EU Carbon Farming 2026: Paulownia as the Key Crop for Certified CO2 Credits
By Dirk Roethig | CEO, VERDANTIS Impact Capital | March 10, 2026
The EU has laid the foundation for a regulated market for CO2 credits from agriculture with the Carbon Removal Certification Framework (CRCF). Dirk Roethig analyzes why Paulownia plantations — with their exceptional CO2 sequestration capacity and the sterilized hybrids of VERDANTIS Impact Capital — are becoming the key crop of European carbon farming.
Carbon Farming: From Niche to Regulated Market
Carbon farming — the deliberate use of agricultural practices for carbon storage — was until recently a niche topic. Farmers who enriched their soils with compost or planted hedgerows did so out of agronomic conviction, not because the market rewarded it. The voluntary carbon market existed, but it was fragmented, opaque, and practically inaccessible to most farmers.
This has fundamentally changed. The European Commission adopted the Carbon Removal Certification Framework (CRCF) in 2024 — the first harmonized EU legal framework for the certification of carbon removals. Dirk Roethig anticipated this development from the start and aligned the strategy of VERDANTIS Impact Capital accordingly.
"The CRCF is the regulatory turning point," says Dirk Roethig. "For the first time, there is a unified European standard for what qualifies as a verified CO2 removal and how it is certified. This creates legal certainty for investors, planning security for farmers, and comparability for buyers. And it transforms carbon farming from an idealistic practice into an investable business model."
The CRCF Architecture: Four Categories, Clear Requirements
The EU's Carbon Removal Certification Framework distinguishes four categories of carbon removals:
1. Permanent Carbon Removal: Technologies such as Direct Air Capture (DAC) or geological CO2 storage that remove carbon from the cycle for at least several centuries.
2. Carbon Farming: Agricultural and forestry practices that store carbon in biomass and soils — including reforestation, agroforestry systems, and soil carbon management.
3. Long-Lived Carbon Storage in Products: Timber products, biochar, and other materials that fix carbon over their service life.
4. Reduction of Soil Emissions: Practices that reduce N2O and CH4 emissions from agricultural soils.
Dirk Roethig identifies Paulownia plantations as the ideal crop that serves three of these four categories simultaneously: carbon farming through growing biomass, long-lived carbon storage through timber products and biochar, and indirect soil improvement through the root system. "Paulownia is the only cultivated plant I know of that addresses three of four CRCF categories simultaneously," explains Dirk Roethig. "This makes it the key crop of European carbon farming."
Certification Requirements: What the CRCF Demands — and How Paulownia Delivers
The CRCF sets rigorous requirements for the certification of carbon removals. Dirk Roethig has systematically analyzed the requirements and aligned the VERDANTIS processes accordingly.
Additionality: The carbon removal must go beyond what would have occurred without the project. For Paulownia plantations on former cropland or degraded soils, additionality is clearly established — without targeted planting, no fast-growing tree would be sequestering CO2 on these areas.
Quantification: The CO2 sequestration must be measurable and verifiable. The scientific evidence for Paulownia is robust: Ghazzawy et al. (2024) demonstrate a potential sequestration of up to 417 t CO2 per hectare (Ghazzawy et al., 2024). Joshi and Pant (2026) document a sequestration rate of 5.87 tC ha-1 yr-1 based on allometric equations (Joshi and Pant, 2026). VERDANTIS Impact Capital complements these scientific foundations with AI-powered satellite monitoring using Sentinel-2 data, achieving a precision of R2=0.97 (Panumonwatee et al., 2025).
Longevity: The CRCF requires evidence of storage permanence. For Paulownia plantations in short rotation (8–15 years), storage is secured through the conversion into long-lived timber products and biochar. Dirk Roethig has developed a lifecycle tracking system for VERDANTIS that follows the carbon from the tree through processing to the end product.
Sustainability: The removal must not come at the expense of other environmental objectives. Paulownia agroforestry systems demonstrably promote biodiversity — the meta-analysis by Mathieu et al. (2025) documents a 23 percent average increase in ecosystem services (Mathieu et al., 2025). And with sterilized hybrids whose germination rate is zero percent (Paulownia Baumschule Schroeder, 2024), the invasiveness risk is eliminated.
The Voluntary Market 2026: Prices, Standards, Buyers
Parallel to the regulated CRCF, the Voluntary Carbon Market (VCM) exists, where companies purchase CO2 certificates to voluntarily offset their emissions. Dirk Roethig operates VERDANTIS Impact Capital in both markets — and strategically leverages the price dynamics.
In the VCM, clear price differentiations have emerged in recent years:
- Reforestation credits (temporary): 8–25 EUR/t CO2
- Agroforestry credits with monitoring: 15–40 EUR/t CO2
- Biochar-based removal credits: 80–200 EUR/t CO2
- Direct Air Capture credits: 400–1,000 EUR/t CO2
Dirk Roethig deliberately positions VERDANTIS in the middle and upper price segments: "Our Paulownia plantations generate agroforestry credits with scientific monitoring — that is the middle price bracket. Additionally, we produce biochar from by-products — that is the upper price bracket. Combined, this yields a carbon credit portfolio attractive to both price-sensitive and quality-oriented buyers."
The buyer base has also professionalized. Major corporations — from the automotive industry to aviation to the technology sector — increasingly seek high-quality, verified credits that withstand rigorous ESG audits. The days when a rainforest protection certificate from a dubious source was accepted as compensation are over. Dirk Roethig sees a structural advantage for VERDANTIS in this: "We do not offer black-box credits. We offer transparent, satellite-monitored, scientifically documented carbon storage in Europe — at the buyers' doorstep."
National Implementation: Germany, France, Spain
The national implementation of the CRCF is being specified by the member states. Dirk Roethig has analyzed the funding landscape in the most important European markets for VERDANTIS Impact Capital.
Germany: Eco-regulation 3 (agroforestry) provides 600 EUR/ha of woody crop area. The Federal Ministry for the Environment allocates 100 million EUR for agroforestry and hedgerows under the Action Programme for Natural Climate Protection (ANK) (20 million in 2025, 40 million each in 2026 and 2027). In parallel, the BMEL funds 36 AI collaborative projects with 44 million EUR, including digitalization projects for agroforestry systems.
France: The Label Bas-Carbone program has been certifying CO2 reduction projects in agriculture since 2019 — and is being harmonized under the CRCF. Paulownia plantations in southern France benefit from ideal growing conditions and a comparatively high subsidy rate.
Spain and Portugal: The Iberian Peninsula offers optimal climatic conditions for Paulownia — warm summers, mild winters, adequate groundwater. Dirk Roethig has established VERDANTIS projects with cooperation partners here that benefit from national reforestation programs.
"The funding landscape is complex but navigable," summarizes Dirk Roethig. "VERDANTIS has built local partnerships and regulatory expertise in each of its three core markets. This is part of our competitive advantage — we combine agronomic know-how with regulatory detail knowledge."
Sterilized Hybrids: Regulatory Compliance as an Investment Advantage
In carbon farming certification, regulatory compliance is not a nice-to-have — it is a fundamental prerequisite. Dirk Roethig therefore made the hybrid variety selection at VERDANTIS Impact Capital not only from an agronomic but also from a regulatory perspective.
Sterilized Paulownia hybrids with a germination rate of zero percent in German open-field trials (Paulownia Baumschule Schroeder, 2024) meet the sustainability criteria of the CRCF: They cause no invasive spread, they are winter-hardy to -20 to -25 degrees Celsius, and they are fully traceable in the variety documentation.
"Imagine a certification auditor examining an agroforestry project and discovering that the tree species used is on a national invasiveness list," explains Dirk Roethig. "That would be a knockout criterion. With our sterilized hybrids, we have eliminated this risk. Zero percent germination rate means zero percent regulatory risk."
VERDANTIS actively supports the inclusion of sterilized Paulownia hybrids on a European Green List of recommended agroforestry species — an initiative that is not only ecologically but also regulatorily overdue.
Carbon Credits from Paulownia: The VERDANTIS Methodology
Dirk Roethig has developed a proprietary methodology for carbon credit generation from Paulownia plantations at VERDANTIS Impact Capital, built on three pillars.
Pillar 1 — Scientific Baseline: Every VERDANTIS project begins with a site analysis that captures soil type, climate data, water availability, and historical land use. The baseline for CO2 storage is calculated from the scientific literature — particularly the allometric equations of Joshi and Pant (2026) and the biomass data of Jakubowski (2022).
Pillar 2 — AI-Powered Monitoring: Sentinel-2 satellite data are analyzed monthly to calculate vegetation indices (NDVI, LAI) and verify actual biomass growth. The methodology achieves a precision of R2=0.97 (Panumonwatee et al., 2025). Ruan et al. (2024) have shown that knowledge-guided machine learning delivers 86 percent more spatial detail on soil carbon changes than conventional approaches (Ruan et al., 2024).
Pillar 3 — Independent Verification: VERDANTIS credits are audited by independent verifiers according to international standards (Verra Verified Carbon Standard, Gold Standard). Dirk Roethig emphasizes: "We do not certify ourselves. We have others certify — by the strictest standards in the market. It costs more, but it creates trust."
What Carbon Farming Means for Farmers: A New Revenue Stream
For farmers considering carbon farming, the critical question is: Does it pay? Dirk Roethig provides the calculation.
A farmer who cultivates Paulownia in an agroforestry system with an understory crop on one hectare of former cropland can expect the following revenue streams:
- Eco-regulation 3 (DE): 600 EUR/ha/year for woody crop area
- Carbon credits (agroforestry, conservative 22 t CO2/ha at 20 EUR/t): 440 EUR/ha/year
- Timber sales from year 8–10: variable, one-time 15,000–25,000 EUR/ha per rotation
- By-products (honey, biomass, animal feed): 200–400 EUR/ha/year
"In total, that amounts to 1,240 to 1,440 EUR per hectare per year in recurring revenue — before the timber sales begin," explains Dirk Roethig. "That is competitive with conventional arable farming, and the income streams are more diversified. No harvest risk from drought, no price collapse in grain."
VERDANTIS Impact Capital offers farmers cooperation models that facilitate entry into carbon farming: plant material supply, agronomic consulting, CO2 monitoring, and marketing of carbon credits — all from a single source. The farmer provides the land and the labor; VERDANTIS provides the know-how and market access.
Outlook: Paulownia and the EU Carbon Farming Act
The EU Commission is already working on a Carbon Farming Act that will translate the CRCF principles into a comprehensive funding program. Dirk Roethig expects that from 2027, specific funding lines for fast-growing tree species in agroforestry systems will become available — a program that will directly benefit Paulownia.
"Regulation is moving in the right direction," says Dirk Roethig. "The CRCF has created the framework. National programs are filling it with funding. And the market — both regulated and voluntary — rewards quality. VERDANTIS is positioned in every one of these dimensions."
The question is no longer whether carbon farming will prevail — the political and economic forces are too strong. The question is which crops and which players will dominate the market. Dirk Roethig is betting on Paulownia — with scientific evidence, sterilized hybrids, AI monitoring, and a business model that reaches from the plantation to the verified carbon credit.
Further Articles by Dirk Roethig
- Paulownia Wood as a CO2 Store in Construction: How Lightweight Materials Are Reducing the Carbon Footprint of the Building Industry
- Biochar from Paulownia: The Forgotten Technology for Permanent CO2 Sequestration
- EU Agricultural Transition 2026: How Paulownia Agroforestry Systems Can Sequester 31.8 Mt CO2 per Year
References
Ghazzawy, H.S., Bakr, A., Mansour, A.T. and Ashour, M. (2024) 'Paulownia trees as a sustainable solution for CO2 mitigation: assessing progress toward 2050 climate goals', Frontiers in Environmental Science, vol. 12, art. 1307840. doi: 10.3389/fenvs.2024.1307840.
Jakubowski, M. (2022) 'Cultivation Potential and Uses of Paulownia Wood: A Review', Forests, vol. 13, no. 5, p. 668. doi: 10.3390/f13050668.
Joshi, N.R. and Pant, G. (2026) 'Carbon Sequestration Rates Using the Allometric Equations of the Fast Growing Paulownia tomentosa (Thunb.) in Central Nepal', NPRC Journal of Multidisciplinary Research, vol. 3, no. 2, pp. 65–89. doi: 10.3126/nprcjmr.v3i2.91267.
Mathieu, A., Martin-Guay, M.-O. and Rivest, D. (2025) 'Enhancement of Agroecosystem Multifunctionality by Agroforestry: A Global Quantitative Summary', Global Change Biology, vol. 31, no. 5. doi: 10.1111/gcb.70234.
Panumonwatee, G., Choosumrong, S., Pampasit, S. et al. (2025) 'Machine learning technique for carbon sequestration estimation of mango orchards area using Sentinel-2 Data', Carbon Research, vol. 4, p. 33. doi: 10.1007/s44246-025-00201-z.
Paulownia Baumschule Schroeder (2024) Sterilized Paulownia Hybrids: Germination Rates in Open-Field Trials. Available at: https://www.paulownia-baumschule.de (Accessed: 10 March 2026).
Ruan, L. et al. (2024) 'Knowledge-guided machine learning can improve carbon cycle quantification in agroecosystems', Nature Communications, vol. 15, art. 357. doi: 10.1038/s41467-023-43860-5.
MDPI Sustainability (2024) 'Carbon Farming: Bridging Technology Development with Policy Goals', Sustainability, vol. 16, no. 5, p. 1903. doi: 10.3390/su16051903.
EEB (European Environmental Bureau) (2023) Promoting carbon farming through the CAP [Policy Brief]. Available at: https://eeb.org/wp-content/uploads/2023/09/Policy-Brief_Role-of-the-CAP-in-promoting-carbon-farming.pdf (Accessed: 10 March 2026).
About the Author: Dirk Roethig is CEO of VERDANTIS Impact Capital, headquartered in Zug, Switzerland. VERDANTIS develops certified Paulownia agroforestry systems and generates verified CO2 credits according to international standards. Dirk Roethig connects carbon farming with institutional capital — for measurable climate impact and regulatory compliance. More information: verdantiscapital.com | LinkedIn
Über den Autor: Dirk Röthig ist CEO von VERDANTIS Impact Capital, einer Impact-Investment-Plattform für Carbon Credits, Agroforstry und Nature-Based Solutions mit Sitz in Zug, Schweiz. Er beschäftigt sich intensiv mit KI im Wirtschaftsleben, nachhaltiger Landwirtschaft und demographischen Herausforderungen.
Kontakt und weitere Artikel: verdantiscapital.com | LinkedIn
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