Carbon farming is a new industry, with the Australian Carbon Credit a new commodity, much like beef or wool. The Emissions Reduction Fund and other investors in carbon projects have already supported hundreds of projects across Queensland that are benefiting our regions through more diversified income streams for land holders, as well as a healthier environment and more resilient ecosystems.
Carbon farming is about a change in your land management to either avoid the emissions of greenhouse gases from your activities, or to change your activities to increase the storage of carbon in the land either in trees or soil.
Activities within carbon farming fall into two broad groups, either emissions avoidance or sequestration, although some methods involve a bit of both. The key thing is that to earn Australian Carbon Credit Units, you need to use a method that’s registered and available for use under the Emissions Reduction Fund. Those methods fall into three broad classes that are eligible for Land Restoration Fund projects. They are agricultural methods, vegetation methods and savanna burning methods.
Agricultural methods are about a change in your management of your beef herd or your cropping system to reduce the amount of nitrous oxide or methane that’s emitted to the atmosphere, as they are both potent greenhouse gases. Agricultural methods can also be a change in the way you manage your pasture or soil to increase the storage of carbon in your soil.
Vegetation methods are primarily about regrowing native vegetation. That can involve either Human-induced Regeneration of Native Forests, which for example can be achieved through a change in grazing management or a cessation of clearing practices, but they can also involve direct planting of native species in what are called Environmental Planting projects.
Savanna burning methods are fundamentally about reducing the extent of really hot fires that occur in the late dry season in our tropics. Those hot fires release a lot of methane and nitrous oxide and consume more of the fuel than cooler fires that are lit earlier in the dry season.
Deciding which method is suitable for you requires independent advice and consideration of how it fits within your enterprise. You can use tools like CSIRO’s LOOC-C to get a sense of the amount of carbon credits you can earn through particular methods and seek that advice from financial, legal and carbon farming experts to really get to understand what’s required under each of the sixteen methods that are available for Land Restoration Fund projects, and understand what the implications of undertaking carbon farming activities will be for your business.
An Australian Carbon Credit Unit represents one ton of carbon dioxide equivalent greenhouse gases either avoided in terms of not being emitted to the atmosphere or being taken from the atmosphere and stored in carbon sinks, like vegetation or soil. We refer to them as ACCUs.
An ACCU is a financial product that can be earned through carbon farming projects registered with the Clean Energy Regulator. Once they’ve been earned, they can be sold or kept for sale later, either to the Commonwealth Government, the Land Restoration Fund, or the broader secondary market.
The number Australian Carbon Credit Units that you’ll be able to generate on your property depends on the method that you’ll use, as well as where you are and what’s happened on that land in the past. They also change in terms of the number of ACCUs you generate per unit area per year through time. For example, a forest will generate a fairly small number of ACCUs when the trees are very young and then the number of ACCUs being generated per year will increase as the forest matures.
Thinking about the financial impact of a carbon farming project requires more than just thinking about the ACCUs. You also need to think about the cost of implementing the activity required for the carbon farming projects. Those activities are land management activities as well as the monitoring and reporting activities required to verify the carbon and co-benefit outcomes for the LRF.
Another consideration is the opportunity cost. Where you reintroduce a forest to your land that you may have been using for grazing, that may impact the grazing potential of that land into the future. Carbon farming projects are often long-term projects and that’s why we suggest you take financial and legal advice, as well as carbon farming advice, when you’re considering entering into the carbon farming industry.
For more information on selecting the right carbon farming method for you, and how to value and design projects for the Land Restoration Fund, visit the Land Restoration Fund website.