A new £1m fund which aims to enable supply chains to financially reward farmers for reducing greenhouse gas emissions is now open for applications.
Farmers can earn £60 per tonne of CO2e (carbon dioxide equivalent) reduced annually, with half of payments provided upfront to help fund their transitions.
And those who have emissions that are below average will be eligible for maintenance payments.
On-farm actions could include reducing fertiliser usage by introducing nitrogen-fixing companion crops, better fuel efficiency or investing in solar.
Developed by Soil Association Exchange, the 'Market Exchange' programme will operate as an insetting fund without any sales of carbon credits.
Instead, it will pool funds from a range of companies with shared supply chains to pay farmers to reduce emissions.
In its first funding round, Exchange Market has secured £1m in funding, contributed to by businesses wanting to reduce their Scope Three emissions.
Soil Association Exchange chief executive, Joseph Gridley said it represented a major step forward in aligning farming activities with climate goals.
He said: "Exchange Market is about creating real, measurable change within farming systems while empowering farmers to make decisions that work for them.
"This carbon insetting programme demonstrates that delivering true environmental outcomes can go hand in hand with financial resilience when farmers and businesses collaborate to build a sustainable future for food and farming.
"Collaboration like this enables greater scalability, affordability, and ultimately more impact in reducing agricultural emissions and advancing positive environmental outcomes."
Support to develop the scheme has been given by Lloyds, who helped to convene retailers and landowners including the Co-Op, Lidl, Tesco and the Church Commissioners for England to contribute to the fund.
The programme has also been co-developed with technical experts at Finance Earth.
Lee Reeves, UK head of agriculture at Lloyds said: "Our support for the Exchange Market as a founding member and lead contributor is an important step.
"Our ambition focuses on a holistic view of farming's environmental impact, rewarding farmers in ways that work for them to become more resilient, while also securing long-term profit."
Farmers can join Exchange Market by completing a baseline assessment and submitting a verified emissions reduction plan.
