ENPLC member ADEPT: financing nature through biodiversity and carbon credits

LIFE ENPLC Project Partner Fundatia ADEPT, in partnership with Biodiversity Credit Company, is developing an innovative combined biodiversity and carbon credit scheme in Transylvania, one of only two such projects worldwide.

Through these credits, the commercial market will support the long-term maintenance of grassland biodiversity at the landscape scale and support traditional farming communities. Through this project, the most comprehensive biodiversity survey at a landscape scale ever undertaken in Romania will occur. No other project in Romania will provide such landscape-scale biodiversity monitoring, long-term farmer support and species conservation, all provided by this project.

Whole valleys in Transylvania (about 2,000 ha each) will be assessed; measures will be implemented for 25 years to protect the valleys and support the farmers. The farmers in each valley will receive a minimum of €300,000 per year for 25 years. Continuous monitoring of biodiversity results will take place. 

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Romanian areas include the most endangered type of habitat in Europe

Romania has the largest area of high-biodiversity grasslands in the EU. Over 2.3m ha (23,000 km2) have been designated High Nature Value grassland. The HNV area includes much of Transylvania and the significant regions of the counties east and south of the Carpathians, as shown on the map below.

Romania has an obligation at the EU level to maintain these grassland habitats, many of which are designated under the EU Habitats Directive.

These Romanian areas include the most endangered type of habitat in Europe: wildflower-rich hay meadows. These grasslands are essential at the EU level for their rich wildflower communities, which are increasingly rare in Europe and for the invertebrate and vertebrate fauna associated with them.

Further, these grasslands are a unique selling point for Romania, potentially providing high income from tourism and high-quality value-added products. They are the source of income for over a million small-scale farmers.

High Nature Value grassland in Romania. © Fundatia ADEPT

Grassland habitats are being lost at an increasing rate due to abandonment and change of use

However, despite the political and economic incentives to maintain these HNV grasslands and support farming communities, they are being lost at an increasing rate due to abandonment and change of use, especially ploughing. As a result, biodiversity is lost, and Romanian farmers are losing contact with and benefits from their land.

Abandonment of HNV grasslands causes significant loss of flora and fauna diversity. © Fundatia ADEPT

Furthermore, soil (under grassland and forest) stores more carbon than all above-ground vegetation (forests, grassland, etc.). When ploughed, a massive amount of CO2 is released. It is accepted by climate change experts (including the International Panel on Climate Change, IPCC) that the best way to store carbon and reduce global carbon emissions from agriculture is to prevent ploughing.

How can Romania’s farmers be rewarded for the biodiversity and carbon benefits of their management so that they have an incentive to continue to manage and conserve their wildflower rich grasslands?

Biodiversity and carbon credits can be a viable solution

The potential of the carbon credit market is well known. It can also be used to reward farmers for good practices in grassland management. Carbon, and biodiversity, are products for which the market will pay if they can be measured and marketed reliably, which leads to an increase in the productivity of grasslands.
Fundatia ADEPT is developing an innovative, combined biodiversity and carbon credit scheme for grasslands in Transylvania, in close partnership with Operation Wallacea (OpWall) and the Biodiversity Credit Company (BCC) recently developed by OpWall. This project in Transylvania, and the BCC’s second project in Honduras, are the only two projects in the world to develop certified and measured biodiversity credits, which will be sold alongside carbon credits to incentivise sustainable farming. These credits represent a payment, by the commercial market, for the maintenance of biodiversity. The involvement of the commercial market is key to the long-term success of preventing the loss of HNV grasslands and the small-scale farming communities that maintain them. The basic concept is to:
  1. Develop a methodology for standardised pricing of biodiversity credits. The methodology provides a regular scientific assessment of biodiversity that benefits from continued good management. The biodiversity elements measured are birds, butterflies, reptiles, flora, and soil invertebrates. Carbon is measured by annual soil analysis.
  2. Combine biodiversity credits with carbon credits, sold as a single package, so that the carbon credits are guaranteed to assist biodiversity rather than damage biodiversity, which is too often the case.
  3. Develop this concept for implementation in grasslands, which have been quite challenging to sell on the carbon market until now, even though soil holds more carbon than all land vegetation combined. Further, the ploughing of permanent grassland emits more carbon than conventional carbon sequestration schemes can replace.
  4. Develop a scheme that pays for the avoidance of loss of carbon and biodiversity. This is urgently needed to provide market incentives to prevent the ploughing of permanent grasslands, which is accelerating rapidly in Transylvania as a result of general market forces and especially now due to the Ukraine war that has increased the profitability of arable crops. Avoidance of loss schemes is marketed based on carbon and biodiversity in HNV grasslands compared with intensified or ploughed areas nearby and based on the grasslands being under immediate risk of ploughing.

The biodiversity and carbon credits are sold in packages to make the size interesting for investors. Each package is a single area around one or two villages: about 1,500 ha of grassland under genuine threat of being ploughed, managed by many farmers. Once each package is prepared, it will be placed on the Voluntary Carbon Market for commercial sale.

The biodiversity and carbon credit package are for a 25-year contract with the landowner, which assures a certain level of payment to the farmers based on certain conditions: protecting carbon by not ploughing, protecting biodiversity by certain other management measures such as continued hay-making.

The scheme is in the process of being certified by Plan Vivo, a highly respected carbon credit certifying organisation. Plan Vivo has strong community benefit principles: a minimum of 60% of the commercial payment for credits goes to the land owners. If the commercial buyer sells the credits on to other investors, a minimum of 60% of any profit from sales of credits also goes to the farmers. See Plan Vivo.

Payments are expected to be about €200/ha, which should be convincing for farmers to keep their land and maintain biodiversity-friendly management. Further, these payments will be at a 3% index-linked annually increase, guaranteed 25 years, as long as the farmer obeys the conditions.

ADEPT has started work in two valleys, and so by the end of 2022, ADEPT experts will have perfected the methodologies to measure biodiversity and carbon benefits. The biodiversity elements measured are birds, butterflies, reptiles, flora, and soil invertebrates. Carbon is measured by annual soil analysis.

Once the credits are sold, the scheme is self-financing: annual management costs (for ADEPT or whichever other organisation is managing it – could be another organisation in another area) plus the payments for the farmers will be paid by the commercial investor.

The BCC, through whom we will be marketing the valleys, already has commitments from several major UK corporate investors for the two valleys in 2022. The demand for certified biodiversity and carbon credits is much greater than the supply. The BCC has received many offers and is confident that a much larger number of valley ‘packages’ can be sold immediately when they are available. The BCC is part of Operation Wallacea, with who ADEPT has worked closely for eight years, so we know each other well (read more).

ADEPT has strong connections with the Romanian Ministry of Agriculture & Rural Development, having developed several agri-environment payment schemes with the Ministry and being on the Monitoring Committee of the National Rural Development Programme. ADEPT is discussing carbon and biodiversity credits with the Ministry of Agriculture to ensure that interests are aligned.

The potential impact is very large

The project would carry out the most comprehensive survey of biodiversity ever carried out at a landscape scale in Romania, covering birds, butterflies, reptiles, flora, soil invertebrates and carbon. The survey will allow continuous monitoring of results to demonstrate the effectiveness of the project.

Once completed, each valley would unlock incentive payments to farmers of a minimum of €200/ha on 1,500ha = €300,000/year over 25 years, which would support biodiversity-friendly management and support local communities. The potential impact of these schemes is very large. This idea can be replicated widely across Romania and other European countries.

The project would save and protect precious biodiversity on a total of 4,500ha (1,500ha in each of 3 valleys) for 25 years. The biodiversity benefits will be measured. Furthermore, the project will have established a replicable model which can be rolled out across all of HNV Transylvania so that the impact will be much greater.

Restored and well-managed high-biodiversity grasslands in Romania. © Fundatia ADEPT

ADEPT has ten years of experience working as a conservation organisation, specialising in creating incentives for continued maintenance of High Nature Value farming systems in Transylvania, especially in the Tarnava Mare area. ADEPT has established good working relations with farmers and farmer associations over the 85,000 ha Tarnava Mare area, to whom we have provided effective advice. ADEPT has developed a relationship of trust with policymakers and with farmers. 

LIFE ENPLC Team

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The news items collected on this blog have been written by project partners of the LIFE ENPLC project.