Carbon pilot paves way for clean credits

Western Australia’s huge land mass is increasingly a cause for optimism in carbon farming circles.

At more than 2.6 million square kilometres, it’s believed the state has the potential to become a major player in the carbon farming market, and the global effort to reduce greenhouse gas emissions.

The agriculture sector has long been considered a gatekeeper to one of the world’s most effective carbon sinks, with modified farming practices capable of removing carbon dioxide from the atmosphere by burying it in soil and vegetation.

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For the past decade, broadacre farmers across the state have been utilising recognised carbon sequestration practices, including the application of biochar as a soil ameliorant, increasing plant production, and mouldboard ploughing.

In 2014, the federal government incentivised those practices as part of an amendment of the Carbon Farming Initiative Act, giving the Clean Energy Regulator the authority to issue Australian Carbon Credit Units for approved emissions-reduction projects.

Each credit unit represents one tonne of carbon dioxide net abatement, which can be obtained by farmers through eligible activities and sold to corporations seeking to offset their emissions.

The scheme was designed to encourage those in vegetation management, energy, transport, and coal and gas production to reduce their carbon footprint, while being touted as an opportunity for the agriculture sector to improve degraded land and generate additional revenue.

With carbon farming practices having been shown to improve productivity and water retention, the arrangement was set to provide multiple benefits for broadacre farmers.

But the difficulties in determining the best carbon farming method and the costs associated with registering and monitoring these activities have prevented many farmers from obtaining credits that could have generated additional revenue.

That could change with the launch of a new WA-based pilot program.

Bridging the gap

Overcoming these barriers was a principal driver for the formation of Terrawise last November, a WA-based company providing commercially viable carbon sequestration solutions for broadacre farmers.

Founded by representatives of environmental consultancy Newgrowth, agricultural farm management consultancy Planfarm, and agricultural investment banking firm Seabourn Capital, Terrawise has developed a system for measuring carbon sequestration.

Terrawise is working to bridge the gap between the farmers and the companies seeking carbon credits and hopes to be the first WA-based company to gain carbon credits for farmers utilising soil amelioration and revegetation practices.

In January, the company opened an expressions of interest process for a carbon farming pilot program, unearthing a groundswell of broadacre farmers desperate to enter the carbon farming market.

Within the three-week EOI period, Terrawise received about 90 registrations from farmers with a combined land area of 350,000 hectares: an area capable of generating 4 million carbon credits.

Terrawise director Eric Hall told Business News the response highlighted how conscious the state’s farmers were of climate change and their carbon footprint, but also how few had the ability to access the benefits on offer through the federal scheme.

“There are farmers in the Mid West who have been doing a lot of activities eligible [under the federal incentive scheme] for up to 10 years because they’re best practice for broadacre farms, but haven’t received credits for it,” Mr Hall said.

“In fact, it’s rare to find a farmer who has gone through the necessary processes to obtain carbon credits.

“Setting it up and becoming accredited is very complicated, it involves a lot of environmental science, it’s time consuming and it’s a costly process.

“We form the bridge between the farmers undertaking these activities and the companies looking to gain carbon credits.

“Essentially, we’re an aggregator; we sell the credits to the corporations looking to offset their emissions on behalf of the farmers.

“I think the response is evidence that WA farmers are extremely conscious of their footprint and speaks volumes about their environmental and social conscience.

“[W]hat it also shows is that, despite some of the commentary coming from the bodies that claim to support them, farmers are very sure of climate change.”

He said Terrawise also expected the program to have broader flow-on benefits, including more local employment opportunities for regional towns.

The program was an opportunity for the agriculture sector to showcase the ways it was already working to reduce its carbon footprint, despite having long been portrayed as a big emitter of carbon, Mr Hall added.

The company’s co-director, Rob Grima, said Terrawise welcomed the response [to the EOI] and that it was clear the state’s farmers were early adopters.

“It demonstrates that the state’s farmers are at the forefront of, and keen to participate in, carbon farming and initiatives that secure both their production opportunities but also their financial security,” he said.

The company expects to be registered with the federal government’s Clean Energy Regulator in a matter of weeks.

Terrawise then plans to launch a pilot program in the state’s Wheatbelt, which will involve several farmers using carbon sequestration practices across a 2,500ha area; an exercise that could generate as many as 30,000 carbon credit units.

Mr Grima said the company was ready to go and eager to ensure its systems were efficient and capable of allowing it to open to the wider market next year.

Climate conscious

The agriculture sector is responsible for about 16 per cent of the greenhouse gases emitted in Australia each year, according to data from the national Department of Agriculture.

The primary driver of carbon farming is to slow the impacts of climate change, the effects of which are already being experienced by WA farmers. For example, a 20 per cent reduction in rainfall in the South West since 1970 is bringing significant water security challenges and changing farming practices.

It’s a trend clear to the state’s farmer representative bodies.

“Climate has been our number one issue over the last few months,” WAFarmers chief executive officer Trevor Whittington told Business News.

“The number of heavy rainfall events has dropped off and summer rainfall has increased.

“Our farming methods have changed, and farmers continue to adapt incredibly successfully.

“We’re becoming better at growing crops with less rainfall; you can grow a crop now with a lot less rain as a result of new varieties and new techniques.

“But the fact of the matter is that our climate is drying, and the general consensus is that people need to do their bit.”

Agricultural asset manager Alterra’s chief executive, Oliver Barnes, echoed those sentiments but said the company viewed climate change as an opportunity to build resilient assets, adjust farming practices, and be conscious of water usage.

“We live in a changing climate and that means periods of dry weather, but it also means periods of freak weather events,” he said.

“In reality, we live in a changing climate and we have to embrace it and that means a lot more capital has to be invested to make the asset resilient. 

“Not only where we farm, how we use water, but all the way through to the techniques that we deploy in the field to mitigate the extremes in weather.”

WAFarmers was the first major farming body in Australia to establish a climate change policy, one it began amending last year in a bid to better align itself with the long-term goals of the state and federal governments, and to accommodate carbon farming practices.

Mr Whittington said WAFarmers supported an economy-wide aspiration of net zero emissions by 2050, as was consistent with both the National Farmers Federation and national grain growers’ policies.

“As an organisation, we’re quite progressive in recognising that climate change is an issue and that the farming community will need to do something to assist,” he said.

“There is a huge amount of work being done by agronomists in the carbon space because they recognise there are significant benefits to carbon in the soil in terms of productivity.

“The other side of the coin is carbon output, particularly with regard to the use of diesel and fertiliser.

“Farmers are looking to buy the latest generation diesel engine and are getting better gear in order to minimise their carbon footprint and the amount of diesel they consume.

“Farmers are also looking at the use of fertiliser and looking to ensure that fertiliser is better absorbed by the plant material, rather than getting lost in the atmosphere.

“It is driven by carbon, but in the vast majority of cases, it’s driven by good farming practices, which, fortunately, coincide with carbon farming.”

But Mr Whittington said industry had been apprehensive because of the difficulties in measuring the capture of carbon in the soil.

He said the state government had backed carbon farming on pastoral leases in 2019, allowing pastoralists to undertake projects to regenerate native vegetation by managing grazing and sequestering carbon.

Under that plan, almost 60 projects were registered under the federal scheme, delivering 9 million tonnes of carbon abatement and a $130 million windfall for pastoralists.

Mr Whittington said these results were made easier by the fact that measuring the industry’s impact was far simpler than gauging how much carbon had been captured by broadacre farming activities over time.

He said WAFarmers was awaiting the release of a national formula by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) – one of five methodologies seen to be credible for trading carbon credits on a global scale – and for the federal government to decide on its preferred methodology before finalising amendments to its climate change policy.

Mr Whittington expected that would open the door to the widespread adoption of carbon farming in WA.

“There is a lot of discussion about which is going to be the dominant methodology,” he said.

“A lot of people in the industry are hanging back because there isn’t a standardised formula [for measuring the capture of carbon in the soil] that has been widely recognised.

“But once the federal government signs off on a system it believes to be credible, I think it will open the doors to a big rush of farmers eager to take up carbon credits.”