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Emissions trading system for the agricultural sector


Farmers and processing companies (e.g. dairies, slaughterhouses) must provide evidence of emission allowances or certificates if they release a certain amount of greenhouse gases (GHG) within a certain period of time as a result of a certain activity (e. g. livestock farming, crop production, use of fertilisers). The GHG emissions included in emissions trading are subject to an upper limit. Farmers can also trade their emission allowances: either within the agricultural sector or outside, if emissions trading in the agricultural sector is linked to trading in other sectors. Certificates can be traded in compliance or voluntary markets.


  • A properly functioning country-wide administration and monitoring system with access to the relevant information and sufficient technical and human capacities for its design, implementation and monitoring
  • Clear and coherent political strategy and targets for policy-makers and public authorities
  • Quality standards for validation / certification of sink performance
  • Country-wide monitoring of natural resources and their quality (e. g. water, soil, forests, air, grassland)
  • Emission registration and monitoring system
  • Market price information systems

Possible Negative Effects

  • The administration and monitoring effort required could overstretch public authorities
  • Prevention costs could overstretch smaller farms and businesses
  • Fraudulent calculations, minimum thresholds exceeded
  • Processing sites move elsewhere
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This page was last edited on 7 May 2023 | 7:22 (CEST)
Implementation Level
  • Competent Authority
  • National Government
Required Budget
medium ($$)
Impact Horizon
  • long
Administrative Complexity
Ministries Involved
  • Agriculture, Fisheries & Forests
  • Trade, Industry & Economic Development
  • Environment & Natural Resources
  • Finance
  • Internal Affairs, Construction & Infrastructure
  • Health
Trade Impact
not distorting
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  • Instruments
  • Policy Objectives