Making money farming carbon!
The word is out - landowners are realising that they can make a sizeable income while reducing Australia’s greenhouse gas emissions and improving productivity!
Win , win, win.
Background - ACCUs
Among the Federal Government’s initiatives to reduce greenhouse gas emissions is the Climate Solutions Fund, previously known as the Emissions Reduction Fund. Administered by the Clean Energy Regulator, the scheme provides incentives for participants to engage in projects that will reduce Australia’s carbon emissions, also known as carbon abatement.
By implementing projects that are approved by the Clean Energy Regulator, participants earn Australian carbon credit units (ACCUs) for every tonne of ‘carbon dioxide equivalent’ they are able to store or avoid emitting. Participants then sell their ACCUs, either to the Government under fixed price or option type contracts, or they can sell them on the open market.
It is possible that one hectare of land could earn more than 120 ACCUs over a period of 10 years.
According to the Clean Energy Regulator’s March Quarterly Carbon Market Report, at its auction in March, the Government made a commitment to purchase 1.7 million tonnes of carbon abatement across 11 projects, at an average price of $16.14 per ACCU.
The report indicates that in the secondary market, the trading price for immediate delivery of ACCUs at the end of March was $16.40.
Here’s a link to the report: http://www.cleanenergyregulator.gov.au/DocumentAssets/Documents/Quarterly%20Carbon%20Market%20Report%20-%20March%20Quarter%202020.pdf
Soil carbon farming – a long term commitment
There are several ways that the agriculture sector is taking advantage of this initiative and earning ACCUs.
One method approved by the Clean Energy Regulator which is becoming popular for landowners is soil carbon farming. Known as carbon sequestration, soil carbon farming involves the extraction and capture of carbon based greenhouse gas from the atmosphere and the long-term or permanent storage of it in the soil.
Landowners manage crops, pasture, stocking rates and grazing practices in a way that over the space of 3 to 5 years increases soil carbon levels.