Cutting through the carbon jargon

Department of Primary Industries and Regional Development (DPIRD) business development officer Andrew McCarthy said there was a long history of climate policy in Australia and many players in the climate and carbon sphere, which meant the topic was often confusing for those on the ground.

He told a recent Real Estate Institute of WA (REIWA) rural forum that carbon farming referred to the land-based activities that sequester (or store) carbon in vegetation and soil, or minimise (avoid) the release of greenhouse gasses.

He said options for landholders in sequestering carbon in soil and vegetation under the Clean Energy Regulator (CER) included: Soil organic carbon sequestration using measurement and models; Revegetation projects - reforestation by environmental or mallee planting; and Agroforestry projects using new plantation or farm forestry methods.

Mr McCarthy said from next year there will potentially be another option called the integrated farm management method.

He said this would allow eligible CER methods to be stacked into one registered project.

Mr McCarthy said carbon farming could range from a single change in land management to a whole-of-farm integrated plan that maximises carbon sequestration.

A soil carbon project stores carbon in agricultural soil.

This can potentially earn Australian carbon credit units (ACCU) for reducing the level of greenhouse gases in the atmosphere.

"Increasing your farm's soil carbon also has many benefits for agricultural productivity and profitability," Mr McCarthy said.

"This includes diversified revenue from higher production and carbon credits, improved soil health, better soil moisture retention and drought resilience, higher crop and pasture yields, regeneration of degraded land areas for productive use and better soil management using soil nutrient data.

"A soil carbon project involves managing your land to encourage increases in soil carbon.

"Increases occur by building carbon stores in the soil.

"Sampling your soil measures changes in soil carbon and provides you information about soil nutrition and health.

"Increases in measured soil carbon earns you carbon credits.

"Improving soil carbon levels can be achieved by introducing one or more new eligible land management activities, such as applying nutrients, lime or gypsum, seeding a pasture and/or changing stocking rates or the duration or intensity of grazing."

Increases in soil carbon can be dependent on existing carbon levels, soil type, management history, rainfall and prevailing seasonal weather.

The ACCU scheme, formerly the Emissions Reduction Fund (EFR), offers landholders, communities and businesses the opportunity to run new projects that reduce or remove greenhouse gas emissions from the atmosphere.

In running an ACCU project, a landholder can earn carbon credits and sell them to the Australian Government or to companies and other private buyers.

Each carbon credit represents one tonne of carbon dioxide equivalent greenhouse gas emissions stored or avoided.

To be eligible, the landholder needs to identify eligible land on their property and have legal right to run a project on the land and claim the carbon credits.

They need to obtain regulatory approvals and consent from all interested parties in the project land - this may include banks, State governments or native title bodies.

And the project has to be new.

"You have to adopt a new land management activity after you register your soil carbon project," Mr McCarthy said.

"There are operating, sampling, reporting and audit obligations in running a soil carbon project.

"You will need to report on your project at least once every five years.

"You receive carbon credits each time you report increases in soil carbon levels over 25 years."

Mr McCarthy said landholders needed to determine current soil carbon and potential future carbon levels and work out which eligible activities would increase these levels.

He said this should include economic evaluation, risks and tactics to maintain the soil organic carbon for the next 25 years.

When it comes to emissions, Mr McCarthy said landholders needed to include emissions from any activity that was part of the registered project - which may include livestock, synthetic fertiliser and lime application, residue and tillage events and irrigation energy.

Before a landholder registers a vegetation/agroforestry project, the proposed area of the property needs to have been clear of native or plantation forest for at least seven years.

There must be demonstration of the integration of plantings into the farming system and regulatory approvals will be needed.

These projects must not be managed under a forestry managed investment scheme.

They should include detail about how carbon stocks will be maintained and fire risk mitigated over 25 or 100 years.

Mr McCarthy said mallee projects could be in linear belts or block plantings in areas that received 600 millimetres of annual rainfall or less.

He said the area must be cleared of forest for at least five years before a project is registered and regulatory approvals obtained.

"Again, the landholder needs to provide detail about how carbon stocks will be maintained and fire risk lowered for 25 or 100 years," he said.

This is a "stacking" of activities in the same project - whether it is vegetation, soil or both.

Mr McCarthy said new activities included any vegetation-based activity that increased sequestered carbon, including planting and seeding of approved tree and fodder vegetation and infill planting using direct seeding or tube stock to assist regeneration.

For all project types there is a set of requirements.

Top of the list is newness.

This means a carbon project should not be implemented before it is registered with the CER.

The project must be run by a legal right and fit/proper person with eligible interest holder consent.

Projects must have a permanence period of 25 or 100 years.

Sequestration rates were discounted by 25 per cent and 5pc for 25 and 100-year projects, respectively.

And he said there were specific eligibility requirements for the chosen method.

A carbon farming project involves costs at planning and establishment phase, compliance when the project is ongoing, time spent running the project and the opportunity cost of land under revegetation or new production systems.

The direct revenue from participating in the Accu scheme depends on how many Accus the project generates.

Estimating project carbon potential, and therefore Accus generated, is done using online software.

Revenue will come from the price that Accus are sold.

In the past two years, ACCU spot prices have ranged from just under $19 to a high of $57 and are trading at about $35.

Mr McCarthy said several online tools could help landholders estimate the carbon sequestration potential of their project, its costs and its returns.

He said landholders and real estate agents armed with this knowledge would be better able to value the land that the project applies to.

Mr McCarthy said most carbon projects would further increase the value of farming land by improving productivity by boosting soil quality and water holding capability, providing a habitat for birds and other native species, establishing shaded areas for livestock, stabilising salinity, improving fertiliser use efficiency, improving the aesthetics of the local environment, creating a cultural connection and potentially boosting regional commercial opportunities and employment.

He said there was a carbon for farmers voucher program in place to provide funding to primary producers.

"There is $1500 available with a co-contribution of 20 per cent to a maximum of $3000," he said.

This involves farmers working with a service provider to develop a vegetation or soil carbon farming plan.

"It is essentially a feasibility report to see if and how carbon farming can fit into the property," Mr McCarthy said.

"Landholders contribute 20pc of the cost and nominate service providers."

Another incentive for growers is the carbon farming and land restoration program, funded to the tune of $15 million by the State government and rolled out by the Rural Business Development Corporation, with support from DPIRD.

Round three of this program is expected to start in early 2024.

Mr McCarthy said it was worthwhile to keep an eye out for biofuel incentives in the near future.

He said bioenergy would play a vital part in the State government's strategy of promoting low-emission technology and reducing WA's carbon footprint.

More information: Go to agric.wa.gov.au/carbon-farming/carbon-farmers-voucher-program