Frequently Asked Questions

Here are some common questions about carbon farming and the ERF

Getting
Started

Who wants to buy my carbon and why?

Under the Australian ‘Emission Reduction Fund’ farmers can modify their grazing and land management practices to sequestrate atmospheric carbon into the soil. This drawn down carbon is then used to reduce the overall carbon emissions of Australia. Once the carbon is positively introduced into the soil via plant management the soil becomes naturally more productive and hydrologically efficient.

You get to benefit twice from the carbon sequestration.

Are trees and set-aside the best ways to harvest carbon?

There are many ways to improve your yield through soil carbon practices. Mob grazing, cover crops, over seeding and many other highly productive techniques will be recommended for the specific requirements of your farm.

What exactly is the ERF?

The Australian Government’s Emissions Reduction Fund (ERF) is a $2.55 billion funding commitment to provide incentives for the development of eligible greenhouse gas (GHG) abatement projects.  Emissions reductions (or abatement) can be in the form of carbon sequestration such as increasing soil carbon, or avoided emissions such as improving energy efficiency.  Australian Carbon Credit Units (ACCUs) are awarded to projects for each tonne of carbon dioxide pollution avoided or sequestrated.  It is these permits that are purchased by the ERF.

How do projects access funding from the Emissions Reduction Fund?

Emissions reduction projects compete on price to win a contract to deliver ACCUs to the Clean Energy Regulator at an ERF Auction.  The contract sets out an ACCU delivery schedule over a contract period of up to ten years for carbon sequestration projects (such as soil carbon) and up to seven years for emissions avoidance projects.

The Regulator has a standard contract that is unable to be varied.  This contract includes penalties should the project not be able to deliver the required ACCUs.

The first auction was held in April and contracts to purchase 47 million ACCUs at an average price of $13.95 per ACCU ($660 million in total) were awarded.  The ERF still has $1.9 billion remaining for future auctions.

How can I participate in the Emission Reduction Fund Auction?

The ERF Auction is essentially a form of tender process with the lowest cost carbon sequestration bids offered being the winners of the auction.  However there are a number of involved steps for project registration, auction pre-qualification, auction participation, project implementation and ongoing monitoring and compliance in order for projects to participate in an ERF auction, create ACCUs and be paid for ACCU delivery.  Project registration is the first step and requires a legislated Methodology Determination that covers the proposed project activity.

Are there any soil carbon Methodology Determinations?

The Carbon Farming (Carbon Farming Initiative)(Sequestering Carbon in Soils in Grazing Systems) Determination 2014 was made in July 2014 and enables eligible land projects in Australia that increase carbon inputs in grazing systems to create Australian Carbon Credit Units (ACCUs).  Every ACCU represents 272 kilograms of carbon stored in soil.  (One tonne of carbon equals 3.67 tonnes of carbon dioxide equivalent (CO2e) and one ACCU represents one tonne of CO2e removed from the atmosphere).

For a project to qualify, it must undertake a ‘new’ management activity to build soil carbon (this addresses the additionally and/or newness considerations).  The carbon delivery team can assist in identifying and implementing this activity.

Are there any alternative approaches to ERF participation?

Corporate Carbon has introduced a streamlined ‘end-to-end’ solution for ERF landholder participation that removes barriers and minimises risk.  Under this approach, Corporate Carbon manages all of the registration, establishment, implementation, monitoring, offsets reporting, audit and ACCU issuance activities required by the scheme, and enters into a contract with the landholder to purchase ACCUs from the project.  This removes not only the upfront cost and hassle of a soil carbon project, it also removes the potential risks of an ERF contract with Government, such as contract delivery shortfall, make good and damages.

Were there any soil carbon projects in the first ERF Auction?

Corporate Carbon, with support from the carbon delivery team, was successful in winning contracts for 5.5 million ACCUs across a number of methodologies, including contracts to deliver 4.1 million ACCUs through soil carbon storage projects in grazing systems.  This level of success has made Corporate Carbon the largest soil carbon contractor and gives them valuable insights into the operation of emissions reduction projects.

Who is part of the carbon delivery team?

Regenerative Australian Farmers, LawrieCo and Corporate Carbon are working together to develop carbon projects with the aim of making the implementation of soil carbon projects as easy and painless as possible for landholders.  These specialist carbon market solutions providers have a strong track record in Australian carbon market participation.

Regenerative Australian Farmers and LawrieCo will identify suitable project areas and design and assist with the necessary activities to build carbon stores in the soil.  Corporate Carbon will interface with the Clean Energy Regulator to register projects, secure ERF contracts and manage the resulting contractual obligations.

Still need help? Send us a note!

For any other questions, please contact

Deane Belfield

deane@regenfarmers.com.au

Tel. 0414 617 542

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