While carbon was a major source of discussion at Beef 2024, a sense of confusion was the overwhelming sentiment. Photo: Beef Australia

AS THOUSANDS of beef industry delegates descended on Rockhampton last week to learn about the latest trends and information, there was a clear sense of frustration at the confusing nature of Australia’s carbon market.

The Government has clearly stated it will need the carbon market to reach its goals of a 43pc reduction in emissions by 2030 and net zero by 2050. It conducted and backed the findings of an independent review of the market, which largely gave it a clean bill of health.

While many were hoping the findings of that report were going to give the industry some direction, it appears confusion is still one of the overwhelming sentiments on carbon.

Producers who spoke to AgCarbon Central across the week appeared to be engaged, with many of them talking about the short-lived nature of methane and the potential for agricultural land to sequester carbon – particularly in the soil.

Many remarked that they did not know where to start or who to believe, with some saying they could see an opportunity and others saying they could not.

Scientists questioning soil carbon

The soil carbon industry had some green shoots appearing at the end of last year with a handful of producers receiving large amounts of credits. But the response to the issuances was not what many of the industry participants had predicted.

“We all thought when the floodgates were going to open when we had some runs on the board but it hasn’t been that straightforward,” one participant told AgCarbon Central.

One of the main issues the industry is facing is a series of highly publicised concerns from scientists about the integrity of the credits that have been issued.

University of Melbourne professor Richard Eckard has been leading the criticism of the soil carbon market – raising concerns about a lack of transparency from the regulator and saying some projects are being recognised for soil carbon gains that have likely come from increased rainfall.

He addressed a Queensland Department of Agriculture forum, where he spoke about some of his carbon accounting research and concerns about soil carbon. Prof Eckard and others on the panel spoke about the potential for soil carbon to go backwards in drought years, which could make producers liable.

ABC landline’s Pip Courtney was hosting the session and asked if he had come across any producers who had signed up to soil carbon projects and had regretted it.

“Unfortunately, I have had a few, not just one,” Prof Eckard said.

The discussion was challenged by carbon developer Natalie Hick, from Natural Capital Co, who said she felt carbon developers were being unfairly undermined.

“Any carbon project developer worth their salt would do their due diligence and make sure the project is viable before starting,” Ms Hick said.

“I agree that more research is needed and I agree that rainfall has a huge bearing on it, but I don’t know what the solution is if there is this continued undermining of what has come before us.”

Prof Eckard said he was not trying to undermine carbon aggregators and that he was mainly concerned about the soil carbon projects and how they were rolling out.

“If I was to re-writing the soil carbon methodology, I would be factoring out rainfall specifically because the current method doesn’t overtly separate it out.”

It must be said there are measures in place to protect from soil carbon reversal in dry years, with projects required to keep carbon in the ground for 25 years and the Clean Energy Regulator holding 25pc of the credits in the case of rainfall dominating the result.

Contracts on the agenda

The soil carbon industry was a significant presence at Beef 2024, with soil carbon service providers taking up many trade stalls in the Tech Yards.

Many of them told AgCarbon Central they were receiving a steady stream of inquiry from producers keen to sign up to projects, but they were having tough discussions about contracts – with who owns what and succession planning being two of the main factors.

Dr Terry McCosker from Carbon Link, which has generated the most Australian Carbon Credit Units through soil, said there are a lot of costs developers incur.

“I think producers look at the amount a carbon developer makes at the end of the day and I can tell you from bitter experience that you are making a lot more money out of it than we are,” he said.

“In our organisation we have over 20 skill sets that are involved in running a project for seven years before there is any income back to us.”

Dr McCosker was keen to make the point that soil carbon projects were working in a complex regulatory environment, with his projects that were credited last year audited multiple times over more than a year.

He was keen to make the point that thorough measurement that may involve more capital upfront decreased risk at auditing time.

Vegetation carbon facing more uncertainty

While the soil carbon projects have been the source of public debate, the regulator has shown no signs of stopping it. It is a different story to vegetation projects, which are facing uncertainty at a regulatory level.

The main issue appears to be with a methodology called human induced regeneration, which focuses on changes of practice to encourage vegetation growth. HIR has received repeated criticism from a group of ANU scientists, which has given the department of environment cold feet in re-writing it into a new methodology.

Carbon project developers working on the vegetation projects have been put on hold in anticipation for the new methodology, with one of them saying it is costing a lot of money.

HIR has driven a lot of property transactions in the north and some of the corporates have either started or looked at starting new projects under the methodology.

At this point, the department says it is tracking towards having a draft of the Integrated Farm and Land Management methodology later this year, which will include a re-written version of HIR.

While HIR is being debated, the rubber is starting to hit the road on deforestation-related regulation – which was a significant topic in Rockhampton and will feature in more Beef Central coverage.