Civil Law and Agroforestry Carbon Credit Ownership Disputes in Europe

1. Introduction

Agroforestry carbon credit ownership disputes arise when two or more parties claim the economic or legal benefit associated with carbon removed or stored through trees, forests, hedgerows, silvopasture, agroforestry systems, or agricultural soils.

Typical participants include:

landowners;

farmers;

tenants;

forest owners;

forestry managers;

carbon-project developers;

aggregators;

cooperatives;

investors;

carbon-credit buyers;

certification bodies;

public authorities.

A central legal difficulty is that ownership of land, ownership of trees, control of the carbon-removal activity, and ownership of a certified carbon unit are not necessarily the same thing.

The EU's Carbon Removals and Carbon Farming Regulation, Regulation (EU) 2024/3012, now expressly recognises farmers, other land managers, forest owners/managers and public entities as possible "operators" of carbon-farming activities. It also creates certification rules for carbon-farming sequestration units. (EUR-Lex)

However, the Regulation is primarily a certification framework. It does not simply declare that the owner of land automatically owns every carbon credit generated on that land. Consequently, contractual arrangements and national property/contract law remain extremely important.

2. What Is an Agroforestry Carbon Credit?

An agroforestry project may combine:

trees with crops;

trees with livestock;

hedgerows;

silvopasture;

windbreaks;

riparian vegetation;

forest restoration;

improved forest management;

soil-carbon practices.

The activity can increase carbon stored in:

living biomass;

deadwood;

litter;

soil;

other recognised carbon pools.

The CRCF Regulation expressly defines carbon farming in terms of land-management activities that increase carbon storage in living biomass, dead organic matter and soils or reduce soil emissions. (EUR-Lex)

A simplified chain is:

Land → Agroforestry activity → Verified carbon removal → Certified unit → Sale/transfer → Buyer

The civil dispute usually arises at one of those stages.

3. The Central Ownership Problem

Suppose Farmer A owns 100 hectares.

Farmer A signs a 20-year carbon agreement with Carbon Company B.

Carbon Company B:

finances tree planting;

measures sequestration;

arranges verification;

sells the resulting credits.

After five years, Farmer A argues:

"The trees and land belong to me, so the carbon credits belong to me."

Company B responds:

"We financed and developed the carbon project, and our contract gives us the carbon rights."

The dispute is not necessarily answered merely by asking:

Who owns the land?

The court may have to examine separately:

ownership of the land;

ownership of trees;

right to manage the land;

right to undertake carbon farming;

contractual entitlement to carbon benefits;

entitlement to certification;

ownership/control of issued units;

right to sell the units;

right to make environmental claims;

allocation of reversal risk.

4. Important Distinction: Carbon vs Carbon Credit

This distinction is fundamental.

Physical carbon

Carbon exists in:

trees;

roots;

soil;

biomass;

dead organic matter.

Carbon-removal benefit

This is the quantified environmental result of removing/storing atmospheric CO₂.

Certified carbon unit

This is a legally recognised unit recorded under a certification framework.

Therefore:

Owning the tree does not automatically answer who owns a tradable carbon unit representing a verified climate benefit.

The CRCF Regulation requires certified units to be registered and prevents the same unit from being issued more than once or used by more than one natural or legal person at the same time. (EUR-Lex)

5. Current EU Regulatory Framework

Regulation (EU) 2024/3012 established the EU's voluntary certification framework for:

permanent carbon removals;

carbon farming;

carbon storage in products;

soil-emission reductions through carbon farming. (EUR-Lex)

The framework entered into force in December 2024 and is intended to improve the integrity and traceability of carbon-removal markets. (Publications Office of the EU)

For carbon farming, the relevant operator can include:

a farmer;

another manager of the activity;

a forest owner;

a forest manager under national law;

a competent public entity. (EUR-Lex)

This is highly relevant to ownership disputes because the person who qualifies as the operator is not necessarily identical to the person who owns the underlying land.

6. Main Types of Ownership Disputes

A. Landowner v Carbon Developer

The landowner says:

"The carbon credits belong to me because I own the land."

The developer says:

"Our development agreement gives us the carbon rights."

The court examines the contract and applicable property law.

B. Landowner v Tenant

A tenant performs agroforestry work on leased agricultural land.

Questions include:

Who owns the trees?

Who receives carbon income?

Does the lease transfer carbon benefits?

What happens when the lease expires?

Who bears monitoring obligations?

C. Farmer v Carbon Aggregator

A carbon aggregator combines hundreds of farms into one project.

Potential disputes concern:

allocation of credits;

commission;

deductions;

project costs;

verification costs;

ownership of future credits;

termination.

D. Joint Ownership

Several persons may own or control:

land;

trees;

farming operations;

carbon project;

certification rights.

This can create disputes over whether one co-owner can sell the credits without the consent of others.

7. Contractual Carbon Rights

A carbon agreement should ideally identify:

project land;

project duration;

baseline;

additionality;

carbon pools;

monitoring obligations;

verification;

ownership of issued units;

revenue sharing;

transfer rights;

termination;

reversal;

fire;

drought;

storm;

disease;

harvesting;

sale of land;

succession;

insolvency.

An unclear agreement can create substantial litigation.

8. Case Law 1 — CJEU, C-595/20

This case is especially useful for agroforestry ownership disputes.

The CJEU considered a contract concerning ownership of trees planted on land, where the trees were ultimately intended to be harvested and sold as timber.

The Court held that, in the circumstances of that contract, the trees could be treated as proceeds of the use of the land, and that contractual personal rights concerning those proceeds could be separated from ownership or other rights in rem in the land. (Infocuria)

Importance for carbon credits

Although this case was not a carbon-credit case, its property-law reasoning is highly relevant.

It demonstrates that:

Economic benefits generated by trees can, depending on national law and contractual structure, be separated from ownership of the underlying land.

Therefore, a carbon contract can potentially allocate carbon-related economic rights separately from land ownership.

Example

Landowner → owns land

Tenant/developer → contractual right to carbon revenue

The two interests do not necessarily have to be identical.

9. Case Law 2 — Commission v Hungary, C-235/17

The CJEU examined Hungarian legislation that extinguished usufruct rights over agricultural and forestry land without compensation in certain circumstances.

The Court held that Hungary had breached EU law, including the right to property under Article 17 of the EU Charter, in conjunction with free movement of capital. (EUR-Lex)

Relevance to carbon rights

Agroforestry carbon projects depend upon legally secure land-use rights.

If a person has:

usufruct;

lease;

management rights;

forestry rights;

the destruction of that underlying right can directly affect the ability to generate carbon benefits.

Principle

A legally protected interest in agricultural or forestry land cannot simply be extinguished without regard to applicable property protections.

This becomes relevant where carbon income is economically connected to a land-use right.

10. Case Law 3 — ArcelorMittal Rodange et Schifflange, C-321/15

The CJEU considered the legal treatment of greenhouse-gas emission allowances and whether unused allowances could be surrendered without compensation.

The Court emphasised the economic logic of the EU ETS and considered when allowances constitute legally established assets. Where allowances had been improperly allocated, their withdrawal did not necessarily amount to expropriation of an asset forming part of the operator's property. (EUR-Lex)

Relevance

This provides an important distinction:

Environmental entitlement ≠ automatically protected private property.

For an agroforestry carbon dispute, the court may need to determine:

whether a unit was validly issued;

whether it is registered;

whether it is transferable;

whether it is contractual property;

whether it can be cancelled;

whether cancellation constitutes deprivation of property.

11. Case Law 4 — Metsä Fibre Oy, C-414/23

Judgment of 15 May 2025

Metsä Fibre concerned greenhouse-gas allowances recorded in the EU registry and the legal consequences of finalised registry transactions.

The CJEU considered the inability of the operator to recover certain allowances after a regulatory correction and examined issues concerning finality, registry entries and property rights. (EUR-Lex)

Relevance to carbon-credit disputes

This is highly relevant to modern digital carbon markets.

Carbon units increasingly depend upon:

registries;

digital records;

certification;

verification;

cancellation;

transfer.

A dispute may therefore become:

Who is the legally recognised holder in the registry?

rather than merely:

Who owns the trees?

Principle

Registry status can become legally significant when environmental units are transferred and recorded electronically.

12. Case Law 5 — Holcim (Romania) SA v Commission, C-556/14 P

Holcim concerned greenhouse-gas allowances that were allegedly stolen.

Holcim sought compensation after the Commission had restricted transactions involving the disputed allowances.

The CJEU considered claims for compensation and the legal consequences of interference with emissions allowances. (EUR-Lex)

Relevance

The case is useful for carbon-credit disputes involving:

stolen credits;

fraudulent transfers;

registry manipulation;

freezing of accounts;

loss caused by third-party fraud.

Civil-law lesson

A claimant seeking damages must establish the relevant:

unlawful conduct + damage + causal connection.

Simply demonstrating that a digital environmental asset disappeared does not automatically establish a damages award.

13. Case Law 6 — A and B, C-453/15

The CJEU considered the VAT treatment of transfers of greenhouse-gas emission allowances.

It held that emission allowances constitute "similar rights" for purposes of the relevant VAT rules. (EUR-Lex)

Relevance to carbon-credit ownership

This case demonstrates that EU law recognises greenhouse-gas allowances as legally transferable economic interests capable of being dealt with within a financial/legal transaction.

It therefore helps distinguish:

physical carbon

from

a legally transferable environmental unit.

For voluntary agroforestry credits, the precise legal treatment will depend upon the applicable certification system and national law.

14. Case Law 7 — Borealis AB and Others, C-180/15

The CJEU considered allocation of EU ETS allowances, including rules preventing double allocation/double counting. (EUR-Lex)

Relevance to agroforestry

The same fundamental problem exists in carbon farming:

One tonne of verified removal should not become:

Credit A for the farmer;

Credit B for the developer;

Credit C for the investor.

The CRCF Regulation similarly requires traceability and prohibits the same certified unit from being issued more than once or used by more than one person at the same time. (EUR-Lex)

Principle

Double issuance and double use undermine the legal integrity of environmental units.

15. Case Law 8 — Lípidos Santiga SA v Commission, C-402/20 P

This case concerned EU renewable-energy rules and land-use impacts involving feedstocks and high-carbon-stock land.

The litigation addressed the EU regulatory treatment of indirect land-use change and carbon-stock considerations. (EUR-Lex)

Relevance

Although it was not an ownership dispute, it demonstrates that the legal value attributed to land-based carbon benefits can depend upon:

land classification;

carbon stock;

environmental regulation;

sustainability criteria.

Therefore:

The legal value of a carbon project depends not merely on the physical presence of trees but also on regulatory qualification of the land and activity.

16. Case Law 9 — Robin Wood and Others v Commission, T-575/22

This recent General Court litigation concerned EU sustainability criteria for forest management and bioenergy under the EU Taxonomy framework.

The Court considered arguments concerning forest management, carbon sinks and climate-mitigation criteria. The case recognises that afforestation, forest restoration and sustainable management can be associated with strengthening land carbon sinks.

Relevance

The case is useful for understanding the regulatory context surrounding:

forestry;

carbon sinks;

sustainable forest management;

climate-related economic activities.

It does not itself determine private ownership of voluntary carbon credits.

17. Important Limitation of the Case Law

There is currently an important legal-research caveat:

European appellate case law specifically deciding "who owns an agroforestry voluntary carbon credit" remains limited.

Most existing European judicial authorities concern adjacent questions:

ownership of trees;

forestry rights;

agricultural land rights;

EU ETS allowances;

carbon accounting;

registries;

environmental property;

renewable-energy carbon effects.

Therefore, a proper legal analysis should not pretend that ETS cases directly decide ownership of every voluntary agroforestry carbon credit.

The most useful approach is to combine the emerging CRCF framework with national property and contract law and these analogous European cases.

18. Land Ownership Does Not Automatically Mean Carbon-Credit Ownership

Consider:

A owns the land.

B leases the land.

C finances the carbon project.

D verifies the carbon removal.

E purchases the certified units.

Five different legal interests may exist.

This is why ownership must be analysed function-by-function.

19. Tenant–Landowner Disputes

A tenant may argue:

"I planted and maintained the trees, therefore I generated the carbon."

The landowner may respond:

"The trees are permanently attached to my land."

The developer may add:

"We paid for the project and own the carbon rights."

The court must examine:

lease;

national property law;

ownership of trees;

duration of the lease;

contractual carbon clause;

project agreement;

financing agreement;

certification rules.

The CJEU's tree-ownership reasoning in C-595/20 is particularly useful because it demonstrates that tree-related economic interests can be contractually separated from the land itself. (Infocuria)

20. Carbon Rights in Forestry

Forestry projects can involve several separate rights:

right to own trees;

right to harvest;

right to manage forest;

right to plant;

right to lease;

right to receive timber income;

right to carbon income.

These rights do not necessarily have identical legal owners.

This makes the drafting of carbon contracts especially important.

21. Carbon Developer Agreements

A typical carbon-development contract may state:

"Developer shall have exclusive rights to all carbon credits generated from the project."

This clause can create disputes concerning:

definition of "carbon credit";

future regulatory credits;

replacement credits;

additionality benefits;

biodiversity credits;

soil credits;

government credits;

voluntary credits;

credits after termination.

A well-drafted contract should specify precisely which environmental units are transferred.

22. Sale of Agricultural Land During a Carbon Project

Suppose:

A sells 1,000 hectares to B.

But A previously signed a 30-year carbon agreement with C.

Possible conflict:

B: "I purchased the land and carbon benefits."

C: "Our carbon rights survive the sale."

A: "I transferred the land but retained the credits."

The outcome may depend upon:

whether the carbon contract is personal or proprietary;

whether it is registered;

whether it binds successors;

applicable property law;

notice;

contractual assignment;

land-registration rules.

This is one of the most important future areas of European carbon litigation.

23. Inheritance Disputes

A landowner dies.

The estate contains:

agricultural land;

trees;

carbon-project rights;

future carbon payments.

Heirs may disagree about:

ownership of future credits;

rights under the carbon agreement;

transfer of project obligations;

monitoring costs;

termination rights.

A carbon agreement should therefore contain succession provisions.

24. Double Selling of Carbon Credits

Suppose a farmer sells the same removal:

once to Company A;

again to Company B.

This can create:

breach of contract;

fraud;

unjust enrichment;

damages;

regulatory consequences;

cancellation of credits.

The CRCF framework specifically aims to prevent duplicate issuance and duplicate use of certified units. (EUR-Lex)

25. Double Counting by the State

A different dispute arises when:

Private farmer claims the carbon benefit

while

the State counts the same removal toward national climate accounting.

A 2023 European Parliament question specifically raised the issue of whether a Member State could take ownership of carbon sequestration in privately owned forests and whether voluntary sequestration could be separately registered. This illustrates the unresolved policy/property dimension surrounding private forest carbon rights. (European Parliament)

The existence of the question should not be confused with a definitive judicial ruling that private landowners automatically own the underlying national-accounting carbon.

26. Carbon Credit vs National Greenhouse-Gas Inventory

These are different concepts.

National inventory

The State accounts for greenhouse-gas removals under international/EU climate-accounting rules.

Private carbon credit

A private or certified unit may represent a quantified environmental benefit that can be transferred or used subject to the relevant rules.

Therefore:

National accounting of carbon does not automatically answer private ownership of a carbon credit.

This distinction is central to ownership litigation.

27. Reversal Risk

Agroforestry carbon is often temporary or vulnerable to reversal.

Potential events include:

forest fire;

drought;

pests;

disease;

storm;

illegal logging;

premature harvesting;

land conversion.

The CRCF Regulation expressly recognises reversal, meaning release back into the atmosphere of carbon previously captured and stored. Carbon-farming sequestration units can expire at the end of the monitoring period unless the required continued monitoring/long-term storage conditions are met. (EUR-Lex)

This creates an important contractual question:

Who bears the financial loss when the carbon disappears?

28. Liability for Reversal

A carbon contract may allocate responsibility to:

landowner;

farmer;

forestry manager;

project developer;

insurance provider.

For example:

Fire caused by lightning

may produce a different contractual result from:

Fire caused by intentional land clearing.

Therefore, carbon contracts should distinguish:

natural reversal;

negligent reversal;

intentional reversal;

regulatory reversal.

29. Certification and Ownership

Certification establishes whether a claimed carbon-removal activity satisfies the relevant methodology.

It does not necessarily answer every private-law ownership question.

For example:

Certification body: "This activity generated 10,000 certified units."

The next question is:

Which private party has the contractual or proprietary right to those 10,000 units?

That may depend on:

land title;

project agreement;

lease;

financing agreement;

registry entry;

assignment;

national law.

30. Registry Disputes

Future litigation may increasingly involve registry records.

Potential disputes include:

erroneous registration;

unauthorised transfer;

duplicate issuance;

fraudulent account access;

incorrect cancellation;

mistaken beneficiary;

transfer after termination.

The ETS cases demonstrate the importance of registry architecture and finality in environmental-unit markets. Metsä Fibre is particularly useful in this respect. (EUR-Lex)

31. Carbon Credits as Economic Assets

European case law on EU ETS allowances shows that emissions-related units can have significant economic and legal value.

A and B, C-453/15 recognised emission allowances as transferable rights for VAT purposes. (EUR-Lex)

But voluntary agroforestry credits should not automatically be treated identically to EU ETS allowances.

The legal nature of a voluntary unit may instead depend on:

its contractual documentation;

registry rules;

certification standard;

national property law;

applicable tax law.

32. Good Faith

Good faith can become important where:

a developer claims ownership over future credits;

a landowner disputes a clause;

a buyer purchases credits from an apparent holder;

a registry contains an error;

one party knows another party has already sold the same credits.

The court may consider:

contractual language;

knowledge;

notice;

reliance;

commercial practice;

representations.

33. Unjust Enrichment

Suppose Company A receives €500,000 from selling carbon credits, but the contract actually entitled Farmer B to 70% of the proceeds.

Farmer B may potentially pursue:

contractual payment;

accounting;

restitution;

unjust enrichment;

damages.

The precise cause of action depends on the national legal system.

34. Fiduciary/Agency Problems

A carbon aggregator may hold credits for multiple farmers.

This creates possible questions concerning:

agency;

trust-like arrangements;

segregation of assets;

accounting;

commissions;

conflicts of interest;

unauthorised sales.

National law is particularly important here because European civil-law systems differ significantly in their treatment of trusts and fiduciary ownership.

35. Carbon Credit Financing

Carbon credits can also become connected to financing.

For example:

Bank → loan

Carbon developer → pledges future carbon revenue

Farmer → provides land/project rights

Potential disputes include:

whether future credits can be pledged;

whether they are sufficiently identifiable;

priority between creditors;

insolvency;

assignment of receivables;

security over registry accounts.

The legal classification of the unit becomes critical.

36. Insolvency

Suppose the carbon developer becomes insolvent.

Questions include:

Do the credits belong to the developer?

Are they held for farmers?

Can creditors seize them?

Are future credits part of the estate?

Can the landowner terminate the project?

Who controls the registry account?

This demonstrates why carbon-credit ownership should be clearly documented before substantial value accumulates.

37. Environmental Claims and Greenwashing

Ownership disputes can overlap with claims concerning:

"carbon neutral";

"net zero";

"climate positive";

"carbon negative."

The EU carbon-removal framework aims to improve transparency and reduce greenwashing. The certification framework requires traceability and safeguards against double counting. (Climate Action)

A party that owns a certificate may nevertheless not automatically possess unlimited rights to make every possible environmental claim.

38. Important Distinction Between Four Rights

For exam purposes, remember:

1. Land ownership

Who owns the soil and land?

2. Carbon-management right

Who has the right to carry out the agroforestry activity?

3. Carbon-credit entitlement

Who is contractually entitled to the resulting units?

4. Registry ownership/holding

Whose account records the certified units?

These can potentially be held by different persons.

39. Comparative Case Table

40. Practical Legal Test for Ownership Disputes

A court analysing an agroforestry carbon-credit dispute can work through the following sequence:

Step 1 — Identify the landowner

Who owns the land?

Step 2 — Identify the operator

Who operates or controls the carbon-farming activity?

Under the CRCF framework, the operator can be a farmer, land manager, forest owner/manager or competent public entity. (EUR-Lex)

Step 3 — Identify the trees and vegetation

Who owns or controls the trees, hedgerows or other biomass?

Step 4 — Examine the land contract

Lease? Usufruct? Licence? Co-ownership?

Step 5 — Examine the carbon contract

Who owns:

current credits;

future credits;

replacement credits;

environmental attributes?

Step 6 — Identify the certification scheme

Which methodology and certification system applies?

Step 7 — Identify the registry holder

Who is recorded as holding the unit?

Step 8 — Examine transfer history

Was the unit already:

sold;

transferred;

cancelled;

retired?

Step 9 — Check double counting

Has the same removal been claimed elsewhere?

Step 10 — Examine reversal

Who bears the consequences if stored carbon is released?

Step 11 — Calculate financial entitlement

Who receives:

sale proceeds;

royalties;

project payments;

replacement credits?

Step 12 — Apply national property and contract law

The ultimate private-law consequences often depend heavily on the relevant Member State's law.

41. Hypothetical Example

Farmer A owns 500 hectares in France.

A enters into a 25-year carbon agreement with Company B.

B finances:

100,000 trees;

verification;

monitoring;

certification.

The agreement says B receives 80% of carbon-credit revenue.

After five years:

20,000 certified units are generated;

B sells them;

A argues that B had no right to sell them.

Issues

Issue 1: Who owns the land?

A.

Issue 2: Who operates the carbon activity?

Possibly A, B or both, depending on the arrangement.

Issue 3: Who is contractually entitled to the units?

Must be determined from the carbon agreement.

Issue 4: Who is recorded in the certification registry?

Important evidence.

Issue 5: Was the agreement properly authorised?

Must be examined.

Issue 6: Was the 80% clause valid?

National contract law applies, subject to mandatory rules.

Issue 7: Were the units already transferred?

Registry evidence becomes important.

Issue 8: Did B exceed its contractual authority?

Potential breach of contract/agency issue.

42. Remedies

A successful claimant might seek:

Declaration

A judicial declaration identifying the contractual entitlement.

Injunction

Preventing unauthorised transfer.

Restitution

Return of improperly received revenue.

Accounting

Disclosure of all carbon sales and proceeds.

Damages

Compensation for loss caused by unauthorised transfers.

Specific performance

Performance of contractual obligations where available.

Registry correction

Where the applicable registry/legal framework permits it.

Termination

Ending the carbon-management agreement.

43. Key Legal Principles

Principle 1

Land ownership and carbon-credit ownership are separate questions.

Principle 2

Ownership of trees does not automatically establish ownership of a certified carbon unit.

Principle 3

Contractual allocation of carbon benefits is extremely important.

Principle 4

The identity of the CRCF "operator" is not necessarily identical to the landowner. (EUR-Lex)

Principle 5

Certification does not by itself resolve every national private-law ownership issue.

Principle 6

Registry entries become increasingly important for determining who holds certified units.

Principle 7

Double issuance and double use of certified units are prohibited under the CRCF framework. (EUR-Lex)

Principle 8

Carbon-farming units can be subject to monitoring and reversal rules.

Principle 9

Property rights in agricultural and forestry land receive significant legal protection.

Principle 10

National property and contract law remains crucial to private ownership disputes.

44. Conclusion

Agroforestry carbon-credit ownership disputes are an emerging area of European civil law. Unlike conventional disputes over land or timber, the central asset is often intangible and digitally recorded.

The legal problem can be expressed as:

Land Ownership ≠ Tree Ownership ≠ Carbon-Management Rights ≠ Carbon-Removal Benefit ≠ Certified Carbon Unit ≠ Registry Holding.

The EU's Regulation 2024/3012 has significantly strengthened the framework for certification, traceability and prevention of double issuance, while recognising farmers, land managers and forest owners/managers as potential operators. (EUR-Lex)

The most useful authorities for analysing the private-law problem are C-595/20 for the separation of tree-related economic rights from land rights; Commission v Hungary (C-235/17) for property rights in agricultural/forestry interests; and the EU ETS cases ArcelorMittal, Metsä Fibre, Holcim, A and B and Borealis for the legal treatment, transfer, registry, property and double-counting dimensions of environmental units. (Infocuria)

Exam Formula

Agroforestry Carbon Ownership = Land Rights + Tree Rights + Carbon-Management Rights + Contract + Certification + Registry + Transfer + Double-Counting Rules + Reversal Risk + National Property Law.