1. Carbon Farming in Australia

Carbon farming is a broad term referring to a range of practices that enhance or maintain carbon in vegetation and soils. Aside from the fertility and productivity benefits of enhancing carbon on your land, it is also possible to generate carbon credits and get paid for the carbon that you store. The federal Emissions Reduction Fund (ERF) has been the main source of carbon payments in recent years, but there are also growing opportunities to sell credits to corporate entities that are looking to offset their emissions in order to comply with government rules or to promote themselves as low-carbon or carbon neutral. Landholders may also choose to offset their own emissions to make their operations carbon neutral or hold on to their credits to use in the future.

There are a wide range of methodologies that farmers can use to generate government-issued credits or ACCUs (Australian Carbon Credit Units). These methodologies cover the storing of carbon in soils and vegetation, as well as reducing emissions from livestock production and other farming activities.

The Clean Energy Regulator (CER) is a Commonwealth Government agency that provides details on the rules that need to be followed in order to generate Australian Carbon Credit Units (ACCUs) under the ERF. This includes the methodologies that landholders can use to measure or model carbon increases in their soils. The CER also operates a register of existing carbon projects and provides information on support schemes, such as the advance payments for soil sampling costs announced in February 2022.

The Carbon Market Institute (CMI) is a non-government entity that provides a range of fact sheets that explain the different methodologies and market opportunities. The CMI operates a Code of Conduct for carbon service providers to ensure that their engagements with landholders are built on trust, transparency, accountability and integrity. Most landholders currently go through one of these carbon service providers to set up a project under the ERF due to the complexity of ERF rules, uncertainty around market conditions and the upfront costs involved. The CMI helps landholders identify suitable service providers by maintaining a list of signatories to their code of conduct.

The Australian Farm Institute (AFI) released a landholder guide to engaging in carbon farming around soil carbon in August 2021. It is primarily aimed at individual landholders and provides estimates of sequestration potential, financial benefits and costs from various changes in land management.

As discussed in the introduction, A Farmer’s Handbook to On-farm Carbon Management, provides a broad overview of carbon farming methods and project pathways.

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