AUSTRALIA producers prepared to generate carbon credits will have no trouble selling them into the developing global market, but need to exercise caution as to the amount they sell and how they are generated.
The message came out of the ‘Mythbuster 6: Pay dirt for the 21st century?’ session at Beef 2021, where Signature Beef principal Josie Angus was the voice of producers.
Also on the panel was Agforce senior policy advisor Greg Leach, Impact Ag national capital manager Toby Grogan, and AgriProve founder and managing director Matthew Warnken.
They spoke about the Federal Government’s Emissions Reduction Fund (ERF) and the Queensland Government’s Land Restoration Fund (LRF) as providing a solid framework for producers farming carbon as an adjunct to their agricultural enterprises.
Ms Angus, as part of a family-farming operation which produces and markets beef from its base at Clermont, said producers needed to be cautious about what multiple jurisdictions could mean for family farmers.
“If we sell a carbon credit today, there could be a drought in 20 years; are we going to have to buy them back for 20 times more?” Ms Angus asked.
“We can’t forget that there are always two sides to a ledger.”
“I don’t want us to create another Murray Darling Basin Plan that works really well for traders in Sydney and Melbourne and doesn’t work so well for farmers.
However, Ms Angus said Australia’s track record seemed sure to put Australia on the front foot in terms of carbon farming.
“The reality is Australian farmers are change agents and always have been.”
Look for carbon fit
A rough rule of thumb for carbon farming given during the session said a productive property with an average annual rainfall of 700 millimetres could be expected to earn $50-$100 per hectare per annum from carbon farming.
This is net of soil-testing and other costs associated with carbon metrics, and equates to a return on investment of around 0.5 per cent per annum.
A raft of ways exists for farmers to monetise good farming practices by turning them into Australian Carbon Credit Units (ACCUs), and Mr Grogan said producers wanting to get into carbon farming should look for the best fit for their operation as is.
“Rather than trying to change your business to fit into the carbon space, you should be looking for methods and markets to suit your business,” Mr Grogan said.
“There shouldn’t be wholesale change to your business.”
“Ag is a lot closer to carbon neutrality than even ag understands.
At the farm level, ACCUs can be given for reducing methane emissions from livestock production as seen in the Arcadian model, and improving metrics like soil carbon, biodiversity and water quality, or a blend of those and more.
Impact Ag has 40,000ha across Australia under regenerative management, and Mr Grogan said some enterprises were better suited than others to join the carbon farming space.
“We have properties in WA with sub-400mm rainfall.
“We’ve influenced the soil carbon there but that rate of sequestration is influenced by rainfall and also temperature.
“On the eastern side of the (WA) wheatbelt – you can see the desert from where we are – we’re not yet at a point where we have the confidence to tip into the market.”
Mr Grogan said properties with an annual average rainfall of 500mm plus seemed to be ideal for carbon farming in the current market.
“That’s probably where the tipping point for us is.”
Ag on the rise
Mr Leach said the Queensland grower organisation was comfortable with the framework now in place for producers willing to dip their toes into the carbon-farming market.
“We have spent two decades working with and fighting against legislation (and) regulatory controls that control our land management.
“Recently, we’ve said there’s another way of looking at this, this whole natural capital.
“This movement and reality has a lot of appeal for landholders having charge of their property and their business.”
“We have a real potential to value our natural assets and create marketable products that are available nationally and on the international marketplace,” Mr Leach said.
Mr Leach said Agforce is using some LRF funding to test 25 properties across 13 bioregions to give landholders a better idea about how carbon farming works across Queensland.
However, he said the uptake for carbon farming in Queensland had been “quite small”.
Mr Warnken said while there were bottlenecks, there was also progress.
“Australia is actually is at the forefront of all this,” Mr Warnken said.
“The Queensland Government was the first sub-national to put in a measurement and market framework for natural capital services worldwide which is a huge innovation.”
He said in the past 12 months, out of all carbon projects registered including industrial and energy ones, soil carbon in agriculture had accounted for 40pc of all registrations, and on all projects, soil carbon accounted for one in eight.
“On a trajectory over the next two to three years, the majority of projects registered under the ERF will be agriculturally based with soils fundamentally at the heart of them.”
With most major corporates pledging to be carbon neutral by 2050, global demand for ACCUs is seen as buoyant at the least.
“The opportunity for agriculture is to sell carbon credits to a world that needs it and attach them to a good story, the production of food and fibre, and create a premium product in that market,” Mr Grogan said.
“There is insatiable demand for carbon credits around the world.”
“I get calls from people looking for millions of these units.
“You’ve got people beating down the door to buy the product.
He said carbon farming was allowing producers to monetise their good farming practises.
“You’re providing a public good for free at the moment.”
Mr Grogan has urged producers interested in getting into carbon farming to talk to other producers and find out what worked for them, and not to try and figure it all out on their own.
“I say to people: ‘Find your trusted adviser’. It might be an accountant, it might be legal.”