Farm Carbon Toolkit release a new report for farmers and land owners which explains the Voluntary Carbon Market and additional climate-friendly farming income streams.
The voluntary carbon market (VCM) has grown in recent years, but many still find the route to accessing the markets unclear and shrouded in uncertainty. Recent research also suggests that conversations around the VCM are polarising and particularly hard for farmers to decode. The VCM is an actively developing market that requires weighing up the potential risks and benefits before participation to ensure reputational and financial risk to a farm business has been considered.
In the report we provide information on various carbon credit types, discuss the differences between carbon insetting and carbon offsetting schemes and provide an overview of how to assess the quality of schemes. We also list relevant schemes operating in the UK agricultural sector and make recommendations. Download the report to read more.
Contents
What is the voluntary carbon market?
Why get involved with the sector?
The Risks of VCM Participation
Projects operating in the UK agricultural sector
Responsible reporting of carbon reductions, removals and credits
Other public and private finance options.
Authors
Dr Grace Wardell, Dr James Pitman, Dr Lizzy Parker, Becky Wilson, Samuel Smith, Tim Dart, Liz Bowles
We are grateful to the Centre for High Carbon Capture Cropping (CHCx3) for supporting Farm Carbon Toolkit to produce this report. CHCx3 is a multi-partner research project helping UK farmers to increase carbon capture and farm resilience through diversified cropping, enabling new income sources and supporting enhanced value chains for industries.
CHCx3 is funded by Defra under the Farming Futures R&D Fund: Climate Smart Farming (project 10042535). It forms part of Defra’s Farming Innovation Programme, delivered in partnership with Innovate UK. www.carboncapturecropping.com
We would also like to thank the following for feedback on the first draft and contributions to the final report
Dr Lydia Smith – Project Lead of the Centre for High Carbon Capture Cropping (CHCx3), NIAB
Megan MacGillivray – 3Keel
Julian Gould – Farm Manager atHendred Estate
Kitty Grubb – Previous roles at Regenified and Agreena
Dr Jonathan Scurlock – National Farmers Union of England and Wales (NFU)
Andrew Adler – Non-executive Director FCT, Veterinarian and Consultant
Andrew Rigg – Non-executive Director FCT and Arable Farmer.
For more information about carbon credits in farming check out our popular piece on getting paid for carbon.
As I was harvesting apples this weekend in an orchard that’s 15 years old, I was marvelling at how apples, and more widely perennial crops, produce food for us with really minimal input.
A sackful of high quality Pinova apples
In this particular orchard, the management I do is mowing or strimming four times a year, pruning trees in winter, hedge cutting in winter…and that’s more or less it. This orchard is planted on Grade 4 land with soil that is light, shallow and with a slight Northerly aspect. It has produced 2/3 of a tonne of apples over 2/3 of an acre this year. Whilst it’s a good year for apples, this orchard consistently produces good amounts of fruit.
The spread of over 25 varieties means any particular variety that crops poorly one year doesn’t impact overall yields too much. Within this, all the varieties are selected for disease resistance (particularly to canker and scab), as well as taste, vigour and genetic diversity,
Much of the fruit will go for juicing, or cider, but much of it is very high quality eaters and cookers that can be stored for months. It is amazing what you can produce on a small area with very little input from humans.
A functioning ecosystem
Orchards are perhaps our best example of agroforestry at work. Existing for hundreds, maybe thousands of years they embody the intercrop between fruit, pasture, livestock and a wide range of biodiversity. Traditional orchards are some of the most biodiverse places in the farmed landscape. Even in more intensive orchards they can be managed for wildlife and carbon sequestration alongside fruit production.
Birdsfoot trefoil is one of the species thriving in this orchard, providing forage for bees
In this particular orchard, and other small orchards on my farm, the land supports lots of butterflies, bees, birds and a wide variety of flora. No chemicals are used and there are actually no fertility inputs. The only machinery used is a mower and a strimmer. There are actually no fossil fuel inputs to the entire system – the machines are electric and we even transport the apples using an electric vehicle! Is this actually the future?
An electric strimmer, one of the few tools used in the orchard
I appreciate this isn’t a fully commercial operation and that in a commercial orchard there needs to be a focus on yields, quality, storage, processing, etc. However in some ways it encapsulates the debate on extensive versus intensive. Extensive growing systems mean low inputs, high biodiversity and moderate production levels. There is a whole debate to be had too around the nutritional quality v quantity of crops.
In addition to low emissions from any machinery or inputs, perennial crops (encompassing many fruits and nuts) also sequester carbon in both the soil and trees. Furthermore, a lack of cultivation means soil organic matter isn’t being oxidised, furthering the potential for carbon sequestration in soils. This is not so far away from a natural ecosystem, which inherently are large carbon sinks.
Agroforestry systems
Traditional top fruit orchards, often with livestock grazing underneath, are timeless examples of a farming system that produces fruit for eating, drinking, and feeding to livestock, as well as seasonal grazing. What hasn’t been grown more widely across the UK are nut groves, such as cobnuts, walnuts and sweet chestnuts. These bring the opportunity to bring protein into our diets as well, but it also requires something of a cultural shift to have more edible nuts in our diets.
The argument I would make is that we can successfully move away from simply fields of grass into agroforestry systems with relative ease, and that livestock and trees are perfectly compatible given the right planning. There are new skills to learn, equipment to buy and markets to access, but these are achievable. In return it would bring a fundamental shift in our landscapes with more carbon being sequestered, shade being provided, diversification of farm produce, and habitat being created.
Cereals grown as alley crops between hazel at Wakelyns Agforestry in Suffolk
However there is also an opportunity to integrate vegetables, other fruits and even arable into agroforestry systems – as has been successfully done at places like Wakelyns Agroforestry in Suffolk. The common thread here is that trees have enormous benefits in agricultural systems and really require very little input from us relative to the benefits that they can bring in terms of diversity of crops, biodiversity, carbon sequestration, water storage and landscape benefits.
Because these systems don’t require much, if any, cultivation, require few inputs, they bring a sort of stability to the land in a way that annual crops don’t. More perennials are something that previous generations would have seen as normal, and their reduced presence in our landscape is a relatively recent thing. Here’s me hoping for the return of perennials in our farming systems which bring real benefits to us all, and for generations to come.
Actions that cut carbon emissions often reduce costs – fuels and artificial fertilisers being the obvious examples. But on the other side of the equation, improving soil health – for instance by reducing cultivations and building soil organic matter, also results in more carbon being sequestered in farm soils. When soil organic matter increases, so does crop health, biodiversity, water holding capacity, resilience to floods and droughts, and in some cases water management for the wider landscape. There are multiple benefits, with carbon reductions being perhaps a secondary benefit to a range of improved business resilience measures.
Here are nine reasons why farmers and growers should care—and why it’s central to building resilient, profitable and sustainable businesses.
1. Economic benefits
Reducing farm emissions is often good for the bank balance. High-carbon inputs like fuel and fertiliser usually carry a high cost; by cutting emissions, you can often cut costs too. Caring about carbon can also create new business opportunities, with sustainability incentives from governments and organisations becoming increasingly common.
2. Improve soil health
Practices that build soil carbon improve soil health. Soil carbon fuels beneficial microbes that supply crops with essential nutrients. Healthier soils support higher yields with the same (or fewer) inputs, making land more productive and profitable. Strong soil health also safeguards fertility for future generations.
3. Highlight inefficiencies on farm
Our free Farm Carbon Calculator is a powerful management tool, helping farmers and growers to undertake a ‘carbon audit’ and identify wasteful (and costly) activities. High-emission items usually have a high price tag; tackling inefficiencies improves both your finances and your farm’s carbon footprint.
4. Improve farm resilience
The climate crisis drives many of the challenges farmers face today. Carbon-smart practices can help farms adapt to:
Local climate impacts (droughts, floods, heatwaves and other extreme events)
Input price fluctuations
Policy changes
Shifting markets.
5. Producers as part of the solution
Agriculture produces much of the world’s methane and nitrous oxide, but it can also be a major part of the solution. Farmers and growers can reduce their own emissions and even absorb carbon from the atmosphere — supporting global climate action while ensuring the long-term sustainability of their farms.
6. Help your country meet climate commitments
The UK, for example, is legally committed to net zero greenhouse gas emissions by 2050. Landowners and businesses will increasingly need to show evidence of action. Starting carbon audits now can put you ahead of future regulations that require monitoring and reduction.
7. Support supply chain commitments
Food businesses are under pressure to decarbonise, and supply chains are favouring low-carbon products. Some merchants, co-ops and buyers may even offer incentives for farms that measure and cut emissions. Farmers and growers who can demonstrate progress may secure stronger market demand and opportunities.
8. Engage positively with the public
Carbon is measurable — a clear way to show change over time. This helps build a positive narrative and public trust in farming. With customers increasingly interested in the footprint of their food, farmers and growers have a chance to share how agriculture is working to reduce impacts.
9. Support biodiversity
Farms are uniquely placed to promote biodiversity and create habitats for wildlife. Diverse ecosystems bring practical benefits like healthier soils, natural pest and disease control, pollination and greater climate resilience. They also connect people with nature, support wellbeing and provide beauty to be shared.
How We Can Help
At Farm Carbon Toolkit, we’ve been working on this for over 15 years. We can provide independent, practical support to help you start—or continue—your carbon journey.
Our free Farm Carbon Calculator is designed specifically for farmers and growers, and we run events, share guidance and offer advice to support action on the ground.
Wherever you are on the journey, we’re here to help. The important thing is to get started.
The regenerative sector must unite to offer the government practical solutions, not more problems, to the challenges facing the country.
Having been part of Groundswell since its very beginning in 2016, this year’s festival-cum-agricultural event felt more relevant than ever. It was a powerful reminder of the trust, collaboration, and creativity needed to navigate the challenges ahead for UK agriculture.
As CEO of Farm Carbon Toolkit, one of the most rewarding ‘takeaways’ was the recognition that farmers and supply chains alike hold Farm Carbon Toolkit (and our staff) in such high regard because of the trust we’ve built over the many years as a farmer-led and fiercely independent organisation, driven by sound science.
That trust is critical now, and it will be even more important in the years ahead if we are to create food production systems that are resilient, profitable, and nature-friendly in the face of the growing climate crisis. We remain as committed as ever to supporting farmers, growers, and other food businesses to measure, understand, and act on their greenhouse gas emissions, while improving their business resilience through supporting farmers on new practice implementation in areas such as soil health, farm nutrient use efficiency, reducing reliance on artificial nitrogen, agroforestry etc.
Solutions… not more problems
For me, one of the key themes from Groundswell 2025 was the consensus around the need to approach the challenges we face with ‘network thinking’ — collaborating more effectively, creating more circular food systems, ensuring the businesses making changes on the ground have the resources and recognition they deserve, and working together to present a clear, consistent message to the government, whatever colour that might be.
At one excellent session, brilliantly chaired by Sue Pritchard from the Food, Farming and Countryside Commission, it became clear that the regenerative sector must work together to present the government not with more problems, but with practical solutions to the issues the country faces. This solutions-focused approach sits at the very heart of what we do at Farm Carbon Toolkit — providing farmers and growers with practical tools and support to meet our common challenges head-on.
Once the regenerative sector shows how our principles and practices can help the government solve many of its challenges, we can gain real traction and turn ideas into action. At the moment, however, I’m not sure we’re yet thinking in this way — and certainly not with the coherence and strength of voice we need.
FCT and Groundswell: Growing Together
It was also striking to reflect on just how far both Groundswell and Farm Carbon Toolkit have come. When the Groundswell festival first took place in 2016, it was held in the Cherry family’s farmyard with a handful of exhibitors running practical demonstrations outside. We held our very first Soil Farmer of the Year awards ceremony in the grain store!
Since then, Groundswell has grown into one of the largest and most important festivals of regenerative farming in Europe, and FCT has grown alongside it. Back then, we were a team of just one, the inimitable Becky Willson. Today, we’re over 20 strong, working with farmers, growers, producer groups, processors and retailers across the UK and beyond.
Our Farm Carbon Calculator continues to go from strength to strength and is now used on four continents, supporting farmers and growers to understand how they can play their part in reducing greenhouse gas emissions while maintaining productive, climate- and nature-friendly farms. We remain committed to our mission as a Community Interest Company and have recently strengthened our independence by becoming an Employee Ownership Trust.
Facing the Challenges Ahead
We are entering some of the most challenging times our food production systems have ever faced. Climate change is reshaping our weather patterns, with hotter, drier summers, unpredictable and often intense weather events, and increasing pressure on farmers and growers to produce in a more environmentally friendly way.
At Farm Carbon Toolkit, we remain driven by science — not by fashion or the latest trends, however tempting that might sometimes be — and we aim to provide practical support and tools to help farmers and growers navigate this complex and changing landscape.
Some are suggesting that Groundswell is moving away from its farmer-to-farmer roots, becoming more of a stage for those wanting to tell farmers what to do. I didn’t have much time to reflect on that myself. We were busy throughout, speaking to farmers and growers and sharing ideas with friends old and new, all trying to make sense of this evolving landscape together.
But what stood out most was the collective sense that trust, collaboration, and clear, solutions-focused thinking will be essential if we are to meet the challenges ahead of producing the quality and quantity of food we need in a profitable and nature-friendly way.
It is May, it is dry, and farmers are praying for rain. The conversations I’ve had with farmers and veterinarians this week have painted a clear picture: while political uncertainty may cloud the immediate horizon, one thing remains constant—the risk of climate change and its disruption to traditional agricultural systems. These discussions have reinforced a fundamental truth that many in agriculture are grappling with: the old ways of doing things may no longer be sufficient for the challenges ahead.
Cracked ground in May 2025
The Reality of Risk in Modern Agriculture
Farmers today face an unprecedented combination of challenges. Extreme weather events are no longer anomalies but regular occurrences that demand preparation. Prolonged dry periods followed by prolonged wet periods, heavy rain and unexpected late frosts, shifting pest patterns that render traditional management strategies obsolete—these are the new realities of agricultural production.
A warm and very dry spring was the reality for most of the UK in 2025. These plots detail how much rainfall and temperature deviate from the long-term averages between 1991 and 2020. Credit: UK Met Office
After 60 years of being encouraged to use chemical solutions to build yield, and measure efficiency as output per unit of land farmed, we have created a system that is reliant on external inputs where we have no control over price. Alongside that, we have transitioned from a predictable political subsidy system to one where objectives differ, and the expectation of delivering public goods means the subsidy systems now favour land ownership over food production.
Yet the challenge extends beyond the farm gate. Veterinarians are also witnessing cultural shifts that demand their own form of resilience. Changing consumer expectations around animal welfare, evolving regulatory frameworks, and new technologies are transforming veterinary practice. Like farmers, they must adapt to remain relevant and practical in serving their communities.
Understanding Assets and Aspirations
Building resilience requires a fundamental shift in how we think about agricultural assets. Traditional measures of farm value—land, equipment, and livestock—remain important, but they’re no longer sufficient indicators of long-term viability. Today’s resilient farms also invest in knowledge assets, relationship networks, and adaptive capacity.
This broader understanding of assets includes soil health as a foundation for productivity, water management systems that can handle both scarcity and excess, and diversified income streams that provide stability when primary enterprises face challenges. It also encompasses the human capital—the skills, knowledge, and relationships that enable farmers to navigate uncertainty and capitalise on opportunities.
Cattle grazing in silvopasture may become a more common sight as we value the shade trees provide and the additional carbon sequestration cows can bring
Aspirations matter equally. Farmers who view their operations as dynamic systems capable of evolution rather than static enterprises bound by tradition are better positioned to build resilience. This mindset shift—from preserving the status quo to embracing adaptive change—is crucial for long-term sustainability.
Strategies for Long-Term Thinking
Successful resilience building requires moving beyond reactive responses to proactive planning. This means developing systems that can withstand shocks while maintaining productivity and profitability. Several key strategies emerge from successful adaptation stories:
Diversification remains one of the most effective tools for resilience. Farmers who have integrated multiple enterprises—combining crops with livestock, adding value-added processing, or incorporating agritourism—have created buffer systems that cushion against financial challenges. This diversification extends to soils, where longer rotations with a greater variety of crops help build soil carbon and protect soil integrity. For livestock, the diversity of forage mix with different harvest dates will provide more flexibility in responding to weather events.
Soil health investment has proven particularly valuable. Farmers implementing regenerative practices report not only improved drought tolerance and reduced input costs but also enhanced carbon sequestration opportunities that may provide additional revenue streams. Cover cropping, reduced tillage, and integrated pest management create agricultural systems that work with natural processes rather than against them.
A herbal lay that has had no synthetic Nitrogen for four years, 21 days after being grazed (taken in September 2024)
Technology adoption, when carefully selected and implemented, enhances both productivity and adaptability. Precision agriculture tools help farmers optimise inputs and reduce waste, while weather monitoring systems provide early warnings that enable proactive responses to changing conditions. However, technology alone isn’t sufficient—it must be integrated with sound ecological principles and business planning alongside openness to learning new approaches to farming.
The Wake-Up Call We Need
The question that haunts many thoughtful observers of agriculture is what it will take for widespread recognition that complacency is no longer an option. Perhaps the answer lies not in waiting for a singular wake-up call but in recognising that the alarm has already sounded—repeatedly.
At Farm Carbon Toolkit, we work with farmers who aren’t waiting for permission to adapt, providing a whole range of services. They’re already implementing changes, investing in resilience, and building systems designed for uncertainty. They understand that protecting livelihoods and businesses requires accepting that the future will be different from the past.
This recognition is spreading through agricultural communities, driven by both necessity and opportunity. Younger farmers entering the industry often bring fresh perspectives on sustainability and adaptation. Established operators are discovering that resilience investments often improve profitability even under current conditions.
Moving Forward
The path forward requires acknowledging that resilience isn’t a destination but an ongoing process of adaptation and improvement. It demands long-term thinking in an industry which is driven by seasonal cycles. However, it understands the importance of legacy and the inheritance of future generations. Most importantly, it requires moving beyond the comfortable assumption that things will somehow work out without deliberate action.
Fundamentally, building resilience is about developing capacity—the ability to adapt, learn, and thrive in changing conditions. For agriculture to meet the challenges ahead, this capacity building must become as routine as any other farm management practice.
Spring barley crop, Norfolk, May 25 drying out and farmer has little grain expectation and even lower straw yield.
The choice is clear: we can continue to hope that traditional approaches will suffice, or we can embrace the reality that our agricultural future depends on our willingness to adapt today. The farmers leading this transformation aren’t waiting for others to catch up—they’re building the resilient systems that will define agriculture’s future.
At Farm Carbon Toolkit we are supporting those farmers to think and deliver the future.
On 4th July 2025, our very own Becky Willson was interviewed by Charlotte Smith for BBC Radio 4’s Farming Today while attending Groundswell, the UK’s leading regenerative agriculture event. Becky gave a clear and compelling explanation of the evolving landscape of soil carbon markets, cutting through the jargon to help farmers understand what carbon insetting and offsetting really mean for them.
“A soil carbon credit is basically a piece of paper that is representative of one tonne of carbon dioxide equivalent held in the soil through the farmer implementing a practice that is sequestering carbon.”
This might sound simple—but the reality is more complex. Some schemes involve detailed measurement, reporting, and verification (MRV), often making them expensive and harder to access. Others rely on modelling—particularly in arable systems using no-till and cover cropping—to estimate the amount of carbon sequestered.
Insetting: Staying Within the Supply Chain
The key point with insetting is that the carbon benefit stays within the food supply chain.
“Rather than it going and being used for somebody else’s carbon accounting, the value of that operation that you’re doing is shared with companies further up your supply chain.”
This is especially important for Scope 3 emissions — those indirect emissions that retailers and processors are under pressure to reduce. Insetting gives them a way to demonstrate reductions while supporting farmers to transition to regenerative practices.
Becky highlighted that currently, insetting is more often framed around a regenerative outcome, rather than the direct purchase of soil carbon credits:
“What we’re seeing more, is the narrative around the fact that these goods are being produced in a regenerative framework.”
Offsetting: Selling Carbon Outside the Farm
Offsetting, on the other hand, is where the carbon credit leaves the farm’s “books”:
“The value in terms of what you’re delivering is then taken off your balance sheet and goes on to the balance sheet of the company or the organisation that is buying that from you.”
This is often attractive to companies like airlines looking to meet climate targets — but it comes with risks for farmers. If your carbon is sold externally, you can’t count it in your own net zero claims or supply chain reporting. This is why many experts, including the Climate Change Committee, have cautioned that:
“Agriculture will need all its own offsetting, because agriculture produces a lot of emissions.”
A Word of Caution and a Call to Prepare
The interview didn’t shy away from the current limitations in the market. Charlotte pointed out the lack of farmer engagement, and Becky responded candidly:
“We have seen only a few people go into it, and that’s because schemes that have been available are primarily available for arable farmers… The models often can’t cope with the complexity [of mixed farming systems]…”
But the key message Becky shared was one of preparation:
“Get a baseline. Take some soil samples so that you give yourself the best opportunity to take advantage of these schemes as they develop.”
Want to Learn More?
This isn’t the first time we’ve explored these issues. Check out our other resources on farm carbon markets:
In my role as a farm carbon and soils project assistant, I get out and about on farms a fair amount. Both at work and at home, this past month has seen me hide in the shade, reach for ice in my drinks and ‘require’ ice-cream…
Everywhere I have been, I have seen animals doing their best to find shade.
They do not have the luxury of opening doors and hiding inside, getting ice for their water, or enjoying the soothing cool of melting ice-cream on the tongue – for many, the best they can find is a hedge.
Don’t get me wrong, I’m a major fan of hedges (plant more, please) but when the sun is high in the sky, at its hottest, when the rest of us are re-applying sunscreen, or, if you’re in sunny Europe, taking a siesta, a hedge alone doesn’t actually provide much shade.
The future could be hot
With the Met Office predicting a 50:50 chance of the UK experiencing 40℃ again within the next 12 years (experienced in Lincolnshire in July 2022), for the sake of farmed animals everywhere, we must bring trees back into our farms.
Heat impacts on animals
A quick search on Google Scholar will pull up data showing that heat-stressed animals reduce their feed intake, gain less weight, produce less milk, experience reduced fertility and are more susceptible to ill health. Prolonged exposure to temperatures as low as 22℃ can induce these stresses in cattle.
I’m yet to meet a farmer who doesn’t love her/ his stock and wants to take the best care of them. Everyone wants to see good animal welfare. Increasingly, for the sake of the health and welfare of our animals (not to mention the myriad other benefits they can provide including carbon storage, alternative income streams, biodiversity gain, etc.), we need to get more trees into our farm systems.
Cows finding any available shade on a hot day
Some solutions
Allowing a tree to grow tall in an existing hedge, or planting trees in a hedge to ‘gap up’ is a simple start, but adding in-field trees to pastures brings even more benefits. For those farmers practising a form of paddock or mob grazing, it is very easy to end up with a grazing plot that only has one side hedged, offering no shelter at all.
There are a variety of options for introducing trees into pasture fields, and an increasing number of agroforestry advisors who can work with you to understand what will work for your farm system and the welfare of your animals. Despite the Sustainable Farming Incentive being paused, you can still produce an Agroforestry Plan for your holding for which you will be paid £1,268. This makes me optimistic that tree planting and management will be funded when the financial support options are opened again next year. It’s also worth knowing that you can plant up to 275 trees per 0.25 hectares without changing the classification of your land.
Cows grazing in woodland
Given that the best time to plant a tree was yesterday, now is a good time to hatch a plan for autumn/ winter planting. You don’t have to wait for the Government to fund this for you. Whilst larger plantings may need some capital assistance, a few trees and some simple protection may be cheaper than you think. Your future bottom line will thank you for it, as will the cows who give you the milk to make that ‘very necessary’ ice-cream…
Improving the profitability and sustainability of UK dairy systems — enhancing biodiversity, reducing greenhouse gas emissions, and promoting high standards of animal health and welfare — has long been an ambition for the sector.
Understanding and quantifying the impact of a range of regenerative farming practice changes on those ambitions has, for the first time, been achieved with the work commissioned by WWF-UK. This was delivered with support from Cumulus Consultants and the Andersons Centre. (who developed the financial modelling of the three dairy system scenarios) and Farm Carbon Toolkit (who assessed the impact of practice changes across all three systems on greenhouse gas emissions, carbon removals, and biodiversity).
Cumulus Consultants and the Andersons Centre developed the dairy systems and the definition of what they would look like post-transition, and the Farm Carbon Toolkit used those models to quantify the climate and nature impacts.
Cumulus Consultants and the Andersons Centre led the work to characterise the three dairy systems analysed:
High-yielding indoor dairy system
Medium-yielding, winter housed system
Lower-yielding, grass-based system
Practice changes modelled in the transitions included:
Reducing nitrogen fertiliser use
Lowering the livestock stocking rate
Planting more diverse swards and herbal leys
Rotational grazing
Feeding less concentrate
Reduced tillage
Increasing tree and hedge cover
These changes led to reductions in milk yield and increases in milk produced from forage.
Table 1: The key features and performance metrics for each system pre- and post-transition.
Impact on greenhouse gas emissions
Farm Carbon Toolkit led this aspect of the work. The two charts below illustrate the impact of transitioning to the new system on greenhouse gas emissions (tonnes carbon dioxide equivalent) and the potential for carbon sequestration
Chart 1: Impact of the transition at the whole enterprise level
Chart 2: Impact of the transition at a per ha level
Chart 3: Impact of the transition at a per litre level
The key changes that have a significant material impact on emissions are reduced use of fertiliser and feed and lower livestock numbers.
This work clearly shows that emissions per litre of fat- and protein-corrected milk (FPCM) are broadly similar before and after transition, with the medium yield system showing the greatest reduction in emissions per litre (4.85%) after transition and the high-yielding system showing a 2% increase in emissions. Emissions from the forage-based system remain unchanged per litre. This is significant, as previous thinking suggested that increasing yield per cow would lower emissions per litre.
The critical factors within this modelling exercise are (not surprisingly) the assumptions used to build the models and their credibility at a practical level. The assumptions are laid out in the tables to allow readers to fully interrogate the work.
Nature impact of the transition
To complete this part of the work, FCT focussed on changes to biodiversity, water quality, air quality and soil health. The work was primarily based on a literature review and inclusion of carbon sequestration within the dairy systems, where the literature suggested this would occur.
The specific practices evaluated included:
Rotational and holistic grazing (contributing to increases in soil organic matter of 0.1% over five years)
Extending the grazing season
Reducing nitrogen fertiliser use
Lowering stocking rates
Introducing diverse swards into the grass platform
Reducing tillage depth
Allowing greater hedgerow growth
Increased area of woodland (4.6 – 9.7 ha more) with consequent carbon sequestration impacts
The review of a wide range of research projects highlighted consistent benefits for soil health, biodiversity increases, improvements in total annual grazing days possible, reduction in water pollution and leaching (P and N), and increases in soil organic carbon (SOC). Combining the practices leads to a greater impact than adopting them in isolation.
A five to seven-year period was modelled for each system—from the starting system, through a five-year transition, to a final year post steady state—to assess the financial impact of the transition. This includes the effect on profitability and cashflow from the investment and divestment required for the transitions, as well as the likely ongoing financial outcome of the new systems.
In the charts below, the financial impact is shown for each of the transitions at a whole enterprise level with each system including a milk price increase of 1.5ppl.
Chart 4: Financial transition for the high yielding intensive dairy system
Chart 5: Financial transition for the medium yielding, winter housed dairy system
Chart 6: Financial transition for the forage-based dairy system
For all three systems, there is a period where profit and cash flow come under pressure due to the transition. This is linked to the investment required to facilitate the new system and the challenge of reducing livestock numbers. This is most noticeable for the high-yielding, intensive system. However, the challenge of undergoing the transition across all systems demonstrates the need for external support to bridge the cash flow gap over this period.
The financial benefits of the transition to a more regenerative dairy farming system include lower exposure to volatile input prices as reliance on such inputs is minimised. The cashflow position for all systems improved by year 7, apart from the medium yield, winter-housed system (down 1% in year 7 compared to year 1). By year 7, Profitability is predicted to be higher than in year one levels for all but the medium yield system, where lower profitability appears to be the new normal—even with the increased milk price of 1.5 ppl, which contributes from £8,500 – £23,500 to dairy profitability for the three systems modelled.
For all three systems, future profit is most sensitive to changes in milk price and feed price, although the level of sensitivity is much lower compared to year one, as exposure is much reduced through lower milk sales and reduced feed use.
Conclusion
This analysis demonstrates that the transition to regenerative dairy farming can result in a profitable business model—better able to withstand input and milk price shocks, while also cutting greenhouse gas emissions, improving biodiversity, and reducing pollution from farming activity.
The cashflow challenges during the transition period highlight the need for a collaborative, supply-chain approach to help de-risk the process—especially for the farmers, who will shoulder most of the risk.
The full suite of reports can be found here:
The carbon and nature analysis of the transition to regenerative practices using three modelled dairy farm scenarios by Farm Carbon Toolkit. This document presents an overview of the methodology and results for the carbon emissions calculations and the findings from the literature review on nature impacts of key regenerative dairy practices.
Economic modelling shows all types of dairy farms are more profitable and resilient at the end of the transition to regenerative practices. However, the transition period (‘fallow years’) is long, and support is needed from the public and private sector.Documentary films feature the personal stories of the five UK dairy farmers on the case study report, challenges and benefits.Practical guide for farming consultants and finance practitioners shows the financial implications, the government and market support available across England, Scotland and Wales, and the carbon and nature impacts of regenerative dairy farming practices.
Case studies: This report showcases five farmers’ transitions to nature-friendly dairy farming, driven by improved system that places nature at the centre, work-life balance and future environmental and economic resilience of the farm. It highlights that regenerative farming is both financially sensible and a strategic business decision.
Insights from sector engagement in England and Wales explores the financial and business case for regenerative dairy with farmers, banks, food retailers, food producers, farm advisors, NGOs, and civil servants. Outlines key actions for government, financial institutions and the dairy sector.
Texel cross Shetland ewe with twin Suffolk lambs on Fair Isle (photo credit: Daniel Stout)
Perched between Orkney and Shetland, Fair Isle is Britain’s most remote inhabited island. A rugged, windswept strip of land where the Atlantic meets the North Sea, it stretches just three miles long and a mile and a half wide. This isolated outcrop is home to a small community of crofters who farm against a backdrop of salt-laced gales and long, stormy winters.
Fair Isle is where Daniel Stout grew up, on his family’s croft. The island’s 768 hectares are divided between communal hill ground to the north and seventeen working crofts to the south. Each croft holds an equal share in the island’s common grazing flock of 340 ewes, which graze across 430 hectares of hill land. Sheep are the lifeblood of the island with no cattle currently being run. All flocks are April lambing with lambs sold at September sales in Shetland’s capital Lerwick. Homegrown silage is also produced to keep croft flocks going through the winter months.
From Crofter to Livestock and Carbon Consultant
The rugged, practical farming environment of Fair Isle along with working for Innovis and SAC Consulting, has laid the foundation for Daniel’s future work. Since founding Stout Livestock Consulting Ltd in 2024, he has helped livestock farmers across Scotland better understand and reduce their carbon emissions.
“I started using carbon calculators in 2019, but it’s in the past couple of years that things have really shifted with audits now part of the Whole Farm Plan,” he says. “It doesn’t have to be just a box-ticking exercise, there’s a lot of value to be had in pulling together data required and reviewing how your enterprises have performed and on what inputs.”
In Scotland, a carbon audit is now one of the five requirements under the Whole Farm Plan, which farmers must complete to access Basic Payment Scheme (BPS) support for which two audits were required in 2025 with all five, if applicable, required in 2028. Funding is through the Preparing for Sustainable Farming (PSF) scheme, offering £500 towards an audit in 2025 meaning it is well worth getting sorted with a carbon audit whilst funding is available.
Choosing the Right Tool for the Job
Since launching Stout Livestock Consulting Ltd, Daniel has used the Farm Carbon Calculator to carry out detailed carbon audits across a range of livestock systems. One of his most extensive applications of the tool has been on his very own home island of Fair Isle, where he completed 14 audits to help crofters meet the requirements of the Whole Farm Plan.
Flocks range in size with some businesses leasing out their in-bye land to other crofters. The audits revealed exceptionally low emissions from the common grazing flock, made up of hardy, low mature weight Shetland ewes, bred pure. These ewes lamb on the hill, are overwintered without supplementary feed, and rear at 90 percent. Two smaller common grazings on the island achieved a 100 percent rearing rate under the same low-input, hill-based system.
Croft flocks performed exceptionally well. Flocks made up of Texel, Cheviot or Highlander cross Shetland ewes, put to Texel or Suffolk rams, averaged a rearing rate of 164 percent from a total of 386 ewes to the tup (ranging from 154 to 171 percent). Crofts running mainly Shetland ewes put to Texel or Cheviot rams reared at an average of 139 percent from 135 ewes.
Shetland cross ewes with texel lambs on Fair Isle (photo credit: Daniel Stout)
Turning Carbon Audits into Insights
“What stood out was the consistently strong productivity the island’s flocks are achieving,” Daniel says. “When you look at the high rearing rates and kg of lamb weaned per kilo of ewe, with low ewe and lamb mortality and low replacement rates, the carbon footprint per kilo of output is impressively low.”
Beyond the numbers, Daniel sees carbon audits as a tool for farm improvement. “It gets farmers thinking about where their inputs are going and how enterprises are performing, highlighting resource use efficiency and what changes could be made that make both environmental and business sense.” On Fair Isle, this helped identify practical mitigation options such as reducing concentrate use, improving grassland management, and even exploring peatland restoration on the common grazings.
The calculator itself also enables broader consultancy services. Its extensive list of building materials supports accurate modelling of embedded carbon in infrastructure like sheds and steadings. “I’ve used it to create full carbon statements for free range poultry shed planning applications by modelling the embedded carbon of the shed alongside the annual operational emissions of the poultry enterprise and carbon sequestration from tree planting on the unit” Daniel says.
The tool’s scenario modelling capabilities are another strength. “The copy report function is a useful tool,” he continues. “You can take an existing audit and tweak it to test different scenario ideas—changing feed use, trying woodland creation, adjusting flock/herd structure and different enterprises. It gives clients a clearer sense of what each option means for their emissions.”
Small Island, Big Lessons
From one of the UK’s most remote and weather-beaten farming communities, Daniel Stout has brought a grounded, practical approach to carbon auditing that resonates with livestock producers across the country. His use of the Farm Carbon Toolkit Calculator has not only helped crofters on Fair Isle meet policy requirements but also uncovered the strengths of their traditional systems—highlighting impressive productivity and low emissions in a challenging environment.
Whether for policy compliance, management improvement, or strategic planning, Daniel’s work demonstrates how carbon audits can empower farmers to make smarter, more sustainable choices—even from the edge of the map.
Daniel Stout is an FBAASS accredited consultant and user of The Farm Carbon Calculator with a Professional Licence. Stout Livestock Consulting provides independent livestock and farm business consultancy to farmers and crofters throughout Scotland. To reach Daniel call +44 7833 226884 – daniel@stoutlivestockconsulting.co.uk
Craig Blyth-Moore is a sustainability communications professional with over a decade of experience turning complex environmental issues into clear, compelling narratives. He has written extensively on energy efficiency, renewable energy, the energy transition and sustainable logistics, helping organisations communicate their sustainability strategies with credibility and impact.
Craig holds an MSc in Environmental Sustainability and brings both subject matter expertise and strategic insight to his work. His writing has appeared on leading global platforms including Economist Impact and the World Economic Forum, helping to inform and inspire meaningful climate action.
Farm Carbon Toolkit is a project partner and actively involved in delivering the Nitrogen Climate Smart (NCS) project, providing a range of information services, including assessing the carbon footprint of goods and activities.
The feed trials are a key part of the project. This blog shares results from the first of several trials, which are being delivered across beef, dairy, and poultry enterprises. This first trial aimed to better understand the potential options of feeding home-grown proteins such as faba beans, as an alternative to soya bean meal.
Soya is commonly used in blended feeds, but it is often imported from areas of tropical rainforest that have been cleared for agriculture, carrying substantial carbon implications. Therefore, if we can demonstrate successful animal performance using home-grown proteins from legumes this can help develop local markets for products that can deliver substantial carbon savings for the UK. This trial examines the option of feeding rolled faba beans and roasted faba beans and the animal performance of two groups of similar groups.
The feed trial in question sought to look at the performance of beef cattle in the run-up to finishing. A herd of limousin cross cattle were split into two equal-sized groups and were housed in two halves of the same shed and fed the following diets:
Diet composition
Green Group
Red Group
1st Cut grass silage (adlib)
1st Cut grass silage (adlib)
Rolled Barley 5 kg/hd/day
Rolled Barley 5 kg/hd/day
Rolled Beans 1.0 kg/hd/day
Roasted Beans 1.0 kg/hd/day
Beef minerals 0.1 kg/hd/day
Beef minerals 0.1 kg/hd/day
Performance
Green Group
Red Group
Av Daily liveweight gain 1.39 kg
Av Daily liveweight gain 1.54 kg
Av % DLWG 16%
Av % DLWG 16%
Feed Conversion Ratio 9.41
Feed Conversion Ratio 8.52
Economics
Green Group
Red Group
Feed cost per day £1.36
Feed cost per day £1.43
Cost per kg/LWG £0.98
Cost per kg/LWG £0.93
Carbon
Green Group
Red Group
6.62 kg CO2e/kg LWG
6.11 kg CO2e/kg LWG
Summary of outcomes from the feeding trial:
The inclusion of roasted beans:
Increased feed cost by 5%
Increased feed emissions by 6%
Increased daily live weight gain by 10%
Reduced feed conversion ratio by 9% (a good thing!)
Decreased cost per kg liveweight gain by 5%
Decreased feed emissions per kg liveweight gain by 4%
Decreased total emissions per kg liveweight gain by 8%
These early results are encouraging. They suggest that home-grown alternatives like roasted faba beans can deliver strong animal performance while reducing emissions and dependency on imported soya.
What next?
This is just the beginning. As part of the Nitrogen Climate Smart project, further trials are underway to build a broader evidence base, with FCT involved in completing more carbon analysis. We’ll continue to share results and insights as they emerge – helping UK farmers explore practical, climate-smart feeding strategies that work for their business and the environment.
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