Guest blog: EU carbon farming agenda can support cocoa and chocolate firms lead environmental change
The EU Carbon Farming Summit. Pic: Project Credible
The recent EU Carbon Farming Summit in Dublin this month actively explored how entire supply chains can play their part in carbon reduction delivery, as our guest blog from Nikol Ostianova, chair of the technical committee, International Platform for Insetting
The recent EU Carbon Farming Summit signals the EU´s appetite to drive decarbonisation and regeneration of the agricultural sector. The hotly debated EU Carbon Removals and Carbon Farming Certification (CRCF) creates the first EU-wide voluntary framework and rule book for certifying carbon removals, carbon farming and carbon storage in products across Europe. This represents a significant opportunity for farmers and companies to create shared value for business and nature. While the current geographical scope of CRCF is the EU land, there were numerous conversations linking corporate Scope 3 GHG removals to CRCF.
This could include GHG emissions associated with farming of cocoa, coffee, soy and other crops outside of the EU. Additionally, although agricultural and food products are currently excluded from the Carbon Border Adjustment Mechanism (CBAM), the European Commission plans to review this by the end of 2025. If included, agrifood importers would face additional costs tied to embedded carbon emissions in their products.
The power of insetting
The EU Carbon Removal & Carbon Farming (CRCF) provides the operating architecture for carbon management in organisations with value chains in Europe. It will provide greater clarity on the use of carbon offsets in Europe and offer recognition to the practice of insetting. In this blog, we focus on insetting as an emerging investment approach involving stakeholders along value chains and transitioning to regenerative agriculture and agroforestry – from farmers to retail. It offers a compelling opportunity for cocoa and chocolate companies to:
- Reduce sourcing risk in the face of climate change
- Improve product quality and nutritional value through enhanced soil health
- Reduce reputational and regulatory risks
- Strengthen farmer relationships and community goodwill
- Benefit from potential premium pricing for regeneratively sourced products
Overcoming Barriers to Adoption
The second EU Carbon Farming Summit held recently in Dublin as part of the stakeholder engagement process identified several barriers to widespread adoption of nature insetting, including financial risks for farmers, limited technical support, and unclear market incentives. To overcome these barriers, cocoa and chocolate companies should focus on key success factors:
- Provide financial support and risk-sharing mechanisms
- Offer technical assistance tailored to local conditions
- Create clear market incentives for regeneratively grown cocoa
- Advocate for supportive policies and stable public funding
From Commitment to Action
While initiatives like the Cocoa & Forests Initiative have set ambitious goals, and companies such as Unilever or Nestlé make public insetting claims, the industry needs to move from commitment to concrete action at scale. There is a compelling evidence base emerging for system change across the industry, prioritising crop value chains where the risk of catastrophic failure is high. Key system leverage points which could enable the identified success factors are:
- Integration of regenerative practices into core business models and central operations. This means sourcing regeneratively grown cocoa and integrating these practices throughout the supply chain.
- Collaboration with the banking and insurance sector to recognize land and nature as critical infrastructure and investment opportunity. The sectors are ready to reward behaviour that reduces risk providing the potential to reward responsible growing and land stewardship practices.
- Building long-term supplier relationships to provide farmers with the security and support needed to make this transition, for example, through advanced market commitments.
- Engagement in cross market collaboration to find new models that allow resources and knowledge to be shared for the benefit of all. Leverage emerging industry best practices and frameworks of nature value chain insetting and offsetting, to establish a trusted third party mechanism and credibility with external stakeholders.
The Way Forward
The cocoa and chocolate industry stands at a crossroads. By embracing insetting and making regenerative agriculture a core business value, cocoa and chocolate companies can secure their supply chains, build stronger farmer relationships, and lead the charge towards a nature-positive future. This transition is not just about sustainability; it’s about ensuring the long-term viability of the entire cocoa and chocolate sector. The companies that act now to create nature-positive, climate-resilient, and inclusive value chains will lead tomorrow’s cocoa and chocolate industry.
