The agricultural sector holds enormous potential to reduce GHG emissions, enhance carbon removals, and support climate adaptation. Delivering these environmental objectives requires adequate funding and support to unlock opportunities that drive the transition toward greater sustainability and are a useful tool as part of a broader policy mix to promote the transition. 

At Ecologic Institute, our role in the CFD was to map and analyze the rewarding mechanisms currently used across the EU and its Member States. These mechanisms incentivize farmers to adopt climate-smart practices, and our goal was to highlight their diversity.

Our researcher, Julia Pazmino Murillo, presented the findings at the Climate Farm Demo Annual Meeting in Seinäjoki, Finland (22–25 September 2025). In her presentation, "Incentivizing farm-level climate action through rewarding mechanisms: A categorisation framework", she introduced the framework developed by Ecologic Institute for Climate Farm Demos and shared key insights from our analysis. 

Key Findings

• The deliverable highlights the existence of a wide range of tailor-made rewarding mechanisms across the EU and its Member States that incentivize climate-smart farming practices. The landscape is broad, dynamic and constantly evolving.
• Rewarding mechanisms for climate mitigation are well established, while mechanisms that promote climate adaptation are less common.
• Blended finance approaches remain limited but are gaining more attention and can help bridge the gap between beneficiaries and providers of the rewarding.
• Supportive mechanisms that encourage long-term behavioral change are often overlooked and not recognized as rewarding mechanisms.
• Farmers and farm advisors face challenges in navigating the diversity of rewarding mechanisms, both in terms of administrative requirements and in identifying those most relevant to their needs.
• Rewarding mechanisms are embedded within a broader policy mix that should be mutually reinforcing. Evaluating both the mechanisms and their possible combinations is essential to ensure the policy mix can be adapted accordingly.