The European Union has adopted its target for cutting climate pollution by 2040 and is now working on the policies needed to achieve it. Its climate advisors have just published a major report on agriculture with a clear message for the sector: business as usual is not an option if Europe wants to ensure a better future for its farmers and rural communities, and, frankly, everyone else.
A key recommendation, made in their first report to focus solely on agriculture, is to reform the EU’s farm subsidies to stop spending public money on climate-harmful farming practices and start spending it on helping farmers switch to more climate-friendly alternatives.
This blog unpacks the report’s key messages and recommendations, and what this means for the EU policy agenda this year.
Agriculture’s untapped climate potential
The latest report released in March by the European Scientific Advisory Board on Climate Change (ESABCC), the body tasked with providing advice on climate-related issues to the EU, is its first to exclusively focus on how to “climate-proof” the EU’s agriculture and food system.
The Board’s experts stress that making changes in the EU’s agriculture and food system is imperative because climate change undermines agriculture’s roles — providing food and materials to our communities while ensuring rural livelihoods.
This not only means that we need to reduce how exposed and vulnerable our food system is to extreme weather events, droughts, pests and the like, which will all be exacerbated by climate change — but also that we will not be able to build resilience if we don’t reduce our food system’s contribution to the climate crisis in the first place. The experts stress that delaying either side would drive up costs in the long term, limit the choices the EU can make in the future, and expose society to compounding risks of climate change.
The advisers emphasize, however, not only that we have a problem but also the tools to implement solutions and make use of the EU’s agriculture and food system’s “untapped potential to deliver climate action.”
The experts summarized their recommendations in six key demands. This article takes a different approach, highlighting IATP’s eight takeaways from the report that should receive specific attention.
1. Transforming the system unlocks real potential for climate mitigation…
The experts’ recommendations circle around one central conclusion, namely that “incremental change is insufficient: a systemic transition of production and consumption is indispensable.”
The Board reaches this conclusion after assessing three possible futures for the EU’s agriculture and food system: business as usual, the adoption of technical measures alone, or adding transformational changes to the portfolio of measures. The Board concluded that transformative changes will not only unlock a larger extent of GHG emission reductions but are also better fit to address other environmental and social challenges.
While the report did not undertake any bespoke modelling, it developed three illustrative pathways based on existing literature that sketched out the scale of GHG emission reductions attainable across the three possible futures.
While business as usual would at best result in minimal GHG emission cuts (or even increases), implementing technological measures would achieve GHG emission reductions of up to one third by 2050 compared to 2005. The real climate opportunity, however, comes with implementing systemic changes — from on-farm practices through to what we all choose to eat — enabling GHG emission reductions of one third by 2040 and half by 2050, while also increasing carbon sequestration in soils and trees.
The extent to which climate pollution is reduced in the agrifood sector has relevance, not only to those within the sector, but for broader climate policy.
Under the EU Climate Law, the EU has committed to balancing out any remaining GHG emissions it makes in 2050 with measures that take carbon out of the atmosphere and store it underground, in trees or soils. In other words, its GHG emissions level is meant to net out to zero. After 2050, this balance should go negative (i.e. “negative emissions”), meaning that the EU removes more climate pollution from the atmosphere each year than it emits. Yet, the possibilities to capture and store carbon in a durable way are limited in scope and often associated with high cost and risk.
As such, the advisors conclude that “without faster progress within the agrifood system, achieving climate neutrality would require additional emission cuts elsewhere or a much faster scale-up of carbon removals, increasing overall costs and climate-related risks for the EU economy,” aligning with IATP’s analysis.
…while delivering on climate adaptation, and other environmental and social challenges.
But climate change is not the only challenge that the EU currently faces — biodiversity is disappearing, water quality and availability is strained, public health is declining, and the livelihoods of farmers and rural communities are under pressure.
Taking a wider perspective than only climate, the advisors find that while technical measure may be able to deliver some GHG emission reductions and to respond to climate impacts in the short term, they are unlikely to do so in the long term and conversely may cause lock-ins and maladaptation (i.e. increased use of water and pesticides to address reduced yields).
They conclude that even in the best-case scenario, “technical options alone will not suffice to bring agricultural production within planetary boundaries.”
A systemic transition would, in contrast, come with advantages on multiple scales to “better safeguard European food production against the risks of climate change in the longer term, and result in higher synergies and lower trade-offs with other environmental and public health objectives.”
Of course, such a transformation does not come without challenges and trade-offs. The report highlights, for example, the need to create alternatives for livestock farmers, addressing the potential shift of production — and with it associated GHG emissions — to outside the EU (so-called carbon leakage) and the difficulties associated with adjusting dietary habits, “which are deeply embedded in culture and territorial identity.”
2. The biggest lever is the EU’s existing scale and type of livestock production
While the report looks broadly at the climate impacts of the entire agrifood system beyond what is happening in the fields and stables, it also highlights that the way in which livestock production currently operates is a not only a key lever to reduce the system’s climate impact, but also a key vulnerability of the system (see takeaway #8).
Today, livestock production accounts for about half of the EU’s agricultural GHG emissions — and dominates how land is used, with two-thirds of EU cereal production going to animal feed.
Going beyond that, the EU is heavily dependent on imported protein feed, mostly soy from Latin America. The advisors cite estimates that this imported feed is associated with an additional 100 million tonnes of carbon equivalent (MtCO2e) due to land use changes that do not show up in the EU’s inventory. To put that number in context, it is equal to about half of the carbon stored in EU lands annually.
The experts are clear that real climate action in the agriculture sector cannot ignore the current scale and form of livestock production in the EU.
What climate friendly livestock production looks like in each case on the ground is still open for discussion. There is no single answer to this question, though considering what the environment can support provides some guiderails to the discussion.
The argument that livestock production contributes to a sustainable agriculture system by maintaining biodiversity-rich grasslands and nutrient cycling paints a picture of a livestock system that is aspirational but largely does not reflect the industrial system currently in place.
Thinking about what possible transition pathways for livestock production could look like, the report draws on different examples. For instance, improving grassland-based dairy and beef may mean moving towards more diversified grasslands with varied species and trees. Grain and crop silage-based dairy and beef could shift towards an agroecological system with diversified cropping and limits on animal numbers within the boundaries of the feed a farmer can sustainably produce. Pork and poultry farms could implement changes in the feed (i.e. circular use of food wasted at other points of the food system) for the animals and move towards free-range options.
Combined with an overall downsizing of the sector, these improvements can adjust the sector to work within planetary boundaries, echoing the conclusions of scientists in other formats.
3. Public transition support needs to come in the form of money, risk management support, and knowledge.
The report’s authors are clear that not one policy can fix all these issues alone, but that we need an array of different measures to make a successful transition.
Public funding is one of those indispensable measures to make a just transition possible. The advisors argue that reforming the EU’s agricultural subsidies, the Common Agricultural Policy (CAP), could deliver a framework that provides such comprehensive transition support.
The advisors outline a number of different forms public support could take, including investment support, balancing out income changes in the period of transition, advisory services and options to exit their current business model.
The advisors’ assessment of current CAP financing shows that while investment support is possible, EU countries use this money to support investments in existing farm structures rather than to support structural changes. To change this, the report suggests that the CAP could improve the conditions that need to be met in order to receive investment support. It could provide variable support rates — with more generous support for investments supporting climate goals — or shift toward financing incremental changes through private funds (backed by public finance) while reserving more funds for structural changes.
The experts conclude that while the Commission’s proposal for the post-2027 CAP — which will be negotiated over the next year to 18 months — largely maintains the existing approach to investment support, there are opportunities in the Commission’s proposal. These include the addition of investments in climate and water resilience as a particular area of focus, and the requirement for EU countries to offer farmers the option for public funding to implement a transition plan towards more organic farming as well as extensive, low-input livestock farming. Such suggestions are a helpful starting point that a just transition approach can build on.
4. Experience with phasing out fossil fuels subsidies can inform what needs to be done for climate-harmful agriculture subsidies.
Phasing out fossil fuel subsidies has been long a core demand in the energy transition. The experts argue that some agricultural subsidies are no different to energy sector subsidies — they both harm the climate and should be phased out.
The report argues that direct payments under the CAP can be considered climate-harmful because “just as general energy subsidies unintentionally encourage higher energy use, decoupled payments generally encourage agriculture over other land uses, resulting in higher emissions within the EU compared with a baseline with no such payments. Coupled payments for livestock and decoupled payments for degraded peatlands are particularly harmful as they actively promote the most GHG-intensive forms of agriculture, making them comparable to fossil fuel subsidies.”
Given that the EU’s agriculture and food system has been built around these subsidies for decades, the authors do not suggest simply stopping these subsidies from one day to the next, but to gradually reform them.
They stress that the next CAP starting from 2028 is a critical opportunity to kick off the reform, starting with reforming the most harmful payments, namely coupled payments for livestock and decoupled payments for degraded peatlands.
This would not mean that the funds would simply disappear. The advisors argue that the best way to avoid most of the negative impacts for farmers is to use those funds to reward ecosystem services — a demand long supported by environmental as well as progressive food and farming groups.
Even if such a comprehensive reform is not implemented, the advisors stress that at least direct payments should be subject to minimum requirements related to climate mitigation.
Zooming out, the report compares the transition in the agrifood system to the energy transition, recommending that decision makers consider both the restoration of peatlands as well as the transition in the livestock sector not as a purely technical issue, but as “a socio-technological transition similar to the German coal phase-out” requiring a comparable policy approach.
EU countries like the Netherlands, Denmark and Finland are part of an international coalition supporting the phase-out of fossil fuel subsidies. To make the ESABCC’s recommendation a reality, adding similar attention to EU agricultural subsidies would be a helpful approach.
5. A systemic transition pathway relies on a comprehensive policy package, which includes pricing agricultural emissions.
The report recommends putting a price on GHG emissions associated with the agriculture and food system, including energy use on farm and GHG emissions from agricultural land use, following the European Court of Auditor’s advice to apply the Polluter Pays Principle to agriculture’s GHG emissions.
The report considers the various options discussed in a study commissioned by the European Commission, involving public stakeholder engagement.
While the experts recommend the introduction of pricing “in a gradual and adaptive manner that encourages the entire agrifood value chain,” they do not take a specific stance on the details of such a system, stressing that cost-effectiveness of the system must not be the only focus when designing such a system.
The advisors view the Commission’s development of the Carbon Removal and Carbon Farming Framework (CRCF) as a potential basis to provide data, given that the precondition for any pricing mechanism is being able to capture the climate impact of changes in farm practices. However, the report also points to expert criticism of the framework, such as the risks of certifying credits from non-additional activities, generating more credits than appropriate or insufficient mechanisms to address the temporary nature of the credits.
While the Board does not take a fixed stance on which form of mandatory GHG emissions pricing they would prefer, they make it clear that a purely voluntary approach, such as the one currently discussed by the Commission, would not be sufficient. A proposal for a mandatory mechanism in the 2040 climate package seems unlikely given that all traces of the Commission’s study and stakeholder discussions disappeared from the Commission’s website, allowing for speculation that the study will not be published.
6. Creating new opportunities in new supply chains, including through a shift towards healthier diets,
The advisors are clear that changes on the production side must go hand in hand with changes in the demand side, namely a shift to healthier diets.
The report emphasizes the importance of addressing any changes from a system’s perspective, meaning that the changes cannot be achieved by one actor alone, but through coordinated action along the supply chains, “supporting the principle of a shared responsibility of the entire supply chain.” Farmers alone would not be able to drive the change because their choices are often “heavily constrained by structural lock-ins and supply chain dependencies.”
Therein also lies opportunity: a coordinated shift in the supply chains would de-risk the transition for farmers. “It is not feasible for farmers to shift from animal-based to plant-rich products if no processing and marketing infrastructure exists for these alternatives.”
The experts revive a policy approach that was originally proposed in the 2020 Farm to Fork Strategy, an “overarching food policy framework”, such as the one originally discussed under the Sustainable Food Systems law which is now officially buried.
7. Restoring peatlands can deliver on climate and bring new opportunities for farmers.
Aside from livestock, peatlands are another focus of the report. Historically, peatlands have been drained to create land more suitable for agriculture, to be used as cropland or grassland. These drained peatlands contribute 5% to the EU’s GHG emissions, according to official inventories, but are likely underestimated.
The extent of their contribution is mostly hidden due to the way GHG emissions are accounted for. Peatland GHG emissions are included in the land sector, not agricultural. Because forest dominates the land sector as a carbon sink, the actual GHG emissions from peatlands are subsumed within this math.
The majority of peatland is located in only a handful of EU countries — Germany and the Baltic and Nordic countries — so it is a specific issue for these regions rather than for the entire EU. The land area involved is also relatively small with only 6% of the EU’s total land area and 2.5% of its agricultural land, but the impact on GHG emissions is significant.
This does not mean that such peatland must be taken out of agricultural production — instead the report highlights the new opportunities for farmers to produce reeds, cattails, or sphagnum moss that will be important biomaterials as we move towards less fossil fuel-based sources. The experts cite an assessment by the European Environmental Agency that such use of peatlands could avoid about 27% of GHG emissions from agricultural use of peatlands.
8. Transforming the food system can make it more resilient, including to supply chain disruptions.
In today’s world we’re experiencing a constant stream of supply chain disruptions, challenging the hyper-globalized systems we have built over the last decades. We cannot necessarily say where the next disruption will come from, but we can be sure that there will be one.
As such, ensuring food security in the future requires building resilience and focusing on risk management. The report specifically highlights the importance of reducing the EU’s reliance on imports of feed and synthetic fertilizer, since the supply chains we rely on are vulnerable to supply and price shocks resulting from a wide array of events, including climate-related events.
Taking the feed supply chain as an example, the advisors concluded that about three quarters of the EU’s animal protein feed is imported, and 82% of these imports are coming from Argentina, Brazil, and the United States. By 2050, about 60% of the soybean imports will come from areas that are highly vulnerable to droughts, making disruptions to the system ever more likely.
The experts conclude that a systemic transition would not only result in a reduced reliance on synthetic fertilizer and an integration of livestock into sustainable systems at a scale, but is also a critical risk management strategy towards more strategic autonomy, strengthening the EU’s food security long term.
Putting climate action in agriculture and food on the agenda
Ultimately the ESABCC’s report is clear: The EU cannot afford to leave its agriculture and food system off the climate agenda, nor can it leave climate considerations off the farm subsidies agenda.
The report is especially timely as the EU is in the process of negotiating its next long-term budget and the policies needed to meet its 2040 climate target. EU governments and the European Parliament are currently developing their demands on the budget, with negotiations following as soon as the respective institutions have settled on their positions. In parallel, the European Commission is expected to make its proposal for a policy package to meet the 2040 climate target — including possible measures for agriculture — towards the end of this year.
First hints of whether the Board’s advice on the livestock transition have been taken up could come in June when the Commission is expected to launch its livestock strategy.
