Physical boundary for "within-value chain FLAG Removals" accounting

Hi all!

I am trying to find clarity on how narrow the physical boundary for “within-value chain Removals” needs to be defined, as there is some room for interpretation with what GHGP and SBTi are publishing.

As per GHGP and SBTi, FLAG Removals (i.e. those that can count towards a FLAG target) need to happen on “land owned or operated by a company or within a company’s value chain”. Furthermore SBTi mentions that “reforestation and forest restoration needs to occur on working lands

Now, I am not sure how “within value chain” and “working lands” should be interpreted. For example:

Company A purchases wheat from a farmer.

This farmer produces wheat (sold to company A) and soy (sold to company B).
The farmer also generates removals on 3 different lands:
1) On his wheat field (working land)
2) On his soybean field (working land)
3) On a forest patch next to the soybean field (non-working land, but owned by farmer)

Question: Which removals can company A account for?
1) Only the ones from the wheat field (as this is the product it purchases)
2) From both, the wheat and soybean field (as they’re both “working land” and owned by the farmer who is part of company A’s value chain)
3) From all three sources. (Even though the forest patch is no “working land” it is still owned by the farmer, who is part of Company A’s value chain)

Would be great to hear your thoughts on this!
Luca

Hi Luca,

I’d opt for option 2. The forest is owned by the farmer but for me it is not part of your production of wheat or soybean and the associated value chain.

All the best,
Steven

Thanks for sharing your thoughts Steven!

So you’d say Company A can still claim removals from the soybean field, even though it’s not purchasing any soy from the farmer?

Hi Luca,

Sorry, I have to correct myself. Only from the product they are purchasing, so it’s option 1). I misread that they were also buying the soybean.

Best regards,
Steven

Hi Steven,

Thanks for getting back on this one!

That’s really interesting, as I think this is exactly where there is some uncertainty within carbon accounting at the moment.

For Removals it’s not quite clear how narrow the boundary should be defined: i.e. Removals need to come from a) exactly the land used for producing the procured product (i.e. option 1 in my example) or b) Any (working) land of the supplier, no matter what’s produced on it (i.e. option 2 in the example).

It’s also an interesting one because if indeed we follow option 1, wouldn’t this restrict dairy and cattle farmers that do not use any lands directly for e.g. beef or milk production? As they wouldn’t be able to generate SBTi-aligned FLAG removals in their stables, and there is no other farmer-owned land that is directly connected to the milk production, they wouldn’t have the option to generate Removals at all (it would be the feed producers who would need to).

Cheers,
Luca