Additionality – essentially the measure of whether one specific action is responsible for making a situation better – is an increasingly important yardstick for UK agriculture. It is a key attribute used to safeguard the integrity of carbon offset markets, for example. But in the context of UK carbon codes, additionality poses specific problems in three ways.

1. Government grant support for the same action that carbon markets are trying to achieve can undermine the need for or desirability of carbon accreditation.

In woodland creation, for example, it has been the case that the high level of government grants available for tree planting has undermined the need for carbon offsets to fund tree planting initiatives. Careful design of woodland creation schemes has been needed to maximise grant funding income (which de-risks the process) whilst ensuring the scheme is available for carbon accreditation too.

2. The second problem is the changing regulatory baseline, against which additionality has to be assessed. Government can set tougher environmental baselines that require land managers to act in a certain way, such as in Wales where all farmers and land managers will be required to have a minimum of 10 per cent of their land in tree cover to be eligible for the new Sustainable Farming Scheme.

The principle of additionality would mean it is the policy change that has created the outcome (increased tree cover), and this could prevent carbon offsets from being sold from the woodland planted as a result. It would be important for the integrity of carbon markets that these farmers were not being paid for the same action twice (for example, through accessing the Sustainable Farming Scheme and through carbon markets payments).

3. The third problem is the most interesting in the context of emerging soil carbon markets. Increasing the levels of soil organic matter (and therefore soil carbon) is either something that farmers say they would like to do anyway to improve biodiversity, or it is actually in their own financial interests to do, as it improves yields, input use efficiency and resilience to drought and flood. In either case, the principle of additionality means creating a tradeable carbon offset from the action to sequester more carbon in the soil could not be attributed to the soil carbon payment, because the evidence implies the farmer was most likely going to do it anyway.

Supply chains are beginning to insist that produce is created from ‘regenerative systems’ that sequester more carbon than they emit. This requirement would also challenge the farmer’s ability to sell any carbon sequestered to a third party, as the action is being caused by selling produce to a supply chain, not by selling the carbon offset.

Ultimately, additionality speaks to the quality of the carbon offset (and therefore its price), rather than the validity of carbon offsets in a voluntary carbon market.

Additionality is needed to encourage integrity in carbon offset markets, and the UK is well placed to ensure carbon offset programmes (either formal or voluntary) created here meet the principles for high quality offsets.

Rather than avoiding these potentially high value opportunities, farmers simply need to have clear carbon strategies to ensure they can sell carbon to third parties (if they want to) and that their interactions with government grants and supply chains do not undermine their ability to do so.

Further information

Contact Alex Godfrey

Savills Rural