Ag Updates - January 2022
Carbon Projects under the Emissions Reduction Fund
The Emissions Reduction Fund is a voluntary scheme that aims to provide incentives for organisations and individuals to adopt new practices and technologies to reduce emissions. It is enacted through the Carbon Credits (Carbon Farming initiative) Act 2011 and the Carbon Credits (Carbon Farming initiative) Rule 2015.
The Emissions Reduction Fund (ERF) allows participants to earn Australian Carbon Credit Units (ACCUs) for emissions reductions. One ACCU is earned for each tonne of carbon dioxide equivalent (tCO2-e) stored or avoided by a project. ACCUs can be sold to generate income, either to the government through a carbon abatement contract, or in the secondary market.
Project proponents can participate in the Emissions Reduction Fund by following stringent methods that generate carbon credits, and that have been approved by the Clean Energy Regulator.
Methodology determinations (or methods) lay out the rules for emissions reduction projects under the ERF in the form of legislative instruments. Currently a number of methods have been developed for agricultural practices, which are continually being refined including an updated soil carbon method released in December 2021.
These projects are split into two different types of carbon projects: Sequestration and Avoidance projects.
Opportunities for the land sector can be identified here.
Carbon + Biodiversity Pilot Program
Australian agriculture depends on a biodiverse and well-managed natural resource base, and farmers are responsible for managing 58% of our landmass. The 2021-22 budget delivers $32.1 million in additional funding to continue to promote biodiversity stewardship. The Agriculture Stewardship Package is working to develop market arrangements and kick start private investment in farm biodiversity and other sustainability opportunities.
Currently, the agriculture biodiversity stewardship pilots are being run in selected NRM regions including Southern Tasmania. The Carbon + Biodiversity pilot is using a market-based approach to reward farmers for increased biodiversity. Farmers who undertake plantings for carbon can receive additional payments for maximising the biodiversity benefits from these plantings by:
· Planting a mix of species
· Managing and looking after that vegetation
Payment for biodiversity and other environmental services can supplement traditional farm income. Farmers can gain multiple benefits and diversify their income by completing a C+B project. To complete a C+B project, farmers must undertake a new Emissions Reduction Fund (ERF) environmental plantings project to plant native trees and shrubs in line with ERF requirements as well as the C+B Pilot planting protocols.
Within this grant, the Australian Government will pay you a biodiversity payment for the biodiversity improvement and you will retain the carbon credits generated by the project.
The biodiversity payment will be made in two instalments as the project becomes established. The carbon credits will be generated as Australian Carbon Credit Units (ACCUs) under an ERF project and will be issued over the 25 year course of the ERF project. These credits can be sold to private buyers, or back to the government under government contracts.
The Carbon + Biodiversity Pilot applications are now open in six new regions and more information can be found here. Applications for this grant close 03 March 2022.
The Australian Farm Biodiversity Certification Scheme
The voluntary Australian Farm Biodiversity Certification Scheme will allow Australian farmers to showcase best practice natural resource management to sustain and build biodiversity. Certification will enable consumers to identify Australian produce from farms that sustain biodiversity and promote community recognition of farmers agricultural stewardship.
This certification would promote sustainability and improve profitability of farm businesses by supporting access to markets, creating premiums for their produce and improving land management practices. To be certified, farmers will need to undertake specified land management practices and report on biodiversity outcomes. Currently, trial certification will begin as part of the Carbon + Biodiversity Pilot outlined under the Agriculture Biodiversity Stewardship Package above.
National Farmer Federation – Sustainability Framework
The government provided $4 million towards the development of an Australian Farm certification scheme. A report was commissioned by the Australian Farm Institute (AFI): Recognising On-farm Biodiversity Management. Phase one of the sustainability framework has been developed, and recommendations for the next phase have been identified. The report outlines the criteria required for a successful biodiversity certification scheme and what would be required for adoption of the scheme.
Currently the scheme has not been implemented, however it is good to note the criteria outlined as the scheme is developed to the overarching standard provided. This would assist in early certification under the sustainability framework.
National Stewardship Trading Platform
In 2020, the Australian Government commissioned Frontier Economics to complete a scoping study on a potential national biodiversity trading platform. The 2021-22 budget provided 4.4 million for the development of a trading platform for biodiversity. The National Stewardship Trading Platform was developed late 2021. Currently, the marketplace for connecting farmers with potential buyers of services hasn’t opened yet and expected to open in 2022.