Developed by Soil Association Exchange, the new Exchange Market will operate as an insetting fund without any sales of carbon credits.
While carbon credits fund decarbonisation projects to compensate (or offset) for emissions that cannot be reduced by a company, insetting works by investing into carbon reduction projects within one’s own supply chain.
The new Exchange Market programme will pool funds from a range of companies with shared supply chains to pay farmers to reduce emissions.
The scheme has been supported by Lloyds, which helped pull together key retailers and landowners including the Co-Op, Lidl, Tesco and the Church Commissioners for England to contribute to the fund.
In its first funding round, Exchange Market secured £1m in funding.
The fund was co-developed with technical experts Finance Earth, but it has also been created with the help of a farming steering group to ensure action plans work for the sector.
These plans will be led by the farmer and put together with the support of Soil Association Exchange expert advisors. Actions to receive funds could include things like reducing fertiliser usage by introducing nitrogen-fixing companion crops, better fuel efficiency or investing in solar.
Soil Association Exchange chief executive Joseph Gridley said the programme represents a major step forward.
“Collaboration like this enables greater scalability, affordability, and ultimately more impact in reducing agricultural emissions and advancing positive environmental outcomes,” he added.
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.
Moreover, 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 the average Soil Association Exchange benchmark will be eligible for maintenance payments. This will recognise progress to date and support these businesses to continue upping their performance.
James Hay of Barton Place Farms and member of the farmer steering group, commented: “As subsidy funding changes in the UK, schemes like Exchange Market give our business further resilience by offering new income streams from private markets.”
Elizabeth Beall, Managing Director from Finance Earth, technical experts on the scheme added: “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. Annual payments are based on verified results.
