• Zero arrangement fees for loans
• Aim is to reduce farm emissions
• Encourages farm carbon audits
A new £200m fund launched by Virgin Money is offering lower cost loans to farmers who reduce greenhouse gas emissions.
The Agri E Fund claims to be the first fund dedicated to supporting farmers with the investment required to achieve net zero. Virgin Money said agriculture had a key role in the UK’s transition to a net zero economy.
Loans are available with 0% arrangement fees when a farmer completes a carbon audit and is borrowing over £50k to invest in emission-reducing initiatives. These include renewable energy, energy efficiency or activities that reduce greenhouse gases.
A Virgin Money survey suggests that almost a quarter (22%) of farming businesses have been asked by their own customers – including supermarkets – to provide evidence of their actions to reduce carbon emissions.
The Agri E Fund also encourages the uptake of carbon audits, which are becoming increasingly important in the agriculture supply chain, by making the completion of one a condition of the loan.
A carbon audit produces a comprehensive report on a farm’s carbon outputs, highlighting inefficiencies on the farm and ways to do things differently, both to lower costs and reduce carbon emissions.
According to the bank’s survey, only 35% of farming businesses have completed a carbon audit, and Virgin Money has been encouraging customers to undertake a carbon audit so they can start to move towards net zero at an early stage.
Virgin Money head of agriculture Brian Richardson said: “While many farmers are working towards their net zero targets, we know from our research that there are many who know what they’ve got to do, they just aren’t sure how to go about it.
“By providing lower cost finance, our new Agri E Fund is providing targeted support to help agri-businesses make the transition and enable investment in reducing and capturing carbon emissions.”
Virgin Money has partnered with Carbon Metrics, a consultancy which aims to help rural businesses understand emissions management and auditing more easily, to produce an Agriculture Net Zero Report.
This guide is a tool to help farmers understand the background to climate change specifically relating to agriculture, what it means for the industry and how they can start to adapt their businesses to plan their own journey towards net zero.