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Beef 2021: Arcadian steps into carbon-credit aggregation

Liz Wells, 06/05/2021

ARCADIAN has branched into aggregating carbon credits on behalf of Australian grassfed beef producers, including some from its base of 80 organic suppliers.

Dubbed the Beef Cattle Herd Aggregation, it has come to the market in time for BEEF 2021, where Arcadian marketing director Paul da Silva spoke about it in Australian Organic Ltd’s Emerging market opportunities – Organic Livestock Marketing Demystified session.

Arcadian is one of the world’s largest organic beef producers, with domestic and export customers.

Mr da Silva said launching the aggregation was a natural progression for Arcadian, the Toowoomba-based business which in 2019 made the decision to become carbon neutral.

“The next logical step was how to reduce our emissions footprint,” Mr da Silva said.

Mr da Silva said early indications are that ACCUs produced through the Arcadian aggregation are in demand.

“We have already been approached by a couple of organisations to say they specifically want carbon credits we would be generating, and did we have carbon credits in Queensland; it was that specific.”

Registered fund

The aim of the Arcadian aggregation is to generate Australian Carbon Credit Units (ACCU) on behalf of organic and conventional beef producers.

“We have established as an aggregator, and that allows any grassfed cattle producer to join our project without carrying the cost of establishing the project.”

Arcadian will cover the administration costs of the fund by charging producers a percentage of the value of any ACCUs generated.

The Arcadian aggregation has already registered with the Emissions Reduction Fund (ERF) as administered by the Federal Government’s Clean Energy Regulator.

Mr da Silva said producers keen to join the aggregation may well be able to monetise goals they were already pursuing.

These include getting cattle to turn-off weights at faster rates, and reducing the proportion of unproductive animals in the herd

“Those objectives are pretty much all objectives of beef cattle producers anyway.”

“If you are able to reduce the life of the animal, or have some activity to reduce those emissions, you’re going to make a substantial contribution to reducing greenhouse gas emissions.”

“It’s like making a vehicle travel the same distance using less fuel.”

In order to prove a reduction in methane emissions per animal under this method, producers need first to quantify their baseline production, and Mr da Silva said Arcadian was available to help producers come on board.

Potential income stream

 The ERF Herd Method calculates ACCUs based on animals spending less days making methane, or enteric emissions.

Methane is deemed to be roughly 28 times more potent as a greenhouse gas than carbon dioxide, and ACCUs represent a greenhouse gas-emissions saving of one tonne of carbon dioxide equivalent.

ACCUs are issued annually by the ERF, and can be traded at any time.

“They have a dollar value and that dollar value is increasing.”

On April 29, ACCUs were trading at $18.35.

ACCUs are sought by those wishing to offset carbon emission in Australia or overseas, and can be held as an investment or offset by their producers.

Cattle not land

 While ACCUs can be generated by land not in agricultural production, Mr da Silva is at pains to say that was not Arcadian’s model.

“It’s not about locking up country.”

“Producers taking part can use all their property, and they can use it how they please.”

Mr da Silva said while some projects based on soil and vegetation metrics had been well publicised as a source of ACCUs, Arcadian’s objective was different.

“It is not land based; it is based around the animal.”

“Theoretically there’s no minimum size for participation.”

Eyes on Europe

Sustainability credentials are already powerful marketing tools for agricultural produce going into some markets including Europe.

It is moving towards introduce a Carbon Border Adjustment Mechanism (CBAM), which will put a carbon price on some goods imported by the EU.

“If you want to access that market, and you do not come from jurisdictions with emissions management, they will force you to buy carbon credits at the market rate in Europe.”

“It’s very prudent to act fast.”

 

 

 

 

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  1. Michael+Vail, 07/05/2021

    Congratulations to Arcadian! A thinking initiative!

    It is interesting that the focus is purely on the animal and ‘faster turn-off’.

    The main aim in the livestock-grazing-game, particularly in the arid and semi-arid regions, and where the production economics is not a mere ‘numbers-game’, is to have the healthiest animals and ‘best in class’ animal husbandry … to maximise weight-gain per day and turn-off the animal faster … ‘stock-turnover’, if you will …

    It is important to understand the land in this context IS the ‘factory’ (that which produces) … and the main focus of what underwrites the whole long-term profitability story, is being slower into the predominate phase of some stage or level of drought, and faster out the other side.

    The greatest Carbon-sink (IMO) is the grasslands. That which grows grass, is soil; and the moisture-levels at depth, therein.

    If grass-root systems are dense and deep (> 2-metres), with soil being ‘covered’ by vegetation as an umbra, and there’s decent ‘flag’ on each tussock, the free process of Photosynthesis from the Sun will capture and bury Carbon at the depth of root-systems. The grass only requires a minimum level of Carbon to remain healthy and circulate into the atmosphere in the Oxygen/Carbon interchange each day; and the rest may remain deep in the soil-profile. This is called Cabon-in-Soil (CiS) sequestration.

    It is the excess CiS above say 3%, that really adds the value to both Beast and Land; as healthy soils are like a ‘sponge’ … as rain falls upon the land, not much will run-off (in a perfect world). This is the key-point.

    To focus on soil-health, slow-down the water running across the soil, and get it deep into the soil-profile … seeping and slowly percolating through … allow the important ‘ingredients to multiply … enzymes, bacteria, fungi, minerals, etc..

    There’s dirt, and then there’s soil … and if you’ve ever held a handful to your nose, you’ll remember the differences.

    Thus, retaining soil-moisture levels is the ideal that creates the optimum outcome …

    There’s also benefits flowing to each participating Land-holder, in that as the bottom-line increases towards the limit and the KPI’s start looking consistently high in any benchmarking exercise, the value of that particular property will increase in value markedly (IMO): and then there’s the measured, annual surplus CiS that may be traded for extra annuity revenue … and this also feeds into underwriting a higher value of both Beast and the underlying Factory that is the Land.

    Maybe the Arcadian model will with time, evolve …

    Good Luck to all involved.

  2. Charlie Hawkins, 06/05/2021

    Congratulations Arcadian!

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