Regardless of whether farmers want to build carbon credits to sell to outside buyers, or accumulate credits against their own greenhouse gas emissions, most will probably choose to get help from a carbon project developer.
Similar to accountants or financial planners, carbon project developers or aggregators help design and manage farmers' Australian Carbon Credit Unit projects for them.
ACCU project developers tend to specialise in certain carbon management areas such and have different degrees of "skin in the game", and therefore, varying fees associated with their service.
Some specialise in building soil carbon in different cropping and grazing systems, while reforestation project developers understand revegetation projects.
In addition to a developer's basic product service costs, such as project design and soil coring, farmers must budget for their own "practice change" costs, such as extra nutrients, cover crops or extra fencing.
Three main project cost options are typical.
A basic fee for service deal means farmers simply pay project design and management costs up front.
This can be a good alternative for producers confident in their farming systems and their skills required to sequester soil carbon.
Alternatively, service fees can be pruned if the developer agrees to take a five to 20 per cent share of their costs in carbon units when these are eventually issued.
This fee-plus units arrangement is the most common model, however, landholders may end up still owning much of the project risk because they will most likely be expected to cover project setup costs.
The third, and potentially least stressful, option is to have project developers absorb all upfront costs and get paid via a percentage of the carbon units created.
For taking a higher portion of risk the developer gets a high percentage of carbon units when they are issued - typically 25pc to 35pc.
This option also encourages developers to be strongly invested in making sure the farm is sequestering as much carbon as possible.
Nobody gets any carbon credit units if the farm does not build any carbon.
A developer's job starts with project design, including mapping the farm into carbon estimation areas (CEAs) to identify similar soil types and farming hectares into like-for-like zones.
Variability in soil samples can hurt a carbon project's capacity to earn carbon credits, so the initial mapping process is an important step.
CEAs also consider succession planning factors, such as considering how a farm may need to be subdivided in 10 or 20 years.
To register a soil carbon project, farmers must have a land management strategy to implement practice changes they were not previously doing.
This may include starting rotational grazing or cover crop regimes, adding different nutrients to the soil, or other strategies worked out with an agronomist.
Land management strategies are re-developed every five years and are expected to involve practice changes which deliver other benefits such as less urea use or lifting cattle weights with cover crops and rotational grazing.
Properly managed soil carbon projects require soil coring services undertaken by carbon project compliant coring crews.
Soil coring to one-metre depths costs $130-$150 a sample.
Farmers should budget for one core every 10 hectares.
A 1000ha carbon project will typically cost about $14,000 for soil coring, plus about $80 per soil core sample for laboratory analysis.
All mapping and soil analysis information must be compiled, managed and submitted to the ACCU Scheme for registration.
Any pre-submission administration work may also include getting consent from the bank if landholders have a mortgage against their farm.
Follow-up soil coring and analysis processes need to be repeated every four to five years to get carbon credits issued (budget for $30/ha).
A qualified carbon project auditor must be engaged to audit the project before the ACCU Scheme will issue any credits and may cost anywhere from $6000 to $20,000 each audit, depending on the farm's locality.
- The Carbon Series was produced in collaboration with the Australian Science Media Centre with support from the META Public Interest Journalism Fund administered by the Walkley Foundation.