The agricultural sector is responsible for a limited part of the total final energy consumption.

Activities in the agricultural sector include the production of foods, such as grains, fruits, vegetables, meat, poultry and milk, and non-food products of economic value, such as flowers, ornamental plants and hemp. The agricultural sector accounts for only a small part of the total energy demand, in both industrialized and developing countries. In the OECD countries, around 2% of total final energy consumption is used directly in the agricultural sector. However, energy costs form an important part of the total costs in the sector, and also represent an important and highly variable part of the production costs of food. In the Netherlands, by far the most energy in the agricultural sector is used by greenhouse horticulture. 

In addition to the core processes that take place in the sector itself, there are processes in other sectors that are linked to the agricultural production chain. These include the production of fertilizers and the processing, packaging, and transport of food. Energy consumption in the agricultural sector itself relates to the consumption of fuel and electricity to drive machines and equipment, to heating and cooling of buildings and lighting on the farm.

Switching to renewable energy and using energy more efficiently can help the agricultural sector to reduce CO₂ emissions, although emissions of other greenhouse gases are dominant.

Agriculture has major consequences for the environment and climate. With the introduction of agricultural machinery, synthetic fertilizers and other modern technologies, food production has increasingly become dependent on fossil fuels. The fossil fuels are used elsewhere in the chain as a raw material for synthetic nitrogen fertilizers and petroleum-based agricultural chemicals and within the agricultural sector for diesel-powered machines. This results in greenhouse gas emissions from the sector, such as carbon dioxide and nitrogen oxide. Switching from fossil fuels to renewables will reduce CO2 emissions. For that matter, Rumen fermentation and manure which result in methane emissions are a much larger emission sources of greenhouse gases than the use of energy or fertilizer.

Geothermal energy is a promising renewable energy source for greenhouse horticulture.

Geothermal energy is an attractive renewable energy source for greenhouse horticulture to replace natural gas that is used in boilers and cogeneration plants that produce both heat and electricity. Some greenhouse horticultural companies in the Netherlands are already using geothermal heat. The costs and possibilities of geothermal energy are dependent on the subsoil situation and especially the depth at which heat at the required temperature is available. The potential for geothermal energy is not yet known for the whole of the Netherlands. However, efforts are being made to map the geothermal resource potential. See also the description of geothermal energy.

Wind, solar and biogas are also suitable forms of renewable energy generation in the agricultural sector.

Like many other sectors, the agricultural sector is expected to contribute to the energy transition. Farm land is well suited for the generation of clean energy. There are already many examples of renewable energy technologies on farms in Europe. Farmland owners are paid by developers of wind energy projects to place wind turbines on their land where they can continue to plant crops or allow animals to graze around them. Farmers are also owners of wind turbines and can use part of the energy produced onsite to meet their electricity needs. 

Roofs of stables and sheds are ideal for installing solar panels. Farmers who own wind turbines and/or solar panels often benefit from tax breaks and renewable energy subsidies to help them make the transition to cleaner energy. They often have to invest in a strengthened grid connection capacity because the onsite production of renewable electricity is higher than their demand. 

There is also considerable commercial experience with fermentation installations, in particular for manure and co-fermentation with organic waste and the digestion of waste from cultivated crops. The scale of these systems differs from farm size (typical for manure processing in intensive livestock farming, dairy cattle, and pigs) to large, centralized digesters that convert various biogenic raw materials from a delivery area. Biogas from the gasification of crop waste, which requires agricultural land and extensive logistics, is more controversial. The total balance of greenhouse gases from such systems depends on land management, the efficiency of the chain and competition. 

Farmers can combine different technologies and can supply renewable energy to electricity or gas networks.

Energy prices, the costs of alternative energy sources and incentive measures are important for the switch to renewable energy.

The agricultural sector, like many other sectors, is sensitive to changes in energy prices, both directly and indirectly. As energy prices rise, incentives will increase for agricultural producers to reduce their energy expenditure by making less energy-based purchases and improving their energy efficiency. The Dutch agricultural sector, where most of the energy use takes place in greenhouses, is in the process of using energy more efficiently and is focusing on introducing new technologies. This is supported by various government incentive measures.

Taking other sectors and local conditions into account is necessary to reduce greenhouse gas emissions from the agricultural sector.

To meet the long-term objectives of the 2015 Paris Agreement, far-reaching future emission reductions are required. A strategic approach to the role of agriculture is needed at EU level to tackle the challenges of the energy transition in Europe. This means gaining insight into what a low-carbon or a completely emission-free agricultural sector could look like, what the interaction is with other sectors, and what consumer behaviour and preferences, motives and actions look like to make the necessary change possible. Also, the role of agricultural land for CO2 storage is receiving more attention. This can also contribute to the reduction of greenhouse gas emissions. At present, there is still considerable uncertainty in the scientific knowledge on the causes, extent and sustainability of carbon capture from agricultural soils.

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