, the compensation of soil sample costs by the project initiator or providing premium prices for certificates was endorsed. All concepts were rated as very good to good (1.67–1.78), reflecting their major significance. At the same time, very few projects had implemented a corresponding concept for stakeholder involvement and interaction (8–66%). This demonstrated the need for a further extension of feedback mechanisms, in particular. Providing a high level of conservativeness could help to ensure the project’s reliability and resilience, for example the limitation of ex ante certificates.

Furthermore, the survey results showed that pre-project efforts should not be rewarded. In total, reimbursement was consciously rejected for four projects, with the argument that these efforts were not additional or that humus could be built up more easily under good soil conditions. Furthermore, only three projects used a combination of measuring and modeling to determine the SOC increase, which was rated best (1.77). Most projects (70%) used soil samples to measure SOC increases; however, this concept is only rated fair (2.3). Approximately half of the projects provided a certificate registry (54%), mostly cooperating with independent verifiers to ensure reliability. As a last point, carbon farming certificates should be in demand and attractive to buyers. Arguments to support this are the co-benefits generated by projects, on-site implementation of the management practice in the buyer’s home country, and a high market volume of certificates. Furthermore, the Voluntary Carbon Market report showed that more than USD 1 billion was spent on buying voluntary carbon credits in 2021 [32]. It was also established that some requirements tended to correlate. On the one hand, this included the MRV process design linked to the type of measurements, the baseline estimation, and the conservative estimation of the emission reduction. A total of 57% of the projects with an MRV process also had a concept for measuring emission reductions and estimating the baseline. Further correlations could be found between transparent project management, which was also ensured by an openly accessible register and simultaneously fulfilled the requirement for preventing non-permanence risks. About 70% of the projects with a transparent stakeholder management concept also used a register for recording certificates and other data. In addition, 71% of the projects had both a concept for promoting self-learning processes and for networking with experts, and 30% of these 17 projects also had additional user-friendly services.

3.3. Evaluation of the Management Practices

Table 4. Overview of certification requirements and evaluation for management practices using a 0–1 scale and justification for evaluation and/or closer assessment of conformity of project concepts with the requirements using the example of agroforestry; (1 = fulfillment of criteria, 0 = no fulfillment); ? = no evaluation possible as effect not approved; - = no evaluation as not currently relevant; ∑ = sum of evaluation; CF = carbon farming; SDGs = Sustainable Development Goals.

Requirement	Evaluation	Justification
Permanent	∑ 1 (3)
Can store SOC independently of soil management	0	The binding of carbon in the soil depends on management and thus can be reemitted by changing it [11,16]
Continued existence secured by legal restrictions or other hurdles	1	Tree removal involves considerable effort and cost [33]; structure elements such as shrubs and hedges are protected by law [34]
Resistant to climate change and natural disasters	0	Loss of bound carbon due to changing climate or natural events cannot be ruled out [11,16,35]
Additional	∑ 4 (5)
Project is not the most economically or financially attractive or is not economically or financially feasible	1	Even if various calculations indicate that agroforestry can generate positive contribution margins [36], they are generally deemed to be economically unattractive since the opportunity costs are often higher [37]. Studies indicate that farmers would even have to be paid a premium to establish agroforestry systems [38]
Not mandated by law	1	Not mandated by law
Not common practice	1	The willingness to establish agroforestry (e.g., in Germany) can be classified as low [39]
Faces technical, financial, ecological, political, social, and cultural barriers and can overcome them	1	There are significant hurdles to establishing agroforestry systems, for example, due to a lack of acceptance and knowledge on the part of farmers [14]
Not financially supported	0	Supported by the CAP 2023 (CAP direct payment regulation)
Non-leaking	∑ 1 (3)
Does not cause activity-shifting leakage (shifting an activity such as agriculture from the project site to some other location)	?	Has to be considered further: the main crops in the area are being displaced by the tree population, but this loss may be compensated by higher productivity on the remaining arable land [40]
Does not cause market leakage (when a project reduces the local supply of a product, increasing production elsewhere)	?	Has to be further considered in a life-cycle analysis
Does not cause ecological leakage (emissions outside the project area resulting from project activity)	1	Has to be further considered in a life-cycle analysis, but research indicates that co-benefits might outweigh the trade-offs [41]
Relevant	∑ 1 (1)
Leads to lower GHG emissions than the baseline scenario	1	The potential of the management practice to demonstrably increase SOC stocks has been proven by studies for temperate zones [11,33]
Sustainable	∑ 1 (1)
Contributes to SDGs by providing positive environmental and socio-economic impacts	1	Through co-benefits associated with the management practice, such as erosion protection, the management practice can also contribute to SDGs 2, 12, 13, and 15 [41]
Generates no net harm (net-positive environmental and social balance)	-	Not visible
Applicable	∑ 2 (2)
Applicable to an approved methodology of a certification standard	-	So far, there is no explicit methodology for agroforestry
Applicable to a result-based payment scheme	1	As agroforestry is a supported management practice in some carbon farming projects that provide result-based payments, this can be considered fulfilled
Legal	∑ 1 (1)
Complies with the applicable host country’s legal, environmental, ecological, and social regulations	1	Depending on the implementation area, in some sites permitted with a few exceptions (e.g., in riparian strips) [1,2,34,42]
Unique	∑ 1 (1)
Not double-financed (refers to the situation in which the same GHG emission reduction effort is monetized multiple times)	1	Although farmers can receive funding for agroforestry systems via the CAP (CAP direct payment regulation), these do not compensate for the climate protection benefits from the sequestration service
Not double-claimed (occurs where two entities ”claim” the environmental benefit of the same reduction or removal unit)	-	Not currently relevant since emission reductions from carbon farming can only be used for voluntary GHG offsets and are not, therefore, officially recorded in an inventory
Sum ∑	70%

shows the certification standard requirements that have to be fulfilled by a management practice for generating valid carbon removal. The management practices were evaluated using a 0–1-point scheme. Number 1 encodes complete fulfillment of the criterion, while 0 was awarded for non-fulfillment or partial fulfillment. A criterion was then considered to be fully met when proven by sources like legal regulations. The allocation of points was based purely on an objective literature search. If a clear distribution of points was not possible due to a lack of sources, this is indicated by a question mark. The table does not include an evaluation by experts, as their expertise is more applicable to the evaluation of the administrative conception. Since result-based payment is also tied to the fulfillment of requirements in terms of management practice, only the best-rated approach, agroforestry, is presented here. In the analysis, the planting of hedges and shrubs was also considered. The evaluation justifications are based on a literature search, and sources are named in the footnote. Since requirement compliance for management-based approaches is not mandatory, the promotion of cover crops, various crop rotations, and the conversion of arable land into grassland may also come into consideration. A complete review of the additional three preselected management practices is given in the

Table A1. Overview of the criteria conformity of three selected management practices and their evaluation broken down by criteria conformity (CC) and overall conformity in %; (1 = fulfillment of criteria, 0 = no fulfillment); ? = no evaluation possible as effect not approved; - = no evaluation as not currently relevant; ∑ = sum of evaluation; CF = carbon farming; SDGs = Sustainable Development Goals.

Criteria of the Certified Climate Protection Effect	Establishment of Catch Crops	CC	Improved Crop Rotations	CC	Conversion of Arable to Permanent Grassland	CC
Measure(s)
Permanent ∑		0		0		1
Can bind SOC independently from soil management	C-binding reversible [11,35]	0	C-binding reversible [11,35]	0	C-binding reversible [11,35]	0
Secured in continued existence by political conditions or other hurdles	Not secured	0	Not secured	0	Permission for grassland ploughing (Regulation (EU) No. 1307/2013)	1
Resistant to changing climatic influences	Resistance not secured [11,16,35,76]	0	Resistance not secured [11,16,35,76]	0	Resistance not secured [11,16,35]	0
Additional    ∑		3		3		4
Economically unattractive or impractical	Usually economically unattractive [37]	1	Usually economically unattractive [37]	1	Usually economically unattractive [37]	1
Not mandated by law	Region-dependent [57]	1	Not mandated by law	1	Not mandated by law	1
Not common practice	Defined as common practice [39]	0	Not defined as common practice [39]	1	Not defined as common practice [39]	1
Faces implementation barriers but can overcome them	Cannot always be integrated into crop rotation [11]	1	Not visible	0	Lack of acceptance by farmers [77]	1
Not financially supported	Supported by CAP (CAP-Regulation)	0	Supported by CAP (CAP-Regulation)	0	Supported by CAP (CAP-Regulation)	0
Non-leaking   ∑		1		2		0
Does not cause activity shifts to other areas (activity leakage)	Not visible	1	Not visible	1	Possible production storage due to loss of space	?
Does not cause a shift in supply (market leakage)	Shift in the cultivation spectrum favored by summer crops	0	Only substitution effects are to be expected [78]	1	Food loss	?
Does not cause any higher emissions inside or outside the project area (ecological leakage)	Possible increased N emissions when using legumes [79]	0	Possible increased N emissions when using legumes [79]	0	Possible increased emissions from grazing [79,80]	0
Relevant    ∑		1		1		1
Leads to lower GHG emissions than the baseline scenario	Proven potential for temperate zones [11]	1	Proven potential for temperate zones [11]	1	Proven potential for temperate zones [11]	1
Sustainable  ∑		2		2		2
Contributes to the consistent implementation of the SDGs through additional positive ecological and socioeconomic side effects	Contribution to SDGs 2, 13, 15, e.g., through improved soil properties [81]	1	Contribution to SDGs 2, 12, 13, 15 through co-benefits [41]	1	Contribution to SDGs 13, 15 through co-benefits [41]	1
Generates no net-harm (net-positive environmental balance)	Not visible	1	Not visible	1	Not visible	1
Applicable   ∑		1		1		0
Applicable to an approved methodology of a certification standard	So far, there is no explicit methodology for CF practices	-	So far, there is no explicit methodology for CF practices	-	So far, there is no explicit methodology for CF practices	-
Applicable to a result-based payment scheme	Often funded by CF projects	1	Often funded by CF projects	1	Not secured as rarely funded by result-based schemes	?
Legal    ∑		1		1		1
Is in compliance with applicable host country’s legal, environmental, ecological, and social regulations	Applicable	1	Applicable	1	Applicable	1
Unique   ∑		1		1		1
Not double-financed (refers to the situation in which the same GHG emission reduction effort is monetized multiple times)	Although funded via the CAP, they do not compensate for the climate protection benefits from the sequestration service	1	Although funded via the CAP, they do not compensate for the climate protection benefits from the sequestration service	1	Although funded via the CAP, they do not compensate for the climate protection benefits from the sequestration service	1
Not double-claimed (occurs where two entities “claim” the environmental benefit of the exact same reduction or removal unit)	Not currently relevant	-	Not currently relevant	-	Not currently relevant	-
Sum (%)    ∑		59		53		52

in Appendix A.

The management practice evaluation showed that, in total, agroforestry could meet 70% of the requirements. This was comparatively high in respect of other evaluated management practices such as cover crops, converting arable land into permanent grassland, and diverse crop rotations that only reached between 52 and 59%. The online survey results confirmed this image of agroforestry: this management practice was viewed by 7 of the 10 experts as a suitable measure for achieving a verifiable CO₂ binding effect. The other practices performed equally or significantly worse. Compared to agroforestry, catch crops were considered suitable with the same frequency (7/10) and diverse crop rotations with a similar frequency (6/10). The conversion from arable land to permanent grassland fared significantly worse (2/10). The implementation of agroforestry was expected to result in higher SOC stocks, and it contributed to the SDGs by achieving co-benefits such as reduced erosion risks and increased biodiversity. In addition, no adverse effects on the environment or society from agroforestry were expected. Regarding additionality, agroforestry met 80% of the requirements, as this strategy was neither established nor economically attractive. However, due to the CAP 2023 reformation, future agroforestry systems will be subsidized and can, therefore, no longer be considered as additional. Furthermore, due to the relatively low establishment of agroforestry in the EU on 9% of the utilized agricultural area [43,44], the recording of possible leakage effects was a challenge. It was expected that a loss of land due to the establishment of trees and competition for light and nutrients would result in yield losses [41]. At the same time, studies indicated that these could be offset by increasing soil fertility [40]. Actual leakage effects had, therefore, to be examined more closely. However, even agroforestry systems were unable to offer adequate security in terms of permanence. The risk of losses of enriched soil carbon due to management changes was lower since tree populations were more difficult to remove, and the removal of hedges and structural elements was prohibited altogether [32,33,34]. However, the bound carbon was vulnerable to natural disasters and other factors such as climate change, and its binding in the ground was thus not secured [45].

3.4. Derivation of a Business Model Example and Comparison to Expert Recommendations

By selecting the respective best-practice concepts and management practices regarding the reimbursement mechanism and certification requirements, a business model was developed to promote valid carbon removal via carbon farming. Based on the online survey, literature search, and a comparison with the findings from the expert workshop, the following section provides an overall assessment.

Table 5. Business model based on identified best-practice approaches for promoting carbon farming to generate valid carbon removal. Source: own depiction.

Target Value	Carbon Removal
Reimbursement mechanism	Concept
	Result-based (ex post) Annual payment and after implementing the management practice Short-term credits (5–10 years)
Framework conditions	Monitoring tool (e.g., platform or app) to upload field and management data Modeled baseline scenario Involving stakeholders in the process, indicating risk factors, defining rules for interaction Buffer income and holdbacks Transparency in documentation Learning programs for producers Open communication and feedback mechanism Community and scientific research organized via an app High payments to reward farmers; no additional costs such as soil samples Conservative calculation of emission reduction Estimation of additional reduction only Measuring and modeling of emission reduction Registering certificates by an independent verifier Highlighting sustainable development impacts of project activities Project effort on site
	Management practice
	Agroforestry

gives an overview of this business model.

As already mentioned, result-based payment mechanisms received superior ratings in achieving carbon removal. For reimbursing the implementation costs, certificates for selling the amount of bound CO₂ for compensation purposes were rated best. As shown by the workshop results, experts recommended short-term credits as a more practicable option for farmers. Further, experts highlighted the importance of an appropriate baseline scenario estimation as they criticized the fact that the methods for measuring carbon at this time are not reliable when it comes to properly determining the amount of soil organic carbon. This is also confirmed by findings of Leifeld et al. [46]. The Clean Development Mechanism (CDM) provides guidance (Ver01.1_CDM-EB67-A25-GUID, https://cdm.unfccc.int/sunsetcms/storage/contents/stored-file-20130402135940368/methCCS_guid01.pdf, accessed on 6 November 2023) on deriving a baseline when formulating six main requirements that need to be met. Firstly, project boundaries and included emission boundaries have to be defined, followed by a three-stage procedure in which the most likely scenario should be identified as a baseline scenario. In the following, project activity additionality has to be demonstrated. As shown in this study, the most suitable way to do this is to refer to agroforestry as it is not common practice, as shown in Table A1, and showed recognized evidence for additionality. In a third step, baseline emissions, project emissions, and leakage effects have to be estimated. In any case, experts advised against obliging farmers to certificate price paybacks in case of re-emissions that put considerable pressure on farmers. Additionally, the generation of co-benefits and their rewards was rated highly (1.33). This corresponded closely to the workshop results, showing that carbon farming was overly reduced to its sequestration performance, although agroforestry systems could also provide additional ecosystem services such as reducing wind speed and buffering temperature, decreasing the dispersal of epidemic spores of airborne diseases [47] and biodiversity, and improving pest regulation [48]. Furthermore, agroforestry reduces erosion by improving soil cover and reducing nutrient leaching. It supports biodiversity-friendly landscapes [49] and promotes soil biodiversity [50]. Agroforestry can improve food security, production of commercial manufacturing, and energy generation (e.g., timber) [51]. Under drought conditions, agroforestry systems may maintain or enhance yields [52]. However, so far, only one project has reported having a reimbursement system on co-benefits. It was not possible to obtain any more detailed information about this process, which indicates a high need for further research. One expert also mentioned the reduced need for mineral fertilizer in some management practices and, by extension, lower resource consumption and decreased emissions (also confirmed by [53]). Providing a high level of conservativeness could help to ensure the project’s reliability and resilience, for example, the limitation of ex ante certificates. However, the accompanying financial pre-payments required to implement management practices placed a heavy strain on the farmer’s liquidity. Annual payments made after implementing the practice might represent a compromise. To this end, the expected amount of bound CO₂ was to be estimated prior to implementation, although this harbored the risk of the overestimation of bound emissions.

Furthermore, the survey results showed that pre-project efforts should not be rewarded. In total, reimbursement was consciously rejected for four projects with the argument that these efforts were not additional or that humus could be built up more easily under good soil conditions. Experts rated the approach for estimating the amount of bound CO₂ by combining modeling and measuring best, as they questioned the reliability for estimating the sequestration effect of management practice accurately. The experts, therefore, recommended practice-based reimbursement decoupled from measurements. However, this result was somewhat contradictory with regard to the financial system assessment, where result-based payments in the form of carbon credits were rated best compared to others. Some experts suggested that the CAP could also make practice-based reimbursements, while the GHG inventory would capture the change in SOC stocks as there were plans to integrate the LULUCF sector into the EU-ETS market (Regulation (EU) 2018/841, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.156.01.0001.01.ENG, accessed on 6 November 2023).

Overall, based on the grades determined in the online survey, there is an average rating of 2.18 for the reimbursement mechanism and a rating of 1.95 for the concepts of the framework conditions. Agroforestry as an implemented management practice meets 70% of the underlying criteria, which would correspond to a grade of 2.20. This can be interpreted as meaning that although all the required criteria could be met in theory, the quality of implementation in practice is not sufficient to be able to achieve valid carbon removal. Even by solely considering best-practice concepts and management practice, complete validity cannot be achieved.

4. Discussion

The discussion is structured as follows: Based on the project review, expert assessment, and the current literature, best-practice approaches for carbon farming were derived and are discussed regarding their translation into practice for achieving valid carbon removal. Afterwards, the methodological approach is discussed. In a third step, recommendations regarding the EU framework for certifying carbon removal in the context of creating carbon farming business models are outlined. Lastly, carbon farming business models as a measure for carbon removal promotion in general and possible alternative approaches for funding carbon farming are discussed.

4.1. Best-Practice Approaches of Carbon Farming Projects and Practical Limitations

The study results showed that a theoretical fulfilment of all requirements could be attained; however, there exist severe weaknesses in their practical implementation. Firstly, the results of this report showed that carbon farming projects offered a variety of concepts for meeting the requirements of voluntary certification standards, which presented minor to major qualitative differences. Approaches in the area of stakeholder engagement and registry could achieved good evaluation results (1.67–1.83). In the areas of reliability and resilience, on the other hand, even best-practice concepts only achieved a moderate rating (2.31–2.56) due to an unreliable baseline determination, poor non-permanence measures, and an unsuitable reimbursement mechanism. The method of combining measuring and modeling to estimate emission reductions was rated as comparatively good (1.77). However, studies indicated that even this approach did not allow for a reliable estimation of emission reductions [15,46,54]. Surprisingly, the remuneration of carbon farming measures through certificates performed best in all evaluations of the remuneration mechanism, although it achieved a mediocre result (2.35). The proportion of projects implementing a concept to meet the requirements varied between 8% for a conservative emission reduction estimate and 100% for implementing a payment mechanism. The proportion of projects implementing best-practice approaches varied between 4% for conservative payment management like ex post reimbursement and the remuneration of co-benefits and 50% for using short-term credits. Results showed that the requirements of additionality could only be fulfilled by a maximum of 80%, and those of permanence and leakage met by a maximum of 33%. Only 12% of the projects fulfilled more than 70% of the requirements, while 12% fulfilled less than 15%. However, this could also be due to the minimal information available about these projects. It was demonstrated that projects already certified in line with a recognized standard, such as the ERF in Australia, delivered higher conformity than non-certified ones.

To meet the requirements of a certification standard, carbon farming projects had to have concepts for reliable, resilient, stakeholder-engaging, conservative, registered, and on-demand project management. A best-practice example had a data portal for uploading information and management practices to enable a good verification process and stakeholder transparency. This platform should also include a registry for certificates, ideally verified and maintained by a third party. Furthermore, any emission removal should, at least, be calculated by a model, supplemented and confirmed by measured field data. A reliable emission estimation also included modeling a conservatively set baseline and a conservative emission reduction estimate. In addition, the needs and interests of all stakeholders had to be included and anchored in a code or set of rules. Project participants had also to be supported by sharing with them expert know-how and colleagues’ experiences through workshops, seminars, conferences, and courses. To prevent re-emissions, concepts such as buffer certificates or the withholding of new certificates had to be implemented. In addition, the binding of carbon in the soil had to be verified by repeated measurements over the certificate’s validity period of between 10 and 25 years. Management practices had to demonstrate permanent security, for example, through political protection regulations, and had to be additional. Implementing the measures should not result in any leakage effects, and both positive and negative effects should be fully considered or avoided. However, even best-practice approaches showed gaps in fulfilling the requirements for certified carbon removal. A main criticism cited by many studies and already mentioned in the introduction was the lack of permanence, which could not be adequately secured even by buffer certificates [15,55,56]. Two points were essential here: On the one hand, even in best-practice approaches, the continuation of the measure could not be secured for longer than 25 years. Such brief storage of CO₂ could not be considered permanent. Furthermore, even buffer certificates did not offer sufficient certainty of preventing re-emissions due, for instance, to climate change [45]. These findings were also confirmed by Paul et al. [15]. In second place, the risk of loss from natural disasters could not be ruled out. Another point of criticism was the additionality of management practices. The results of our study showed that, strictly speaking, since the CAP 2023 had been translated into practice, it had no longer been possible to establish additional management practices that could achieve a real mitigation effect. Management practices, such as catch crops, were either already well established or required by law [39,57]; Other management practices, such as agroforestry and converting arable land to grassland, which were less established and generally faced higher hurdles (e.g., [38]), could be funded via the CAP since the 2023 reform and were, therefore, no longer additional. A proper formulation of a baseline was likewise challenging as first field measurements often used for this could not be considered as a valid approach. Investigations by Demeyer et al. [13] showed that often it was not possible to accurately measure carbon stocks. Modeling approaches may provide more precise results, but the baseline determination very much depended on the quality of the input data and the model calibration. Furthermore, additional research is needed to develop standards for SOC stock change metrics and monitoring [15]. According to Viscarra Rossel et al. [58] and also confirmed by results of this study, the most appropriate instrument was a model-based estimation of SOC stock changes, with additional confirmation via soil samples. An accurate baseline estimation was of crucial importance, as projects may also set their baselines deliberately low. Results from an investigation of the world’s first major carbon offset program, the CDM, showed projects overestimating their impact on emission reduction by strategically manipulating their baseline scenarios [59], which also applied to certified projects [60]. In addition, the criticism was raised that establishing carbon credits in the land use sector could intensify financial speculation and land grabbing. Municipalities in the United Kingdom (https://www.ft.com/content/2ae63752-cefd-45b9-9282-a97584cc2cb2, accessed on 6 November 2023) and Australia (https://www.independent.co.uk/news/long_reads/australia-outback-carbon-farming-net-zero-b2282018.html?r=40426, accessed on 6 November 2023) had already observed negative effects on stakeholders, for instance, increased land lease prices, progressively making it difficult for small-scale farmers, in particular, to access the land market. Many projects neglected stakeholder inclusion and protection from negative impacts. At the same time, co-benefits were not adequately honored and considered. Only one project stated rewarding additional services achieved through carbon farming. Many studies indicated that, in addition to storing carbon in the soil, co-benefits could be derived from carbon farming. In particular, agroforestry systems were advantageous when comparing co-benefits like improved soil fertility and enhanced biodiversity, as mentioned before (see also Section 3) and trade-offs [41]. These results showed the importance of promoting management practices such as agroforestry from a co-beneficial perspective and not reducing them solely to sequestration performance.

4.2. Discussion of the Methodology

This section refers to the potential limitations of the approach applied here. It is important to stress that the standards and supplementary sources used to compile the list of criteria refer to versions from 2021 and before. The regulations of these standards are regularly renewed and supplemented. Therefore, it could not be guaranteed that the requirements were complete and reflected the latest standards and versions of the guidelines. In addition, a comprehensive evaluation of all criteria is currently only possible to a limited extent since further research is necessary, in particular, to record leakage or net harm effects, and it might not be possible to record them in their entirety. As a result, the assessment of agroforestry could deteriorate further. In addition, the 26 projects from 12 countries on three continents examined in the study probably represented only a small number of currently ongoing global carbon farming projects. Thus, further concepts might not be included in this work, and the selection of the projects might not be representative. However, we believe that the insights were highly informative and reflected a wide range of current carbon farming project approaches. Most concepts examined were based on information obtained from the projects’ homepages and websites. However, the completeness of this information could not be evaluated. As already mentioned, the implementation or number of concepts could be higher than assessed in this study. Due to the small sample size of 10 participants evaluating the concepts in the online survey, it could not be considered representative either. In addition, the results could be distorted by a bias since no additional incentives were given for participation. Therefore, it must be assumed that mostly experts with a high interest in certifying carbon farming projects took part in the survey. The same applied to the participants in the workshop, in which a total of six experts took part.

4.3. The Role of the EU Framework for Creating Reliable Carbon Removal Business Models and Recommendations

As this study has shown, compliance with certification requirements is essential to achieve valid carbon removal. The EU framework offers the opportunity to form a binding basis for carbon removal business models of all kinds and, therefore, to create a uniform standard. However, we recommend making some adjustments explained below. Firstly, a clear requirement for formulating a baseline scenario should be included in the framework as this is the prerequisite for an adequate emission reduction estimate. In addition, the framework could prohibit certain concepts such as estimating emission reductions purely via soil samples. Furthermore, a distinction must be made between emission reductions and emission removal [61]. Currently, the framework includes both reductions and removal, but there is no need to certify reductions since avoided emissions cannot be re-emitted or occur at a later point in time. Moreover, these are preferable to emission removal, which is why the framework should also define a limit to considering emissions as unavoidable and to be removed. This also includes a maximum amount of removal to avoid greenwashing. In the future, therefore, these mechanisms would have to be separated into three parts: emission reductions and permanent and non-permanent emission removals. Emission reductions should primarily be striven for and are eligible for funding even without certification. For example, in the land use sector, the rewetting of peatlands would be appropriate. Accurate emission removal that could safely store carbon for several centuries to millennia, which might be provided by geological carbon capture, must be certified using a uniform scheme such as the CRCF [62]. However, this article did not examine which practices outside the land use sector were effective and certifiable, but further information can be found in [63]. Non-permanent emission removal, such as management practices from carbon farming, are not comparable to long-term carbon removal or emission reductions in terms of their climate protection effect [62,64]. This qualitative difference should be clearly visible to investors aiming to compensate for their emissions. The framework could, therefore, provide a ranking or offer a portfolio of measures that clearly highlights the mitigation effect and possible risks of the respective measure. It may, therefore, be appropriate to separate the LULUCF sector from other sectors [64]. This could even mean its exclusion from the CRCF, for example, by formulating a concrete definition of permanence. The findings of this article have shown that the permanent storage of CO₂ via carbon farming was only possible to a limited extent and could not be secured. This was also confirmed by Paul et al. [15] and showed, furthermore, that even long-term contracts could not successfully address this issue. Although current studies found short-term carbon binding to have a possible climate change mitigation impact [65], these findings could not be confirmed by Dooley et al. [61]. Further research is needed to evaluate the actual contribution of carbon farming to offsetting unavoidable emissions.

4.4. General Evaluation of Carbon Farming Business Models for Promoting Carbon Removal and Discussion of Alternative Funding

Given the results, even the best-practice approaches shown above might not consistently deliver satisfactory results for meeting requirements such as measuring emission reductions or guaranteeing permanence. Consequently, the concepts and the business model in the form examined so far were not a credible measure to promote reliable carbon removal. This is also aligned with findings from Paul et al. [15], Demenois et al. [66], and Boysen et al. [67], indicating that nature restoration is essential but cannot be used, for example, for fossil fuel offsetting. Beyond this, the presented study showed a high standard of variety in existing carbon farming projects and their ability and approach to meeting concrete certification requirements. Nevertheless, studies proved the positive effect of humus-building practices and recommended promoting such measures. Consequently, a rational approach might be to deviate from considering carbon farming as a pure carbon removal strategy for generating carbon certificates and to shift the focus to co-benefits. The ability to increase the climate resilience of soils could be seen as an adaptation strategy to climate change, which was also confirmed by Paul et al. [15].

The study results showed that there were already approaches to promoting carbon farming involving practice-based instead of outcome-based funding. For example, donations or diversifying revenues could promote carbon farming measures without generating certificates. This was also confirmed by the results of other studies, such as Paul et al. [15]. It could be further substantiated by these study results through the expert evaluation of concrete practical examples. Promoting co-benefits through carbon farming could be interesting for businesses being obliged to disclose their environmental impact as part of corporate sustainability reporting (CSR) and could thus improve their environment balance [68]. In addition, this commitment could be highlighted as part of eco-marketing.

Municipalities and cities are encouraged to support environmental services as part of the Biodiversity strategy for 2030 (https://environment.ec.europa.eu/strategy/biodiversity-strategy-2030_en, accessed on 6 November 2023) farm-to-fork strategy and other initiatives and could also have an increased interest in promoting carbon farming outside of GHG compensation [69]. Furthermore, a corresponding direct marketing campaign at the farm level or a form of certification through labeling could be used alternatively to directly address the customer [70]. As shown in Demenois et al. [66] there are already standards to certify practices that increase SOC in Europe and, in particular, in France and Spain. They offer a more holistic approach to soil management, could meet and overcome the issues concerning additionality, facilitate the certification procedure, and factor in ecosystem services. The French standard “Au Coeur des sols (https://aucoeurdessols.com/www/, accessed on 6 November 2023)” could be mentioned as one example of certification. By combining the results of the presented study and Demenois et al. [66], a new approach to supporting carbon farming could be developed. As shown in Bithas and Latinopoulos [70], customers are willing to pay a price for olive oil produced via climate-mitigating cultivation practices that is, on average, 30% higher than the regular price. This results in a theoretical reimbursement of EUR 257/t CO₂ that is almost nine times higher than the certification reimbursement of EUR 30/t CO₂ for farmers via certificates in the case of Ökoregion Kaindorf (https://www.oekoregion-kaindorf.at/index.php?id=191, accessed on 6 November 2023) and more than four times higher than the current CO₂ price of EUR 80/t (Boerse, https://www.boerse.de/rohstoffe/Co2-Emissionsrechtepreis/XC000A0C4KJ2, accessed on 9 October 2023). Even eco-scheme payments would only deliver a reimbursement of EUR 60/t CO₂ in conjunction with a sequestration factor of 1 t CO₂/ha for agroforestry (own calculations based on GAPDZV [12]). In the context of average abatement costs of between approximately EUR 62.5 and EUR 82/t CO₂ for implementing agroforestry [71], the approach to remuneration through a label targeting customers’ willingness to pay seems to be the most profitable one. However, it should be borne in mind that willingness to pay might be influenced by the population’s income and educational level, which vary from region to region and are country-specific [70,72]. Furthermore, the term carbon farming could also be abandoned entirely and the associated practices promoted in a different context that focuses more on the co-benefits and additional ecosystem services related to these practices. These co-benefits are also necessary to secure the long-term willingness of farmers to implement the measures [73].

When it comes to carbon farming, the attention of the European Commission is very much focused on its sequestration performance (e.g., [6]), although promoting sustainable soil management is already anchored in various regulations and guidelines. They include, for example, the sustainable use of terrestrial ecosystems (SDG 15) or the voluntary Guidelines for Sustainable Soil Management [74,75]. The main focus is on promoting soil health, resilience, and fertility. This can be achieved, for example, by establishing humus-building practices within the framework regenerative agriculture following the provisional definition of Schreefel et al. [17]. It deems regenerative agriculture to be a farming approach that uses soil conservation as the entry point to regenerate and contribute to multiple ecosystem services. The identified best-practice concepts can be helpful in developing a corresponding approach. Future carbon farming research should focus more on how to reward its contribution to sustainable soil management.

5. Conclusions

This study shows the theoretical potential to develop a business model for promoting carbon farming in order to generate carbon removal. However, even best-practice concepts and measures cannot fully exploit this potential in practice. While several approaches showed a high degree of conformity with the underlying requirements, some achieved mediocre to insufficient ratings. The use of a data portal to upload information and management practices including a registry for certificates, ideally verified and maintained by a third party, demonstrated a high degree of fulfillment of the requirement. The reliability of the business model could be increased by estimating emission removal via a model calculation, supplemented and confirmed by measured field data, a conservative baseline, and a conservative emission reduction estimate. In addition, involving stakeholders and supporting farmers with expert know-how and buffer certificates might strengthen project resilience. However, all project concepts examined have weaknesses in terms of the baseline formulation, adequate permanence assurance concepts, and additionality. It is, therefore, important to note that even if uniform standards are adhered to, such as those that could be provided by the CRCF, the resulting CO₂ removal cannot be considered valid. Furthermore, the importance of these best-practice concepts has so far been underrepresented in practice. This was documented by the fact that only 12% of the projects could fulfill more than 70% of the requirements, while 12% met less than 15% of the criteria. Consequently, the focus should shift from C-sequestration to co-benefits. Promoting carbon farming in this way might be interesting for stakeholders and potential investors from two perspectives. Within the framework of various sustainability commitments or intrinsic motivation, there could be an interest in promoting biodiversity, for example. Furthermore, promoting carbon farming seems to make sense in terms of a Pareto-efficient solution. It might contribute to reducing climate change without worsening the adoption of the land use sector to climate change or the promotion of other co-benefits such as biodiversity. Alternative business models based on a fund, discount, or label could promote practices with desirable side effects such as improving soil condition and, simultaneously, avoid the problem of re-emissions used for compensation. This article already sets out initial approaches that form the basis for the development of a business model aiming to promote, for example, regenerative agriculture with a stronger focus on co-benefits. Further studies should examine the extent to which the business models that can be developed from this and should be evaluated with regard to the promotion of co-benefits and their importance for different stakeholders and investors.