Economic policy for agricultural voluntary carbon markets in the EU: structural weaknesses and reform options

The intensification of climate change, driven by unsustainable human activities, calls for urgent action to transform key sectors such as agriculture. This article argues that the transition to more sustainable agricultural systems requires a combination of market-based and non-market-based instruments, and focuses on agricultural voluntary carbon markets (VCMs) in the European Union as one such tool. Adopting an economic policy perspective, it provides a balanced assessment of agricultural VCMs by outlining their main structural features and synthesising recent evidence on their development. The analysis organises the principal criticisms and concerns surrounding agricultural VCMs, including information asymmetries, fragmented standards, permanence and integrity risks, and unequal distribution of costs and benefits, into a set of structural weaknesses. These weaknesses are then examined in light of emerging European Union initiatives, such as the Carbon Removal Certification Framework, the Green Claims initiative and the Corporate Sustainability Reporting Directive, to assess how regulation may reshape the space for agricultural VCMs. Finally, the article discusses reform options aimed at tightening eligibility and use of credits, strengthening verification and aligning private offsetting with public climate objectives.