Property

Property business options: turning carbon into cash

Beef Central, 27/04/2016

CARBON farming may offer landholders a once in a lifetime chance to secure a ten-year income stream, but the opportunity won’t last forever, according to a carbon farming project management company.

Josh Harris, from project managers Climate Friendly, said with shifting legislation around vegetation and no word on plans to top-up the Federal Government’s current Emissions Reduction Fund, property owners who did not act soon could miss out.

The Emissions Reduction Fund started out with $2.55 billion to buy carbon credits from carbon farming programs, including revegetation or reduced stocking projects. About half the fund has already been allocated to projects.

“We simply don’t know if there is more funding coming,” Mr Harris said.

The next round of projects will be awarded in the third Emissions Reduction Fund auction being held on 27 and 28 April.

“But it’s unclear what will happen once the current fund is expended after the fourth auction at the end of 2016.”

“Climate Friendly has already secured a number of projects and there will also be new projects funded this year, but farmers and graziers who are thinking about carbon farming on their property shouldn’t wait too long,” he said.

“A 10 year guaranteed income stream is virtually unheard-of in farming. It’s the kind of opportunity that most farmers wouldn’t normally see.”

Climate Friendly was established by a former CSIRO scientist 13 years ago and currently runs projects over about two million hectares of farmland worldwide.

The company says its clients are enjoying average returns of more than $1 million over ten years, with some receiving considerably more.

Mr Harris said contrary to popular belief, carbon farming did not necessarily mean farmers had to ‘lock up’ their land for long periods.

“Carbon farming does require some change in land management practice, but that doesn’t automatically mean fencing off a huge area and never touching it again. Many farmers are still able to run stock on areas set aside for re-vegetation, and there are also carbon farming projects that aren’t about re-growth at all, like soil health, savannah burning and avoided deforestation projects.”

He said the benefits could be significant.

“Carbon farming can work like any diversification strategy, in that it acts as a kind of insurance. For farmers in drought-prone areas, the revenue stream from carbon farming can help them maintain their business and give them the breathing space they need.”

“For those in other areas, carbon farming can fund business expansion or other investments that let them do what they do best,” he said.

“And carbon farming projects improve environmental outcomes, which link directly to long-term business sustainability.”

 

Case study: Avoided deforestation project near Bourke

Forest country on Oakvale, near Bourke

Forest country on Oakvale, near Bourke

 

One of Carbon Friendly’s clients is Oakvale, a grazing property between Coolabah and Bourke in Western NSW.

It is a mixture of habitats including rangelands, wetlands and native forest.

Since the 1800s Oakvale has been used for grazing of livestock and cropping. Scientific work on the property dates back to the 1970s, and it has been included in several CSIRO studies.

Under the Avoided Deforestation method, native forest that has previously been approved for clearing, is reclassified as protected. To be eligible, the land needed to satisfy certain requirements, including being classified as forest as at December 1989 and holding a permit for clearing before 1 July 2010.

One of the great strengths of this program is that it is not locking-up the land, with sustainable grazing still able to be carried out, Carbon Friendly’s website says.

Oakvale had a 2009 approval to clear 14,500ha (around 80pc of the property) to increase sheep numbers, and it is this land that has been included in the CFI project. Once approved, the project area is protected for a minimum of 100 years.

The carbon project at Oakvale is the latest in a series of measures by the landowner to protect the natural environment, Carbon Friendly says. The avoided deforestation project allowed the land to be destocked, kept weed and pest free and fenced while providing an income.

 

  • The Federal Government’s Carbon Farming Initiative (CFI) allows farmers and other land managers to earn carbon credits by storing carbon or reducing greenhouse gas emissions on the land. Participants can generate carbon credits by setting up a project under an approved CFI methodology, which sets out the rules for the activity. This fact sheet outlines the methodology for Avoided deforestation.
  • Project manager Carbon Friendly says it has limited capacity to enrol farmers in existing projects. Farmers interested in finding out more can click this link.

 

 

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