Repurposing EU Subsidies for an Effective Agrifood System Transition to Net Zero

The report highlights a significant gap between current EU agricultural emissions trends and the 2030 and 2050 climate targets. It identifies the absence of agriculture from the EU Taxonomy as a major barrier to defining sustainable activities. The author proposes repurposing the CAP, which accounts for approximately 30% of the EU budget, to fund a transition that requires an estimated annual public investment of EUR 155bn to reduce emissions by 53% by 2050. Key recommendations include adopting science-based sectoral criteria, reforming payment structures to reward green practices, and potentially extending the Carbon Border Adjustment Mechanism (CBAM) to agrifood products to prevent carbon leakage.

• EU agricultural emissions have seen minimal reduction recently, falling by only 3% between 2005 and 2021, which is insufficient to meet the 40% reduction target by 2030 set by the Effort Sharing Regulation (ESR) for non-ETS sectors.
• The EU agricultural sector is currently excluded from the EU Taxonomy, meaning there is no single, legally comprehensive definition of sustainable agricultural practices or transition pathways to guide policy and investment.
• Achieving a 53% reduction in EU-27 agricultural emissions by 2050 would require an estimated annual public investment of EUR 155bn, representing an increase of EUR 44bn over current spending of EUR 108bn.
• The Common Agriculture Policy (CAP) represents approximately 30% of the EU budget, yet the majority of its subsidies are not aligned with climate objectives, presenting a significant opportunity for repurposing funds.
• The transition to net-zero agriculture faces severe political economy challenges, including farmer protests in France, Germany, Belgium, and the Netherlands, driven by concerns over production costs, regulation, and the economic viability of the sector.
• The report recommends that the EU develop science-based sectoral criteria and transition pathways, such as those from the Climate Bonds Initiative, to provide a credible framework for aligning subsidies with climate goals.
• Extending the Carbon Border Adjustment Mechanism (CBAM) to agrifood products could prevent carbon leakage and create a level playing field for EU farmers facing stricter climate regulations, though it presents technical challenges in measuring embedded emissions.

APA

Climate Bonds Initiative (n.d.). Repurposing EU Subsidies for an Effective Agrifood System Transition to Net Zero. https://www.climatebonds.net/files/documents/publications/Repurposing-EU-Subsides-for-an-Effective-Agrifood-System-Transition-to-Net-Zero.pdf

Chicago

Climate Bonds Initiative. Repurposing EU Subsidies for an Effective Agrifood System Transition to Net Zero. n.d. https://www.climatebonds.net/files/documents/publications/Repurposing-EU-Subsides-for-an-Effective-Agrifood-System-Transition-to-Net-Zero.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=Repurposing EU Subsidies for an Effective Agrifood System Transition to Net Zero |url=https://www.climatebonds.net/files/documents/publications/Repurposing-EU-Subsides-for-an-Effective-Agrifood-System-Transition-to-Net-Zero.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatebondsinitiativendrepurposing, author = {{Climate Bonds Initiative}}, title = {{Repurposing EU Subsidies for an Effective Agrifood System Transition to Net Zero}}, institution = {Climate Bonds Initiative}, url = {https://www.climatebonds.net/files/documents/publications/Repurposing-EU-Subsides-for-an-Effective-Agrifood-System-Transition-to-Net-Zero.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }