Overview

Following engagement with major agri-lending banks as well as the Australian Banking Association, CMI identified a significant variability, inconsistency and complexity in third-party contract agreements used by financial institutions interacting with the carbon market.

To address this, CMI engaged an external legal consultant to draft and consult on a series of example contract clauses for carbon farming, which would harmonise these discrepancies across the industry. CMI also sought independent legal advice from a number of additional law firms to provide additional feedback on the documents before finalising the example clauses.

Example agreements & guidance

There are two primary types of agreements entered into with the owner or perpetual lessee of land (Landholder) for carbon farming projects: one where a carbon project developer is the project proponent of the project, commonly referred to as a ‘Project Development Agreement’; the second where the Landholder is the project proponent, commonly referred to as a ‘Services Agreement’.

The documents below provide a set of clear, easily digestible contract clauses that include common elements of these agreements. Where applicable, they also include optionality so that they are easily adaptable to different project types.

Refer to the Guidance Note as a starting point to provide context on both agreements.

CMI Carbon Farming Contracts – Guidance Note

Services Agreement – Example Clauses

Project Development Agreement – Example Clauses

How the example contracts should be used

 

The example templates should be viewed as examples to assist in the preparation of contracts that are understood, negotiated, executed, and implemented in good faith. Project participants and stakeholders should obtain their own independent legal and financial advice before relying on them or entering into any specific agreements of their own.

Introductory Webinar: 26/04

On April 26th 2023, CMI held a Corporate-Member only webinar to launch the consultation process for the example agreements. For more background on the initiative and the consultation process, members can view the recording of this session, as well as the slides from the session, available below.