Broad benefits of carbon farming celebrated as industry embarks on scale, assurance and integrity challenges
The need to build scale and integrity while recognising broad environmental, social and economic benefits of carbon farming were at the centre of discussions at the Carbon Market Institute’s 2021 Carbon Farming Forum. The Forum, held on two Fridays in September (the 10th and 17th), was hosted by the Queensland Government with event partners CBA, GreenCollar, Forico and New Forests.
More than 500 farmers, landholders and Indigenous representatives gathered virtually for the 5th annual forum as the industry celebrated significant milestones and the tenth anniversary of the Carbon Farming Initiative Act.
John Connor, CEO of the Carbon Market Institute said: “The Australian carbon farming industry has grown from a relatively boutique industry to a mainstream one. But it needs to achieve much more if we are to fully realise its potential for the transition to net-zero and negative emissions economies over coming few decades.”
CMI presented an updated edition of its 2017 Carbon Farming Industry Roadmap for discussion with Forum participants.
The Forum was organised around four themes: Boosting Supply; Building Trust; Recognising Co-benefits and; Farming and Carbon.
The Forum recognised key milestones in Australia’s carbon market. This includes the issuance of the 100 millionth Australian Carbon Credit Unit (ACCU) by the Clean Energy Regulator for confirmed emissions avoidance or carbon sequestration. Two thirds of these ACCUs were land-based, carbon farming related.
These carbon farming credits for emissions avoidance or sequestration are growing at about ten million per year, a rate that needs to at least triple over this decade. A target of 1 billion tonnes by 2030 was raised at the Forum.
The Forum heard that supply could be boosted with a step-change in approach to methodologies that approve ACCUs. The Government’s recent prioritisation of method development was welcomed, with good progress in soil carbon, blue carbon and plantation methods. Potential new or improved methods were discussed for savanna, blue carbon, biochar, and livestock feed management.
An Agricultural Land Management and Production Method was presented that could “stack” or include a range of methods and integrate the latest technological developments in remote sensing and spatial data management. The CMI Landscape Taskforce estimates that the implementation potential of this new method is 5000+ new projects, 65m+ hectares, 50b+ value and 2.5b+ ACCUs.
Unlocking increased finance for carbon farming was raised, “there’s no shortage of capital, but there’s a shortage of deals”. Capacity-building across the value chain was raised as an important step, this includes with bankers, lawyers, valuers, accountants, and landholders.
Other drivers for boosting supply were discussed including new financial models, business management technologies and innovations and partnerships along the supply chain from seedlings to monitoring.
It is crucial to ensure that carbon claims have integrity if the carbon farming industry is to endure, this involves consultation and engagement with investors, landholders, native title rights and consumers are respected. It is critical that the integrity be not just in the carbon credit units themselves, but in the transition to net-zero emissions the carbon farming industry is assisting. Integrity was raised in relation to increased corporate climate pledges, and expectations around the quality of units associated with these.
The Forum discussed the operationalisation of the world’s first Carbon Industry Code of Conduct after three years of development. We now have a new “steward of the market, not cop on the beat!” with the launch of an Independent Review Panel. The Forum heard how the Panel and the Code Administrator will spend this year focusing on assuring quality for investors, ensuring proper engagement and information for landholders and developing best practice for seeking free prior and informed consent from Indigenous communities for carbon projects.
The Forum also discussed innovations from the Clean Energy Regulator, such as the implementation of a duty of good faith, and emerging international alternatives to the ACCU process for measuring and assuring carbon farming efforts.
Carbon farming can bring a range of social, cultural, employment and environmental benefits. Internationally, in voluntary carbon markets, there is a growing demand for nature-based credits with investment in these surpassing other project types such as renewable energy projects.
The Forum discussed how Australia’s carbon farming industry can facilitate strong co-benefit market development, by:
- building robust co-benefit taxonomy, transparency, assurance and standards frameworks that can be integrated with existing carbon market structures;
- providing market participants with clear, consistent, easily accessible information, including price, volume, and origination data; and
- developing a ‘meta-standard’ that provides Australian market participants with a set of integrity principles and guidance on how co-benefits should be consistently measured reported and verified across the country.
It was discussed that the government is working with the finance and banking sector to ensure biodiversity opportunities/metrics are understood by banks and able to be incorporated into risk assessment and decision-making frameworks.
For Indigenous representatives, carbon farming projects are delivering a range of co-benefits including personal and professional growth of young men and women and bringing people back on to country that has been deserted for 60 years. An example was provided of carbon money being used to fund a local school.
Farming and Carbon
Carbon is now an important new commodity for farmers, earning additional revenue and supporting access to markets as well as boosting productivity and resilience to climate impacts over the long term. ABARES recently estimates that climate change was costing farms on average $30,000 per year.
It’s a critical time for the sector as it expands and develops, and the Forum heard from a broad range of stakeholders about the diverse benefits that carbon farming can provide. Most farmers are reinvesting their carbon money back into the landscape. Carbon neutral commitments are becoming more important, but scalability was raised as an issue.
The Forum also heard of the importance of farmers carefully considering their options in choosing to sell rights from carbon sequestration and/or maintain them to assure carbon neutrality. Doing this incorrectly could lead to consumer and integrity concerns of double counting or claiming.
Risk was discussed, with participants stressing they did not want farmers bearing all the risk, risk should be factored into business models. The issue of sequestration vs avoidance (i.e. through methane reduction) was raised, and whether these credits should be valued differently.
It was stated that overtime all farmers will need to move in this [carbon farming] direction, as markets become more sustainably-focused, especially as Australia exports ⅔ of produce.
CMI’s Carbon Farming Industry Roadmap states that with the right policies and methods in place the sector could generate 20,000 jobs and drive $20+ billion in revenue by 2030.
The Forum concluded with Cathie Schnitzerling, journalist and executive producer of ABC’s Landline, interviewing three farmers who have integrated carbon farming and revenue into their business. These farmers are involved in cattle or sheep grazing and carbon farming projects under different methods (soil carbon, HIR, regeneration): Nadia Campbell – Goondicum Station, Monto – Queensland, Nathan Simpson – Binginbar Farm, Gollan – New South Wales and Sasha/Will Treloar, Boothulla Station, Queensland.
The 5th Carbon Industry Forum was a great success with unprecedented participation from farmers, Indigenous community leaders, investors and carbon service providers. CMI has received invaluable feedback from this Forum for our updated Carbon Farming Industry Roadmap. CMI will continue to develop and deploy the Roadmap with a recognition that this industry also has to maintain its social licence to operate with an open mind to integrity, transparency and engagement with local communities.