Media Statement: CMI response to carbon farming issues raised in nine newspapers
Many of the carbon farming issues raised in nine newspapers over the weekend have been the subject of intense scrutiny and reform over the last two years, a process that needs to continue but progress and commitment should be recognised, said the Carbon Market Institute (CMI) today.
“Issues raised in these articles should and are being considered seriously by CMI and government regulators, and CMI will continue to work to address these and other issues. That said, the articles do have internal contradictions including saying the industry is both over and under regulated,” said CMI CEO John Connor.
“Carbon farming is a relatively new industry providing, as partially noted in the articles, a range of climate, social and environmental benefits. Like other land sector industries, carbon farming needs to address social licence and stakeholder relation challenges.
“CMI, whose over 140 members include project developers but also conservation, Indigenous and other industry stakeholders, has been working to support best practice in addition to supporting integrity and method reforms in the Australian Carbon Credit Unit (ACCU) framework.”
This includes working on a recent study coordinated by six council areas in a South-West Queensland (SWQ) region briefly referred to in the online not print version today. This report revealed that the rapid expansion of carbon farming in the region in the early days of the ACCU scheme has left a legacy social license impact not necessarily reflective of current practices or realities. It provides important insight into challenges around appropriate use of land in the regions and managing the impacts of subsequent land use changes.
The SWQ report’s quantitative data shows that the economic benefits have outweighed any disbenefits to-date and farmers reported a broad range of improvements over the past decade, however there is clearly more work required to quantify these benefits on a larger scale. The report highlights strong participation levels and a growing appetite to engage with projects, but there is clearly a need for better knowledge sharing to ensure landholders have all the information they need to form informed views and make informed decisions.
Contrary to views expressed in today’s article, this industry is regulated by government under provisions set out in the Carbon Credits (Carbon Farming Initiative) Act 2011 administered by the Clean Energy Regulator (CER). ACCUs are issued by the CER under methods approved by the Minister after recommendations from an independent Emission Reduction Assurance Committee strengthened after the 2023 Professor Chubb led independent review of the ACCU framework.
Recommendations from the Chubb Review are still being implemented, including significant extra checks on projects using the Human Induced Regeneration (HIR) method. CMI is urging the government to continue to resource and accelerate the implementation of outstanding Chubb Review recommendations.
CMI provides additional voluntary compliance, education and engagement initiatives including:
- The Code Administrator of the Australian Carbon Industry Code of Conduct, which audits Signatories to the Code and their projects each financial year. This audit determines whether Signatories have met their obligations under the Code and produces an annual report on their findings. This audit and complaints process work in tandem to support integrity in the carbon market. Further, the Code requires signatories to provide landholders with a fact sheet highlighting obligations.
- After a recent independent review of the Code, CMI is taking steps to provide further independence between CMI and the Code Administrator.
- Example contract clauses for contracts between landholders and carbon project developers with a guidance note on differing business models
- A project showcase directory of carbon projects highlighting climate, Indigenous, environmental and other benefits
- CMI has developed a Carbon farming industry roadmap setting out issues for engagement with stakeholders that will be upgraded this year, incorporating lessons from the SW Queensland study, other research and the evolution of a nature repair industry emerging in recent years.
CMI has also been engaging with the property valuation sector to improve understanding and communication of recognising carbon value as well as restrictions. CMI is developing a guide for landholders with a checklist of questions that should be addressed and will be working with farming and other relevant organisations to distribute it.
There are a range of business models for carbon farming support which give most of the value of carbon credit sales to the landholder. Risk is shared between farmers and developers. ACCU prices have varied but are now around $35, more than double the average value of contracts issued under the previous government’s Emission Reduction Fund.
Farmers are very familiar with fluctuating commodity prices and of course due diligence is key to any contractual arrangements. CMI stresses the importance of seeking independent financial and legal advice before entering long-term contracts.
The inflammatory and derogatory language used in today’s article unfairly tars many working to build healthy partnerships that contribute to restoring degraded Australian landscapes, delivering benefits to Indigenous and rural communities, capturing carbon whilst increasing agricultural productivity, bolstering drought and climate resilience and assuring new revenue streams that often keep landholders on their land where farming income fluctuates or is unreliable.
“CMI and leading participants understand the future of this industry depends on appropriate partnerships, values and scientific rigour. There has been substantial recent progress, but more must be done by government, industry, community and the media. CMI will continuing to work with all stakeholders to a durable transition to our vision of an inclusive and prosperous negative emission, nature positive economy,” concluded Connor.
