A new programme to enable supply chains to reward farmers for reducing greenhouse gas emissions is now open to farmers.
Developed by Soil Association Exchange, the new Exchange Market differs from carbon credit sales schemes as it pools funds from a range of companies with shared supply chains to pay farmers to reduce emissions.
The scheme is being supported by Lloyds, the bank has helped to convene key retailers and landowners including the Co-Op, Lidl, Tesco and the Church Commissioners for England to contribute to the fund. The fund has been co-developed with technical experts Finance Earth.
It has also been devised in close and ongoing collaboration with a farmer steering group and farmers will receive funding for cutting emissions by adopting action plans that work for them. These plans will be led by the farmer and put together with the support of Soil Association Exchange expert advisors and could include actions such as reducing fertiliser usage by introducing nitrogen-fixing companion crops, better fuel efficiency or investing in solar.
Soil Association Exchange Chief Executive Joseph Gridley said: “Exchange Market is about creating real, measurable change within farming systems while empowering farmers to make decisions that work for them.
“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.
“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.”
Rewards for all farmers who reduce carbon
Farmers participating in the scheme can earn £60 per tonne of CO2e (carbon dioxide equivalent) reduced annually, with half of payments provided upfront to help fund their transitions.
Importantly, farmers who are already ahead of the curve will be rewarded, in addition to those who are 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.
James Hay, of Barton Place Farms, and member of the farmer steering group, comments “Exchange Market has been created in collaboration with farmers from the start. The result is a fund that 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. As subsidy funding changes in the UK, schemes like Exchange Market give our business further resilience by offering new income streams from private markets.”
In its first funding round Exchange Market has secured £1m in funding, contributed to by businesses united by a commitment to reduce their Scope Three emissions – the indirect emissions generated through their supply chains, or their rental or lending footprints.
The programme connects farmers with businesses striving to meet ambitious sustainability targets, ensuring mutual benefit for all involved.
Elizabeth Beall, Managing Director from Finance Earth, technical experts on the scheme comments:
‘Mobilising private capital to address the climate and nature emergency is critical to speed up action. Farmers are on the front lines and should be remunerated for the work they have done and incentivised to do more. We’ve designed a mechanism which enables both to happen – private finance is mobilised, farmers get paid, while businesses can share costs in reducing emissions in their supply chains.’
Farmers can join Exchange Market by completing a baseline assessment and submitting a verified emissions reduction plan – with support from Soil Association Exchange advisors.
With annual payments based on verified results, the programme ensures transparency and accountability at every step.
To get involved or to find out more about current and future funding rounds, visit: www.soilassociationexchange.com/exchangemarket
