The £200 million Agri E fund will offer lower cost loans that can be used to invest in changes which reduce on-farm emissions. Loans are available with zero per cent arrangement fees when a farmer completes a carbon audit and is borrowing more than £50,000 to invest in emission-reducing initiatives such as renewable energy projects or activities that reduce greenhouse gases.
While farming contributes about 10 per cent of the UK’s carbon emissions, the significant land resource within agriculture provides the opportunity to capture and store carbon over and above the sector’s level of emissions, helping to enable the wider economy to transition to net zero.
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.
In a recent survey of the bank’s agricultural customers, 72 per cent of respondents said they wanted to see specialist banking products tailored towards sustainability, and 82 per cent said that reducing climate emissions was important to improving their sustainability.
Brian Richardson, head of agriculture at Virgin Money, said: “Farmers need to be proactive in adjusting their businesses to a low carbon future. 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.
“We have a long history of supporting the agriculture sector through periods of change and are committed to working closely with our farming customers to help them on their journey to net zero.”