Carbon prices outpacing house gains

Woomargama Station's Clare and Andrew Cannon are entering the carbon market.
Woomargama Station's Clare and Andrew Cannon are entering the carbon market.

On Woomargama station 50 km north of Albury on the NSW-Victorian border, Clare Cannon is excited about the future.

The beef and wool producer runs 1100 head of grass-fed Herefords and 5000 Merino sheep.

But that's not all she's farming on her family's 2600 plus-hectare property.

Cannon has also entered the carbon market.

"We're working with our agronomist to see how we can improve putting carbon back into our soil," she says. "So, changing management practices."

Cannon is part of a growing number of people on the land exploring the market and one of more than 240 who have joined a new farmer-owned co-op focused on carbon trading, Regen Farmers Mutual.

"It's about really finding a trusted partner ... to work out what your carbon footprint is and to sell your carbon credits. What's great about it is that you keep your data," she tells AAP.

"There are shysters out there ... they'll say 'we'll fund that but then we'll take 80 per cent of your future 25 years of carbon credits'.

"I, like most farmers, am learning about this," Cannon says. "But my first job is to work out what my carbon footprint is."

Agricultural emissions have declined 18.5 per cent nationally since 1990, according to the government's latest quarterly Australian greenhouse gas inventory update released in November

Over the shorter term, though, they rose 4.9 per cent between June 2020 and 2021 due to graziers restocking properties following years of drought.

There's been a huge interest in demand from farmers wanting to enter the carbon market with interest going "through the roof".

Director of Carbon Farmers of Australia, Louisa Kiely last week told the Australasian Emissions Reduction Summit carbon farming has come a long way but methods remain complex and integrity is a must.

John Connor, the CEO of the Carbon Market Institute, an independent industry association for business focusing on net zero emissions, says integrity has been a focus.

"We've seen carbon prices go up faster than house prices and that is attractive to a whole new lot of entrants ... we won't pretend that there won't be some not acting in good faith," he tells AAP.

"Our carbon industry code of conduct is a world first."

Kiely says interest among farmers in the carbon market continues to grow and that "the switchboard lit up" when the federal government committed to net zero emissions by 2050.

"The appetite has been there but they haven't had the permission," she says. "What's been given now is the permission and what's lacking now is that the complexity remains."

There have been obvious attempts by the government to change that including cheaper soil carbon testing methods.

Energy Minister Angus Taylor announced a new one in December under the Emissions Reduction Fund (ERF) to allow carbon levels to be worked out remotely.

Soils previously had to be tested in the laboratory but from here in, farmers will be able to access remote sensors and satellite technology to measure soil carbon stocks.

But Emeritus Professor of Soil Science Robert White from the University of Melbourne warns there are still major hurdles.

"It's expensive - not just the cost of measurement but the opportunity cost if a farmer has to change their management practice."

He says getting the price down from $30 a hectare to $3 is only a "remote possibility" given current technology and he doesn't expect it to have much impact.

There's still "too much hype" around soil carbon farming, he insists.

"It's going to have a marginal effect ... unless something radically changes."

Analysis for Australia's Long Term Emissions Reduction Plan shows increasing soil carbon could reduce emissions by four to 16 per cent.

While more than 200 projects have been registered with the ERF, Professor White says "inflated figures" have been used to say how much carbon can be stored in the soil.

But soil carbon project developer Matthew Warnken supports the new method. He says it will slash the cost for landowners to sample their soils up to 90 per cent by increasing the accuracy of the measurement system.

As managing director of Agriprove, he helped negotiate Australia's first and so far only deal in 2019, which earnt a farmer carbon credits through the ERF by sequestering carbon in soil.

Warnken admits progress has been slow but tells AAP that's changing.

"It took five years for the first 50 projects to be registered and over the last 18 months about 150 have come on to the ERF register ... our expectation is we'll hit 200 projects registered by Agriprove by Christmas.

"Measuring soil carbon is a significant cost but the new soil carbon method ... means those costs will be dramatically reduced.

"In effect we need to take carbon out of the atmosphere and put it into the soils where it is a resource."

Warnken says the industry has extensively researched how farmers can reduce livestock emissions, as well as those from fertiliser use, conservation and preservation of vegetation and overall, using more climate-smart solutions.

Further changes to the ERF were made on Friday when Taylor announced ag would be prioritised over native vegetation projects.

"Projects covering more than one-third of a farm will no longer be able to go ahead if there is evidence they will have an adverse impact on agricultural production or the local community," he said.

Those restrictions could be a thorn in the side for farmers, according to Connor.

"We're not sure whether this is a bit of overkill but we need to look at the consultation paper and engage in good faith.

"Generally, carbon farming is a string added to the bow of farmers, not one taking away other agricultural productivity outcomes."

A third of Woomargama station already has a biodiversity covenant over the land, preventing it being cleared.

Although paid to preserve it, Clare Cannon says she wants to leave a legacy.

"My husband was sort of having a hissy fit saying, 'you're giving away a third of the property in perpetuity with this covenant' but in fact not only did we get carbon offsets, we've added enormous value to the brand."

Now Cannon hopes drawing more carbon into the soil by changing their farming method will mean spare carbon credits.

"It's a really great time to be quite enterprising and to have that third stream of income rather than just beef and wool is very exciting," she says.

Australian Associated Press