In previous articles, we’ve looked at the potential downsides of carbon farming initiatives and the need for farmers to be aware of these to ensure they are not severely disadvantaged.

While the largest concerns remain that the sector may be hollowed out by wealthy fossil fuel interests in washing their climate obligation, it appears some large food companies have their own concerns.

At a recent Organisation for Economic Co-operation and Development (OECD) meeting on the future of carbon accounting, attended by industry leaders and different countries’ government representatives, the potential for the “wild west” of carbon trading to currently devalue our product was raised by industry leaders.

Climate pledges signed

Large companies, such as Nestlé, Abbots, Mondelez (parent company of Cadbury) and even Diageo (parent of Guinness among others), have increasingly been pushing – or are being pushed by activist investors and consumers – to sign up to climate pledges aimed at slashing emissions.

While this has in many cases triggered a pouring of money into various pilot projects, and in many cases, ill-defined production standards, such as “regenerative agriculture”, it is also pushing multinational buyers to look harder at their suppliers.

One such is Danone, which shocked the business world by saying it would slash 30% of methane from its fresh milk product.

Even more surprising – but also more positive – for dairy farmers was that Danone did not intend to do this by simply replacing dairy with plant-based products, but by instead working with suppliers.

Due to Ireland being a supplier of mostly dried and prepared dairy product, this is not an immediate concern for us, however, this is a clear direction for suppliers of dairy, grain and even meat products.

As large industry-leading companies move from simply saying they’re supporting practices to placing hard targets on reduction, could we see demand for supplier changes increase?

‘Double accounting’

How does the current state of unregulated or barely regulated carbon credits fit into this? Well, the term “double accounting” is cropping up as often as “greenwash” these days.

Say a co-op taking my milk wants to secure a contract – it says it can deliver a 10% cut in emissions versus a competitor, prompting a contract from a company looking to meet their public targets.

This co-op would then be expected to facilitate this change; getting its suppliers to sign up to changes in practice to preserve soil carbon, maybe even areas of natural rewetting with no cost. Or in the future it might supply feeds designed to reduce methane or low-emissions fertiliser at discount.

The term “double accounting” is cropping up as often as “greenwash” these days

A positive step all-round, helping to meet the sectoral emissions at national inventory and Government level, and contributing to securing more contracts for the co-op by improving milk price on a market level.

However, if that farmer chooses to sell these “carbon credits” to a fossil fuel company, in an era where regulation might be clarified to prevent double-accounting, this milk can no longer contribute to the milk purchaser emissions reduction.

In many ways, this would be like selling the cow to one neighbour, but not telling him you’re selling the milk of that cow to another.

Threat post-2023

This may sound complex (it is), but the fact that multinational corporations are already raising this as a concern means it’s a real threat to the sector.

Add to this the attempts by Government and, indeed, EU actors to potentially offset the filthier sectors, such as oil, gas, transport and even manufacturing by using ‘land based’ emissions reductions, and this means there is a real threat here post-2030.

Politicians need to be made aware of these concerns immediately, otherwise we as farmers could be trapped between increasing national policy obligations, and the gears of private companies and corporations.

The possibility of a misrepresentation of the potential return to farmers of carbon credits may be the most immediate threat.

All farmers should be ready with hard questions for those promoting the ideas of trading farm carbon reductions.