From Offset to Inset — Challenges in the Agrifood Sector and the Evolving Global Framework
“Insetting” is rapidly gaining attention as a strategy that enables companies to achieve verifiable greenhouse gas reductions within their own supply chains. In the agrifood sector, implementation remains complex due to the need to manage non-CO₂ gases, the prevalence of smallholder producers, and the technical difficulty of environmental monitoring and verification. This article outlines the fundamentals of insetting, key international policy and market shifts, sector-specific challenges, and emerging case studies. It also discusses how insetting can strengthen corporate competitiveness and long-term brand value.
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From Offset to Inset — A Shift in Mindset
Carbon offsetting was once considered a cornerstone of corporate decarbonization strategies. However, mounting evidence questioning its credibility and climate impact has accelerated a shift toward insetting, a more direct and measurable reduction pathway.
Limitations of Carbon Offsets and Growing Scrutiny
In January 2023, The Guardian, Die Zeit, and investigative group Source Material released findings from a nine-month inquiry revealing systemic over-crediting within nature-based offsets. The report suggested that more than 90% of forest carbon credits certified by Verra lacked measurable climate benefit, classifying them as “phantom credits” (1). Citing analysis from Cambridge University, the investigation pointed to inflated baseline assumptions that overstated avoided deforestation, resulting in estimated emissions reductions being exaggerated by an average of 400% (1). Further concerns included improper handling of community land-rights, indicating potential social justice risks within the offset system. While Verra issued rebuttals, the findings triggered widespread loss of confidence across the voluntary carbon market (VCM) (1). Similar academic critiques have emerged in the United States. Researchers from UC Berkeley found that offsets used under California’s emissions trading system lacked additionality and overstated avoided emissions impacts (2).
The SBTi Pivot Toward Insetting and Stakeholder Expectations
Declining trust in offsets has strengthened expectations for real, traceable emissions reductions. The SBTi’s Corporate Net-Zero Standard is a defining influence: it requires companies to reduce at least 90% of emissions through internal or supply-chain mitigation, limiting offsets only to residual emissions (3). The number of SBTi-aligned companies continues to rise globally, establishing reduction quality—not only reduction volume—as a new corporate climate benchmark (4).
This shift is reinforced by consumer and investor behavior.
・More than 60% of surveyed consumers report willingness to pay a premium for products from companies demonstrating meaningful sustainability efforts (5). ・PwC research shows that over half of Gen Z and Millennial respondents incorporate ESG performance into purchasing and employment decisions (6).
As a result, insetting now functions not only as an environmental strategy but also as a driver of competitive advantage, brand trust, and talent attraction.
Why the Agrifood Sector Requires Tailored Insetting Approaches
Although the agrifood system holds high mitigation potential—particularly through regenerative agriculture and soil carbon sequestration—delivering measurable, high-integrity insetting remains complex.
Managing Multiple Greenhouse Gases
Unlike sectors where CO₂ dominates, agriculture must address methane (CH₄) and nitrous oxide (N₂O)—gases with warming potentials tens to hundreds of times higher than CO₂ (7)(8). These gases originate from diverse biological and chemical processes, making standardized MRV frameworks technically challenging.
Fragmented, Small-Scale Production Systems
Globally, 85% of agricultural producers are smallholders, according to FAO (*9). Limited capital, infrastructure, and digital capability create structural barriers to scaling insetting programs rapidly. Implementation requires long-term technical assistance, coordination, and system-level capability building.
MRV Challenges in Soil Carbon Measurement
Soil carbon measurement remains one of the most technically demanding areas within agricultural MRV. FAO references indicate the need for repeated sampling over large areas and long timeframes, with significant geographic and seasonal variability (10). Variability in sampling methodologies and the current limits of remote sensing accuracy further complicate verification (11).
Long-Term Nature of Carbon Sequestration Cycles
Meaningful carbon sequestration outcomes typically occur over 5–20 years, and reversal risks—flood, drought, or land-use change—require robust permanence frameworks (*12). This temporal reality often conflicts with annual reporting cycles and short corporate planning horizons.
Global Case Studies and Policy Trends
Despite structural complexity, implementation momentum is increasing as governments and corporations develop enabling frameworks and pilot models.
Europe: Regulation and Carbon Farming Infrastructure
Europe is advancing regulatory mechanisms supporting agricultural emissions reduction. The EU Carbon Removals and Carbon Farming Regulation, entering enforcement in 2024, formalizes certification pathways for agricultural removals and reductions (14). The EU Farm to Fork Strategy sets targets for 50% pesticide reduction and 25% organic agricultural land by 2030, with some member states—such as Ireland—already ahead of schedule (15) (16). France’s 4 per 1000 Initiative further positions soil carbon as a core climate mitigation pathway at international scale (14).
North America / California: Public Funding for Regenerative Systems
California’s policy environment actively supports agricultural emissions reduction through programs such as:
・SWEEP (irrigation and water-efficiency grants) and
・AMMP (methane reduction in livestock systems),
providing grants up to USD $750,000 (17). Beginning January 2025, the State Board of Food and Agriculture adopted an official definition of regenerative agriculture, creating a potential regulatory reference point for future insetting investments (18).
Emerging Corporate and Municipal Pilots
Food companies in Europe and North America are using these policies to pilot regenerative agriculture programs and develop verifiable MRV frameworks within their sourcing regions (14)(17)(*18). These cases suggest that scalable models are achievable despite structural challenges.
Insetting as a Strategic Value Driver
Insetting is not only a method of emissions mitigation—it is a long-term differentiation strategy enhancing supply-chain resilience, product credibility, investor trust, and brand equity. Transparent ESG performance is now a competitive requirement in both B2B and B2C markets.
cuoncrop Support Services
cuoncrop supports organizations in designing and implementing insetting programs across complex agrifood supply chains. Our services include environmental footprint baselining, insetting feasibility assessment, MRV alignment with international standards, and quantification of emissions reduction or sequestration potential. We currently support clients across Japan, Europe, and Asia and welcome inquiries from organizations exploring high-integrity insetting pathways.
cuoncrop ESG
Global Trend Research Division
References
1. The Guardian Investigation Of Verra Carbon Offsets（Carbon Herald）
2. California’s Cap-and-Trade Plan Is Getting a Failing Grade（San Francisco Chronicle）
3. Science Based Targets initiative (SBTi): Net-zero standard
4. Science Based Targets initiative. (2025). Target dashboard.
5. McKinsey & Company (2022): “Consumers care about sustainability—and back it up with their wallets.”
6. PwC (2022): “Consumer and Employee ESG Expectations”
8. Food and Agriculture Organization (FAO), GHG Emissions from Agriculture, Forestry and Other Land Use
9. FAO, The State of Food and Agriculture 2014: Innovation in family farming
10. FAO, Measurement of Soil Carbon Stocks
11. Kuhnert, M., Vetter, S. H., & Smith, P. (2022). Measuring and monitoring soil carbon sequestration.
12. IPCC, Special Report on Climate Change and Land (SRCCL), 2019
14. ClearBlue Markets「EU Carbon Removal Certification Framework: Key developments and implications」
15. European Commission「Farm to Fork Strategy」
16. Teagasc「Ireland has already achieved key 2030 pesticide reduction target」
17. California Department of Food and Agriculture「CDFA Climate-Smart Incentive Program」
18. Agri-Pulse「California adopts a regenerative agriculture definition for programs and policies」