Apr 24, 2016

Carbon Sequestration on Land – the Government’s Greenhouse Gas Policy

By Alan Broughton
May 7th 2014. 

The Labour Government set up the Carbon Farming Initiative in 2011, soon to be renamed and adjusted as the Emissions Reduction Fund. This will be the Abbott Government’s key strategy for greenhouse gas abatement. The aim is to use the ability of soils and vegetation to absorb the emissions from industry while at the same time reducing the emissions from agriculture. Landholders get paid to sequester carbon or reduce emissions under the scheme. 

While the potential exists for a large proportion of greenhouse gases to be taken out of the atmosphere by sequestration in soil and vegetation, it is unlikely to occur for several reasons: the cost and difficulty of verification of soil carbon increase, the extra work in record keeping, the long time before farmers get paid (at least five years in the case of soil carbon sequestration), the uncertainty about the price per tonne of carbon dioxide equivalents they will receive, the absence of any training program for farmers about how to sequester carbon, and the increasing emissions from the coal, gas and oil industries that are not at the same time being addressed. 

Australian Carbon Credit Units

Under the scheme, landholders develop a project to either sequester carbon or reduce emissions. The project gets approval from the Clean Energy Regulator and is carried out according to the methodologies developed by the Carbon Farming Initiative. Changes are verified, and finally the landholder receives Australian Carbon Credit Units (ACCUs). One ACCU equals one tonne of carbon dioxide equivalent. 

Under current legislation ACCUs can be sold on the domestic compliance market or voluntary market. Once the government repeals the Carbon Pricing Mechanism (the previous government’s so-called carbon tax) and introduces the Emissions Reduction Fund, the ACCUs can be sold to the government or to the voluntary market. There is likely to be no domestic compliance market when the Carbon Pricing Mechanism is abolished. ACCUs can be traded on the international compliance market when linkages have been established with these markets (for example with the European Union or New Zealand), but this has not so far happened. 

The domestic voluntary market is regulated by the government’s National Carbon Offset Standard (NCOS) Carbon Neutral Program. It is available for individuals and companies to voluntarily offset their emissions, which they may see as a marketing advantage. To be accredited under the program, the companies can purchase ACCUs. For example: an airline charges customers more if they want to be carbon neutral travellers, and the airline uses that money to buy ACCUs. 

So far (by November 2013) no ACCUs had been traded on the international voluntary market, but that is possible.

There are some other mechanisms to trade on the voluntary market other than in ACCUs. They include VER (Voluntary, or Verified, Emissions Reduction) and VCU (Voluntary Carbon Units). Rules for VSU are similar to ACCU in that reductions or sequestrations must be additional to “business as usual”. It is likely that the same applies to VER. 

Eligible carbon abatement projects

Methodologies have been developed for about 20 project types. Projects have to be new; any greenhouse gas abatement must be additional to what is already occurring in order to qualify (called the additionality rule). Agricultural emission reduction and sequestration projects that are already in place do not count.

Project methodologies that have been completed include the following:
  • Permanent plantings
  • Capturing methane from landfill sites
  • Destruction of methane emissions from piggeries and dairy farms
  • Nitrate licks and other feeding supplements for ruminant livestock to reduce enteric methane emissions
  • Early burning of tropical savannahs to reduce the likelihood of wildfires
  • Avoided deforestation.
Soil carbon sequestration methodologies have not yet been completed, but are expected to be ready by mid 2014 (a draft has been published). Some types of project’s starting times can be backdated, but the limit is to July 2010. As the soil carbon sequestration methodologies are yet to be completed it is unclear when a baseline can set and if backdating is possible. That means biological farmers, if they have already started, will probably be ineligible. An organisation called Carbon Link (www.carbonlink.com.au) is calling for expressions of interest from farmers to put in joint applications, and is lobbying to have what they call pioneer carbon (carbon already sequestered by changed farming practices) included.

Biochar production is to be included late in 2014, based on pyrolysis (burning in low oxygen conditions to create charcoal) of chicken litter, and subsequent incorporation into soil. Others to be developed include using nitrification inhibitors to reduce nitrous oxide emissions from fertiliser use, feral ruminant animal reduction (deer, goats, camels, buffalo), farm forestry, and restoration of wetlands. 

So far 110 projects have been approved. The majority are for methane abatement in landfill and for early savannah burning. Projects have to have permanent effect, which is defined as 100 years, though discussion is underway to reduce this to 25. 

The price landholders receive for carbon credits is uncertain. The previous government set a price of $23 per tonne; the current Environment minister Greg Hunt suggests about $8. Currently the price on the European market that Australia is planned to link into is considerably lower than that. What the price will be in 5 years is guesswork.

One quite bizarre project that has been accepted is that of a farmer who gained a land clearing permit in 2008 but decided not to take it up; he is being paid for avoided deforestation. Also dubious is the feeding of nitrates to cattle in order to reduce methane emissions – many cattle herds already suffer ill health from excess nitrate intake because of the extensive use of urea on pastures. Excess nitrate deposited as ammonia in urine increases nitrous oxide emissions, 300 times more potent as a greenhouse gas than carbon dioxide. 

Much work is being done on methods of verification for soil carbon increase. It looks likely that at least initially this will require soil testing on a regular basis using traditional methods – taking samples down to at least 30cm and sending them to a laboratory for analysis. A baseline is established at the start of the project and subsequent testing measures the gain in soil carbon. This will be expensive, a cost to be borne by the landholder of about $130 per sample, and many samples will be required on a farm. In the future there may be cheaper methods available but they are still in the development stage. Soil testing must be done by a set method to assure accuracy. 


There are many benefits to agricultural sustainability from increasing soil carbon, benefits that are being realised by the increasing number of biological farmers: better water holding capacity, better nutrient availability, less erosion, drought hardiness, lower input needs, fewer weeds and many more. That the work and advocacy by biological farmers over the past several decades is receiving official confirmation instead of the denigration that has been common in the past is a significant advance. These farmers though will not be able to claim carbon credits for their past achievements under the current guidelines.

It will take much more than a vague promise of carbon credit payment sometime in the future for large numbers of farmers to convert. Either the Abbott Government is naïve about the success of the initiative, or it is content to merely create the impression that it is doing something to address global warming without actually achieving anything.