Soil Association Exchange and Lloyds Banking Group have launched a £1m carbon insetting fund for arable producers, which will pay them a premium for meeting a series of sustainability goals on-farm.
The fund is being backed financially by Tesco, Lidl, Co-op and major landowners such as the Church Commissioners for England as a key part of their scope 3 emission reduction work.
Devised in “close and ongoing collaboration with a farmer steering group”, the Exchange Market project will reward producers in areas such as reducing fertiliser usage, better fuel efficiency or investing in solar.
“Exchange Market is about creating real, measurable change within farming systems while empowering farmers to make decisions that work for them,” said Soil Association Exchange CEO Joseph Gridley.
“This carbon insetting programme demonstrates that delivering true environmental outcomes can go hand in hand with financial resilience when farmers and businesses collaborate to build a sustainable future for food and farming,” he added.
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“It represents a major step forward in aligning farming activities with climate goals and demonstrates the power of what can happen when businesses and farmers work together. Collaboration like this enables greater scalability, affordability, and ultimately more impact in reducing agricultural emissions and advancing positive environmental outcomes.”
Farmers participating in the scheme can earn £60 per tonne of CO2e (carbon dioxide equivalent) reduced annually, with half of payments provided up front to help fund their transitions.
The project also confirmed that “farmers who are already ahead of the curve” would be rewarded, in addition to those who were making new steps to reduce carbon.
Those who have emissions that are below average, according to their Soil Association Exchange benchmark using the Farm Carbon Toolkit, will be eligible for maintenance payments, recognising their progress to date and supporting them to continue their performance.
The Exchange Market fund “offers the flexibility we need to do the right thing for our farm, and provide the financial support for us to try new ways to reduce our emissions”, said James Hay, of Barton Place Farms, and a member of the farmer steering group.
“As subsidy funding changes in the UK, schemes like Exchange Market give our business further resilience by offering new income streams from private markets.”
The project had the potential to be expanded to other sectors and categories in the future, said Soil Association Exchange.
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