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Bias against northern producers in soil carbon methodologies, industry gathering told

Sue Webster, 18/02/2022

Panelists from left, Garry Wyatt, Naomi Wilson, James Henderson and compere Pip Courtney

 

SOIL carbon methodologies are skewed against northern producers, according to a pioneer of carbon farming in Australia.

“There’s a fundamental problem with soil carbon,” fourth-generation Monto beef producer James Henderson told a Queensland Rural Press Club gathering in Brisbane yesterday.

“It’s written in the 2021 methodology, no one likes to talk about it. It says ‘cannot have forest or forest potential’ and that rules out about 70 million hectares of Queensland that’s not eligible.”

He said the rule only favours southern Australia. “It’s fantastic for one-hour’s drive from Canberra or Melbourne where the universities are – they love talking about soil carbon – but very clearly it doesn’t really apply in Queensland,” he said.

“I wish people would stop hailing soil carbon as this wonderful thing.”

Mr Henderson and his wife Kylie run a breeding/backgrounding operation incorporating two carbon farming projects on Colodan, one of three family properties that total 5400ha.

Economic data shows Colodan’s tradeable Australian Carbon Credit Units (ACCUs) contributed 46 percent of total farm income in 2019, and 30pc the following year.

Comparative economic analysis from 2009/19 shows Colodan exceeded the profit gross ratio of the average farm (benchmarked to MLA Farm Survey data) by 128.31pc; returning 72pc more revenue on average and 104pc higher profitability on average.

Since ACCUs haven risen from $15 to $51/tonne (see earlier Beef Central story), Mr Henderson told the Queensland Rural Press Club that he is now likely to make more money per hectare from carbon than cattle, despite current beef prices.

He was part of a panel appearing at a sold-out lunch delayed from 2021 due to COVID … and after ACCU values had fallen from $57/tonne two weeks ago.

Other panel members were Garry Wyatt, managing director of Corporate Carbon and Naomi Wilson, head of environment and sustainability at AA Co. All panellists remained confident about the future market strength of ACCU’s.

“Although, in the short-term there’s going to be a whole lot of fluctuations,” Mr Wyatt said.  “Government policy is a large driver of carbon pricing and there will be some uncertainty as we go through a federal election, so that will add some volatility.”

The influence of politics further concerned Mr Henderson who said there needed to be more security around tenure. “That’s the biggest risk, what’s going to happen to your country at the end of the project?” he said, asking for more written guarantees against ongoing regulation at the at the end of the project.

“The way it stands now, at the end of our project what could quite easily happen is we’ll get hit with a conservation act or we’ll get koala mapping or we’ll get a whole other level of regulation that we don’t have now, simply because we did a carbon project,” he said.

“This is not really desirable.”

“From the government’s point of view you want to encourage the environmental markets, encourage stewardship and keep the connectivity across the landscape, but you need to do your bit to facilitate that to de-risk it,” he said. “If you go to the bank they’ll tell you that is the risk.”

Role of banks

The role of banks was discussed, with Ms Wilson saying: “ Certainly in the next ten years it’s going to be increasingly difficult for businesses, if not impossible, to have access to finance and to capital if they don’t address the carbon impact. I think that’s very clear. The writing’s on the wall.”

An immediate challenge for AA Co was the cost of soil sampling. At $20 a sample, the company would face a $128m bill across its 6.4m hectares for full assessment.

“We can’t engage in broadscale sequestration at that cost, so we have started a project with additional partners to start to develop satellite estimates of carbon at scale in the landscape,” she said.

Ms Wilson also detailed some longer-term challenges. “There’s a lot of uncertainty in the methods that we use and the technologies we need to employ. There’s also significant uncertainty around the cost of implementing those methods, particularly if you’re looking at methods of , for example, addressing methane emissions. There’s going to be significant cost to the industry in doing that.”

She noted that around 70pc of people say carbon-neutral food is important to them, but only 3pc will pay for it in the food they purchase. “And if you can’t get a premium for your product, it is going to make it a challenging cost.”

Asked about AA Co’s ongoing investigation into mitigation and sequestration, Ms Wilson said the company had an idea of what the answers might be, and thought the answer was ‘pretty good’.

“It’s why we’re continuing to work in that direction. We’re seeing it as something that could potentially help us drive improvements in how we manage our landscape and help us to drive more value out of protecting the landscape and improving its condition.”

Mr Wyatt warned previous good stewardship would not qualify for market consideration.

“Probably one of the biggest complaints we get from landholders is ‘this thing they’re asking me to do – I’ve been doing it for the last ten years. Are you going to give me in credits for the last ten years?’ That’s quite often a hard conversation to answer because the answer basically is no,” he said.

Questioned about the 100-plus projects he is overseeing, Mr Wyatt said most centred on environmental plantings, human-induced regeneration or management of methane emissions.

“A small handful have worked really well and you’ve seen most projects gravitate to those. Those have been about vegetation and, what has worked very well in northern Australia, management of savannah wildfires. Those have been the predominant ones,” he said.

He added that carbon farming was only one form of environmental services that could help diversify farm income.

“It’s just one step in delivering a whole range of environmental services, for example, water quality,” he said.

“Delivering these environmental services could be an add-on to agricultural production.  We would think of a time when you’re a producer and 25pc of your income is from delivering other services. And if not, you’re missing out.”

 

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Comments

  1. Paul Franks, 20/02/2022

    So all this carbon being “sequestered”. Isn’t it supposed to be sequestered for eternity?

    Greenhouse gases like carbon dioxide from burning of fossil fuels entering the atmosphere are all coming from CO2 that was sequestered millions of years ago. So it only stands to reason any new sequestering of carbon dioxide has to remain in the ground for millions of years. Otherwise the whole thing is a fraud as what is to stop in a hundred or a thousand years time that carbon being liberated back into the atmosphere.

    Also what about the trees that inhabited the land before it was cleared for agricultural production? Should not those landholders wishing to get paid for sequestered carbon firstly have to sequester the carbon that was liberated to the atmosphere through the clearing of their land? Otherwise it seems pretty silly clearing the land, then getting paid to put carbon into the soil.

    Or are these points inconvenient truths?

  2. David+Dwyer, 20/02/2022

    What worries me is, if you can make more from growing forest and not developing your pasture why grow beef or sheep protein? Would this not the long term kill ruminant markets.

  3. Peter Dunn, 18/02/2022

    Garry Wyatt has nailed the risk. Any change in the political environment could bring a Conservation Act or a threatened species limitation, or similar, at the end of the project. Some political groups have a penchant for ruthlessly exploiting such opportunities, while other groups do not.. It is critically important that political commitments are sought and publicly recorded now, before the event when the voters might take it out of your hands.

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