Woodside buys farms to offset emissions

Farm Weekly understands this includes three purchases, with its most recent being a 3630ha property at Badgingarra for $3.6m (known as the Manalling Springs and Windy Lane sites), along with earlier purchases near Pingrup (Cowcher site), a 1710ha property for $2,585,000 and at Cranbrook (Sukey Hill site), a nearly 400ha property for $1.4 million.

Woodside acquired the properties to conduct carbon farming projects, in partnership with Greening Australia, to offset its carbon emissions and to achieve its aim to be net zero by 2050.

In May 2020, Woodside commenced a mixed native planting project, the Native Reforestation Project, in WA.

In 2020 the company reported it planted 3.6 million native trees on three of its properties in WA.

"The project is part of a broader collaboration between environmental enterprise Greening Australia and Woodside to assess environmental and economic viability of a range of bio-sequestered opportunities across Australia," Woodside stated.

"Australian carbon credit units (ACCUs) generated from the project will be used to offset Woodside's carbon emissions from planned gas developments in the Pilbara and Kimberley.

"Future tree plantings are planned, with the timing, location and scale dependent on Woodside's offset demand and supply factors, such as land availability and cost."

The neighbouring Manalling and Windy Lane sites each have 600ha planted, Cowcher has 1540ha of plantings and Sukey Hill has 279ha planted.

Nutrien Harcourts WA sales representative Brad King said buyers from the mining and resources sector only made up a small part of the WA rural market.

"They do fill a whole in the market, particularly in some remote areas," Mr King said.

"Family farmers still make up the majority of the market and are the major drivers."

Mr King said these companies were not a key driver in rising land prices and if they weren't active buyers, land prices would most likely still be just as strong.

"It can be hard for smaller farmers to expand, but for sellers having more buyer pressure is always a good thing," he said.

With companies under more public and government pressure to reduce or offset their emissions, Mr King expected demand from the mining and resources sector to continue.

"I think demand will probably increase, but we're not sure where (the carbon farming sector) will land because it's not quite black and white," he said.

Ray White Rural WA director Hugh Ness said having a large company like Woodside in the market had not yet been a factor in driving land prices.

(Buyers looking for land for carbon farming) have bought so little and the type of land that they're chasing is degraded land - they don't want to buy good grain growing country," Mr Ness said.

"We have certainly had more enquiry from corporates, mostly coming from Eastern States eco-consultancy companies who deal for big clients, in the past six months, but how far it goes and what form it takes - we don't know."

Whether or not carbon farming could have the potential to further increase or strengthen land prices, Mr Ness said it was too early to tell and would depend on the income that carbon farming generated.

"I have a suspicion that it will be a competing factor (in driving land prices) but at the moment the economics don't stack up, from what I'm told, to buy good quality farming land for carbon farming - so they are chasing land that's in poorer condition," he said.

As such, country that is in lower rainfall or more marginal areas, has the potential to see more growth from carbon farming compared to medium to higher rainfall country."

WAFarmers president John Hassell was cautious about mining and resource companies buying more land and preferred they "would work with farmers, rather than buying up big tracts of land".

"Energy companies are using it as a licence to pollute by offsetting their emissions," Mr Hassell said.

"We need farmers to benefit and not be treated like the bad guy.

"Rather than just buying up big areas, companies should be utilising bits of land that are arable - then everyone would benefit."

In terms of the long-term impact, Mr Hassell said more farmland being converted into carbon projects instead of being used for agriculture, could lead to farmland values increasing further, less food being produced and produce price increasing, which would affect consumers.