In recent years, sustainability has evolved from an ethical aspiration into an economic and regulatory criterion.
In the European Union, this transformation has a precise name: the EU Green Taxonomy.
It is the common language used to define, measure, and regulate what can truly be considered sustainable — including agriculture.
For cereal producers, this means that sustainability is no longer a moral choice but a prerequisite for access to funds, markets, and green finance.
What the EU Green Taxonomy Is
The EU Green Taxonomy, established in 2020 and updated in 2023, is a classification system defining which economic activities make a substantial contribution to the EU’s environmental goals.
It identifies six main objectives:
- Climate change mitigation
- Climate change adaptation
- Sustainable use of water and marine resources
- Transition to a circular economy
- Pollution prevention and control
- Protection of biodiversity and ecosystems
An activity is considered taxonomy-aligned only if it contributes to at least one of these goals without causing significant harm (the DNSH principle – Do No Significant Harm) to the others.
For the first time, sustainability is not just a statement — it is a measurable and verifiable condition.
Agriculture and the Taxonomy: A Developing Framework
Agriculture was initially excluded from the first delegated acts of the Taxonomy but has been progressively integrated since 2023.
Currently, technical criteria are being developed by the EU Platform on Sustainable Finance, covering areas such as:
- Fertilizer and pesticide use;
- Soil and organic carbon management;
- Water efficiency and irrigation;
- Biodiversity and habitat protection.
For cereal systems, the practices considered “taxonomy-compliant” include:
- Precision agriculture, to optimize input use and resource efficiency;
- Crop rotations with legumes and cover crops;
- Certified organic or integrated farming systems;
- Conservation tillage and permanent soil cover;
- Reduction of direct N₂O emissions from synthetic fertilizers.
Why the Taxonomy Changes the Game for Farmers
Until now, sustainability in agriculture was often voluntary, expressed through labels or certifications (such as ISO, GlobalG.A.P., or organic).
With the Green Taxonomy, it becomes a binding component of financial reporting and investment eligibility.
Banks, insurance firms, and investment funds must now disclose how much of their portfolios align with the EU Taxonomy.
This has major implications for the farming sector:
- Taxonomy-aligned agricultural projects will have easier access to green financing and incentives;
- Farms that demonstrate sustainable practices will gain visibility and credibility in supply chains;
- Those not aligned may struggle to access future funding or environmental subsidies.
In short, sustainability is turning into a new financial language that determines who can invest and who can grow.
Examples from the Cereal Sector
Several Italian wheat and barley cooperatives are already experimenting with taxonomy-aligned sustainability reporting, integrating environmental and financial data.
Examples include:
- Cereal consortia producing Sustainability Reports to attract EU funding and ESG partnerships;
- Farm cooperatives documenting CO₂ and water reductions as measurable financial indicators;
- Pasta and milling companies qualifying for green credit through regenerative sourcing and traceable low-impact supply chains.
Regional Rural Development Programmes (PSR) in Emilia-Romagna and Marche are now financing pilot projects to test Taxonomy and SDG-aligned sustainability metrics in cereal systems.
Challenges and Opportunities
Applying the Green Taxonomy to agriculture is complex.
The main challenges include:
- A lack of digitalized farm-level data on inputs, yields, and emissions;
- The technical complexity of environmental metrics;
- Limited financial and sustainability literacy among farmers.
Yet the opportunities are significant.
According to the Joint Research Centre (2024), farms that adopt standardized sustainability reporting gain faster access to EU financing and improve market confidence.
For wheat producers, this can translate into higher market value, especially in short supply chains, organic production, and low-impact farming.
Toward Transparent Green Finance
The Green Taxonomy is more than a regulatory tool — it’s a system of transparency and accountability.
It allows stakeholders to distinguish between real sustainability and green marketing, based on measurable, verifiable criteria.
Over time, this shift will lead to:
- Fairer, more responsible agricultural finance;
- Full environmental traceability along agri-food supply chains;
- Economic recognition for soil conservation and climate-smart practices.
Wheat, the symbol of Mediterranean agriculture, thus becomes an ambassador of green transparency — a product that tells not only where it was grown, but how, and with what environmental footprint.
Sources:
- European Commission (2023–2024). EU Taxonomy Regulation and Delegated Acts for Sustainable Finance.
- Joint Research Centre (2024). Sustainable Finance and Agricultural Sector Alignment with the EU Taxonomy.
- FAO (2024). Green Finance and Sustainable Agricultural Systems.
- CREA – Policy and Bioeconomy (2024). Application of Taxonomy Criteria to Italian Cereal Supply Chains.
- EU Platform on Sustainable Finance (2024). Technical Screening Criteria for Agricultural Activities.