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EU taxonomy in agriculture: 10 things you should know

Celsia team
April 28, 2022
 min read

One day, the European Parliament decided that more is needed regarding what they are doing from the regulatory point of view to achieve the EU's environmental objectives. As a result, they created the green deal, which is a set of policy initiatives from the European Commission that enable the EU to become climate neutral by 2050.

One of the green deal's initiatives is the EU taxonomy, as part of the EU Corporate Sustainability Reporting Directive. Taxonomy regulation establishes a list of environmentally sustainable economic activities. A business activity must demonstrate that it substantially supports at least one of these six areas while not significantly harming any other. It must also adhere to the minimum social safeguards outlined in existing conventions and UN guidelines to be considered "green" under the EU taxonomy. Business activities must satisfy technical screening criteria that are being created under the direction of a recently established Platform for Sustainable Finance to be evaluated for their contribution to one of the six objectives, which are:

  1. Climate change mitigation
  2. Climate change adaptation
  3. The sustainable use and protection of water and marine resources
  4. The transition to a circular economy
  5. Pollution prevention and control
  6. The protection and restoration of biodiversity and ecosystems

To learn more about EU taxonomy, check out our blog where the EU taxonomy is explained. There is alco the social side of the framework to take in consideration. to learn more, read the blog on EU social taxonomy.

So what about EU taxonomy in agriculture?

This blog contains 10 facts about agriculture and the EU taxonomy which will give you an overview of its application and essential considerations.

How is agriculture represented in the EU taxonomy?

To be classified as environmentally sustainable under the EU taxonomy, an agricultural activity must meet several technical screening criteria developed to ensure that the activity has a positive environmental impact. These criteria cover a range of environmental objectives, including climate change mitigation, adaptation to climate change, water management, and soil protection.

Agricultural activities that meet these criteria can be considered environmentally sustainable under the EU taxonomy and may be eligible for financing from sustainable finance instruments. However, it is important to note that the EU taxonomy is a framework for sustainable finance and does not regulate or require adopting sustainable practices in the agricultural sector.

The EU taxonomy classifies the production of perennial and non-perennial crops, also livestock, as sectors in agriculture with the power to make a substantial contribution to the six environmental objectives.

Here are ten facts about EU taxonomy in the agriculture industry:

1. Agriculture is crucial for achieving environmental objectives

Agriculture is one the most significant contributors to biodiversity loss, and its impact is increasing with the needs of growing populations. Animal products represent the most significant impacts on biodiversity and land use for agriculture and climate change.

However, there has been a growing interest in sustainable agriculture. Its goal is to meet society's food and textile needs in the present without compromising the ability of future generations to meet their own needs.

Sustainable agriculture means integrating the three main objectives into work: a healthy environment, economic profitability, and social and economic equity. Every person involved in the food system—growers, food processors, distributors, retailers, consumers, and waste managers—can play a role in ensuring a sustainable agricultural system.

2. Agriculture only contributes to some six activities. Yet

Agriculture has been left out of the mitigation and adaptation annexes until the completion of the Common Agriculture Policy. Now, it is included and split into several activities in the latest draft annex.

In practice, agriculture may serve as a mitigation solution by sequestering carbon in soil and tree biomass and reducing greenhouse gas emissions. We expect that agriculture will be included in the annexes in the near future and develop further the taxonomy in agriculture.

3. Animal and crop production make a substantial contribution to biodiversity

Under the new technical screening criteria, animal and crop production can now make a substantial contribution to biodiversity. Animal production can contribute via grazing in habitats where grazing is beneficial, through promoting rare breeds, or by ensuring a sustainable farm-gate nitrogen balance

4. Not all animal-related activities are covered

Criteria cover the raising (farming) and breeding of all animals except aquatic animals.

5. Insect farming is an unsure 

Insect farming was considered but excluded as the long-term sustainability needs to be clarified. Hopefully, there will be more research in the area, and insect farming will include in the agriculture EU taxonomy in the near future.

6. Not all crop-related activities are covered either

Criteria for crop production cover growing crops in open fields but do not cover growing crops in greenhouses or other indoor settings at this time.

7. … and not always!

Crop production can contribute if the farm area incorporates large biodiversity-rich areas. Suppose it ensures a sustainable farm gate nitrogen balance or completely abstains from using synthetic plant protection products and copper that harm biodiversity and ecosystems.

8. Forestry logging and fishing are covered

Forestry logging and fishing are also included in the new technical screening criteria.

9. … and also food and beverage

Food and beverage manufacturers can also make a substantial contribution by selecting ingredients from farm suppliers that meet the technical screening criteria for agriculture.

That's your starting point for applying EU taxonomy in agriculture! Want to get closer to your score?

How can Celsia help?

All of the above may seem complicated at first glance, and you probably need help translating it into actionable steps. You may need help to conduct a sustainability assessment in a timely manner to meet the deadlines fully and efficiently surf the long and complicated documents, for example the environmental delegated act. And Celsia is here to do just that. One of our company's main goals is to make sustainability assessments simple, fast, and accurate, and most importantly, we make them effective with our EU taxonomy reporting software.

It doesn't matter what size your company is or the complexity of your case. Working with Celsia, you can participate in the green finance system. Celsia offers a high-tech platform to make sustainability assessments for commercial organizations, consulting firms, investment funds, and banks. Avoid hiring a third-party company to evaluate your business using taxonomy criteria. Why waste your money on this when you can use a tool that allows you to do it yourself?

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Checkout our guide to the EU Taxonomy to get on top of timelines, requirements, and the steps needed to get your report ready.
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Not sure where to start?
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