Mr. Bill Callanan:

I understand the question on the ambition for ten years' time. What we are trying to do is invest in creating the framework for an opportunity for finance, be it in respect of nature capital or carbon farming. The Department has just run a public consultation on carbon farming and has received over 400 submissions. It is a matter of how we create a framework of additionality in terms of opportunities for farmers. As a regulator, I see my role as determining whether the framework is robust and verifiable and whether there is confidence regarding opportunities – for example, in terms of companies investing.

On carbon farming, let me give an example. We have a soil sampling scheme that is run to get a better handle on the amount of carbon currently in our soils. We have the highest density of soil carbon monitoring equipment in Europe under the National Agricultural Soil Carbon Observatory, NASCO, which is being run on our behalf by Teagasc but paid for by the Department. We will have 30 individual sites assessed for carbon movement up and down. Also, we are engaging in public consultation on how to create a carbon framework. There is an emissions trading system, ETS, which creates an internal value in terms of carbon, which we know from a market compliance point of view is nearly at €100 per tonne at this stage. I urge caution regarding these venues in that the reality is that European policy will not allow carbon in agriculture to compete by way of an ETS-type structure. Therefore, we are looking at voluntary carbon markets, for which we believe there is a very strong appetite, but we just have to recognise that there will be a different price point. While we are very clear on the opportunities for ecosystem services and nature capital accounting, into which we have invested in research and regarding which there are several projects and an opportunity for carbon farming, I want to manage expectations.

We need to consider the value of carbon reduction emissions which would be associated with better peatland management and whether there is the same appetite for payment compared to the carbon removal that people might get from forestry. Those are the issues we deal with as a regulator. I do not see us running a carbon scheme per se, but we have to have a regulatory process available so that we can put in place those that are providing those services and there is confidence in the market.

For example, 25% of the basic payment is now paid for eco-schemes in recognition of what farmers currently have or propose to have on their farms in respect of space for nature. That is a direction of travel that is going to continue in terms of the development of CAP. I have spoken about our change to a results-based system, which is monumental in terms of having 46,000 farmers in the scheme and 1 million ha to be scored this year. I challenge the remarks on urgency. I recognise that we have to be open and clear with farmers in terms of the expectation for greater sustainability and payments for services. As a regulator, we need to have systems in place to support that and an open and honest approach.