As the source of 10% of the EU's greenhouse gas emissions and a major carbon sink, agriculture offers significant potential to mitigate climate change. This on-farm agricultural climate mitigation is referred to as carbon farming. On behalf of the European Parliament, Ecologic Institute with support from IEEP investigate the potential of carbon farming to mitigate emissions in the EU and how to effectively incentivise farmers to act. Ahead of two key EU Commission policy proposals in December 2021 (the 'Carbon Farming Initiative' and 'Carbon Removals Certification Mechanism'), this study summarises existing knowledge on carbon farming options, business models, challenges, and evaluates funding and policy opportunities to support its uptake. The report is available to download.