Financial and Economic Mechanisms for Incentivizing Low-Carbon Technologies in Organic Farming within the Context of European Integration

The European Union’s (EU) climate commitments and Ukraine’s European integration trajectory necessitate the development of effective financial and economic instruments for decarbonizing the agricultural sector. This article aims to systematize financial and economic mechanisms that incentivize low-carbon technologies in organic farming by examining the EU experience and identifying prospects for their adaptation in Ukraine. The research methodology employs monographic and statistical-economic methods, generalization and systematization, and comparative analysis. Data were gathered from official EU regulations and strategic documents, analytical reports by the European Commission and the European Environment Agency, and statistical sources such as Eurostat and FiBL/IFOAM. The article identifies four groups of financial and economic mechanisms for incentivizing low-carbon technologies: direct payments and subsidies; market-based instruments; fiscal incentives; and credit-investment instruments. The theoretical basis for this classification is the concept of addressing market failures inherent in the provision of ecosystem services. At the same time, its practical implementation is embodied in the QU.A.L.ITY criteria, which currently establish the minimum standard for all incentive instruments. Additionally, the article examines the risks of double funding that arise from combining Common Agricultural Policy (CAP) eco-schemes with Carbon Removal Certification Framework (CRCF) certificates, as well as ways to mitigate them. The study results indicate that the EU’s Common Agricultural Policy (CAP) has established an extensive financial support system, with a significant share of its budget allocated to voluntary environmental and climate-related measures. For Ukraine, as an EU candidate country, the instruments examined provide a practical framework for developing a national system to incentivize low-carbon organic farming. While the existing domestic credit and investment infrastructure creates the technical prerequisites for introducing targeted “green” credit products, it requires supplementation with market-based and fiscal instruments that are harmonized with CRCF approaches and with the experience gained from designing CAP eco-schemes. The findings of this study will be valuable to government bodies, research institutions, and the expert community involved in formulating a national strategy to support organic and low-carbon production.