MRV financing under EU carbon farming governance: a review

1 Introduction

Achieving the UN Sustainable Development Goals (SDGs), specifically SDG 13, Climate Action, is closely tied to the broader climate finance agenda. While the Paris Agreement calls for aligning financial flows with low-emission, climate-resilient development, increasingly large-scale capital is needed to support climate mitigation and adaptation (Carè and Weber, 2023). For the agricultural sector, this agenda hinges in part on sustainably managing soils, which is essential for managing the dynamics of soil organic matter, sequestering carbon in the soil, and influencing greenhouse gas emissions (European Commission, 2006). It also contributes to other ecosystem services, such as nutrient cycling and water purification (Blum, 2005; Keesstra et al., 2016). Central to SDG 13, ecosystem carbon sequestration services are recognized as directly supporting SDG progress (Yin et al., 2023). Yet, soils currently face an unprecedented risk, as intensive agricultural management has pushed 60–70% of European soils into functional degradation (EEA, 2025). This risk is compounded by climate change, which threatens to turn soils from carbon sinks into carbon sources (EEA, 2025). Within this soil–climate context, and drawing on evidence that soil degradation undermines a wide range of ecosystem services (Blum, 2005; Keesstra et al., 2016; EEA, 2025), we suggest that soil carbon sequestration through carbon farming (CF) emerges not merely as a mitigation opportunity but as a response to these risks to soil ecosystem services.

To reach climate neutrality by 2050, the European Green Deal states that the EU must “protect and restore natural sinks” (European Commission, 2019), with soils being a primary terrestrial sink, thus mandating actions targeting an additional storage of 42 Mt. CO_2e by 2030 (EEA, European Environment Agency, 2024). Soil carbon sequestration has been shown to be a low-cost measure for reducing greenhouse gas emissions and is therefore a relevant option for implementation (Dilnessa et al., 2026). Under Regulation (EU) No. 2024/3012 on Carbon Removals and Carbon Farming (CRCF), the focus shifts to result-based actions. The regulation requires actions to deliver a net carbon removal benefit or a net soil emission reduction benefit with a verifiable positive climate impact, stemming from activities that, overall, reduce soil carbon emissions or increase removals in biogenic carbon pools (European Commission, 2024). This requires the adoption of CF practices, such as cover crops, agroforestry, reduced tillage, incorporation of organic residues, and shifts in crop rotations. While these practices enhance adaptive capacity to climate change, including improved soil health, biodiversity, and climate resilience (Smith et al., 2019; Svoboda et al., 2026), their climate mitigation and ecosystem service potential depend on multiple factors (Strauss et al., 2024). Widespread adoption of CF practices requires addressing financial and structural barriers as well as developing credible and cost-effective monitoring, reporting, and verification (MRV) systems (Bellassen et al., 2015; Batjes et al., 2024; Brummitt et al., 2024). Results-based climate payments may entail high monitoring costs because they require farm-level measurement of environmental outcomes such as changes in soil carbon stocks (Kreft et al., 2024). These MRV costs vary substantially depending on the activities, project design, and protocol standards, with monitoring accounting for the largest share of total MRV expenses (Vanderheyden et al., 2026). This creates an accuracy–cost paradox because rigorous MRV is essential for credibility but adds substantially to farmers’ costs. Cost-intensive MRV systems can make CF schemes economically unviable for farmers if they are burdened with MRV costs without compensation. This is a problem because CF practices are often cost-effective, even when the MRV costs are considered (Karpavicius et al., 2025; Karpavicius and Elofsson, 2026). Addressing this paradox requires strategies aligned with the European Green Deal’s emphasis on sustainable agriculture and climate change mitigation (Boix-Fayos and de Vente, 2023), and leveraging private funds to supplement public budgets (European Commission, 2019). However, translating these policy directions into operational financing mechanisms for MRV systems remains underdeveloped in the literature.

A growing body of literature highlights the role of MRV systems in monitoring soil carbon in different land uses, climates, and soil types (Smith et al., 2020; Torrús Castillo et al., 2024; Loria and Lal, 2025). Studies indicate that MRV is needed to track how CF practices enhance soil carbon content or slow down carbon loss while boosting agricultural resilience (Smith et al., 2020; Brummitt et al., 2024). Therefore, the literature has given increasing attention to the attributes of accurate MRV systems for result-based CF schemes (Kreft et al., 2024; Paul et al., 2023; Perosa et al., 2023; Don et al., 2024; Siemons et al., 2025; Thorsøe et al., 2025). We identified a research gap concerning the lack of studies on suitable financial mechanisms to support MRV systems for transparent result-based schemes, reflecting a broader disconnect between soil carbon science and its translation into policy and practice (Bradford et al., 2019). In particular, existing research has paid limited attention to the incentives that motivate farmers to participate in result-based schemes under the CRCF. While farmers who opt into the CRCF take on MRV data obligations, the technical complexity of generating this data often means they rely on intermediaries to fulfill these requirements. This research gap reflects a downstream consequence of a broader financing challenge: adequate public and private capital directed toward MRV infrastructure and farmer transition costs is essential for scheme viability, yet aligning and mobilizing investments at scale remains one of the most significant obstacles to accelerating climate action (OECD, 2024). The literature on climate finance (Carè and Weber, 2023) and that on agricultural soil carbon sequestration potential (Smith et al., 2019; Petersson et al., 2025) has largely evolved in parallel. However, connecting these domains—understanding how financial mechanisms can support MRV systems that enable carbon farming at scale—remains under-researched. A deeper understanding of the design of financial mechanisms for MRV is therefore crucial for implementing practices that align with SDG 13 and the EU’s climate targets.

The literature identifies several types of financial mechanisms. Policy-governed monetary means (Gren and Aklilu, 2016) rely on public funding. Market-based monetary means (Smit et al., 2024) involve CF contracts through which carbon credits are generated and traded. In-kind and barter means (Marti, 2005) involve direct exchanges between parties. CF schemes require organizations or associations that certify farmers’ implementation of CF practices (Rabobank, 2021; Oldfield et al., 2022). While CF practices are carbon sequestration management options performed on the ground, CF schemes act as socio-economic entities that incentivize farmers to adopt CF practices (Thorsøe et al., 2025). In the context of CF literature, carbon credits (Walsh and Toffel, 2023; WEF, 2023) are widely adopted corporate incentives, distinct from subsidies (Laborde et al., 2021). Taxation as an incentive for implementing CF practices is also studied in the literature (Jansson et al., 2024), but is rarely implemented in practice, with Denmark being an exception due to its upcoming tax on carbon emissions from organic soils if the ambitious goal of permanently setting aside 140,000 hectares of organic soils is not achieved voluntarily (with subsidies) by farmers before 2028 (Reuters, 2024; The Danish Government, 2024). Taxation as a financial means is not included in this review. Early on, Paul et al. (2023) noted that the potential impact of CF schemes on climate change is uncertain. However, the situation has changed with the CRCF regulation, which establishes principles for carbon accounting under the carbon removal certification framework. Our goal in this study is to review and compare the financial mechanisms necessary to support gains in verifiable agricultural soil carbon stocks. Therefore, we begin by examining the sequestration potentials of CF practices. Furthermore, we examine the design of MRV systems, particularly the challenges and barriers associated with them. While we start from the dichotomy between the financing of practices and the financing of MRV systems, the two main research questions addressed are: (Q1) Are there interdependencies between the financing of CF practices and the financing of MRV? and (Q2) Are there interdependencies between private and public financing of CF practices and MRV? If such interdependencies exist, how should they be managed? The paper is based on a structured literature review of MRV financing mechanisms under the EU’s CRCF Regulation, aiming to contribute to the knowledge base on the implementation of the Commission’s delegated acts.

The remainder of this paper is organized as follows: Section 2 presents the methods used for the literature review; Section 3 presents the findings from the literature review; Section 4 develops the conceptual framework; and Section 5 provides the discussion and conclusions.

2 Methods

This study employs a structured literature review approach to examine the financial mechanisms and MRV frameworks associated with carbon farming (CF). The review follows established methodological guidelines to ensure transparency, replicability, and rigor (Page et al., 2021). The procedure involved a two-stage flow (see Figure 1). In a preliminary phase, a broad search based on the search strings was conducted. Phase 1 focused on the screening of abstracts and selection of sources, including quality appraisal. Phase 2 focused on qualitative data extraction, coding, and semi-analytical synthesis. The full screening report and coding data can be found in the Supplementary material.

2.1 Search strategy

A comprehensive search was conducted across three primary databases: Web of Science (WoS), Scopus, and Google Scholar. The literature search was initially conducted between May 2023 and February 2024, with iterative updates performed periodically through December 2025 to ensure the review remained current throughout the manuscript’s revision process, using the same search strings and databases (Table 1). The final update was conducted in June 2026. The search was limited to peer-reviewed articles published between 2001 and 2026 to capture the evolution of carbon markets in relation to the UN SDG agenda and the European climate neutrality goals. Google Scholar (GS) was included to capture interdisciplinary policy reviews and to allow for rapid, comprehensive scrutiny of relevant peer-reviewed studies. In other words, GS was considered useful for quick searches, but with the caveat that GS has limited search functionality. Therefore, GS is regarded as a secondary source to the other databases mentioned. The search strategy was organized to respond to the two research questions; thus, we investigated several disciplinary domains: Policy Studies, Agricultural Science, and Climate Finance. The specific search strings used included combinations of Boolean operators for two different domains (Table 1). Furthermore, we used several inclusion keywords: climate policy, carbon subsidies, payment efficiency, result-based incentives, adaptation to climate, and CRCF.

Table 1. Boolean operators.

2.2 Eligibility criteria

To ensure the review addressed the specific research questions regarding financial interdependencies, the following inclusion (IC) and exclusion (EC) criteria were applied: IC1: Studies focusing on the implementation of MRV systems in agriculture; IC2: Research on carbon offsets in agriculture; IC3: Research evaluating result-based payment schemes; IC4: Studies focusing on the EU policy context or selective international studies (e.g., Australian or US voluntary markets); EC1: Technical papers focusing solely on soil science without contextual carbon credit implications; EC2: Grey literature, industry brochures, or non-peer-reviewed reports, unless necessary (to maintain high evidence standards). Only studies in the English language were considered.

2.3 Screening and selection

In Phase 1, the initial database queries yielded 222 records. During the Screening stage, three independent reviewers screened titles and abstracts against the eligibility criteria. In the Selection stage, the full-text versions of the remaining studies were assessed. Qualitative data were coded according to themes: Theme 1 Policy Context, Theme 2 CF Practices, Theme 3 MRV, and Theme 4 Costs and Challenges. Expert judgment was applied to resolve discrepancies regarding geographic relevance (e.g., ensuring non-EU studies were compatible with the EU’s CRCF principles). In Phase 2, a total of 122 studies were selected for semi-analytical synthesis.

The full screening and selection flow is as follows: In Phase 1, a total of 1,276 records were retrieved from Web of Science, Scopus, and Google Scholar. After merging these records, 186 duplicates were identified and removed through manual checking, leaving 1,090 unique records. Prior to formal screening, 17 records were excluded due to non-retrievability, leaving 1,073 records for the title and abstract screening stage. At this stage, 851 records were excluded for failing to meet the core thematic requirements of agricultural carbon farming, leaving 222 articles for full-text assessment. In Phase 2, during the full-text evaluation, 100 papers were excluded due to the absence of a carbon or climate finance component, their classification as grey literature, or their exclusive focus on biophysical soil measurements without policy or economic context. A total of 122 studies met all eligibility criteria and were selected for the final qualitative and thematic synthesis. The time series of studies included in the semi-analytical synthesis, differentiated into four categories, with each category signifying a theme, can be found in Figure 2.

2.4 Quality appraisal

Within Phase 1, as part of the selection stage, we conducted a quality appraisal for all peer-reviewed papers and policy papers (n = 122) included in this review. Each study was evaluated and scored across four dimensions (journal quality, methodological rigor, geographical relevance, and scientific impact), with a maximum score of 11 points. Journal quality was scored based on the Scimago/WoS Journal Rank Quartile, with Q1 journals receiving the most points. Methodological rigor was assessed by study type, with empirical analyses and model studies receiving more points than reviews and syntheses. Geographical relevance accounted for context, with country- or EU-wide level studies receiving more points than studies with a regional or global focus. Finally, scientific impact was evaluated via citation velocity, calculated as the average annual citations since publication. The cumulative score was used to classify studies into three categories. Studies with 8 points or more were designated as “Strong.” Studies with 5–7 points were classified as “Medium,” and studies with 4 or fewer points were classified as “Weak.” Of the 122 peer-reviewed studies used in the review, 79 (64.8%) were classified as “Strong,” while 37 (30.3%) were classified as “Medium” (Figure 3b) and six (4.9%) as “Weak.”

Detailed quality appraisal results are provided in the Appendix. An overview of the quality appraisal is presented in Figure 3. It shows that the data sources used for the themes CF Practices and MRV systems were of considerably better quality, with “strong quality” sources largely prevailing. For the themes Policy Context and Costs and Challenges, there is a larger proportion of “medium quality” sources and a noticeable fraction of “weak quality” ones. However, as a general rule, we did not include the “weak”-rated sources in the review unless no other source was available for an important consideration. It should be noted that the Policy Context theme, in particular, relies on policy papers, which were rated lower overall because no points were awarded under the citation criterion. Still, a number of these policy papers, scored as “medium” for consistency with the quality appraisal method, come from well-established institutions (OECD, World Bank) that apply their own quality-control procedures, so the “medium quality” appraisal should be interpreted with caution as it probably underestimates their reliability.

2.5 Thematic synthesis

To address our research questions, the synthesis was conducted in a semi-analytical manner. It was structured around the dichotomy between the financing of CF practices (opportunity costs) and the financing of MRV systems (transaction and infrastructure costs). The coding procedure was conducted following a full-text review, whereby two independent coders applied a standardized coding framework to each study, assigning codes for: study type (empirical, modeling, policy analysis, review), geographic focus (EU member state, EU-wide, global), and funding mechanism type (public, private, blended). Coding consistency was verified by comparing independent assignments; any discrepancies were resolved through discussion and refinement of code definitions. Quality appraisal ratings (weak/medium/strong) were assigned based on documented criteria (see Section 2.4 and the Supplementary material). Study data were extracted into an Excel workbook organized into four category sheets (Policy context, CF practices, MRV, Costs and challenges). Each sheet records study characteristics (author, year, type, geographic focus, funding type), quality appraisal rating, exclusion reasons (if applicable), and key findings. This tabular format enables systematic comparison of evidence across categories while documenting screening decisions. The dataset is provided in full in the Supplementary material to ensure transparency and replicability.

3 Literature review findings

3.1 Theme 1: policy context

3.1.1 Policy context for CF practices

As regards private funds, the EU Green Deal emphasizes two important aspects that also feature in the CRCF. Firstly, the Commission recognizes the need to utilize private capital for environmental improvements, with carbon sequestration being one area where this is possible. Secondly, the Commission highlights the importance of result-based incentives as a means to improve existing schemes (Smit et al., 2024; Thorsøe et al., 2025). Carbon credits under CF schemes compensate land managers for adopting carbon farming practices, thereby contributing to both climate mitigation and farm income (Glenk et al., 2017). However, the overall emissions-reduction system for achieving climate neutrality is rather complex, and Böhringer et al. (2009) previously argued that overlapping regulations on emissions can lead to high costs. Carbon credits are either used for “insetting” at the scale of an agri-food value chain or for “offsetting,” i.e., used by industrial emitters and manufacturers who cannot claim reductions within their own value chain and therefore buy credits on voluntary markets (see Figure 4). In this way, redirecting policies towards market-based fees for services, based on results for carbon removals, takes into account all costs and benefits for society and farmers. The markets associated with CF that compensate the carbon credits through a financial mechanism named “offsetting” (Cacho et al., 2013) need to be differentiated from other strands of financial markets, such as the financial mechanism of “insetting” (Medeckytė-Žydelé, 2026), the markets linked to carbon dioxide from large installations (ETS), and non-ETS climate policies associated with nitrous oxide and methane from agriculture (Figure 4).

As regards public policies, a good mix of private funds and public policies is often necessary for climate adaptation at the farm level, as has been investigated globally (Hansen et al., 2022). Using public policies and public funds has been the focus of the EU farming sector so far. The CAP has aimed to drive change in the farming sector by directly affecting farm income while also integrating climate protection into farmers’ goals (Martineau et al., 2016; Varacca et al., 2023; Svoboda et al., 2024). Whether farmers should receive public support for the various public benefits that they provide is a central issue for environmental planners (Pretty et al., 2001; Reay, 2020). The CAP has not been able to prevent carbon losses (ECA, European Court of Auditors, 2021), and, in particular, direct income support overrides the environmental objectives (Hasler et al., 2022). On the other hand, Hönle et al. (2026) note that result-based CF payments from private funders carry specific uncertainties — unreliable quantification of SOC change given high spatial variability and largely unknown baselines, together with volatile credit demand and unresolved rules on who may claim offsets — and argue that public frameworks (stable payments, clear legal rules, and shared MRV and baseline infrastructure) therefore have a decisive role in reducing these risks and should be coordinated with, rather than replaced by, private markets.

Policy coherence represents an important dimension of effective CF governance. Nilsson et al. (2012) distinguish internal coherence (alignment with declared objectives) from external coherence (non-contradiction with complementary policies). Literature suggests that carbon-only policy frames may not align with farmers’ decision-making, which encompasses broader sustainability considerations (Coderoni, 2023). This implies that effective MRV financing requires coherent integration across EU soil governance frameworks.

3.1.2 Policy context for MRV systems

Scientists (Balkovič et al., 2020) and policymakers (European Commission, 2021) have advocated for robust, verifiable MRV systems to underpin carbon-related policies and the credibility of voluntary carbon trading. However, policies on MRV systems remain sparse in EU member states; therefore, the European Commission has adopted the CRCF regulation (European Commission, 2025). Developing a policy on consistent, credible, and accountable MRV systems in Europe is a precondition for functioning markets (Batjes et al., 2024). However, measuring verifiable changes in soil carbon levels presents several challenges that are likely to incur costs. The policy-driven MRV methodology enhances trust in the comparability of different carbon certificates, thereby increasing confidence in voluntary carbon trading. The MRV methodologies are operationalized in Europe (European Commission, 2024) and in the US (Climate Action Reserve, 2022; ICVCM, 2025), while national policy-driven schemes, such as France’s Label Bas-Carbone, provide a counterpart (Ministère de la Transition écologique, 2019). The MRV methodologies set binding guidelines for farmers’ projects, but in all cases, the feasibility of these schemes hinges on monitoring and transaction costs, which shape contract design and the allocation of risk between credit buyers and sellers (Capon et al., 2013). The rule-setting reflects an approach that lies between public and private policies (Bellassen et al., 2015). MRV components, further detailed in Section 4.1, would entail some costs for a range of stakeholders. The monitoring method would influence the transparency of CF and, linked to that, the transparency of climate neutrality claims.

The MRV components, as encapsulated in the CRCF certification framework (Regulation (EU) No. 2024/3012), were already foreshadowed in the emphasis on carbon sequestration activities within the CAP 2023–2027. Farmers are aware of the gradual policy shift towards decentralized income from CF (Smit et al., 2024). Hönle et al. (2026) emphasize that creating a policy framework for agriculture’s carbon economies faces uncertainty and complexity surrounding the MRV systems. This means that the MRV systems may enhance the credibility of private certificates for carbon neutrality and pave the way for improving the measurability of carbon credits. The impact of CF depends on how accurately it can be verified relative to a baseline. A recent literature review identifies the lack of robust MRV and certification mechanisms as a barrier to the uptake of CF across different payment types (Raina et al., 2024). In France and Finland, efforts are underway to establish a monitoring framework focused on MRV systems related to soil carbon. The costs of establishing and maintaining the carbon monitoring framework, along with the associated expenses for farmers (Bamière et al., 2024), will provide valuable information to understand the drawbacks at the farm level, which is relevant in designing potential financial mechanisms. Transparent and adequate financial support is a factor in developing a low-carbon economy, particularly given the significant role played by potential local investments that are co-financed by EU funds.

3.2 Theme 2: CF practices

3.2.1 Sequestration potentials of CF practices and their link to MRV

Carbon sequestration is the process of removing carbon from the atmosphere and storing it, such as in soil (Don et al., 2024). It can help offset greenhouse gas emissions, but while soils have significant carbon uptake potential, many are also facing continuous losses (Don et al., 2024). The sequestration potential of agricultural soils depends on their initial carbon content levels (Paustian et al., 2019; Torrús Castillo et al., 2024). Compared to detailed studies in larger report formats, such as those by Guerrero et al. (2024) and Torrús Castillo et al. (2024), Beillouin et al. (2023) made a succinct assessment of the effect of farming practices in arable lands and grasslands. Section 4.1 shows the findings of a meta-analysis of sequestration potentials for CF practices in arable lands and grasslands. The impact of practices differs by land use: 83% of practices in arable lands significantly increased soil carbon levels compared to the baseline, and arable land accounted for 70% of all practices producing significant soil carbon gains (Beillouin et al., 2023).

It is important to consider that these practices are part of a long-term time horizon that involves soil carbon (Beillouin et al., 2023; Feng et al., 2002). CF practices can increase soil carbon levels, but over time, this increase will decline as soil carbon reaches a new steady state between formation and respiration (Don et al., 2024). Furthermore, in practical terms, farmers also experience a temporal mismatch that affects their farm margins: the costs of investing in new practices are incurred up front, soil carbon accumulates only slowly and gradually, and payment through carbon credits arrives later still, once the results have been measured and verified.

One of the primary criteria for transparent financing through result-based projects is the permanence of carbon sequestration at the farm level (Leifeld, 2023). However, a challenge is the non-permanence of biogenic carbon sequestration. The carbon sequestered over time by farming practices such as catch and cover crops and no-till is inherently temporary. These crop management practices are eventually supplanted by others, and no-tillage fields could be plowed every few years. This temporality may deter investors from financing carbon schemes, thus affecting the traded price of carbon and its appeal to buyers (Kim et al., 2008; Kim and McCarl, 2009).

The pressure for MRV accuracy (see Section 3.3.1) means that if sequestration potentials are overestimated due to weak MRV, the resulting carbon credits may lose market value because of transparency risks (Don et al., 2024). Conversely, if the MRV requirements are too stringent or costly relative to the sequestration potential of a land parcel, the expenses may be prohibitive (Raina et al., 2024), making participation economically infeasible for the farmer. Therefore, the MRV system serves as the economic filter that translates raw biophysical sequestration into a verifiable, tradable asset. Consequently, financial mechanisms for MRV may need to be incorporated into governance framework agendas.

3.2.2 Co-benefits of CF practices to sustainability and adaptation to climate

The soil’s capacity to sequester carbon underpins, in a circular fashion, the continued formation of soil and biomass, thereby supporting further ecosystem services that contribute to overall sustainability (Yin et al., 2023) with better adaptation to climate (Schils et al., 2008). The effect of CF practices on soil carbon sequestration is thus a central policy topic, and its implications for sustainability are especially relevant to farmers (Cooper et al., 2009). Overall, according to Paul et al. (2023), increasing soil carbon levels is beneficial for productivity, farm resilience to drought and extreme weather, and has a long-term positive effect on soil biodiversity. Adapting traditional farming practices also significantly improves the resilience of farm households under various climatic conditions (Sang et al., 2024). Adapting traditional farming practices to local conditions has shaped agricultural landscapes over millennia (Cooper et al., 2009; Lefebvre et al., 2015). Through the adoption of CF practices, the sector reduces greenhouse gas emissions, improves soil quality, and increases farmers’ resilience (Zheng et al., 2024). The enhanced effectiveness of a CF practice, such as rotations over single cropping (Farina et al., 2018), is likely to increase the resilience of crops to pests and diseases in a rotational system compared to monoculture practices. Instances of positive impacts of CF practices include the enhancement of habitats, the management of water cycles (which also aids in alleviating flood and drought effects), the control of soil erosion, and the preservation of soil health (Schils et al., 2008; Paul et al., 2023).

Co-benefits provide a more compelling value proposition for farmers, which may reach beyond any financial compensation (Vermeulen et al, 2019). Nevertheless, the co-benefits are shaped by various location-specific factors (Svoboda et al., 2026). For instance, while a CF practice such as cover crops can effectively minimize soil erosion in areas prone to high erosion, in regions where erosion is naturally minimal (and thus the demand for this service is low), the benefit for erosion control is also diminished (García-Ruiz, 2010). Kangas and Ollikainen (2023) directly model the introduction of carbon payments into an existing payments-for-ecosystem-services scheme to promote synergies between biodiversity and carbon storage using site-selection modeling. However, some farmers are worried about the financial viability of their farms (Bernini and Galli, 2024). Furthermore, there is a time lag between the point at which the costs of switching to CF are incurred and the point at which the benefits of productivity improvements are realized; thus, it can take time for investments to generate a return (Henderson et al., 2022).

3.3 Theme 3: MRV

3.3.1 Issues in MRV

A crucial element of MRV design is baselines. The baseline represents the trend of carbon stocks under a business-as-usual scenario, expressed in tons of CO_2eq/ha/year. According to Henderson et al. (2022), setting a credible baseline against which to measure carbon credits is crucial. The baseline chosen can significantly impact the cost and quantity of credits provided, as well as equity among farmers. For example, setting the baseline at a regional level can help avoid overly strict or lenient adoption of sequestration practices (e.g., cover crops as a one-, two-, or three-variety mixture) among different farmers. Therefore, choosing the baseline represents a trade-off between equity and efficiency. Moreover, a poorly defined baseline could result in an overprovision of credits compared to the actual environmental benefits provided.

Apart from baselines, the MRV system involves: (a) soil sampling at the farm and field levels and stratification; (b) modeling; and (c) remote sensing. The method components still need to be ranked from the most accurate and costly to the least accurate and least costly. The two essential monitoring approaches cutting across the MRV components are field measurements alone (measure-remeasure) and field measurements in combination with modeling. Remote sensing has been proven to depend on direct validation in terms of soil sampling and long-term soil carbon measurements (Broeg et al., 2024) and could also be used to detect management practices as input for models. The method for developing the MRV system involves the components set out in Section 4.1. The overview outlines that private actors (farmers, R&D suppliers, investors/CF providers) and public actors (governments) may be involved. The components presented in Section 4.1 will influence the full range of actions needed for implementing MRV.

3.3.2 Issues of permanence and reversibility in CF practices

Non-permanent, temporary effects of CF practices lead to price spikes and price volatility, posing a risk to the political acceptance of CF schemes (Rickels and Rothenstein, 2022). A growing number of scientists advocate a stringent approach to temporary carbon sequestration. Matthews et al. (2023) found that ton-years of carbon stored in soils are proportional to degree-years of avoided warming. The temporary nature of storage in agricultural soils by CF schemes is hindering the large-scale appeal of CF to investors. However, temporary carbon benefits are still valuable for the climate in the short run (Leifeld, 2023). According to Kim et al. (2008) and Kim and McCarl (2009), a temporary sequestration offset may only receive payments amounting to 50% of the market carbon price. The non-permanence of carbon sequestration in agricultural soils, coupled with the risk that farmers may discontinue these practices, may result in additional monitoring and enforcement costs (Cacho et al., 2013).

Based on the above literature on permanence and the analysis of CRCF policy documents, operational MRV parameters need to be defined by a CF scheme. Operational parameters regarding permanence are: Contract/monitoring duration—minimum commitment period over which sequestration must be maintained; Reversal liability allocation—who bears the cost/credit clawback if sequestered carbon is later lost (farmer, buffer pool, insurer, state); Buffer pool/discounting mechanism—percentage of credits withheld to cover reversal risk across the scheme; and Re-verification frequency—how often MRV re-confirms that prior sequestration still holds.

3.3.3 Additionality and measurable carbon credits

Additionality is a key criterion for evaluating the quality of carbon credits (Verra Standard, 2023). It is crucial to ensure additionality—directing carbon credit investments toward projects that would not occur otherwise—to avoid creating uncertainty for companies regarding the reliability and credibility of carbon credits. With increased public scrutiny of greenwashing and environmental claims, both farmers and investors may be more cautious about taking meaningful steps toward reducing carbon emissions (Mueller et al., 2023). Scuderi et al. (2024) emphasize the need for public funding to help develop practical, monitorable, and sustainable systems for long-term carbon sequestration. They also urge the scientific community to focus its efforts on this issue to develop an outlook for the farming sector.

The projects under CF schemes are likely to combine several CF practices from Table 2. Drawing on the North American experience, Barbato and Strong (2023) argue that farmers implement practices based on their economic goals and concerns about yield sustainability. Additionally, farmers tend to register for CF projects when they have already implemented the beneficial practices (Barbato and Strong, 2023). Therefore, the additionality of the registered projects should be the primary concern of the monitoring framework. On the other hand, when farmers have already begun implementing soil carbon sequestration, a strict application of additionality would mean they do not qualify for the new income (Thamo and Pannell, 2015). This highlights the need for negotiation in defining the additionality criterion with policy-driven MRV methodologies.

According to the recently adopted CRCF regulation and the relevant literature (Thamo and Pannell, 2015), projects that do not demonstrate additional benefits may not be eligible. The MRV methodology assures investors that the additionality principle has been fulfilled by applying the counterfactual principle, which is well-established for achieving sustainable finance (Perez Dominguez et al., 2016). In the case of France, the CF scheme determines that carbon removal would not have occurred without the incentive created by carbon credit revenues (Lorand et al., 2024). The carbon removal meets the additionality requirement when it exceeds the business-as-usual scenario and would not have occurred without the incentive from the carbon market. Enforcing the additionality principle involves establishing the baseline (see Section 3.3.1). In some cases, a generic reference scenario can ensure additionality, but none of the CF schemes reviewed are issuing credits proving additionality by using this option (Lorand et al., 2024). The time frame considered is critical for the outcome of the additionality assessment.

Additionality thus includes two components: regulatory and financial. Regulatory additionality implies that project activities are not required by existing regulations, such as the standards for good agricultural and environmental conditions (GAEC; Regulation EU 2021/2115). Therefore, carrying out GAEC does not qualify a farmer for new funding. In essence, regulatory additionality means CF payments must go beyond the regulations that underpin CAP subsidies.

If additionality is uncertain, soils may or may not be enhanced in terms of soil organic matter, and farmers may or may not be fairly treated in receiving carbon offsets. A borderline example is the use of cover and catch crops, which are widely recognized as a management option to sequester carbon (Table 2). However, this practice is partly required by GAEC standards under the CAP (specifically GAEC 6 on minimum soil cover and GAEC 7 on crop rotations), hence it is not eligible due to regulatory issues. It is also included in many CAP Ecoschemes in EU Member States, making it problematic for additionality. For a carbon sequestration practice to be considered additional, it must go beyond GAEC requirements. Regarding the CAP Ecoschemes, the EU-wide framework allows for variability at the member state and regional levels. The installation of catch and cover crops is likely already incentivized by CAP Ecoschemes in many regions, which may or may not be in tension with additionality, depending on the standpoint of the European Commission as the regulator.

Table 2. Review of the effect of CF practices.

Sequestration potentials were collected from source studies, preferably using median values. When the source study provided data for standard deviation, it is included in the table; if the median was unavailable, a mean value is used instead. The numerical data were triangulated across the referenced studies to ensure validation.

Based on the policy documents reviewed (GAEC, CAP Ecoschemes, CRCF), additionality can be represented as a conditional structure: a practice qualifies as additional only if it exceeds the existing GAEC baseline applicable in the relevant Member State or region, as charted in Table 3.

Table 3. Operational decision tree for CRCF additionality regarding GAEC and CAP Ecoschemes.

3.3.4 Social issues in MRV

Studies show that farmers see production risk as a major hurdle. When analyzing contract farming projects, continuously monitoring farm-level financial data can complicate the case for additionality (WB, 2016). This difficulty exists because small-scale agriculture leaves little room for mistakes, as most small-scale farmers operate with high debt and low profit margins in contrast to large corporations. Furthermore, these farmers are under constant pressure to meet the strict timing and product specifications set by powerful processors and retailers who control the food supply chain (Rosochatecká, 2014). Farmers face substantial heterogeneity in their capacity to adopt and sustain CF practices, as soil carbon management decisions are embedded in diverse farm contexts with varying economic, technical, and labor constraints (Ingram et al., 2014). Beyond these structural constraints, small-scale farmers are further disadvantaged by the burden of fixed monitoring and certification costs that do not scale with farm size (Lorand et al., 2024; Vanzini et al., 2024), risking de facto exclusion from CF schemes regardless of formal eligibility. This exclusion is compounded by farmers’ weak bargaining position relative to processors and retailers (Rosochatecká, 2014) and by limited access to credit, which constrains small-scale farmers’ capacity to pre-finance MRV-related investments (Nazu et al., 2022). Consequently, MRV costs may be effectively shifted along the food chain toward the weakest actors rather than being equitably distributed. Aggregation schemes (Vanzini et al., 2024) and collective monitoring arrangements may partly redress this imbalance, but their effectiveness depends on explicitly accounting for power asymmetries in cost- and benefit-sharing, not only technical cost-pooling.

3.4 Theme 4: costs and challenges

3.4.1 Cost of CF practices

Foundational research evaluated the additional net cost of a change in practice compared to the baseline situation (Antle et al., 2003). Recent evaluations consider more precisely the following factors: variations in input use (e.g., fertilizers, pesticides, seeds, irrigation, animal feed); changes in cropping operations and machinery (including energy, labor, and third-party services); variations in yields (such as crops, milk, and meat); dedicated investments (e.g., planting tree lines or hedges); and foregone revenues from converting crop areas to hedges and grasslands (Bamière et al., 2024). In the EU, the costs of implementing CF practices can differ significantly depending on local factors, including soil type, climate, water availability, and existing infrastructure (Bamière et al., 2024). However, cost estimates rarely account for the co-benefits of CF practices for other ecosystem services (Tang et al., 2016; Svoboda et al., 2026).

Mooney et al. (2002) show that the efficiency of measurement and monitoring for soil carbon depends on the carbon credit price: because each ton is worth more at higher prices, more precise and costlier sampling becomes worthwhile, and monitoring costs are highest where carbon values are most spatially heterogeneous. Costing a monitoring protocol for the same prototype, Mooney et al. (2004) estimate that, for a contract paying farmers per ton of carbon sequestered, the upper bound of measurement and monitoring costs is around 3% of a credit’s value, which is small relative to the contract’s net value. A higher carbon price also makes CF profitable across more hectares, including more heterogeneous land that is costlier to monitor. Independently of price, operating at a larger scale spreads the fixed-cost component of MRV across more hectares, lowering per-unit monitoring costs. Together, higher prices and larger scales improve the economic viability of MRV, though expanding the enrolled area changes the sampling design needed to keep uncertainty within acceptable bounds. Grace et al. (2012) examined a carbon abatement curve (i.e., the amount of carbon that can potentially be sequestered as a function of the tradable carbon price in the financial market) while deriving this curve from two key components. First, the amount of additional carbon credits supplied by farmers to the financial market as a direct consequence of the carbon sequestration process (in this case, the introduction of a no-till system). Second, the additional cost to the farmer of implementing the CF practice (including all equipment, chemicals, fertilizer, and transaction costs to verify changes in soil carbon). Following Grace et al. (2012), the costs of CF practices include some additional costs to the farmer to implement the practice and the transaction costs to measure and monitor changes in soil carbon. We consider the latter to be inversely proportional to the market price of carbon credits (Mooney et al., 2002).

3.4.2 Costs of MRV systems

Monitoring CF practices is associated with a benefit, as it allows the policymaker to target the most cost-effective sites; however, the monitoring is costly, and costs rise with MRV accuracy. MRV costs will accrue to the intermediary or agency responsible for a CF scheme, including technical costs (for building up the operational systems, information systems for carbon tracking, and bridging various existing databases) and transaction costs (time requirements in operating the systems, including ensuring their transparency and liability) (Bamière et al., 2024). In Section 4.1, the two basic monitoring (M) methods of MRV at the farm level are: (i) field measurements only, and (ii) field measurements in combination with modeling, each entailing different cost implications. In addition, there are costs for reporting (R) and verification (V).

A key distinction in MRV financing is between direct MRV costs (e.g., establishing the soil carbon baseline, measurements and modeling, and running additionality tests) and broader transaction costs (e.g., research on MRV methods, information, training, and advisory services) (Section 4.1). For example, when a public body provides standardized baselines, it constitutes public transaction costs, which, in turn, help reduce private transaction costs. Additionally, the development of MRV methodologies is also considered a public transaction cost (Bamière et al., 2024). Soil sampling and modeling are the methodological focus of the MRV literature. Bradford et al. (2023) highlight that the time and financial resources needed to quantify changes over relevant periods—typically tens of years for carbon credits—cannot be met using the current best methods for soil sampling. Therefore, sampling could serve only as a complement to models and remote sensing. In agricultural soils, the cost–benefit of soil sampling and lab analyses should be weighed against the cost–benefit of models. Compared to forestry, soil sampling and lab analyses need to be conducted at a much higher frequency (Guthrie and Kumareswaran, 2009). The carbon credit price is affected by the accuracy of carbon monitoring. In the modeling domain, examining the correlations between multiple cost–benefit variables helps address the question of what conditions, in terms of adopting and monitoring the effects of sequestration practices, are acceptable to farmers (Smith et al., 2014). Models also account for different carbon prices, with carbon sequestration values and the model’s cost parameters varying accordingly. Mooney et al. (2002) point out that it must be possible to verify that the actions taken by farmers lead to an increase in the levels of carbon content in the soil and that this increase can be sustained throughout the duration of the contract. The carbon price depends on the accuracy of MRV. Mooney et al. (2004) estimated relatively low MRV costs for carbon sequestration practices in North America, amounting to only 3% of the value of carbon credits. However, an EU project (Frelih-Larsen et al., 2020) assessed MRV costs as high as 42% of the total transaction costs associated with carbon credits (or offset payments). The high cost associated with certain CF practices also means there is considerable variation in the potential for carbon removal from soils at different carbon prices (Smith et al., 2014).

3.4.3 Challenges in financing MRV systems

In this section, we review the structural and social challenges to implementing monitoring and reporting of verifiable soil carbon contents. While previous literature has mainly focused on the fundamental adoption issues at the farm level, our study explored the challenges related to establishing MRV systems. Specifically, the peer-reviewed literature was found to investigate problems affecting agricultural policies (GAEC standards, agri-environment schemes), similar to those influencing CF schemes.

Challenges in financing MRV systems include:

• (A11_Cost burden) A critical challenge for CF scheme design is preventing the disproportionate allocation of MRV costs to the farm level, which creates an administrative burden and time demands on farmers for reporting activities (Lorand et al., 2024; Gonzales-Gemio and Sanz-Martín, 2025). The scalability of MRV systems is constrained by labor demands and economic viability concerns, particularly for small-scale farms; however, innovations in digitalization and standardized protocols show promise for cost reduction (Vanderheyden et al., 2026).
• (A12_Cost of certification) Projects can be costly when the carbon produced is certified by an international standard, as most reputable projects do (Lorand et al., 2024).
• (A13_MRV measures) Research that reviewed around 160 CF schemes in Europe found that most of the top 23 ranked schemes operational in the area of CF, regardless of payment model, do not have an internationally approved standard for monitoring or predicting the amount of carbon stored or carbon emissions avoided (Smit et al., 2024), which may be difficult for farmers to understand.
• (A14_Bridging databases) CF schemes and intermediaries would utilize data and evidence for MRV that mostly exist in a plethora of public or public/private databases; however, these databases are often disconnected or operate at different granularities. Critical data on carbon results at the farm level may lack comparability (Balkovič et al., 2020).
• (A15_Setting up a regional baseline) Setting up a regional baseline through a regional carbon agency involving more CF schemes in a region could be a way to address farm-level heterogeneity (climate, soils, crop rotations); however, the cheaper the monitoring, by using modeling approaches rather than in situ soil sampling for varied situations, the less accurately carbon increases can be measured across varied situations with the same baseline (Bamière et al., 2023).
• (A16_Production risk) Literature on farmer attitudes frequently highlights production risk as a significant challenge. When assessing a CF project, monitoring costs and benefits at the farm level throughout operations may challenge the idea of additionality (WB, 2016). This is due to the minimal room for error in the agricultural sector, where many small-scale farmers, unlike large corporations, operate under high levels of debt and face low profit margins. Farmers are under immense pressure to supply their crops in specific forms and at specific times to processors and retailers, who wield significant influence in the food chain (Rosochatecká, 2014). Farmer attitudes are shaped by economic, social, and personal preferences (Dessart et al., 2019), as well as concerns for the long-term health of the soils and the environment (Dessart et al., 2019; Thamo and Pannell, 2015).
• (A17_Government programs) Authors examining government programs in the area of agriculture note that these programs are at least as effective as carbon certificates and voluntary trading (Paul et al., 2023), while certain farming practices, such as no-till, require no government support. Furthermore, institutional capacity needs to be strengthened (Roe et al., 2021).
• (A18_Constraints) Financial sector constraints may make it difficult to provide bank loans to small-scale farmers (Jankulovski et al., 2018).
• (A19_Sustainability co-benefits) Beyond carbon, CF practices enhance soil biodiversity, water management, and climate resilience (Sykes et al., 2020; Paul et al., 2023). However, these co-benefits are often location-specific and subject to a “benefit time lag,” where transition costs are immediate, but productivity gains take years to materialize (Hepburn et al., 2019; Henderson et al., 2022). This creates a valuation challenge for MRV systems: if financial mechanisms focus strictly on carbon credits, they may undervalue the total co-benefit, discouraging farmers who prioritize long-term soil health over short-term carbon markets. Addressing this requires financial mechanisms that explicitly price or weight co-benefits alongside carbon, rather than treating them as secondary.
• (A20_Under-researched topics) There is limited peer-reviewed information on contract design for MRV requirements; insurance/liability for MRV; price discovery related to MRV quality; and aggregator business models for coordinating MRV. Only sparse industry reports exist, and their quality varies. Other elements of financial mechanisms—such as revenue-risk sharing, buyer behavior, and the financial architecture of voluntary markets—relate to CF contracts as such, rather than to MRV financing.

4 Developing the conceptual framework

4.1 Expert-informed conceptual framework

The MRV components in Table 4 were assessed by an expert panel (n = 4: one agroecology scientist with MRV design experience, two agricultural economists, one policy specialist), selected for their direct expertise in MRV design, soil carbon, and EU CF policy. This small, expertise-matched panel approach can yield stable, reliable judgments without large samples (Akins et al., 2005). Following the issue definition and classification of MRV-related actors (farmers, R&D suppliers, investors/CF providers, government), experts conducted individual assessments, which were cross-checked with seven cooperating individuals (2 farmers, 2 civil servants, 3 academics) via e-mail/phone, then reconciled in a final non-anonymous panel discussion. Ratings were verbal (very relevant/relevant; yes/no relationship). In the first step, the issue was clearly defined for all experts in the panel: the key components of MRV, their impact on carbon sequestration in soil, and the identification of actors’ relationships to MRV. Further, specific measures were identified, and actors were classified according to whether they have a relationship to MRV components. Table 4 is thus an expert-informed conceptual synthesis, not a statistically validated consensus. The key finding in the panel discussion was that the components of MRV systems must be consistent over time and space in terms of the principles of setting up the monitoring, reporting, and verification tasks. However, the detailed choices made by CF schemes may need to respect bioclimatic and agronomic conditions at the regional level.

Table 4. Expert-informed conceptual synthesis of MRV components, including a map of stakeholders who are involved in implementation.

C sequestration potential: Very relevant ** Relevant *; Yes ◼; C – can only be implemented when collective action is undertaken at the local level. Source: own compilation based on European Commission (2025), Lorand et al. (2024), and Verra Standard (2023), using qualitative panel scoring.

4.2 Enabling and financial support mechanisms

This section provides an overview of relevant enabling and financial support mechanisms. The overview is structured from the perspective of farmers in relation to practice adoption, as well as from the perspective of carbon monitoring and reporting.

4.2.1 Farm-level supports

• (B11_Type of subsidy) Carbon subsidies from CF schemes are an increasingly available income opportunity for farmers: a review of 160 European schemes documents rapid experimentation across the continent, though uptake and scale have generally remained limited (Thorsøe et al., 2025), with operational examples such as France’s Label Bas-Carbone (358 projects, ~0.3 Mt. CO₂-eq/yr) and the Dutch SNK (46 projects, ~0.18 Mt. CO₂-eq/yr) illustrating still-modest volumes (Hönle et al., 2026). Result-based indicators are useful for validating the effectiveness of CF policies at state and national levels, as well as for developing proxy indicators, models, and metrics (Baumber et al., 2019). Börner et al. (2017) argue that linking payments to farmers to result-based indicators is only appropriate when participants have low risk aversion and external factors do not strongly influence farmers’ ability to deliver environmental outcomes. In addition, CF schemes may need to establish supports such as reserve funds to cover reversals of carbon benefits or to set out liability principles associated with buyers, which may conflict with the need to keep such markets attractive (McDonald et al., 2021).
• (B12_Advisory and information) Carbon subsidies could potentially take the form of farmers’ access to a publicly funded EU CF Advice Scheme. This could help farmers make informed decisions based on the best available knowledge of the agricultural objectives and MRV principles in the region. For instance, the CF Advice Scheme has been an essential component of Australia’s CF program (Rural and Industry Development Authority, 2023). Integrating CF practices with continuous learning through capacity building is central to progress monitoring (Okoronkwo et al., 2024). In the EU, a CF Advice scheme would need substantive backing from national state aids, as the CAP budget has become tighter with each programming period. Creating a CF Advice Scheme may depend on providing higher-level training to participating advisers, which would enable them to address challenges of red tape, specialization, and commercialization in agricultural advice (Brunier, 2016).
• (B13_Public funds availability) Hepburn et al. (2019) and Rockefeller (2024) highlight the stabilizing role of pre-existing government grants, cost-share programs, and subsidies available to land managers who undertake beneficial practices for farmers.

4.2.2 Supports to carbon monitoring

• (C11_Cost burden) CF schemes need to avoid passing the MRV costs to the farm level. Acceptance by policymakers and buyers may require international standardization to ensure transparent carbon subsidies. More result-based schemes have an internationally approved standard compared to action-based schemes (Smit et al., 2024).
• (C12_Bank guarantees) Carbon subsidies could also be provided as guarantees to small-scale farmers when monitoring costs are prohibitive. Public finance actors could offer such guarantees to farmers to access bank loans in these situations. Globally, groups such as Agri3 provide finance indirectly through investment guarantees (Rabobank, 2021; Vanzini et al., 2024).
• (C13_Cost reduction) Reducing policy costs remains important for establishing carbon agencies. Early work by the OECD (2007) set out guidance on reducing policy costs. This includes sharing expertise across agencies, regions, or countries; drawing on existing administrative networks; integrating government and private information systems; reducing the number of agencies; and using up-to-date information technology.

4.2.3 Comparison of options for enabling and financial support mechanisms

Building on the literature review findings on MRV challenges, we present a structured, expert-informed framework that links each identified problem to specific financial instruments and policy mechanisms. Table 5 maps eight central MRV financing challenges to their corresponding instruments, specifying for each the primary funding source, who benefits, the required scale of implementation, and the institutional conditions necessary for effectiveness. The framework synthesizes insights from the literature with expert assessment to operationalize the financial mechanisms that can address the accuracy–cost paradox and related barriers to CF scheme participation.

Table 5. Comparison of viable options for enabling and financial support mechanisms.

Mechanisms without explicit citations (marked with †) represent policy proposals documented primarily in industry reports and EU policy frameworks rather than peer-reviewed literature. Relevant references to these reports regarding specific instruments are included in Supplementary material. Mechanisms cited in literature (marked *) refer to Kangas and Ollikainen (2023).

The table sets out the viable options for resolving MRV financing challenges and highlights several key features. No single instrument adequately addresses the accuracy–cost paradox; viable approaches bundle complementary instruments with their enabling conditions (e.g., integrating modeling and remote sensing for MRV cost reduction, robust land registries for permanence management). The table suggests that effective role differentiation is needed among public actors (baseline-setting, de-risking), private actors (verification, market participation), and civic actors (aggregation, cost-pooling) to enhance viability. Furthermore, viable options need to be appropriate to scale, as farm-level instruments (advisory services, upfront payments) differ from regional mechanisms (aggregation, data systems) and national or EU-level mechanisms (buffer pools, price guarantees). Achieving financial viability for result-based CF may thus rely on integrated policy design combining complementary instruments within appropriate governance structures and institutional conditions.

5 Discussion and conclusions

This review synthesizes evidence on monitoring, reporting, and verification (MRV) financing mechanisms for CF under EU governance, revealing a central accuracy–cost paradox: credibility requires precise monitoring, yet high-precision MRV often renders schemes financially unviable. To address this, the literature findings led us to propose a novel conceptual governance framework that explicitly maps the interdependencies between MRV system design, cost structures, and financing sources (public, private, civic), offering scheme designers and policymakers a structured approach to trade-off management in MRV financing. The study emphasizes that achieving climate neutrality through CF hinges not only on technological innovation in MRV systems but also critically on overcoming the operational and financial obstacles inherent in implementing result-based schemes (Kreft et al., 2024; Vanderheyden et al., 2026).

There are several important limitations of this study. Regarding scope and geographical focus, this review is explicitly focused on MRV financing mechanisms under the EU’s Carbon Removal and Carbon Farming Regulation framework. Findings are therefore EU-centric and may not generalize to CF schemes in other governance contexts, particularly those lacking the policy infrastructure and regulatory standardization of the CRCF. Furthermore, the review deliberately excludes several financial mechanisms—taxation, insurance/liability structures, guarantees, aggregator business models for MRV coordination, and contractual risk-sharing arrangements—which exist primarily in grey literature or remain theoretically underdeveloped, limiting the comprehensiveness of the financial instruments analysis. It should also be noted that the review examines the nature of MRV costs but does not construct a fully harmonized comparative cost framework across studies, scales, methods, and jurisdictions, nor does it undertake new empirical cost estimation. MRV implementation remains an emerging field in which a reliable, harmonized cost base does not yet exist; systematic cost harmonization is viewed as a distinct meta-analytic undertaking for future work. Similarly, given the focus on the EU’s CRCF framework, the analysis does not extend to comparative case studies of governance models in individual EU member states or non-EU jurisdictions, nor does it include blueprints for multi-benefit sustainability credits beyond carbon. These represent valuable but methodologically distinct research directions—respectively requiring comparative policy analysis and scheme-design modeling—that go beyond the literature synthesis and financing mechanism mapping this paper is designed to deliver.

Another limitation lies in the methodological constraints of the expert-informed framework: Table 4 (MRV components and stakeholder relationships) comprises an expert-informed synthesis based on a small panel (n = 4 specialists), which, while appropriate for structured expert elicitation, limits the generalizability of the framework beyond the EU context and the specific expertise represented. The non-anonymous panel format, while supporting transparency, may introduce deference bias or social desirability effects. The verbal rating scale is coarser than formal quantitative elicitation methods, reducing granularity and cross-study comparability. A further limitation concerns the availability and heterogeneity of the literature. The peer-reviewed literature on MRV financing mechanisms—particularly on contract design, insurance structures, and aggregator models—is sparse. As documented in Section 4.2.3, MRV-specific financial instruments are discussed primarily in industry reports and policy documents of varying quality rather than in peer-reviewed research. Additionally, MRV cost estimates across studies are highly heterogeneous in methodology, geographic context, and scope, preventing systematic meta-analytical harmonization. Most evidence derives from English-language publications, potentially missing relevant insights from non-English scholarship. A further limitation lies in the carbon-centric framing of the review. While the review acknowledges co-benefits (soil health, biodiversity, water, resilience), it does not deeply integrate these into the core financial framework. The analysis remains primarily carbon-focused, which may underrepresent the value proposition for farmers prioritizing broader sustainability outcomes, as noted in the literature but not operationalized in the proposed mechanisms.

In conclusion, several points can be drawn from this literature review:

First, the accuracy–cost paradox is structural. Precision in MRV is necessary for environmental integrity, but cost-intensive systems create barriers to farmer participation. This reflects a structural tension in result-based scheme design, not a technical problem solvable through innovation alone.

Second, addressing the paradox requires complementary public and private financing mechanisms. The literature indicates that CF advice schemes (training farmers and advisers in MRV practices) reduce participation barriers by addressing information gaps, distinct from financial transfers. Since fixed certification costs and the complexity of MRV data required from farmers can exclude small-scale farmers (Demenois et al., 2022), collective monitoring arrangements (aggregation) that distribute MRV costs across farmers could improve their viability, though institutional conditions for equitable aggregation remain poorly documented. Beyond these, public support can manage regulatory additionality, de-risk private initiatives through carbon credit purchasing, and establish baseline-setting infrastructure. However, optimal cost-sharing and risk allocation across public and private actors remain undefined across different governance contexts.

Third, co-benefits are recognized but remain insufficiently integrated. The literature documents that a carbon-only payment logic may discourage farmer participation, as farmers prioritize soil health and resilience (Kangas and Ollikainen, 2023). However, how to operationalize multi-benefit payment frameworks without creating undue MRV complexity remains unresolved. Co-benefits are an important contextual factor shaping farmer motivation, but they are not yet the organizing logic of result-based schemes.

Fourth, public–private interdependence is necessary but ill-defined. MRV financing requires complementary public (baseline-setting, de-risking) and private (verification, carbon buyers) roles. Crucially, the literature implies the need for research underpinning models and the use of remote sensing; for providing access to data like CAP databases (see Table 5); and for public intervention to manage regulatory additionality, ensuring that incentives target carbon sequestration that goes beyond existing mandates, such as cover crop requirements. Furthermore, public support can de-risk private initiatives by purchasing carbon credits, provided they comply with de minimis rules for farmers. However, optimal cost-sharing and risk allocation across actors remain undefined, particularly across different governance contexts. Critical gaps remain in evidence of real-world implementation, context-specific comparative performance, and empirical outcomes from the CRCF framework.

Finally, effective MRV financing for carbon farming involves policy coherence at multiple governance levels. Internally, policies are most effective when aligned with their declared objectives. The literature indicates that carbon-centric approaches alone may not match farmer decision-making, as farmers assess practices against broader sustainability objectives. Externally, financing mechanisms benefit from alignment with complementary policies targeting climate and ecosystem goals, which in the EU context point toward the need for coherence between the CRCF and the Common Agricultural Policy (to avoid double funding), as well as with newer instruments such as the soil monitoring law and the nature restoration directive. This governance coordination relates to the accuracy–cost paradox: private markets demand high-precision MRV to ensure credit credibility, while public authorities can invest in shared monitoring infrastructure, such as open-access data and regional baselines. The literature suggests that this division of responsibility—meaning public infrastructure investment coupled with private market standards—supports financial viability for small-scale farmers and enables agricultural carbon removal to scale in ways consistent with SDG 13. Such integrated governance structures contribute to both climate action and equity in the transition toward verifiable carbon removal at scale.

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Supplementary material

The Supplementary material for this article can be found online at: https://www.frontiersin.org/articles/10.3389/fclim.2026.1835304/full#supplementary-material

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Footnotes

Edited by: Norichika Kanie, Keio University Shonan Fujisawa Campus, Japan

Reviewed by: Arnaud Zlatko Dragicevic, Center for Ecological Economics at Chulalongkorn University, Thailand

Nidhi Raina, University of Bologna, Italy