Considering the UK’s ambitious commitment to achieve Net Zero carbon emissions by 2050, the government will be looking at all industries to ensure greenhouse gas (GHG) emissions are cut and sequestered. As the UK agricultural industry emits approximately 10% of the UK’s GHG emissions it has a crucial role to play in achieving this target. Importantly, agriculture doesn’t just contribute to global warming through the omission of CO2, but through other more harmful gasses such as nitrous oxide (N2O) and methane (CH4).
There are a variety of measures and methods which the agricultural industry can utilise to reduce its footprint. These will include improvements to efficiency and productivity (e.g. precision farming and utilisation of best practise), increasing the rate and capacity for carbon sequestration (e.g. good soil management and tree planting), and wider adoption of renewable energy (e.g. installation of solar panels and wind turbines).
The Government is incentivising land owners and managers via a variety of structures to include the Woodland Carbon Code (WCC) which provides a route for carbon credits to be traded, and it is anticipated that the Environmental Land Management (ELM) scheme will pay for specific soil management and reduced fertiliser use, both of which would improve a farm’s carbon footprint.
Besides the obvious purpose of mitigating the effects of global warming, farmers may experience additional pressure to improve their carbon footprint if they want to remain on the best contracts and have access to affordable finance. Carbon auditing calculators will be an essential tool to ensure this progression, however this technology is still in its infancy and more data needs to be collected to ensure accurate baselines can be generated and relied upon.
Much is yet to be seen, but there will be opportunities for land owners and managers alike whether that be through carbon offsetting via afforestation of marginal land, or advancements in technology to generate improved efficiency which would reduce carbon emissions and therefore benefit profit margins.
These shifts in land use are likely have an impact on land values alongside a plethora of other impacting factors which will be a consideration for those in the market buying and selling land. The size of this impact is unknown, however, shifts in land value could pose another opportunity for those with interests. All parties with agricultural interests should keep a close eye on the ever-shifting landscape to ensure they are well positioned to take advantage of opportunities as they present themselves.